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Featured Banking Finance

Impact of insolvency regimes on non-performing loans: Lessons from detailed credit data

Effective insolvency frameworks can address multiple issues in the banking sector. This column examines the impact of insolvency framework reforms on non-performing loans, using a new metric derived from the European Banking Authority’s Transparency Exercises. It finds that debtor-oriented reforms seem to be more effective in reducing the accumulation of non-performing loans, particularly benefiting larger […]

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Finance Economy Featured

The housing consumption channel of mortgage demand

Many housing markets have experienced a dramatic rise in house prices and mortgage debt over recent decades that has outpaced average income growth. Increased wealth and increased collateral values have been cited as possible explanations. This column suggests that much of the increase in mortgage debt can be attributed to homebuyers being compelled to borrow […]

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Technology Economy Featured

The expansion of AI will likely shrink earnings inequality

The 1980s and 1990s saw a sharp increase in earnings inequality in the US. As new technologies displaced the routine tasks typically performed by less-educated workers, more-educated workers experienced an upturn in their economic position that has endured ever since. This column argues that artificial intelligence could mitigate or even reverse this disparity between low […]

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Economy Featured Technology

The macroeconomic effects of AI innovation

The recent rise of generative artificial intelligence has spurred a heated debate on its potential for economic growth and on the risks of displacing workers. This column uses US patent-level data over 1980-2019 and finds that the aggregate economy can benefit from AI-driven technological progress. Historically, an increase in AI innovation has boosted industrial production […]

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Development Economy Featured

The cross of gold: Brazilian treasure and the decline of Portugal

Throughout the early modern period, Portugal was a leading European colonial power. But by the 19th and 20th centuries, it was one of the poorest nations in Western Europe. This column explores the resource curse as an explanation for the Portuguese decline. The influx of Brazilian gold in the 18th century shifted production towards land-intensive, […]

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Economy Featured World

Economists should point their attention to the stars

The economics of space is no longer the province of science fiction. However, the economics profession has paid little attention to space exploration as a dynamic market. This column argues that economists should turn their attention to the stars, harnessing opportunities that beckon beyond Earth’s limits. A variety of concepts from standard economics can be […]

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Technology Featured Finance

Photonic startup Lightmatter raises $400 million amid AI datacenter boom, eyes IPO next

Lightmatter, a Mountain View, California-headquartered startup building photonic tech in datacenter networking chips, said on Wednesday it has raised $400 million in a Series D funding round at a valuation of $4.4 billion. New investor T. Rowe Price led the funding round, with participation from existing backers including Fidelity and Alphabet’s GV. The latest funding […]

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Finance Banking Featured

Morgan Stanley profit exceeds forecasts on dealmaking surge; shares jump to record

 Morgan Stanley’s profit surpassed estimates on a bumper third quarter for investment banking that had also buoyed rivals, sending its stock to a record. A revival in corporate debt issuance, initial public offerings (IPOs) and mergers has bolstered profits for Wall Street banks this year. As markets hover near record highs and the U.S. Federal Reserve begins […]

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