Economic historians have long debated whether lagging regions can catch up in productivity with industrial leaders. This column shows that, under the right conditions, such catch-up can be remarkably rapid. Using newly digitised US Census of Manufactures data covering 48 states and over 120 industries from 1880 to 2007, it finds strong unconditional convergence in […]
Education is part of the enabling infrastructure required for jobs, social development, and future economic growth. Unfortunately, low- and middle-income countries face an urgent skills crisis with nearly 70% of children unable to read a simple text by age 10. In response, governments, households, and donors spend more than $5.8 trillion annually on financing education […]
Economic growth in Europe continues to lag behind that of the US, largely due to smaller productivity gains. This column uses a general equilibrium model to show that a more integrated capital market in Europe could strengthen investment by reducing the cost of capital (price effect) and encouraging the entry of investors more inclined to […]
Working hours are a fundamental determinant of economic growth and wellbeing, but we still lack a comprehensive picture of how they vary globally and historically. This column presents a new database covering 160 countries, documenting global patterns in hours worked. Hours per adult average 25 per week, with a strong bell shape by age. Women […]
The US should start fiscal adjustment as soon as it can if it wants to head off the risk of exploding debt related to Trump’s tax and spending plan. On 4 July 2025, President Donald Trump signed into law the One Big Beautiful Bill Act (OBBBA) . It contains tax and budgetary provisions and is projected […]
Preliminary data releases can diverge significantly from subsequently revised figures, complicating economic policy decisions made in real time. This column shows how real-time GDP releases understated the strength of the post-pandemic recovery in both the euro area and the United States. This distorted view painted a more pessimistic picture than subsequently revised data revealed, masking […]
Developing economies today face an investment shortfall of historic proportions. Meeting even the most modest development goals will require a huge investment push—equal to about 5 percent of global gross domestic product (GDP) per year. For low-income countries, the financing gap is about 8 percent of GDP annually. It’s a prohibitive price tag that runs into trillions of […]
The 2025 US tariff increases varied significantly across most economies. This column argues that the economic impact of these tariffs will also not be uniform. Using a multi-sector, multi-region computable general equilibrium model, it estimates that US real GDP will decrease by around 4%, and that larger adverse impacts are expected in Canada and Mexico. […]
When wealth or income suddenly increases (‘easy money’), this may be directed towards unproductive ‘easy spending’. This column explores the relationship between conspicuous consumption and revenue windfalls using country-specific variations in commodity export prices, and finds that the responses are bigger for luxury than for non-luxury imports. Countries that have higher inequality, weaker control of […]
If economic activity is considered the primary driver of climate change through emissions of carbon dioxide, then supporting economic growth and fighting emissions would appear to be at odds. However, the process of economic development may itself foster complementarity between GDP growth and emissions reductions. Such complementary in the relationship between economic development and emissions […]
