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Education Featured media World

Local problems, local solutions: The need for advanced skills and R&D in the developing world

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 […]

Finance Banking Featured News World

The economic impact of European capital market integration

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 […]

Business Featured Finance News World

The market implications of industrial subsidies

Governments are increasingly employing industrial subsidies, raising questions about their market implications. This column undertakes a thorough econometric testing of the causal impacts of subsidies on several firm performance indicators for large manufacturing companies. The authors find that subsidies increase firms’ market shares but have either no impact, or a negative impact on investment and […]

Innovation Development Economy Featured

Tax incentives for R&D can spur innovation and growth—when done right

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 […]