Roughly two-thirds of the world’s poor work in agriculture (Castaneda et al. 2016). Policy interventions aimed at increasing agricultural productivity – such as programmes that provide access, training, or subsidies for modern inputs and production techniques – have therefore been central in the fight against global poverty. In a push for ‘evidence-based policymaking’, recent years […]
Historically, despite being high in international comparison, European energy prices did not constitute an insurmountable obstacle to industrial expansion because of the exceptional energy efficiency of the local manufacturing sector (Rezessy et al. 2015). However, the recent developments in energy markets have driven an extreme wedge between prices in Europe and some other regions, as […]
With year-on-year inflation rates reaching 10% in 2022, central banks in Europe and the US have been raising interest rates to ensure price stability. These policy decisions involve a delicate balancing of risks to inflation, growth, and financial stability, which have featured prominently in the surrounding debates (Acharya and Rajan 2022, Ball, et al. 2022, […]
Climate change is rapidly being recognised as a potential source of financial risk by regulators and supervisors (Claessens et al. 2022, FSB 2022, ESRB 2021a, 2022, ECB 2021a, BIS 2021a, 2021b). Climate-related financial risks have two main dimensions. The first is physical risks: these stem from extreme weather (storms, floods, droughts, heatwaves etc.) or changes […]
Far-right parties across the globe have made significant electoral gains in recent years. Some of them have even been able to defeat traditional cordons sanitaires that actively prevented them from governing. The recently formed Italian government is a case in point, with Giorgia Meloni becoming the most far-right prime minister since fascist rule under Mussolini. Existing research […]
Bank lending is inherently pro-cyclical. This is because, during upswings in the business cycle, banks tend to overestimate the creditworthiness of their borrowers, often resulting in excessive credit expansion. At the same time, they rapidly cut lending during downturns. When an exogenous shock hits the economy, this reduction in the provision of bank credit may […]
In early 2020, as COVID-19 morphed into a global pandemic, countries faced multifaceted challenges: a health crisis from a poorly understood disease, a financial crisis as investors ‘dashed for cash’ and liquidity dried up, and an economic crisis as governments announced lockdowns and mobility restrictions. How did policymakers respond to these overlapping challenges? What policy […]
The economic, social, and political consequences of globalisation have been a hot topic in the public debate over the last decades. The international integration of global markets can influence many aspects of national economies – access to new markets can boost national exports, while international competition may put downward pressure on wages and displace local […]
Modern financial systems rely on safe assets. A ‘safe asset’ is defined by three characteristics (Brunnermeier et al. 2016, 2017, Brunnermeier and Huang 2018, Gorton and Ordonez 2022). First, it has a low default risk, or high asset ‘quality’. Second, like a good friend, a safe asset retains its value during bad times (‘robustness’). Third, […]
The draft European Union Data Act, proposed by the European Commission in February 2022, aims to fill a big gap in data regulation. It is intended to tackle a situation in which manufacturers design machines to give themselves exclusive access to the data those machines generate. Manufacturers can then leverage this data monopoly to sell exclusive […]
