The strict measures to contain the spread of COVID-19 called for a quick governmental response. This column highlights how the allocation of support across firms during the pandemic evolved over time. During the acute phase in 2020, policy support reached medium- and high-productivity firms, and therefore did not distort the efficient allocation of resources. In […]
Firms increasingly rely on immigrant researchers or imported R&D services for innovation. This column argues that these sources of foreign ideas play a pivotal role in firm growth. Drawing on administrative data from Denmark, the authors show that firms employing immigrant researchers or imported R&D services see higher productivity growth than other firms, and that […]
Since the 2008 global financial crisis, firms’ funding patterns have changed, with a shift towards more market-based finance with active issuances of debt securities by non-financial corporations. This column uses French data to investigate the implications of firms’ debt structure for the transmission of monetary policy to investment. Interest rate policy has a stronger impact […]
The US and China’s economic rebound has fueled global growth and put upward pressure on commodity prices, while geopolitical risks are increasing the volatility of prices. This column reveals the significant impact of export price fluctuations, driven by idiosyncratic events in commodity markets, on the business cycles of emerging markets and developing economies. It also […]
Monetary policy is often feared to have limited traction in emerging markets. Yet, empirical evidence supporting or disproving these concerns is scarce. This column constructs novel monetary policy shocks based on analysts’ forecasts of policy rate decisions. Critical for the identification of the shocks, analysts can update their forecasts up to the time of the […]
Non-bank financial intermediation has grown rapidly since the global financial crisis, and its size now equals that of banks in many countries. This column reviews research and policy work on this form of financial intermediation from a financial stability perspective. Research has documented the benefits relating to its specific comparative advantages in maturity and liquidity […]
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 […]
