Economists typically rely on unemployment and inflation rates to gauge how consumers feel about the economy. This column examines why consumer sentiment in the US remained depressed in 2023 despite low unemployment and falling inflation, and finds that increasing borrowing costs can explain much of this gap. The cost of money is not included in […]
Facing pressures from population ageing, many countries are reforming their social security systems, including by increasing retirement ages. This column provides new evidence on the employment and savings impacts of a reform in Denmark that increased retirement ages. It finds that the reform led to postponed retirement and the accumulation of more retirement savings. These […]
In the wake of the 2008 global financial crisis, many governments implemented austerity policies aimed at reducing budget deficits through public spending cuts. This column examines the rollout of programme awarding grants for home energy efficiency upgrades in the UK examine the extent to which cuts to local government finances may have impacted efforts to […]
The significant reduction in trade barriers along with rising US firm markups in the early 2000s may seem puzzling at first. To explain these trends, this column argues that lower trade barriers allowed US firms to enter new markets and utilise their intangible assets to boost profitability. Consistent with this hypothesis, it shows that foreign […]
There is considerable disagreement about the growth potential of artificial intelligence. Though emerging micro-level evidence shows substantial improvements in firm productivity and worker performance, the macroeconomic effects are uncertain. This column argues that the promise of AI-related economic growth and social welfare hinges on the rate of adoption and its interplay with labour markets. Policies […]
The COVID-19 pandemic significantly accelerated the shift to work from home around the world, but with significant cross-country variations. This column explores how factors such as lockdown stringency, population density, and individualism affected the adoption of working from home across 34 countries. Individualism has the strongest association with work from home, followed by lockdown stringency […]
Political discontent has been on the rise across Europe. This column draws on the concept of regional ‘development traps’ to examine the complex relationship between regional economic stagnation and increasing Euroscepticism within the EU. Regions mired in long-term economic decline, with limited economic prospects and a declining standard of living compared to more prosperous regions, […]
Despite the large surge in inflation across advanced economies since 2021, long-term expectations are mostly in line with central bank targets. However, this column argues that the factors which facilitated low average inflation for decades have started to reverse. These include globalisation, de-unionisation, and a deepening of the Washington consensus including especially fiscal restraint. Using […]
Global supply chains are central to economic policy debates. This column examines recent attempts to regulate climate sustainability within supply chains. By analysing the corporate climate action and governance practices from a global sample of firms, the authors find increasing customer pressure on suppliers to decarbonise, but no evidence that emissions or energy inputs decrease […]
Non-bank financial intermediaries have surpassed banks as the largest global financial intermediaries, yet they remain lightly regulated. This column argues that the intermediation activities and risks of non-bank financial intermediaries and banks have become intricately intertwined and should not be thought as operating in parallel or as substitutes. Examples of this transformation include corporate and […]
