The ECB’s Governing Council moved to the preparation phase of the digital euro in October 2023. This column studies the implications of the digital euro for financial stability. New survey data indicate that German households are open to the digital euro. However, the demand for digital euro also raises financial stability concerns as households seem […]
Integrating ethnic minorities in the classroom enriches the educational environment, but some studies find that it lowers student test scores. This column explores what may drive such effects, using data from Taiwanese schools, where Indigenous students are randomly assigned to different classrooms. Students placed in classrooms with minority peers showed less effort, their parents invested […]
With his 2024 Spring Budget, UK Chancellor Jeremy Hunt intends to deliver long-term growth through “more investment, more jobs, better public services and lower taxes.” The latest CfM-CEPR survey asked its panel to forecast the short-run effect of the announced national insurance contribution cut on the UK’s GDP, to predict whether the next government would […]
As the world grapples with signs of increasing geopolitical fragmentation, it is important to reflect on the lessons of the past. This column studies the economic impact of the Cold War, focusing on how the severity of trade barriers varied over time. While the Iron Curtain represented a tariff equivalent of 48% at its height […]
Industrial policies (government financial and non-financial support to businesses) are increasingly used in advanced economies. This column discusses the pros and cons of such policies, and outlines principles to inform policy guidelines. Data from nine OECD countries suggest governments actively provide support to selected industries, but the intensity of support varies over time, country, and […]
Personal interviews remain at the centre of most recruitment processes. This column examines the impact of ‘contrast effects’ – whereby people evaluate a current choice option relative to the previous one instead of evaluating it individually – in interviews. The authors find that individual admission and hiring recommendations strongly react to the quality of the […]
The energy transition will require large quantities of the critical raw materials mined and processed in countries that are geopolitically distant from the EU. This column documents the ownership interests in extractive companies, information essential for accurately assessing the EU’s strategic dependencies. Investors from outside the EU control a significant share of the capital of […]
The EU recently settled on a revision of its fiscal rules, replacing a system increasingly perceived as ‘one size fits all’ with bespoke guidance based on a state-of-the-art debt sustainability analysis. This column argues that a debt sustainability analysis-based approach makes a lot of sense, yet comes with an inevitable drawback in the form of […]
An extended period of benign funding conditions has changed corporate bond markets globally. This column shows how the investment grade segment has become dominated by the lowest-rated (BBB) issuers, and these issuers have become more leveraged over time. Given the large stock of BBB-rated bonds, even relatively low transition rates – downgrades from investment grade […]
China is experiencing high credit growth in its manufacturing sector, the prices of its exports are falling, and its global export share in goods has significantly increased. This column assesses potential spillovers from China to the US and the euro area. In the scenario of a credit-fuelled manufacturing boom, higher Chinese demand and commodity prices […]
