Noboru Kawahama, 22 March 2012

Competition may drive down prices but it also drives down profits – and some would argue innovation as well. How should policymakers balance the short-term need for competition with the the long-term need for innovation? This column explores the idea of ‘innovation and competition policy’ rather than just ‘competition poliicy’.

Romain Rancière, Amine Ouazad, 16 March 2012

Did the rise in subprime mortgages – predominantly to black and Hispanic borrowers – lead to a fall in racial segregation as people were able to move to more desirable neighbourhoods? This column looks at extensive data on mortgages and changes in the ethnic mix at local schools. It finds that the credit boom that precipitated the global financial crisis may actually have increased racial segregation.

C Randall Henning, Martin Kessler, 25 January 2012

In the last few months, several Vox columns have drawn parallels between Europe today and an emerging – and even less stable – United States in the eighteenth century. This column stresses that Europe’s leaders in search of a fiscal union need not seek to replicate the US experience but they should at least learn from it.

Thibault Fally, 10 January 2012

As the oft-cited iPhone example illustrates, production has become increasingly fragmented across countries. This column presents recent research, however, suggesting that this trend may be reversing for manufacturing plants in the US. It shows that intermediate goods account for a decreasing fraction of output value, while industries that are closer to the final consumer contribute to an increasing share of GDP.

Sheldon Garon, 06 January 2012

Sheldon Garon of Princeton University talks to Romesh Vaitilingam about his book, ‘Beyond Our Means: Why America Spends While the World Saves’. He contrasts continental European and East Asian countries, which have over many decades encouraged their citizens to save, with the US, which has promoted mass consumption and reliance on credit, culminating in the global financial meltdown. The interview was recorded in London in November 2011. [Also read the transcript]

Carlo Altomonte, Filippo di Mauro, Gianmarco Ottaviano, Vincent Vicard, Armando Rungi, 04 January 2012

Trade in today’s global economy is not a simple game of exchange-rate muddling. The complex web of global value chains ensures that products marked “Made in China” are often in fact made all over the world. This column looks at firm-level data from French firms between 2007 and 2009 and explores how their structure affects their behaviour, with insights for policymakers the world over.

Hans Gersbach, 03 January 2012

Incumbent politicians have a host of advantages in US elections; members of the US Congress are typically re-elected about 90% of the time. This column argues that such a head start can often be bad for the country, with leaders focusing on short-term populist policies rather than the greater good. It suggests raising the bar for incumbent candidates.

Thomas Piketty, Emmanuel Saez, Stefanie Stantcheva, 08 December 2011

The top 1% of US earners now command a far higher share of the country's income than they did 40 years ago. This column looks at 18 OECD countries and disputes the claim that low taxes on the rich raise productivity and economic growth. It says the optimal top tax rate could be over 80% and no one but the mega rich would lose out.

Valentina Bosetti, Jeffrey Frankel, 28 November 2011

The signatories of the UN Convention on Climate Change will meet again this week in Durban, South Africa. But time is running out if they are to come up with a successor to the Kyoto Protocol, especially with the US at loggerheads with China and India. This column proposes a novel yet pragmatic solution.

Bruce Blonigen, Lindsay Oldenski, Nicholas Sly, 26 November 2011

The most recent G20 summit led to a multilateral agreement to facilitate information sharing between tax agencies, with the US currently negotiating bilateral tax treaties with the tax havens of Switzerland and Luxembourg. But before celebrations begin, this column points out that cracking down on tax evasion comes at a cost. International investment may well suffer.

William Kerr, William Lincoln, Prachi Mishra, 22 November 2011

Lobbying is a primary avenue through which firms attempt to change policy. But only a few big firms lobby and lobbying is highly persistent over time. This column argues that entry costs to the political process help explain these facts. It provides evidence from a change in immigration policy that induced firms that were already lobbying and were sensitive to the policy changes to switch from lobbying on other issues towards immigration while other firms did not enter the lobbying process.

Heleen Mees, Philip Hans Franses, 20 November 2011

Are the Chinese prone to money illusion? This column uses a unique Chinese dataset and finds that, unlike their American counterparts, Chinese people are more likely to base decisions on the real value and not be fooled by inflation.

Adalbert Winkler, 06 November 2011

The Eurozone crisis is escalating as governments have failed dismally in their attempts to restore confidence. This column argues that the interventions have been too little and too weak, leaving the EZ crisis with no end in sight. To back up its case it looks at 19th century finance in the US.

Tommaso Monacelli, Vincenzo Quadrini, Antonella Trigari, 18 October 2011

Three years after the beginning of the Great Recession, the US unemployment rate remains at 9%, double its pre-crisis level. This column suggests the credit crunch may be behind this high number. It argues this is not because lower debt impairs the hiring ability of firms, but because it places firms in a less favourable bargaining position, allowing workers to negotiate higher wages, and thus reducing employment.

Moshe Hazan, Hosny Zoabi, 03 October 2011

What is the relationship between women's education, income, and family size? CEPR DP8590 presents new evidence from the US in support of the 'marketization hypothesis' -- that women's increased labour-force participation allows them to buy market services to raise their families. Highly educated American women substitute much of their own time with nannying and housekeeping services, which enables them to have more children and work longer hours.

Emi Nakamura, Jón Steinsson, 02 October 2011

A major question facing many governments in the rich world today is whether we should try to stimulate the economy by increasing government spending. This column exploit variation in military spending across US states and identifies a fiscal multiplier of around 1.5. It then suggests that aggregate fiscal stimulus should have large output multipliers when the economy is at the zero lower bound.

Owen Humpage, Michael Bordo, 03 October 2011

The Great Recession has resulted in sharp exchange-rate changes and threats of ‘currency wars’ linger. Some countries – notably Japan and Switzerland – have shown an interest in foreign-exchange intervention. This column argues that sterilised intervention does not afford monetary authorities a means of systematically affecting their exchange rates independent of their domestic policy objectives. Countries that engage in currency wars run a real risk of shooting themselves in the foot.

Charles Wyplosz, 16 September 2011

Europe’s debt crisis is unfolding while Japanese and US debt problems are on hold. The problem of public debt in advanced economies will be with us for decades. This column introduces a new Geneva Report on the World Economy that addresses the nuts, bolts, and worries surrounding the issue.

Barry Eichengreen, Jürgen von Hagen, Charles Wyplosz, Jeffrey Liebman, Robert Feldman, 16 September 2011

The 13th CEPR/ICMB Geneva Report on the World Economy takes a long-term perspective on debt sustainability, arguing that fiscal stabilisation is easier the faster the economy is growing.

Douglas Irwin, 11 September 2011

The swift policy response to the recent financial crisis helped the world economy avoid a replay of the Great Depression of 1929-32. But can we avoid a replay of 1937-38? With the world economy weakening once again, this column addresses the question with a renewed urgency and comes up with an oft-overlooked explanation – the Treasury Department's decision to sterilise all gold inflows starting in December 1936.



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