No country is safe from the risks posed by connections between politicians and private companies; scandals involving conflicts of interest plague governments around the world. Using a detailed dataset from the Czech Republic, this column demonstrates that ties between political parties and boards of government contractors lead to overpriced contracts without any corresponding gains in […]
Most research examining how the benefits from trade vary across domestic consumers focuses on imports. This column analyses the welfare implications of consumers in Switzerland purchasing foreign goods by physically crossing into neighbouring countries. The authors find that cross-border shopping substantially lowers the cost of living for Swiss households, particularly for those living near the […]
Despite progress in gender equality, significant labour market disparities persist, particularly impacting mothers after childbirth. This column investigates how cultural norms influence women’s labour supply decisions in reunified Germany. The authors find that East German women maintain higher employment rates post-birth, even after migrating to the West, reflecting the resilience of egalitarian norms. Conversely, West […]
In March 2020, the ECB recommended that euro area banks temporarily halt dividend distributions to shareholders and suspend share buybacks. As a result, dividends and the dividend payout ratio were near zero in 2020. This column shows that the dividend ban led to an increase in credit supply in the syndicated loans market. However, the […]
Heterogeneity across different jurisdictions in climate policies to regulate firms’ emissions can lead to economic activity shifting away from countries with the most stringent environmental laws. This column uses the case of the US, where California’s cap-and-trade programme is the only policy regulating emissions by industrial firms, to show that carbon leakage can occur through […]
Lifetime earnings in the US are highly unequal. This column examines a frequently overlooked factor to explain the persistence of lifetime earnings inequality: long-term differences in hours worked. Even among men who are very attached to the US labour market, lifetime differences in hours worked are substantial and correlate strongly with both lifetime earnings and […]
Capital incentive policies are traditionally geared towards boosting tangible investments. However, with the rise of cloud computing, firms can now also access IT as a digital service. This column examines how a UK capital incentive successfully increased tangible IT investment by firms but slowed cloud service adoption. The policy also slowed the diffusion of advanced […]
Remote work and geographic mobility have surged in the US since 2020. This column examines trends for both and discusses the potential electoral implications. The authors find that remote work opportunities are disproportionately located in left-leaning areas, state-movers are 45% more likely to work remotely, and that since 2020, cross-state movers have primarily relocated from […]
Zombie firms are commonly defined as mature, consistently under-performing firms that are unable to repay their debt but sustain due to (subsidised) bank credit. This first in a two-column series proposes a new methodology to classify zombie firms, and finds that they represent about 3–4% of firms in the economy and are thus less prevalent […]
Daron Acemoglu and Simon Johnson of MIT together with James Robinson of the University of Chicago have been awarded the 2024 Nobel Prize in Economic Sciences “for studies of how institutions are formed and affect prosperity”. This column, written by a former student and now fellow scholar, outlines how their research shines a light on […]
