The timely detection of recessions is critical for policymakers to make informed decisions. This column presents an algorithm for detecting recessions early using labour market data. By combining unemployment and vacancy rates, it shows that a less noisy signal can be obtained compared to relying on a single measure like industrial production. Current official prediction […]
Stanley Fischer, the World Bank’s chief economist from January 1988 to August 1990, passed away on May 31, 2025. Stan Fischer’s immense professional contributions to modern macroeconomic and monetary policy, both as faculty at MIT and in the positions he held thereafter—as the first deputy managing director of the IMF (1994-2001), in running the Bank […]
Since the 1970s, banking regulators have worked to set minimum standards for internationally active banks. The latest agreement, Basel III, was introduced following the 2008 financial crisis, but only partially adopted by the US in 2013. This column discusses the final set of rules (‘Basel endgame’) and their potential implications for the US economy and […]
State aid regulation is crucial to ensuring competitiveness in the EU Single Market, but enforcement remains challenging. Non-compliance by member states and foreign subsidies are ongoing concerns; however, detection is difficult. This column proposes an approach to identify suspect cases of hidden state aid recipients using machine learning algorithms. The predictions allow regulators to substantially […]
Central banks raise interest rates to reduce aggregate demand and bring inflation down. This column uses credit register data and product-level price data from the euro area to highlight a parallel and potentially offsetting supply-side mechanism. It shows that in markets where firms rely more heavily on floating-rate loans, the ECB’s monetary tightening had a […]
The presence of directors on the boards of competing firms (‘interlocking directorates’) raises concerns about collusion. This column studies the Italian corporate loan market and exploits a reform that prohibited directors of Italian banks from sitting on multiple boards simultaneously. Comparing treated and control loans before and after the policy, it shows that the ban […]
The number of people fleeing war and persecution worldwide has nearly tripled since the early 2010s, challenging European policymakers to ensure swift integration of asylum seekers into the labour market. This column assesses a pilot programme in Italy that provides early, personalised labour market support to asylum seekers. Even in resource-constrained settings, the early targeted […]
According to the UNDP’s Global Multidimensional Poverty Index (MPI), the Republic of Chad has a poverty score of 0.517. But what does this number mean? Is it a good score or a bad one? If you have no clue, you aren’t alone. While the concept of poverty is easy to grasp, quantifying it is actually pretty hard. […]
Central bank digital currencies are gaining traction as a potential innovation in central banking, with numerous countries considering their implementation. However, given the limited real-world experience with such currencies, researchers and policymakers depend on theoretical analysis to assess their potential. This column presents a new macroeconomic model that reveals significant welfare gains from introducing central […]
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 […]
