Joshua Aizenman, Hiro Ito, Gurnain Kaur Pasricha, 08 April 2021

Facing acute strains in the offshore dollar funding markets during Covid-19, the Federal Reserve implemented measures to provide US dollar liquidity. This column examines how the Fed reinforced swap arrangements and established a ‘financial institutions and monetary authorities’ repo facility in response to the crisis. Closer pre-existing ties with the US helped economies access the liquidity arrangements. Further, the announcements of the liquidity expansion facilities led to appreciation of partner currencies against the dollar, as did US dollar auctions by foreign central banks. 

Alessio Terzi, 02 April 2021

Inspired by conspicuous historical parallels, some scholars and journalists have argued that GDP growth and productivity might boom in the aftermath of the Covid-19 pandemic. This column reviews the evidence for and against the ‘Roaring Twenties’ hypothesis, concluding that some countries might well experience a forceful economic expansion. But policymakers should avoid complacency and make the most of the Recovery and Resilience Facility funds, combining them with wide-reaching structural reforms to improve economic prospects for the decade to come.

Hâle Utar, 28 March 2021

The Mexican Drug War, including the ostentatious killings and the targeting of civillians, has been amply covered in the media. What is less known are the economic impacts of the violence, particularly at the firm level. This column presents evidence from Mexican firms, focusing on the differing experiences of ‘blue-collar’ and ‘white-collar’ organisations. The results suggest that violence can cause a negative labour supply shock, particularly in sectors that more frequently employ lower-skilled female workers.

Emanuel Moench, Loriana Pelizzon, Michael Schneider, 23 March 2021

In March 2020, a ‘dash for cash’ driven by the Covid-19 crisis affected the liquidity of the US Treasury bonds market as well as numerous other financial markets around the globe. This column investigates how euro area sovereign bond markets fared during the same period. While deteriorations in sovereign debt market liquidity are evident, these appear to be driven by a ‘dash for collateral’ in euro-denominated safe assets. This suggests some differences from the US experience, as well as variations across European countries. 

Robin Döttling, Lev Ratnovski, 19 March 2021

Technological progress increases the importance of corporate intangible assets such as research and development knowledge, organisational structure, and brand equity. Using US data covering 1990 to 2017, this column shows that the stock prices and investment of firms with more intangible assets respond less to monetary policy shocks. Similarly, intangible investment responds less to monetary policy compared to tangible investment. The key channel explaining these effects is a weaker credit channel of monetary policy, as firms with intangible assets use less debt.

Lauren Cohen, Umit Gurun, Danielle Li, 14 March 2021

Covid-19 has revealed the importance of quick, efficient, but safe medical innovation. The development of various vaccines, as well as a range of treatments, have been tech tools in the fight against the public health and economic crises. This column explores the impact of informal deadlines within the drugs market, arguing that such regulatory pressures can end up distorting product safety and marketability. The findings highlight the need for well-designed regulatory systems which allow medical innovators to move swiftly but safely during the next health shock.

Victor Chernozhukov, Hiroyuki Kasahara, Paul Schrimpf, 08 March 2021

Policymakers must weigh up the consequences of prolonged school closures on young people against any impact of reopening them on the spread of COVID-19. This column shows that counties in the US that opened K-12 schools with in-person learning modes experienced an increase in the growth rate of COVID-19 cases by 4.7% on average and by 6.4% when mask-wearing was not mandated for staff at school. The findings suggest that local governments should promote mask-wearing requirements and other mitigation measures at schools.

Alma Cohen, Moshe Hazan, David Weiss, 08 March 2021

The gender gap in corporate America is increasingly well documented, but the literature has not yet examined how a CEO’s political preferences might be associated with gender equality in the executive suite. Focusing on the US, this column compares the fraction of a CEO’s political contributions that went to Republican, rather than Democratic, candidates and the gender balance among top executives (excluding the CEO). Companies run by a CEO who only donates to Democrats employ a 15–25% higher fraction of women in the executive suite than those run by CEOs who only donate to Republicans.

Stefan Pichler, Katherine Wen, Nicolas Robert Ziebarth, 05 March 2021

By now, it should be clear that presenteeism (going into work when sick) contributes significantly to the transmission of diseases. This column summarises current evidence on sick-pay mandates in the US and the spread of flu-like illnesses and COVID-19. Over the last ten years, states that introduced sick-pay mandates saw a decrease in seasonal flu activity by up to 30% in the first years compared to states that didn’t introduce such mandates. Introducing sick-pay mandates did not result in significant employment or wages decreases. Mandating COVID-19-related emergency sick leave also significantly reduced COVID-19 infection rates in states previously without sick-pay mandates, especially affecting low-income and service-sector employees.

