Egor Malkov, 22 July 2020

The lockdown measures have brought to light the importance of the nature of work. This column discusses how teleworkability and contact intensity of different jobs both shape the distribution of risks created by the pandemic. The existing distribution of working couples suggests that two-thirds of the US ‘dual-earner’ couples are exposed to greater intra-household contagion risk. About one-fourth are exposed to greater labour income risk. Patterns in skill requirements increase the likelihood of skill mismatch for the newly unemployed. These observations have direct policy implications whilst highlighting potential constraints on their effectiveness.

Qing Hu, Ross Levine, Chen Lin, Mingzhu Tai, 18 July 2020

The financial conditions facing parents can have effects on children’s education outcomes, both in terms of schooling and parental support at home. This column presents evidence from the US, arguing that changes in banking regulation across states can cause changes in the experience of children through a number of channels. These effects are not uniform across household income brackets and can be mitigated when there are other family members such as grandparents that are able to help children with their personal development.

Victor Chernozhukov, Hiro Kasahara, Paul Schrimpf, 15 July 2020

Faced with COVID-19, people rationally and voluntarily respond to information on risks, making it difficult to distinguish the effect of containment policies from that of voluntary behavioural responses. This column examines the effect of mandatory mask policies on COVID-19 cases and deaths in the US. If the US had on 1 April 2020 universally mandated that employees of public-facing businesses use masks, there could have been nearly 40% fewer deaths by the start of June. Containment policies had a large impact on the number of COVID-19 cases and deaths, directly by reducing transmission rates and indirectly by constraining people’s behaviour, and account for roughly half the observed change in the growth rates of cases and deaths.

Jose Maria Barrero, Nicholas Bloom, Steven Davis, 14 July 2020

One of the most urgent economic impacts of the Covid-19 crisis is on labour markets. Widespread job losses, drastic increases in unemployment benefit claims, and the rise of working from home have dominated the discussion during the pandemic so far. This column presents evidence from the US, arguing that the pandemic itself represents reallocation of labour within the economy. As different sectors and occupations are hit with variable severity, the authors argue that policymakers should be wary of this variation, responding with policies that will hold firm over time.

Peter Petri, Michael Plummer, 09 July 2020

The US-China trade war has negatively affected global growth and trade prospects, redirecting supply chains and leading to inefficiencies. However, this column suggests that emerging mega-regional trade agreements, including the Comprehensive and Progressive Agreement on Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership, have the potential to compensate for the trade war by reducing regional costs. Such agreements are likely to lead to deeper integration within Asia, especially among Japan, China, and Korea. They could also trigger further economic distancing between Asia and the US, and a large increase in the influence of China.

Ulrich J. Eberle, Vernon Henderson, Dominic Rohner, Kurt Schmidheiny, 09 July 2020

Urbanisation is a major driver of economic development. Agglomeration forces that make cities productive and dispersion forces that limit their growth have been extensively studied, but the effect of ethnolinguistic diversity has been largely overlooked. This column shows that more diverse regions tend to experience more social tensions and conflict, less urbanisation, less urban concentration, and hence potentially less economic growth. This effect is however more confined to intermediate political regimes like fragile democracies, whereas a mature degree of democracy helps to defuse the negative impact of diversity on urbanisation.

Giovanni Facchini, Brian Knight, Cecilia Testa, 07 July 2020

The disproportionate arrest rates of black Americans is well established, but the relationship between racist police practices and political accountability is not. This column examines whether black voter turnout – which soared following the Voting Rights Act of 1965 – affected police departments in the southern US. It finds that an historically oppressed minority’s enfranchisement can lead to their improved treatment by police, but only when the chief law enforcement officers in a district are elected rather than appointed. While historical in nature, the findings have significant policy implications given ongoing debates about policing, race, and voting.

Karol Jan Borowiecki, Christian Møller Dahl, 02 July 2020

Black Americans have been underrepresented in the nation’s creative industries since the end of slavery. This column argues that the implications of that marginalization extend beyond career choices into homes and neighbourhoods, as cities with thriving arts sectors also lead in job creation, innovation, and trade. The authors recommend that financial support for black artists be pursued in a systematic way, with policies that provide emerging black artists with access not only to relevant artistic networks, but also to supply-related organisations such as gallerists and publishers.

Lena Edlund, Cecilia Machado, 27 June 2020

The urban renewal that transformed many US inner cities may have hit its first major speed bump with the outbreak of Covid-19. The ‘space versus commute’ trade-off has been thrown into doubt and confusion by work-from-home orders. This column draws on socioeconomic history, arguing that a mass exodus of skilled professionals to the suburbs could have major implications for inner city areas. Although this could spell the return to the homicidal days of the 1980s, the authors argue that this may not be the case – the reason being: cell phones and how they have impacted illicit drug retailing.

