The growing interest in regulating the market power and influence of social media platforms has been accompanied by an explosion in academic research. This column synthesises the research on social media and finds that while it has made dramatic progress in the last decade, it mostly focuses on Facebook and Twitter. More research is needed […]
The power of monetary policy to affect interest rates and exchange rates depends on the downward slope of the demand function. This column uses the Chinese experiment with parallel currencies to study the impact of sudden increases in money supply. The authors find causal evidence that increases in money supply lead to currency depreciations, and […]
The effects of economic fracturing are intertwined with broader, longer-term shifts in trade, investment and global value chains. In many respects, the impact of these longer-term trends on foreign direct investment outweighs – at least for now – the impact of fracturing. This column highlights ten transformative trends in foreign direct investment spanning the two […]
Recent geopolitical tensions have been putting pressure on international supply chains. This column presents the findings from recent surveys conducted by central banks of the Eurosystem which suggest that firms’ exposure to critical inputs produced in China remains elevated, especially in Germany. Many companies are implementing de-risking strategies to reduce this dependency, mainly by substituting […]
When new general-purpose technologies like AI emerge, both techno-optimists and techno-pessimists predict that inequality will increase among the labour force. This column studies the rapid introduction of electricity in early 20th century Sweden and its effect on workers. The transformative technology benefitted those at the bottom of the income distribution, resulting in higher incomes, lower […]
Sanctions in response to the invasion of Ukraine led to a substantial decline in Russia’s crude oil revenues in 2022 and 2023. This column argues that the decline in revenue was due almost entirely to the embargo on Russian crude oil imports, which forced Russian oil exports to be redirected from Europe to more distant […]
Biodiversity losses pose risks not only to environmental health but also to global financial stability. This column examines the propagation of nature-related transition risks from international borrowers to European lenders. Using a database of international borrowing firms that receive funds from European lenders in the syndicated loan market, the authors find that the level of […]
The US dollar is the dominant vehicle currency for global goods trade, but there is less evidence for trade in services. This column uses a novel firm-level dataset of Portuguese firms to study the currency choice for international trade in services. Larger firms, and firms with greater exposure to foreign currency imports, are more likely […]
There has been a rise in trade restrictions since the US-China tariff war and Russia’s invasion of Ukraine. This column explores the impact of geopolitical tensions on trade flows over the last decade. Geopolitical factors have affected global trade only after 2018, mostly driven by deteriorating geopolitical relations between the US and China. Trade between […]
Financial institutions, especially in Europe, hold a disproportionate amount of domestic sovereign bonds on their balance sheets. This home bias is facilitated by regulation that allows banks to assign a zero-risk weight to sovereign debt issued by any EU country. This column argues that the zero-risk weight policy leads to capital misallocation and a significant […]
