Political incentives often push leaders toward policies that prioritise short-term gains over long-term benefits. This column argues that the decision to raise public debt plays a key role in shaping political incentives around implementing reforms. Beneficial reforms are more likely if sufficient debt can be raised and if enough of the future gains are of […]
The cost-of-living-crisis has been a major concern for households across the world. This column examines the impact of the crisis on household wealth across various demographic and income groups in six euro area countries, focusing on the role of households’ mortgage status. The findings indicate that working-age mortgage holders have experienced wealth gains despite higher […]
Industrial decline has been directly linked to a worsening of various social and economic indicators. This column examines how the impacts of deindustrialisation in the UK reverberate across generations, finding significant effects on the health, wealth, and living standards of those who grew up under industrial decline. The ability to migrate to wealthier parts of […]
The discourse on stakeholder governance has been a contentious issue in recent years. This column argues that the challenge of multiple goals in stakeholder theory can be addressed through an integrated performance measure that combines profit and impact. Recent advancements in impact accounting facilitate the quantification of stakeholder value, enabling a more comprehensive approach to […]
The idea of an episode of negative sentiment causing poor economic performance has gained prominence in the press and drawn attention from policymakers struggling to read contradictory macroeconomic signals. This column applies natural language-processing tools to assess the importance of narratives for the US business cycle. The analysis suggests that contagious narratives are an important […]
In the last 20 years, the share of German firms with political connections has increased, but the impact of political connections on firm growth is not clear. This column examines how German firm outcomes are affected when federal politicians serve as firm directors or officers. Firms appointing a politician to a corporate position are less […]
The impact of a US-China technological decoupling on trade, foreign direct investment, and welfare is quantified using a simple dynamic quantitative trade model that includes FDI as a channel of technology diffusion. By evaluating the impacts of restrictions on technology diffusion and export controls separately, this column suggests that the potential negative impact of a […]
Financial crises affect economic activity and may also distort global supply chains. This column estimates the network effects of crises by examining European multinational enterprises during the Great Recession in the 2000s. A larger network shock (captured using changes in risk premia across European countries) during the financial crisis led to lower growth in the […]
Despite exceeding 100% of GDP, US public debt is considered safe due to the country’s role as a safe global asset and reserve currency supplier. This column uses a model to quantify the additional debt capacity generated by this ‘exorbitant privilege’ status. It finds that the special status of the US increases maximal sustainable debt […]
The transfer of technical information is key to unlocking a country’s ability to develop. This column argues that ‘technical literacy’ is needed so the economy can effectively absorb these new technologies. Using the case study of Japan in the 1870s, the authors demonstrate that a state-organsed knowledge transfer, centred on improved education and translation of […]