Philippe Aghion, Helene Maghin, André Sapir, 25 June 2020

The COVID-19 pandemic has shed light on the structural dichotomy between the models of capitalism operating in Europe and the US; the former offers better protection for its citizens while the latter shows greater economic dynamism. This column argues that for all the harm COVID-19 has caused, the crisis has also provided an opening to rethink the versions of capitalism practised on both sides of the Atlantic. Some degree of convergence towards a better model is desirable, the authors suggest, and perhaps even possible.

Gunther Capelle-Blancard, Adrien Desroziers, 19 June 2020

During the COVID-19 pandemic and the related economic fallout, the response of the stock markets has raised concerns as well as questions. This column explores the surprising trends. There is some evidence that shareholders have favoured the less vulnerable firms, and that credit facilities and government guarantees, lower policy interest rates, and lockdown measures mitigated the decline in stock prices. However, fundamentals only explain a small part of the stock market variations at the country level. Overall, it is hard to deny that the links between stock prices and fundamentals have been loose at best.

Sylvain Leduc, Zheng Liu, 14 June 2020

The COVID-19 pandemic has raised concerns about the future of work. The pandemic may become recurrent and necessitate repeated adoptions of social distancing measures, creating substantial uncertainty about worker productivity. This column presents a theoretical framework suggesting that such job uncertainty reduces aggregate demand, and dampens business investment in general. However, automation may provide one way for businesses to cope with the uncertainty about worker productivity. It appears that pandemic-induced job uncertainty could stimulate automation investment, despite declines in aggregate demand.

Ross Levine, Chen Lin, Zigan Wang, 14 June 2020

There is ample evidence of the negative effects of pollution on health, with about one in six deaths worldwide attributed to air pollution. However, the effect of one firm’s toxic emissions on neighbouring firms’ employees and profits are not known. This column examines whether opening toxic pollution-emitting plants affect the career paths of executives at S&P 1500 firms in the US. The opening of such plants triggers substantial increases in executive migration from neighbouring firms. Corporations exposed to toxic emissions from other firms lose talented individuals and suffer stock-price declines.

Graziella Bertocchi, Arcangelo Dimico, 12 June 2020

The Covid-19 outbreak and the murder of George Floyd have dramatically exposed the racial inequalities in US society. This column studies the association between the historical experience of slavery and the African American family structure. Results indicate that the extreme demographic conditions prevailing among slaves on sugar plantations in the US South may have persistently shaped African American family formation. Over the period of 1880-1940, higher sugar suitability is associated with a higher likelihood of single female headship among black households.

Thomas Plümper, Eric Neumayer, 11 June 2020

Is Covid-19 a ‘rich man’s disease’, as many citizens in poorer countries believe it to be? This column descibes how in Germany, infections began with individuals returning from skiing holidays. In the first phase of the pandemic, infection rates were higher in richer areas and lower in more socially deprived districts. In the second phase, the ability to socially distance oneself mattered more – an ability that is itself socioeconomically stratified. Richer districts are now seeing fewer new infections, and the initial safety advantage of more socially deprived districts has disappeared.

Kritee Gujral, 10 June 2020

A quarter of all rural US hospitals, most of which are highly essential to their communities, are at high risk of closing.Hospital closures may increase transport time and delay treatment. This column examines hospital closures in California from 1995 to 2011 to assess the effects of rural and urban hospital closures on inpatient mortality. Mortality increases after a rural hospital closure not only in the local rural area but in the neighbouring urban areas as well. This adverse effect is larger for Medicaid patients and racial minorities.

Shaun P. Hargreaves Heap, Christel Koop, Konstantinos Matakos, Asli Unan, Nina Weber, 06 June 2020

The behavioural interventions to control the spread of COVID-19 present trade-offs between health and wealth. To be successful, an understanding of how the public currently values lives over economic loss is needed. A survey experiment in the US and UK finds that people highly prioritise saving lives, but this valuation will change as economic losses mount. Individual differences in valuation also predict individual compliance with COVID-19 policies, and information on COVID-19 deaths and income losses can affect valuations. Caution in relaxing the lockdown will help build public support and mitigate polarising effects and, through increasing compliance, improve its economic efficacy.

Jeffrey Chwieroth, Andrew Walter, 23 May 2020

Although necessary, many of the economic policy responses to the COVID-19 crisis may end up damaging political incumbents in the medium and long term. This column presents evidence suggesting that voters expect great things from their leaders in deep crises. Yet the potential for great disappointment arises from the inevitable perceived inequities that will follow from the coronavirus crisis bailouts. As the pandemic exacerbates existing divisions within societies, the political costs predicted implies that only a minority of the most skilled political leaders are likely to survive this crisis.

Olivier Darmouni, Oliver Giesecke, Alexander Rodnyansky, 20 May 2020

The share of firms’ borrowing from bond markets has been rising globally. This column argues that euro area companies with more bond debt are disproportionately affected by surprise monetary shocks, compared to firms with mostly bank debt. This finding stands in contrast to the predictions of a standard bank lending channel and points toward frictions in bond financing. This provides lessons for the conduct of monetary policy in times of hardship such as COVID-19, when the corporate sector suffers from liquidity shortages.


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