Wage rigidity – for example, due to collective contracts – can generate employment fluctuations, particularly during economic downturns. This column studies the impact of downward nominal wage rigidity on wage and employment dynamics during the 1993 and 2009 recessions in Spain. It shows that collective contracts renegotiated just before the recession led to higher wage […]
Governments around the world mostly rely on two types of policy to reduce greenhouse gas emissions from road transport – fuel taxes, which affect driving behaviour, and standards that regulate either average fuel economy or average emissions directly, which affect technology adoption. This column shows that standards have also been effective in inducing clean innovation […]
Natural resource dependence subjects economies to macroeconomic and structural challenges. The focus of attention in the ‘resource curse’ literature has been on the export side, while the import side has received much less attention. This column uses new firm-level data on imports in 53 countries to explore the effect of natural resource dependence on market […]
Trade wars can have large macroeconomic consequences, but there is limited focus on the interaction between optimal trade and macroeconomic policies. This column studies the optimal design of trade policies under different monetary policy rules. It finds that in a trade war, a monetary policy rule which targets Consumer Price Index inflation leads to lower […]
The US Inflation Reduction Act has sparked concern in the EU that it could shift investments to the US, threatening EU competitiveness in burgeoning green industries. This column argues that this perceived negative impact should be re-evaluated in light of the EU’s own green funding initiatives. With strategic use of available EU funds, member states […]
Government guarantee programmes for bank loans to businesses adopted during the COVID-19 crisis were broad in scope and sometimes quite different in their design and terms. A new CEPR Policy Insight uses a survey of 17 central banks to explore policy lessons by examining the design parameters of the guarantee programmes implemented in their jurisdictions […]
What do politicians think of the ECB? Based on an elite survey of the Members of the European Parliament, this column gauges elected policymakers’ attitudes towards the mandate and policy conduct of the ECB. The political orientation of politicians largely drives attitudes towards the central bank’s mandate and its policy conduct, but less so on […]
The US healthcare system relies on a heavily subsidised and lightly regulated private sector, and despite living in the world’s wealthiest country, millions of Americans remain uninsured, underinsured, or unsure of their coverage. This column examines the rise of private health insurance after WWII, when the American Medical Association – an interest group representing physicians […]
To achieve the internationally agreed temperature targets, increasingly stringent climate policies are of utmost importance. This column argues that theory-based scenarios, termed ‘economic pathways’, are a powerful tool to induce efficient policies. Calibrating a dynamic economic climate model to calculate different economic pathways reveals that deep decarbonisation only moderately delays economic development, while population growth […]
Energy prices have played an important role in the recent surge in inflation. This column analyses the relationship between energy price shocks and inflation expectations of both households and firms. It finds that households extrapolate their personal experience of energy price increases to their view of the overall economy. Meanwhile, firms exhibit significant pass-through to […]
