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Fiscal is local: EU standards for national fiscal frameworks

Editors' note: This column is a lead commentary in the VoxEU debate on euro area reform. The activation of the “general escape clause” (GEC) of the Stability and Growth Pact (SGP) temporarily paused the review of EU fiscal governance. The GEC is now expected to be lifted by the end of 2022, recently prompting the European Commission to relaunch the review. Yet, governments’ appetite for reform is low. A predictable outcome is that no significant reform will be enacted by 2023. ...

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The impact of maritime piracy on trade and transport

Maritime piracy has long haunted both global shipping and people living near the shore (e.g. Accetture et al. 2020). However, in times of pandemic-induced closures of ports, a blockage of the Suez Canal by the Ever Given and conflicts between rival governments in the Strait for Hormuz and South East Asia (Cosar and Thomas 2021), it does not come to mind as the number one threat to global transport networks. Nevertheless, modern piracy remains a common threat to international...

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Identifying state dependence in brand choice

Consumers tend to be loyal to products they purchased in the past, which can confer market power to companies that are able to extract higher prices from their captive customers (Dubé et al. 2010). To understand how customer habits evolve and how they shape firm pricing and consumer welfare, it is important to understand how easily habits can be disrupted and behaviour altered. Recently, shops have experienced ‘stockouts’ due to COVID-related purchases in categories such as...

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Reflections on the EU’s Carbon Border Adjustment Mechanism

Japan should lead the global effort to decarbonise: Reflections on the EU’s Carbon Border Adjustment Mechanism On 6 October, the EU-Japan Centre for Industrial Cooperation held a webinar entitled "What is the EU's carbon border adjustment mechanism (CBAM)",1 in response to a formal proposal for a climate change legislation package made by the European Commission on 14 July. As the main speaker, Mr. Vicente Hurtado Roa (Head, Unit of Indirect Taxes (other than VAT),...

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Ramadan intensity and subsequent student achievement

Is the Muslim faith a major impediment to success in secular education? A simple cross-country comparison of educational achievement could lead to such a conclusion. In the 2019 Trends in International Mathematics and Science Study (TIMSS) assessment of 8th graders, countries with a Muslim-majority population achieved substantially lower test scores in maths (439 out of 500) and science (449) than, for example, Christian-majority countries (495). Similar educational gaps between...

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The triple impact of school closures on educational inequality

Francesco Agostinelli, Matthias Doepke, Giuseppe Sorrenti, Fabrizio Zilibotti 21 January 2022 In the words of the American educational reformer Horace Mann, education is “a great equaliser of conditions of men – the balance wheel of the social machinery”. The social-levelling function of schools has been confirmed by research conducted by sociologists, psychologists, and economists (e.g. Growe and Montgomery 2003, Torche 2011, Stantcheva 2021). During the...

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Consumption inequality in the digital age

Does digitalisation make the world more unequal? Economic research so far seems to suggest yes. There is substantial evidence that digitalisation leads to an increase in income inequality throughout the Western world (Akerman et al. 2015, Gaggl and Wright 2017, Burstein et al. 2019).1 As the literature shows, information and communication technology (ICT) tends to make high-skilled workers more productive, whereas low-skilled workers are often made redundant. As a result, the skill...

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Gender differences in the labour market returns to child behaviour

Headstrong girls and dependent boys: Gender differences in the labour market returns to child behaviour Despite substantial convergence in pay and employment levels, gender differences in the labour market persist (Azmat and Petrongolo 2014). Among potential explanations for these disparities are gender differences in preferences (Booth et al. 2012) and labour market discrimination (Booth and Leigh 2010). In recent work (Kaestner and Malamud 2021), we explore the...

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The other great migration

In the 20th century at least 6 million African Americans migrated from poor southern states to northern cities to escape discrimination and poverty, changing the course of American history. At least as many whites also migrated, taking their ideas with them. Samuel Bazzi tells Tim Phillips that they have also influenced social structures and politics in the US. Read more about this research and download the free DP:Bazzi, S, Ferrara, A, Fiszbein, M, Pearson, T and Testa, P. 2021....

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Employment effects of restricting fixed-term contracts

Pierre Cahuc, Pauline Carry, Franck Malherbet, Pedro S. Martins 20 January 2022 In 2009, Portugal restricted the use of fixed-term contracts by firms with over 750 employees. This column finds that while the reform was successful in reducing the number of fixed-term jobs, it did not increase the number of permanent contracts and it decreased employment in large firms. Despite positive spillovers on small firms, the reform reduced total employment and had...

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