Surprise inflation impacts households’ balance sheets through several channels. This column presents the three key channels – wealth, income, and consumption – and quantifies them for Spain in 2021 using a new granular dataset. The results show that the wealth and income channels trumped the consumption channel. Middle-aged individuals were largely unaffected by inflation, while […]
Major cities around the world have introduced various policies to reduce or manage road traffic flows, but the extent of their pollution-reducing effects remains unclear. This column examines the relationship between traffic flows and local air pollution concentrations in Japan. The findings suggest that a reduction in road traffic flows alone is unlikely to be […]
Taxing the wealthy effectively and equitably presents a choice between wealth and capital income taxes, each with its own trade-offs. This column compares the effectiveness of the two forms of taxation. A wealth tax targets unrealised gains but faces valuation and liquidity challenges that limit its applicability. Capital income taxes target corporate profits and individual […]
Cohesion Policy is the main instrument of the EU’s commitment to shared prosperity. A new report from the High-Level Group on the Future of Cohesion Policy advocates for a revamped policy to address today’s structural challenges. It stresses the need for a Cohesion Policy that, while keeping its focus on economic, social, and territorial cohesion, […]
The Covid-19 pandemic led to a significant increase in global supply chain pressures. This column studies the impact of these supply disruptions on euro area core inflation. It shows that global supply chain pressure shocks were the dominant driver of euro area core inflation in 2022, and their impact on inflation is persistent and hump-shaped. […]
Article 6(4) of the Digital Markets Act (DMA), which comes into full force in the European Union on 7 March, requires Apple to permit third-party app stores to distribute apps on its iOS devices. This column reviews Apple’s scheme to comply with this requirement and argues that the proposed terms will block entry and innovation […]
Throughout 2022 and 2023, the EU labour market showed a high degree of resilience in the face of weak growth, which is partly explained by firms hoarding labour in the presence of persistent labour shortages. This column presents a new Labour Hoarding Indicator developed by the European Commission based on its Joint Harmonised EU Programme […]
Much of the current research on offshore financial centres has focused on the roles of tax havens in advanced economies, and less is known about the case of developing countries, especially after a financial crisis. This column shows that tax havens not only facilitate tax evasion and corruption in ‘normal times’, they also harbour funds […]
Oil prices ticked up slightly on Monday following the widely expected extension of voluntary output cuts by the OPEC+ producer group on Sunday. Brent futures climbed 14 cents to $83.69 a barrel at 0729 GMT after rising 2.4% last week. U.S. West Texas Intermediate (WTI) inched up 3 cents to $80 a barrel following a […]
The Swiss National Bank on Monday posted an annual loss of 3.2 billion Swiss francs ($3.62 billion) for 2023, as a switch to positive interest rates cost it dearly and meant it couldn’t pay a dividend for a second straight year. The SNB became the latest central bank to report losses as higher interest rates imposed […]
