Most studies on central bank digital currencies focus on the effects after they become well established. This column analyses the macroeconomic effects in the transition to the new equilibrium. Using a two-country model with financial frictions, it shows that, under plausible assumptions for demand for central bank digital currency, the transition is characterised by volatility […]
The pandemic led to a significant shift in preferences toward suburban living in the US and an increase in relative house prices in suburban compared to urban areas. In several US cities, this dynamic has flattened the traditionally negative relationship between house prices and distance from city centres. This column documents the continued nature of […]
Policies to limit carbon emissions create trade-offs between reduction and redistribution for policymakers, especially in countries with high inequality. Addressing the distributional consequences of carbon taxes is crucial to enable electoral support. This column shows that the most attractive policy mix is a progressive climate tax on income that finances a proportional price subsidy for […]
Economic sanctions are increasingly being used by states to penalise both other states and non-state actors. One way to assess their effectiveness in incentivising a change in behaviour is to analyse the economic harm they cause to targeted firms or entities. This column assesses the impact of US sanctions on Xinjiang Production and Construction Corps, […]
The threats that misinformation poses to politics and public health are well documented, but the macroeconomic effects of fake news remain largely unexplored. This column surveys the impact of fake news on economic stability. Leveraging a novel dataset, the authors unveil the detrimental effects of technology-related fake news on key economic indicators. Fake news profoundly […]
Housing affordability is a crucial yet subtle concept, especially when it comes to cross-country comparison. This column introduces a new cross-country dataset on a mortgage-based indicator of housing affordability, and argues that compared to the 1990s, affordability has improved, largely driven by lower mortgage rates and favourable economic conditions. Housing is more affordable in advanced […]
2024 marks the 80th anniversary of the Bretton Woods conference, which led to a major shift from the operation of the gold standard in the interwar years. This column explores how Britain’s 1931 departure from the gold standard impacted the interwar British economy through its effects on unemployment. The findings suggest that leaving the gold […]
Support for large-scale climate adaptation investments is insufficient in many countries. This column studies the drivers of voter support for public adaptation, focusing on voters who vary by age, income, and beliefs about the efficacy of such policies. It shows that the winning coalition shifts in response to the growth in climate damages and rising […]
Historically, inherited land in some German areas had to be shared or divided equally among children, while in others land was ruled to be indivisible. This column leverages this variation in land inheritance rules that traversed political, linguistic, geological, and religious borders and shows that today, equal division areas feature higher average incomes and more […]
Industrial policy is undergoing a major resurgence. Spurred by multiple overlapping crises, economists have been seeking to draw lessons from the past, while policymakers have had to take urgent action. This column describes how the paradigm shift in ‘industrial strategy’ in the US has been occurring alongside a fundamental shift in antitrust thinking – and […]
