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 […]
Starting in mid-2021, energy prices soared to unprecedented heights. Initially driven by the global post-pandemic rebound, this was exacerbated by the Russian invasion of Ukraine. This column shows that an energy price shock has a negative effect on individual households and macroeconomic outcomes. Passive monetary policy can mitigate the economic consequences, whereas active policy responses […]
While the financial secrecy of offshore tax havens has historically created ample tax evasion opportunities for wealthy individuals, automatic information exchange between tax authorities is an ambitious attempt to make tax enforcement possible. This column summarises describes how information exchange creates large improvements in tax compliance through repatriation of offshore wealth, self-reporting of offshore financial […]
Critics of foreign aid are often quick to point out the faults of recipient countries. This column looks at the motives of the donor countries themselves. Examining the flow of foreign aid following major discoveries of natural resources, the authors find that aid flows tend to increase following a discovery despite the recipient country becoming […]
Assets prices can amplify economic cycles through their effects on firm investment. Furthermore, these effects vary depending on firm size, with larger firms being better at self-financing investments. This column uses firm-level data from France to show significant heterogeneity by firm size in the sensitivity of investment to real estate prices. Using variation in firm […]
The notion that politicians’ identity, including their gender, can influence policy outcomes is supported by a growing body of empirical research. This column reports a study exploring the extent to which the share of women members in national governments during the Covid-19 pandemic shaped the policy responses. Higher female representation was associated with a lower […]
A large proportion of the financing needs for Europe’s digital, energy, and demographic transitions, as well as defence, will have to be covered by public funding. This column argues that these can all be seen as European public goods, and that a first step towards achieving them should to maximise the capacity of existing instruments, […]
