Carbon taxes are notoriously unpopular, but handing back carbon tax revenue as lump-sum dividends to all citizens as climate dividends is inefficient. This column investigates three revenue recycling scenarios through a simulation model for Germany. For optimal efficiency and equity, carbon taxes must be set higher, beyond the aggregate damages from global warming, and the […]
Sample surveys have been a fundamental tool for capturing policy-relevant heterogeneities among agents, especially firms, and remain crucial for providing insights into key analytical issues. This column argues that the digitalisation of information systems, the rise of artificial intelligence, and the growing availability of administrative and big data offer significant opportunities for improving surveys. Integrating […]
Global financial markets are becoming increasingly intertwined. This column analyses the potential spillovers of shocks originating in China on the financial markets of emerging economies, distinguishing between disturbances stemming from monetary policy and those related to China’s macroeconomic developments. The findings reveal that macroeconomic disturbances in China have significant lasting effects on financial variables of […]
Artificial intelligence has been shown to deliver large performance gains in selected economic activities, but its aggregate impact remains debated. This column discusses a micro-to-macro framework to assess the aggregate productivity gains from AI under different scenarios. AI could contribute between 0.25 and 0.6 percentage points to annual total factor productivity growth in the US […]
The recent surge in the price of Bitcoin has reignited debates about a cryptocurrency bubble, many of them based on intuition. This column takes a formal approach to the beliefs underlying both sides of the debate by introducing a model that builds on the classical framework for rational bubbles. If the price of a cryptocurrency […]
Mobile phone-based extension programmes can be used to disseminate information about modern inputs and management practices to smallholder farmers in low-income countries who would be difficult to reach through in-person visits. This column reports on an evaluation of six different text message-based agricultural extension programmes that collectively reached over 128,000 farmers in Kenya and Rwanda. […]
While conventional wisdom considers research investment and human capital the wellsprings of innovation, a more subtle catalyst has perhaps been overlooked: the quality of institutions, especially at the regional and local level. This column exploits the staggered implementation of government agency reforms in China to examine the impact of institutions on innovation. It finds that […]
Standard Chartered (StanChart) will target $200 billion in new assets and double-digit growth in income from its wealth business over the next five years, as part of its wider strategy to shift to higher fee-earning businesses. The Asia-focussed bank wants to expand in serving wealthy Chinese and Indian clients who have assets offshore or cross-border needs, […]
Barclays agreed to pay $19.5 million to settle a lawsuit in Manhattan by shareholders who accused the British bank of securities fraud after it sold $17.7 billion more debt than regulators allowed. A preliminary settlement of the proposed class action was filed on Tuesday in Manhattan federal court, and requires approval by U.S. District Judge […]
To manage the consequences of unexpected shocks, policymakers need to understand how firms respond to such shocks. This column uses linked, high-frequency survey micro data to analyse the high-dimensional responses of UK firms to the recent energy price shock. It finds that firms adjust along multiple margins, such as passing on costs to prices, building […]
