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Europe Needs a DARPA

Germany needs an industrial revival of the sort it experienced in the late nineteenth century, but this will be possible only if the state offers technological backing to German companies. The US government’s successful Defense Advanced Research Projects Agency should serve as a modelThe mood in Germany is bleak, and not just because of the country’s current economic slowdown. Long famed for its engineering know-how and high-quality industrial products, the German economy is now in danger of...

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The EU’s plan to catch up on artificial intelligence

While the US and China have been setting the pace when it comes to Artificial Intelligence, the European Union seems to be lagging behind. What are the Commission's plans to finally catch up? Will AI increase the gap between big and small companies? This week, Nicholas Barrett is joined by Julia Anderson and Guntram Wolff to discuss the EU's plan for AI. By: The Sound of Economics Date: February 14, 2020 Topic: Innovation & Competition Policy

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The dynamics of data accumulation

The bigger you are, the more data you can harvest. But does data accumulation necessarily breed monopolies in AI and related machine learning markets? By: Julia Anderson Date: February 11, 2020 Topic: Innovation & Competition Policy Each new sunrise increases the certainty that the sun will rise tomorrow. The more we know about the past, the better we can predict the future. The same holds true in important AI and related machine learning (ML) applications, where great volumes...

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China’s Coronavirus will not lead to recession but to stimulus and even more debt

The coronavirus outbreak will not lead to recession but the costs of ensuring growth targets will be highThe outbreak of coronavirus has struck yet another blow to the Chinese economy after the improvement in business confidence since the Phase One trade deal was announced in mid-December. How severe the coronavirus may be for the Chinese economy will not only depend on the extent and depth of the virus outbreak but also on the government response. The People’s Bank of China immediate and...

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Industrial revolutions might not be as fun as they look

AI promises a new industrial revolution but history warns us that industrial revolutions aren't always that fun for people in the eye of the storm. This week, Nicholas Barrett and Maria Demertzis spoke with Dr. Carl Frey, author of the book "The technology trap: capital, labor, and power in the age of automation", and Robert D. Atkinson, President of Information Technology and Innovation Foundation (ITIF), about how artificial intelligence will affect the job market. By: The Sound of...

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Europe’s Green Deal must reach beyond its borders

A European Climate and Sustainable Development Bank could become the external investment arm of the European Green DealUrsula von der Leyen has made climate change a top priority for the European Commission, proposing a European Green Deal that would make Europe climate neutral by 2050.This is good for Europe and for the world.It is good for Europe because deep decarbonisation represents a historic occasion to revitalise Europe’s economy and provide purpose and meaning to the common...

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Climate risks to European banks: a new era of stress tests

Several European central banks have begun assessing the impact of adverse climate scenarios on banks’ capital. Comparable work at EU or euro area level has evolved more slowly. Supervisors need build up a distinct and more complex type of analysis, and should engage with banks now.The release of a proposed methodology for assessing climate risks within UK banks and insurers by the Bank of England just before Christmas has fuelled calls for a similar ‘climate stress test’ for European...

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Resisting deglobalisation: the case of Europe

Global trade and finance data indicates that the pre-2008 pace of economic globalisation has stalled or even reversed. The European Union has defied this trend, with trade flows and financial claims continuing to grow after the recovery from the 2008 global economic and financial crisis. Immigration, including intra-EU mobility, has also continued to increase. By: Zsolt Darvas Date: February 4, 2020 Topic: European Macroeconomics & Governance Our analysis of public opinion in EU...

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Berlin will make or break the European Green Deal

€1 trillion isn't enough for the European Green Deal and the EU's fiscal framework is constraining public investment. "Mrs Merkel, tear down this rule".This opinion piece was originally published in Le Monde and Il Sole 24 Ore€1 trillion: this is the ‘green investment wave’ the European Commission seeks to mobilise over ten years with its newly-launched European Green Deal Investment Plan.In doing so, the EU executive arm seeks to unleash the public and private financing required to reach its...

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India navigates a new global order

India’s economic diplomacy must seek to strengthen a reformed and inclusive multilateralism.With Indian economic growth slowing, commentary is focused on Finance Minister Nirmala Sitharaman’s 2020–21 Union Budget.Less public attention is being paid to India’s external challenges.  The world economy matters to India today and India has itself become a global player. The rules-based multilateral economic order which supported global integration for a generation is under widespread challenge. ...

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