Economists Warn: Trump’s Intel Move Looks Like Performance, Not Policy

08/26/2025 Ineteconomics Analysis

Two economists who have studied Intel warn that Trump’s move to take a stake in the company amounts to flashy optics, incoherent strategy, and a creeping politicization of economic policy.
Intel, once dominant in semiconductors, has flailed amid manufacturing problems, leadership changes, and fierce global competition. And unfortunately, it matters because in a world where chips are the new oil, controlling them means controlling power -- economic, military, and geopolitical.

Central bank communication with non-experts: insights from a randomized field experiment

08/26/2025 European Central Bank Central banks

We would like to thank Philipp Lane, Klaus Adam, Michael Ehrmann, Christophe Kamps, Timo Reinelt, Annalisa Ferrando, Philippine Cour-Thimann, Felix Hammermann, Davide Romelli, Andreas Kapounek, and colleagues from DG Communication for for their valuable feedback on earlier versions of this paper. This paper was presented at the 2025 AEA Conference in San Francisco, and we appreciate the feedback and suggestions received from the participants.

IFDP Paper: Why are Manufacturing Plants Smaller in Developing Countries? Theory and Evidence from India

08/25/2025 Federal Reserve Central banks

Anil K. Jain and Siddharth KothariPoorer countries (and poorer states within India) have a larger share of manufacturing employment in small plants. This paper presents empirical evidence and a theoretical model to show that this relationship is driven by greater demand for lower quality goods in poorer regions, which can be produced efficiently in small plants. First, using data for India, we show that richer households buy higher price goods and larger plants produce higher price products.

The macroeconomic impact of trade policy: a new identification approach

08/25/2025 European Central Bank Central banks

This paper examines the effects of trade policy shocks on the US economy using a novel identification strategy that combines narrative information on trade policy changes with stock market data. We introduce a new data set of daily trade policy statements from 2007 to 2019, allowing us to capture a comprehensive range of trade policy actions. By analyzing stock price reactions of trade-exposed and non-trade-exposed firms around these statements, we can identify unanticipated trade policy shocks.

IFDP Paper: Explaining World Savings

08/22/2025 Federal Reserve Central banks

Colin Caines and Amartya LahiriSaving rates are significantly different across countries and remain different for long periods of time. This paper provides an explanation for this phenomenon. We formalize a model of a world economy comprised of open economies inhabited by heterogeneous agents endowed with recursive preferences. Our assumed preferences imply increasing marginal impatience of agents as their consumption rises relative to average consumption of a reference group.

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