Wednesday , September 22 2021
Home / VoxEU

VoxEU

Social distancing in macrodynamic models

At the time of writing – about ten months after the COVID-19 virus was first reported in Wuhan, China, in December 2019 – more than 28.68 million people are infected with COVID-19 worldwide, more than 920,000 have died, and the pandemic shows no signs of slowing down. However, many countries have already relaxed the strict lockdown measures implemented during the early stages of the epidemic in order to ease the pressure on the economy. Accordingly, controlling the spread of the...

Read More »

The lasting impact of the Covid crisis on economic potential

As the global economy recovers from the immediate economic impact of the Covid crisis, attention is increasingly turning to the long-run impact of the shock on the productive potential of the economy. Such assessments are crucial in various looming policy choices. The UK government’s fiscal plans, for example, rest on the Office for Budget Responsibility’s assessment that the UK’s economic outlook will remain 3% below its pre-crisis trend into the long run (OBR 2021). And as the US...

Read More »

Why tax havens may bias productivity measurement

Productivity slowdown and multinational enterprises’ intangibles: Why tax havens may bias productivity measurement Vincent Aussilloux, Jean-Charles Bricongne, Samuel Delpeuch, Margarita Lopez Forero 21 September 2021 Multinational enterprises (MNEs) tend to be very large and intangible-intensive firms that can choose strategically how they book activities across their affiliates around the world, with the potential to significantly distort...

Read More »

Can China’s outsized real estate sector amplify a Delta-induced slowdown?

In our recent research paper (Rogoff and Yang 2021), my co-author Yuanchen Yang and I argue that the footprint of China’s real estate sector has become so large that absorbing a significant housing slowdown would significantly impact overall growth, even setting aside the usual (elsewhere) amplification effects from financial sector fragilities (Reinhart and Rogoff 2009).  With real estate production and property services accounting for 29% of GDP – rivalling Ireland and Spain at...

Read More »

Intellectual property rights and wage inequality

From the Luddites destroying woollen machines in 1800s to doctors or bankers today being disrupted by robots, it is now clear that technological progress has a major impact on the wage distribution in an economy. As firms, heterogeneous in their capabilities, continuously innovate and adopt new technologies, the relative demand for different types of workers changes. In the process, the returns to these types of workers changes differentially, such as for skilled and unskilled...

Read More »

Economic integration, democratic capital, and the ‘export’ of democracy

The democratic backsliding that followed the Arab Spring almost ten years ago and the recent collapse of the Afghan government have renewed interest in the question of whether democracy and, more generally, democratic values can be ‘exported’ and, if, so, under what conditions. While the ‘top-down’ imposition of political regimes is not desirable and rarely successful, many scholars have pointed to economic openness as a mechanism through which democracy might spread around the...

Read More »

Skill-biased technological change and the demographic composition of the US military

Skill-biased technological change and the demographic composition of the US military, 1979-2008 The demographic composition of the US military is a topic of central policy and scholarly relevance. It touches upon debates such as how socioeconomic inequality affects who joins the military and hence bears the burden of American defence.  According to the literature, the US ‘all-volunteer force’ is profoundly unfair, as it imposes the cost of American wars on the less...

Read More »

Teams become more productive when their hours are shorter

It has been argued that when workers are already working long weeks, adding more hours can reduce productivity. This column tests this argument using evidence from Japan. The authors find that long working hours of key team members harm team productivity. In contrast, shorter hours cause the opposite effect, perhaps because workers recover from fatigue and arrive for work with increased energy and focus. Is it true that less really is more? Can companies, by...

Read More »

The impact of trade costs can be weak or strong – depending on how much countries trade

The impact of trade costs can be weak or strong – depending on how much countries trade A key research topic in international trade is the link between trade costs and trade flows (Arvis et al. 2013). If trade costs go down, by how much does trade go up? Economists refer to this as the ‘trade cost elasticity’. To evaluate the effect of trade costs, researchers typically rely on a standard gravity equation framework and insert trade cost proxies as regressors on the...

Read More »

The flight from quality

In March 2020 we all assumed there would be some reaction to Covid-19 on Wall Street but, when markets did the opposite of what most people expected, the Fed had to step in to stabilise the economy. Anil Kashyap and Kathryn Judge tell Tim Phillips what happened, why, and how to stop it happening again. Read more about the research behind this: VoxColumn: Reforming the macroprudential regulatory architecture in the US, Kathryn Judge, Anil Kashyap.

Read More »