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The real cost of political polarisation

While uncertainty among firms and professional forecasters is known to be countercyclical (Bloom et al. 2018), a large share of the current literature focuses on the role of real economic factors, such as stock returns or employment growth. Uncertainty surged over the course of the pandemic and, while it has currently subsided, it remains above trend (Baker et al. 2020a). An additional literature on belief formation has also emerged, emphasising the role of personal experience...

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Finance and politics: New insights

There are two fundamentally different views on how financial sector policies and regulation develop across countries and over time. On the one hand, the public interest view argues that governments act in the best interest of society, ultimately maximising public welfare. Policy mistakes are driven by limited information and inefficiencies in the policymaking process. The private interest view, on the other hand, argues that policymakers, including regulators, act in their own...

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The impact of Covid-19 on the value of online goods

Consumer spending patterns changed substantially during lockdown in the UK, as in other countries, with online consumption in general increasing. This column uses findings from a survey of the UK online population conducted before lockdown in late February 2020 and again in May to reveal some large and significant changes in the valuations of goods and services, with some large differences by age and gender. The lockdown has acted as a natural experiment testing the extent to...

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Covid-19: How to build better Early Warning Systems

The COVID-19 crisis has not only brought about a double whammy on global demand and supply, but also an assault on the very assumption upon which our societies, economies, and political systems rest: that we operate in a mostly predictable environment. Consumers, investors, workers, and policymakers tend to act as if the world was calculable and the near future could be forecasted with sufficient accuracy. When this basic conviction breaks down, rational decision making becomes...

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Testing the effects of reminders to promote social distancing

Social distancing measures have been the cornerstone of the global effort to fight COVID-19 (Gourinchas 2020, Baldwin and Weder di Mauro 2020) and the main reason for the economic crisis that ensued (Furman 2020, Baldwin and Weder di Mauro 2020). Mandatory restrictions played an important role, especially in countries like France and Italy where strict lockdowns were imposed, but the effectiveness of social distancing largely rested on individual initiative and voluntary compliance...

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Gender norms and leadership roles in the legal profession

The absence of women in top positions in the corporate, financial, and legal sectors, and among top income earners, has been widely documented (e.g. Bertrand et al. 2010, Blau and Winkler 2018, Boschini and Roine 2020). The legal sector has some of the largest gender gaps in leadership positions when compared to other professions, although entry levels have been at near parity for many years (NAWL 2019). At what stage in a career trajectory do gender gaps in the legal sector...

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The role of ethnicity – and democracy – for urbanisation

Ulrich J. Eberle, Vernon Henderson, Dominic Rohner, Kurt Schmidheiny 09 July 2020 Urbanisation is a major driver of economic development. Agglomeration forces that make cities productive and dispersion forces that limit their growth have been extensively studied, but the effect of ethnolinguistic diversity has been largely overlooked. This column shows that more diverse regions tend to experience more social tensions and conflict, less urbanisation, less...

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WTO negotiation and institutional reform priorities: Stakeholder perspectives

Matteo Fiorini, Bernard Hoekman, Petros Mavroidis, Douglas Nelson, Robert Wolfe 09 July 2020 On 14 May 2020, Roberto Azevedo, the Director-General of the WTO, announced he would step down from his position at the end of August. In a previous column, we reported on findings from a recent survey relating to the attributes of candidates for the position that WTO members and the international trade community consider the most important. In this column, we turn...

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Early lockdowns save more lives and livelihoods

The COVID-19 pandemic has resulted in huge economic and human costs since its outbreak in early 2020 (Baldwin and Weder di Mauro 2020). While theoretical work on the COVID-19 pandemic is abundant, comparatively little is understood of its economic consequences, partly because the official economic indicators have not been published yet. An important unanswered question for the academic and policy debate is whether the non-pharamteutical interventions (NPIs) implemented in 2020 did...

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