Simeon Djankov, Eva (Yiwen) Zhang, 03 March 2021

Steep falls in entrepreneurial activity were recorded in early 2020 across G7 economies. In the US, however, the creation of US startups shot up by 24% relative to the previous year. This column uses data on new company applications in the US since 2004 to show that firm birth generally accelerates in the aftermath of economic crises and that this pattern was particularly pronounced in 2020, fuelled by the government assistance provided to small businesses. It also shows that US firm births are estimated to have surpassed firm deaths in 2020, unlike in the aftermath of the previous financial crisis.

Mike Andrews, Alexander Whalley, 20 February 2021

We have witnessed significant changes in economic geography over the last years. However, little is known about the spatial concentration of innovation over time. This column uses a novel dataset containing the location of all US patents between 1836 to 2016 to analyse the geography of innovation over time. It finds that while concentration was as high as it is today in the late 1860s, it has seen a substantial decline thereafter, remaining at significantly lower levels for the larger part of the 20th century. It further finds substantial turnover in the identities of top inventing places.

Leticia Abad, Noel Maurer, 19 February 2021

While the COVID-19 pandemic seemed to have affected the 2020 US presidential elections, it had remarkably little effect on the electoral returns. This column compares the situation to the 1918 influenza pandemic and examines whether the flu pandemic affected US congressional, gubernatorial, and presidential elections during 1918–1920. Flu deaths did have a small effect on elections – voters did indeed blame incumbent parties for bad health outcomes. However, it appears they cared about other things much more.

Samuel Delpeuch, Etienne Fize, Philippe Martin, 12 February 2021

How much can trade imbalances account for the rise in protectionism of the past ten years? This column reveals that both bilateral and multilateral trade imbalances are strong predictors of protectionist attacks, partly – but not entirely – driven by the US and the Trump years. Moreover, countries with more expansionary fiscal policies react to the ensuing trade imbalance by a more protectionist trade policy. A transatlantic gap in the fiscal response to the COVID crisis may therefore pave the way to renewed trade tensions.

Thorvaldur Gylfason, 06 February 2021

Trust is a crucial norm in any democratic system. And respect for the truth, as well as support for the institutions that uphold it, are fundamental for a functioning market economy. This column argues that recent controversies in the US, as well as the UK, have seen this norm begin to erode, and that this may have negative effects for democracies and economies worldwide. Citing evidence from Iceland, the author argues that unless reforms are implemented soon, advocates for democracy may see greater power slide into the hands of those who propagate mistruths for their own material gain.

Dirk Niepelt, 05 February 2021

The role of central bank digital currency is increasingly being discussed, both in terms of its utility in monetary policy as well as the controversy of bank-level profit from money creation. This column presents a method for quantifying the funding cost reduction enjoyed by banks, highlighting that money creation substantially contributes to profits. This raises important questions for policymakers to address as they seek to optimise the deployment of digital currencies within financial institutions.

Chad Bown, Paola Conconi, Aksel Erbahar, Lorenzo Trimarchi, 03 February 2021

In a world in which production processes are fragmented across countries, the effects of tariffs propagate along supply chains, with firms in downstream industries suffering from protection upstream.  This column studies the effects of US antidumping duties applied against China – its most frequent target – over 1988-2016 on US firms in downstream sectors. It finds that tariffs have large negative effects on downstream industries, increasing production costs and decreasing employment, wages, sales, and investment.

Alex Chernoff, Casey Warman, 02 February 2021

COVID-19 may accelerate the automation of jobs, as employers invest in technology to safeguard against pandemics. This column uses survey data from the US to show that women with medium to low levels of wages and education are at the highest risk of COVID-induced automation.

Branko Milanovic, 29 January 2021

In classical capitalism, the rich earn their money from capital while the poor sell the value of their labour. In which countries is that still true, and how does it affect the gap between rich and poor? Branko Milanovic tells Tim Phillips about a new way in which we can think about inequality.

Casey Mulligan, 28 January 2021

The spread of COVID-19 in the US has prompted extraordinary steps by individuals and institutions to limit infections. Some worry that ‘the cure is worse than the disease’ and these measures may lead to an increase in deaths of despair. Using data from the US, this column estimates how many non-COVID-19 excess deaths have occurred during the pandemic. Mortality in 2020 significantly exceeds the total of official COVID-19 deaths and a normal number of deaths from other causes. Certain characteristics suggest the excess are deaths of despair. Social isolation may be part of the mechanism that turns a pandemic into a wave of deaths of despair; further studies are needed to show if that is the case and how. 

Chiara Farronato, Jessica Fong, Andrey Fradkin, 24 January 2021

Mergers between digital platforms frequently attract widespread attention, not just from the media but from researchers in economics and law as well. This column explores the effects of a merger between two rival platforms, using the case of the two largest US two-sided markets for dog sitting. The results of the study suggest that online users are, on average, no better off with a single dominant platform compared to two competitors. The authors argue that this net effect is the result of two counterbalancing forces: network effects and platform differentiation.

Pages

Events

CEPR Policy Research