Thorsten Beck, Orkun Saka, 15 August 2021

Despite the commonly held views of economists on regulatory capture, our profession has been much more hesitant in recognising similar conflicts of interests that may exist in economics research. This column reports on the related discussions and research presented at the second London Political Finance (POLFIN) workshop, including work on the interaction between political power and corporate favouritism, the influence of partisanship on international capital flows, and political polarisation in financial news as well as in corporate boards. It lays out some of the important takeaways and suggests directions for further research that can shed light on the remaining issues.

Maria Milosh, Marcus Painter, Konstantin Sonin, David Van Dijcke, Austin L. Wright, 23 December 2020

As the use of face masks has been shown to effectively diminish the spread of COVID-19 without hampering economic activity, it should be among the least controversial public policy responses to the pandemic. This column shows, however, that mask usage is strongly associated with political partisanship in the US. Using various research designs, it finds that localities which voted for Trump in 2016 are significantly less likely to wear masks, even if mask wearing is mandated. Leadership is shown to matter as well – tweets with positive sentiment towards masks surged after Trump wore a mask in public the first time. 

Scott Baker, Aniket Baksy, Nicholas Bloom, Steven Davis, Jonathan Rodden, 22 December 2020

Elections can cause economic uncertainty, especially when elections take place in a politically polarised context. This column studies how national election cycles in 23 countries influence economic policy uncertainty, as measured by the share of newspaper articles that discusses uncertainty and economic policy. Economic policy uncertainty clearly rises in the months leading up to national elections. Average economic policy uncertainty values are 13% higher in the month before and the month of national elections than in other months during the same election cycle. In the US, economic policy uncertainty increases are especially pronounced around close and highly polarised presidential elections. 

Levi Boxell, 01 October 2017

The internet has received a substantial amount of blame for the recent increase in political polarisation. Using US data, this column argues that, in fact, the internet has played no significant role in a generally increasing trend of political polarisation that goes back at least to the 1970s. The results highlight the importance of looking beyond convenient narrative explanations, and the need for a deeper understanding of the drivers of political sentiment.

Christian Dippel, Robert Gold, Stephan Heblich, 07 October 2016

The increasing polarisation of politics in the US in particular has spurred scholarly research on the potential links to increasing globalisation. This column focuses instead on Germany to investigate whether the rise of right-wing populism is associated with increased international trade. Regions most threatened by exposure to imports saw increases in support for far-right parties, while regions that benefited from export opportunities saw decreases. To counter this globalisation backlash, policy should aim to cushion the effects of trade exposure on the losers from globalisation. 

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