This Policy Brief sets out why the deforestation regulation has the right objectives but needed better design and preparation for implementation Forests are essential to regulating the climate, absorbing greenhouse gases and providing fresh water and habitats for biodiversity and indigenous peoples. If deforestation continues at current rates, large parts of the planet will become […]
Though public and private investment survived the energy and inflation shocks following the pandemic, signs indicate that corporate investment has since weakened. This column presents the results of the 2024 European Investment Bank survey on investment finance. Despite pressing needs to step up investment in innovation and digitalisation, strengthen value chains and encourage climate action, […]
Western nations have seen remarkable per capita wealth growth over the 20th century and, in this period, wealth inequality has also fallen. This column explains this development by the emergence of inclusive political and economic institutions that broadened access to homeownership and pensions for millions. It questions previous explanations and offers several lessons for today’s […]
Financial openness can constrain the monetary autonomy of central banks. This column uses a new dataset to study how central banks use their balance sheets to absorb international monetary shocks since the late 19th century. It documents a systematic expansion of central bank domestic assets following international monetary shocks in financially open economies. By accounting […]
Japan and China both faced exposure to Western imperialism in the 19th century, but their responses were starkly different. Japan’s decentralised political system allowed more flexibility in adopting Western technologies and institutions during the Meiji Restoration, whereas China’s centralised bureaucracy hindered significant reforms. This column argues that ideological factors – particularly the willingness to embrace […]
The ‘child penalty’ significantly reduces women’s lifetime earnings and pension savings, but whether this is the result of deliberate forward-looking decisions remains unclear. This column uses survey responses and an experiment with Swiss public-school teachers to examine the role of information constraints in women teachers’ labour supply decisions following childbirth. Long-term financial factors are not […]
In recent years, and during Covid-19 in particular, many countries have experimented with innovative approaches to fiscal stimulus. This column reports on an experiment in France in which individuals were given a debit card tied to a new bank account with an initial balance of €300, but with differing conditions. While certain groups, such as […]
Global foreign direct investment flows are increasingly mirroring the world’s geopolitical divides. This column introduces a new index for FDI fragmentation that differentiates flows within and between three distinct blocs: a Western bloc, an Eastern bloc, and a neutral bloc of non-aligned nations. Being part of different geopolitical blocs reduces greenfield FDI flows between two […]
Decentralised finance lending platforms have experienced tremendous growth since 2020. This column uses transaction-level data to study the behaviour of investors in the market. It finds depositing in decentralised finance lending pools is mainly driven by ‘search for yield’ motivations, particularly for retail investors. Borrowing is driven by speculation as well as for governance benefits, […]
The ECB concluded its last monetary policy strategy review and adopted a new strategy in 2021, just before the unprecedented surge in inflation. Three years and three crises later, this column takes stock of how well the revised strategy functioned in a high-inflation environment. The redefined inflation target helped achieve the ECB goal to tame […]
