James Hamilton, 08 July 2019

Shipping costs offer a potentially attractive measure of world real economic activity. However, the popular approach of removing a deterministic trend is not consistent with the observed behaviour of shipping costs and results in an unrealistic measure in data since 2015. This column compares alternative monthly measures based on shipping costs with direct estimates of world industrial production in terms of coherence with world GDP and usefulness for forecasting commodity prices, and concludes that industrial production is a much better measure. If shipping costs are to be used, the cyclical component should not be calculated using residuals from a linear trend.

Katharina Erhardt, Simon Haenni, 27 May 2019

Firm entry is widely viewed as a central driver of economic growth, so understanding the role of culture in explaining differences in entrepreneurial activity is important. Using Swiss data on individuals’ cultural origins going back to the 18th century, this column compares the entrepreneurial activity of individuals who live in the same municipalities but who have their cultural origins on different sides of the language border. It finds that individuals with ancestry from the German-speaking side founded 20% more firms than those with ancestry from the French-speaking side. Yet, the cultural origin of the founder does not affect firm-level outcomes such as bankruptcy or revenues.  

Pierpaolo Benigno, 26 April 2019

Cryptocurrencies have attracted the attention of consumers, policymakers and the media. This column investigates whether they can jeopardise the primary function of central banks, namely, controlling inflation and economic activity. Currency competition can succeed in calming inflation and preventing the sort of manipulation of interest rates and prices to which governments have historically been prone. But currency competition may also lead to government money losing the function of medium of exchange, which could be risky and lead government currency into further troubles. 

Francesco Amodio, Michele Di Maio, 09 December 2018

The economic impact of conflict can be catastrophic, but disentangling and identifying the different ways in which conflict affects the economy is challenging. Using data from the Occupied Palestinian Territory during the Second Intifada, this column examines the specific mechanisms through which economic losses materialise in a conflict zone with low-intensity violence. The findings highlight the close interaction between security and trade issues, calling for an integrated policy approach acting on both fronts.

Katre Eljas-Taal, Neil Kay, Lucas Porsch, Katarina Svatikova, 12 October 2018

Collaborative platforms have quickly penetrated several services sectors. Statistics on the development of the collaborative economy are essential for appropriate policy responses but there are few available. This column presents a simple methodology for estimating the economic size of the collaborative economy, which is also relevant for the platform economy.

Davide Debortoli, Jinill Kim, Jesper Lindé, Ricardo Nunes, 17 September 2018

Previous studies have suggested that for central banks, a focus on inflation stabilisation is enough to stabilise other macroeconomic variables, and that focusing on economic activity can even be harmful. Using a model similar to those in use at central banks, this column studies the welfare implications of increasing the weight on economic activity in the central bank’s objective. The results suggest that stabilising measures of economic activity should be one of the primary objectives of central banks, as important as or even more important than stabilising inflation around its target. 

Marco Buti, José Leandro, Katia Berti, 12 May 2017

As the recovery in the Eurozone approaches its fifth year, this column presents the latest economic forecast from the European Commission, which projects a continuation of the recovery at a steady pace (1.7% in 2017 and 1.8% in 2018). Nevertheless, over the next two years, wage growth is expected to remain constrained, the investment gap is expected to persist, the current account surplus is forecast to remain high, and core inflation to stay subdued. This suggests that there is still scope for higher growth without triggering inflationary pressures, and the Spring forecast shows that maintaining the current supportive macroeconomic policy environment is the right approach, while implementing comprehensive and productivity-enhancing structural reforms. The main immediate priority should be cleaning up the banking sector.

Charles Bean, 31 March 2016

The increasingly digital 21st century economy – with many zero-priced goods and services – is a challenging place for those striving to measure economic activity. This column reviews some of the main themes of the Bean Report on UK economic statistics. It suggests the exploitation of new data sources and the creation of a network of academics, private sector actors, and expert users. They would undertake research and development into the measurement of the economy and propose experimental statistics to capture the new phenomena.

Events

  • 17 - 18 August 2019 / Peking University, Beijing / Chinese University of Hong Kong – Tsinghua University Joint Research Center for Chinese Economy, the Institute for Emerging Market Studies at Hong Kong University of Science and Technology, the Guanghua School of Management at Peking University, the Stanford Center on Global Poverty and Development at Stanford University, the School of Economics and Management at Tsinghua University, BREAD, NBER and CEPR
  • 19 - 20 August 2019 / Vienna, Palais Coburg / WU Research Institute for Capital Markets (ISK)
  • 29 - 30 August 2019 / Galatina, Italy /
  • 4 - 5 September 2019 / Roma Eventi, Congress Center, Pontificia Università Gregoriana Piazza della Pilotta, 4, Rome, Italy / European Center of Sustainable Development , CIT University
  • 9 - 14 September 2019 / Guildford, Surrey, UK / The University of Surrey

CEPR Policy Research