Executive summary The historical track record of centralisation of public expenditures at European Union level is patchy, and the prospects of agreement on future common spending are not good. However, Russia’s attack on Ukraine, NextGenerationEU, ensuring the stability of the euro and the climate crisis have been cited as justifying a further step-up in public […]
This working paper explores the tension between rapidly increasing artificial intelligence investment costs and the slower pace of productivity growth, raising concerns about a potential ‘economic winter’ for AI. AI has shown significant technological progress, particularly with machine learning and generative AI models like ChatGPT. Investment in AI has surged. But there are concerns about […]
Executive summary The European Commission has recommended that the European Union should cut greenhouse gas emissions by 90 percent by 2040 compared to 1990. Modelling shows that this target is feasible technically and is in line with social acceptability and global fairness objectives. Achieving it will require massive expansion of renewable electricity generation, drastic reductions […]
Energy cooperation Despite Brexit, the European Union and United Kingdom remain linked through energy. In 2023, trade in energy accounted for 10 percent of EU-UK trade, and energy accounted for 20 percent of the UK’s exports to the EU 1 . The UK is a major supplier of crude oil to the EU with around €1 billion […]
For years, the age profile of mental ill health was hump-shaped, peaking when people were in their late 40s or early 50s. But in recent years the mental health of the young has deteriorated to such an extent that, today, anxiety and despair peak when UK citizens are in their mid-20s. In most international surveys, […]
Recent research suggests that the impact of climate change on economic output might have been underestimated in the past. This column reviews the results from various damage functions used to estimate economic losses induced by climate change. It also elaborates on the choice of damage function made by the Network for Greening the Financial System, […]
The Medici family ruled Florence for nearly 300 years, patronising the arts and making Florence a cultural centre of Europe. But there was a dark side to Medici rule. This column studies the circumstances under which a relatively open political system can be corrupted by its confrontation with concentrated wealth. Without formally changing the constitutional […]
Effective insolvency frameworks can address multiple issues in the banking sector. This column examines the impact of insolvency framework reforms on non-performing loans, using a new metric derived from the European Banking Authority’s Transparency Exercises. It finds that debtor-oriented reforms seem to be more effective in reducing the accumulation of non-performing loans, particularly benefiting larger […]
The impact of generative AI on the economy hinges on whether it improves productivity in many important work tasks, and how quickly and intensively is it being adopted. This column uses survey data from the US to reveal that generative AI has been adopted quite rapidly compared with other transformative technologies, and that workers are […]
Many housing markets have experienced a dramatic rise in house prices and mortgage debt over recent decades that has outpaced average income growth. Increased wealth and increased collateral values have been cited as possible explanations. This column suggests that much of the increase in mortgage debt can be attributed to homebuyers being compelled to borrow […]
