Zombie firms are commonly defined as mature, consistently under-performing firms that are unable to repay their debt but sustain due to (subsidised) bank credit. This first in a two-column series proposes a new methodology to classify zombie firms, and finds that they represent about 3–4% of firms in the economy and are thus less prevalent […]
Daron Acemoglu and Simon Johnson of MIT together with James Robinson of the University of Chicago have been awarded the 2024 Nobel Prize in Economic Sciences “for studies of how institutions are formed and affect prosperity”. This column, written by a former student and now fellow scholar, outlines how their research shines a light on […]
Economic inequality between white and non-white Americans remains pervasive. This column analyses how health inequality relates to disparities in other key economic outcomes. At age 55, Black men and women have the frailty (i.e. biological age) of white men and women 13 and 20 years older, respectively, while Hispanic men and women exhibit frailty akin […]
Election integrity is a cornerstone of democracy. In the US, voters who move will often have active registrations in more than one state, opening up the possibility that they can choose where to vote. This raises fairness concerns. This column uses the universe of US voters in 2020 to measure the number of double-registered individuals […]
The transmission of poverty across generations is a long-standing concern for national and EU-wide anti-poverty strategies. This column uses retrospective data for 30 European countries to compare the strength of the association between growing up in poverty and the risk of current poverty. Countries differ in the strength of this relationship: Scandinavian countries have low […]
There is large uncertainty around the economic effects a second Trump term would have. This column assesses the potential implications of Trump winning the upcoming election through the lens of financial market participants. The authors find that investors associate a higher likelihood of Trump winning with adverse supply-side effects on net. In the US, an […]
Populism poses significant economic risks, often undermining long-term growth for short-term political gains. This column uses the example of the cancellation of Mexico City’s New International Airport in 2018 to exemplify how impulsive policy decisions can trigger uncertainty, deter investment, and lead to economic downturns. The author finds that the cancellation led to a 3% […]
During the past decade, subdued wage growth and a faulty Phillips curve have puzzled economists. This column proposes an explanation: involuntary temporary workers have exerted significant competitive pressure on permanent workers, slowing overall wage growth. Using data from 30 European countries over the period 2004 to 2017, the authors incorporate temporary employment into the standard […]
There has been a growing trend towards more disclosure by central banks on the currency denomination of their foreign exchange reserves. This column introduces a new comprehensive dataset on the currency composition of foreign exchange reserves of 64 economies from 1996 to 2023. It shows that the US dollar and the euro remain the dominant […]
While distance may seem unimportant in the face of technological progress in transportation and communication, several studies have found that distance is a barrier to the diffusion of inventive activity and technology adoption. This column examines US firms’ adaptation and adoption of artificial intelligence in response to AI innovation. The authors find that distance from […]
