Faced with declining fertility rates and persistent gender gaps, governments have expanded policies to support working families. But sudden increases in allowable parental leave can impose wage costs on firms and negatively affect firm survival. This column examines how Austrian firms responded to a parental leave reform for which they could plan. Whether mothers could […]
This week ten years ago, Greece was on the brink of exiting the euro. The integrity of the currency union was again in jeopardy after the crisis of 2010-12. This column reflects on how political responsibility (including the determination of the Greek people to remain in the euro area), institutional determination, and behind-the-scenes arm-twisting eventually […]
Governments are increasingly employing industrial subsidies, raising questions about their market implications. This column undertakes a thorough econometric testing of the causal impacts of subsidies on several firm performance indicators for large manufacturing companies. The authors find that subsidies increase firms’ market shares but have either no impact, or a negative impact on investment and […]
Investment funds are important players in global financial markets. This column examines their behaviour and interaction with other investors during stress periods on European sovereign bond markets. It shows that investment funds are the only investor group that exhibits a distinctly procyclical behaviour by persistently selling euro periphery sovereign debt in response to euro disaster […]
The transition from sail to steam power for cargo and passenger shipping to Australia lagged behind the North Atlantic by nearly two decades. This column explores how Brunel’s iconic ship, the SS Great Britain, succeeded where others failed, thanks to its size and innovative design that combined sail and steam power. The Great Britain made […]
Population ageing makes it harder for governments to finance programmes like public pensions and long-term care. But policy responses, such as tightening programme eligibility and benefit levels or raising taxes on current workers, often prove unpopular. This column presents findings from the latest wave of the OECD’s Risks that Matter survey, which takes stock of […]
As geopolitical uncertainty rises – due to events ranging from Brexit and the increasing rivalry between major economies to Russia’s invasion of Ukraine – firms are increasingly factoring political alignment into their investment decisions. This column uses detailed global data on greenfield projects, mergers and acquisitions, and affiliate stocks, and four measures of political alignment, […]
Many countries are considering introducing or reforming their wealth tax policies. This column studies the effects of a French wealth tax reform, which reduced reporting requirements, on taxpayer behaviour. The scaling back of reporting requirements had large negative effects on tax compliance, with 35% of wealth taxpayers missing in affected brackets and evading 10% of […]
The EU and the US have taken starkly different approaches to the regulation of new monies issued using distributed ledger technology. The current US administration prefers dollar-backed stablecoins, with the aim to reinforce dollar dominance worldwide. This column argues that dollar-pegged stablecoins pose a risk for the EU, but the current legal framework can ensure […]
Policy debates around climate change frequently focus on the trade-off between the near-term costs of reducing carbon emissions and the long-term benefits of mitigating climate change. William Nordhaus highlighted the importance of aggregate productivity losses from climate change in shaping this intertemporal trade-off, but estimating these losses is challenging. This column examines both the direct […]
