Faced with declining fertility rates and persistent gender gaps, governments have expanded policies to support working families. But sudden increases in allowable parental leave can impose wage costs on firms and negatively affect firm survival. This column examines how Austrian firms responded to a parental leave reform for which they could plan. Whether mothers could […]
Population ageing makes it harder for governments to finance programmes like public pensions and long-term care. But policy responses, such as tightening programme eligibility and benefit levels or raising taxes on current workers, often prove unpopular. This column presents findings from the latest wave of the OECD’s Risks that Matter survey, which takes stock of […]
Three forces have always shaped globalisation – technology, policies, and geopolitics. What distinguishes the current moment is that all three are accelerating simultaneously but in different directions. This column introduces a new eBook showing how this divergent acceleration creates transformation rather than retreat from globalisation. But it also generates acute tension between rapidly changing economic […]
As the debate around industrial policy intensifies, there is broad consensus on the rationale for government support to encourage private sector innovation. Economy-wide returns from research and development (R&D) in the private sector can be much greater the returns reaped by private firms alone. That’s because the knowledge generated by R&D often spills over to […]
Many sovereign bonds trade at a premium for being safe assets that retain their value even in deep recessions. This premium, or ‘convenience yield’, allows governments to borrow cheaply. This column argues that sovereign bonds remain particularly valuable in comparison to other assets, such as stocks, only in disinflationary demand recessions. In inflationary supply recessions, […]
Every year on United Nations World Bicycle Day (June 3), we celebrate the transformative benefits of the bicycle. At the World Bank Group headquarters in Washington, DC, staff from across the institution gathered in the main atrium—as per a growing tradition—to recognize the tremendous contribution the bicycle can make to the World Bank’s mission of ending extreme […]
Government procurement—the process in which public entities buy goods and services from private companies—represents between 5% and 20% of a country’s GDP, depending on the country. Public procurement policies allow governments to strategically support certain firms and sectors, for example, small businesses or eco-friendly products. In using public procurement systems, policymakers must navigate a trade-off: […]
Tariff escalation between China and the US will result in decoupling of goods trade, raising fears that Chinese exports destined to the US market in 2024 will be redirected or deflected to third markets. Fearful of intensified competition from Chinese products, some business associations and officials are calling for pre-emptive measures by importing governments. This […]
Forecasts from professionals (economists, analysts, brokers, academics) are a key input into economic decision-making. This column highlights that professional forecasts are ‘lumpy’, often remaining unchanged for several periods, before shifting in large, infrequent jumps. It argues that this reflects ‘rational inaction’, as frequent adjustments or constant swings could undermine credibility. It suggests a natural distinction […]
