Spending smarter: A powerful growth strategy
With high public debt and weak medium-term growth, finance ministries seek to do more with less. This column argues that efficiency gaps in public spending
The impact of interest: How loan rates shape firm investment
Monetary policy moves aggregate investment, but the underlying drivers remain unclear. This column opens the black box with a German firm survey. A one percentage
Conditional budgeting: Striking a balance in EU economic governance
In July, the European Commission fired the starting gun on the negotiations of the next Multiannual Financial Framework – the EU’s budget. Against a tough
25% inflation, 50 years on
UK CPI inflation in 1975 reached 25%, a period now known as the ‘Great Inflation’. This column uses a range of empirical and narrative evidence
The return of inflation: Why ‘look through’ can backfire under incomplete information
Central banks facing post-pandemic inflation often considered ‘looking through’ supply shocks. Using a New Keynesian framework in which agents gradually learn whether a cost-push shock
Investor memory and biased beliefs: Evidence from the field
Financial markets are volatile, and research attributes this to highly variable and often irrational investor beliefs. This column uses a large-scale survey of Chinese retail
Chat Bankman-Fried: An experiment on LLM ethics in finance
As large language models gain traction, it is important to ensure that decisions delegated to them comply with ethical and legal principles. This column reports
The making of a supply shock: Tariff propagation via domestic production networks
President Trump’s “Liberation Day” announcement triggered a discussion of whether import tariffs can reduce trade deficits or boost certain industries. This column develops a model,
Reconciling the European Union’s clean industrialisation goals with those of the Global South
Importing energy-intensive goods would be more efficient for EU clean industry goals than importing clean energy itself. Clean industrialisation is a political and economic priority
When supply shocks to essential inputs spur innovation: Lessons from the global rare earths disruption
Trade and industrial policies designed to support domestic industries can unintentionally kindle technological progress abroad. This column examines the case of rare earth elements –
