UK bond yields are currently higher than the G7 average, leading to historically high debt interest payments. Importantly, the level of breakeven inflation embedded in UK gilt yields is high compared to international peers, and well above the 2% inflation target. This column argues that the UK government can reduce its debt interest bill by […]
Climate change is frequently described as an existential threat, posing significant risks to our lives, livelihoods and the global economy. This view, however, stands in stark contrast to empirical estimates of the impact of climate change on economic activity, which imply only modest economic effects. Do existing estimates not account for the full impact of […]
Japan identifies ‘top-level sales’ through overseas visits by political leaders as an important policy tool to help Japanese firms win more infrastructure contracts. However, overseas visits can be controversial, not least because of their cost. This column examines the net benefit of overseas visits by Japanese political leaders. The probability of contracts being awarded to […]
Fuel excise duties are a substantial source of tax revenue for many countries as well as a tool for pricing the climate and non-climate externalities of road transport. This column examines how the decarbonisation of the French economy will affect both tax receipts and the pricing of road externalities. The authors calculate that road transport […]
The narrowing of the gender pay gap slowed around the turn of the 21st century. Meanwhile, younger workers have fared progressively worse than older workers. This column uses data for the US, Italy, Canada, and the UK to show that while pay convergence was initially driven by a narrowing of the gender gap at labour […]
A recent sustained growth deceleration in China raises the question of whether the country has fallen into a ‘middle-income trap’. This column argues that China cannot continute to rely on capital accumulation for sustaining growth, while the country’s ongoing demographic transition also implies that there are limits to a continued positive contribution of labour to […]
Do people distinguish between income and wealth, how they are distributed, and how they should be taxed? This column reports results of a survey-experiment in the Netherlands to study people’s beliefs about the distribution of income and wealth and how these beliefs relate to their policy preferences. It shows that people make very little distinction […]
Asset pricing anomalies documented in the post-WWII period are commonly used to design investment strategies. This column uses historical data over 1900-1925 from nine equity markets to provide an out-of-sample test for these asset pricing anomalies. It finds strong evidence of cross-sectional momentum (difference in returns of past winners and past losers), which is driven […]
Open banking enables customers to share their transaction data with other financial service providers – including incumbent banks or new fintechs – fostering competition, spurring innovation, and promoting inclusion. This column argues that open banking is unambiguously good for competition in the financial sector, but that it can impose costs on privacy conscious consumers. Evidence […]
In 2021, the US temporarily expanded the Child Tax Credit, a programme intended to support the income of families with children. This column shows that the US was comparatively less successful in reducing child poverty through its redistribution system prior to the reform. The temporary expansion brought it more in line with programmes in other […]
