Ricardo's threads | Nothing contributes so much to the prosperity and happiness of a country as high profits

Mainstream media and electoral outcomes

07/31/2022 Voxeu Analysis

Citizens often seem to choose which political party to support by seeking out information based on their party affiliation, rather than based on informed opinion. Along with the explosion in new media in the US, trust in mainstream media has been decreasing, particularly amongst Republicans. This column presents a framework to analyse how beliefs regarding the mainstream media impact individual media choice and thereby influence electoral outcomes. A substantial political advantage accrues to the side with less exposure to or trust in mainstream media.

The role of venture capital and governments in clean energy

07/30/2022 Voxeu Analysis

Large investments in low-carbon technologies are needed to limit global warming. This column uses data on US start-ups over the past 20 years to analyse how venture capital in clean technologies can address the funding gap. It argues that unsuccessful nationwide US climate policy has dampened demand for clean energy technologies in the past.

Macroeconomic costs of conflict: Impact on GDP and refugee flows

07/29/2022 Voxeu Analysis

Analysis of large-scale conflicts over the past 30 years can shed light on the range of possible economic outcomes for Ukraine. This column shows that, in general, the impact on GDP is very large, persisting even ten years after conflict onset, and affects all sectors of the economy. This is overwhelmingly driven by declines in private consumption and official trade.

Transatlantic economy policy responses to the pandemic and the road to recovery

07/29/2022 Voxeu Analysis

In November 2021, the Federal Reserve Bank of New York, the European Commission, and CEPR brought together US- and European-based policymakers and economists from academia, think tanks, and international financial institutions to discuss issues that transatlantic policymakers are facing.

Yellow vests and carbon taxes

07/29/2022 Voxeu Analysis

Opposition to a carbon tax was at the root of the gilets jaunes protests in France. Did the protestors think the tax wouldn’t work, or that it wasn’t fair, or that they would personally lose out? Adrien Fabre talks to Tim Phillips about the link between tax and trust in government.

The Russia-Ukraine war, European financial integration, and crises

07/29/2022 Voxeu Analysis

Russia’s invasion of Ukraine added another one to a series of crises affecting Europe over the last decade and a half. This column finds that fragmentation of euro area financial markets has been relatively limited, as policymakers have benefitted from reforms after and experiences with past crises, European countries and authorities reacted with quite some unity, and direct financial exposures to Russia and Ukraine are relatively small.

River pollution: Combating cross-border externalities

07/28/2022 Voxeu Analysis

In order to improve the water quality of the downstream stretch of the Xin’an River, in 2011 China implemented the Ecological Compensation Initiative, a pioneering policy establishing side payments between upstream and downstream provinces. This column shows that the initiative mitigates cross-border externalities by sharply reducing water pollutant emissions by upstream firms and also induces firms to relocate to neighbouring cities. The findings highlight the potential for bilateral compensation for ecosystem services to reduce pollution.

Variability in the impacts of COVID-19 on student achievement

07/28/2022 Voxeu Analysis

There is robust evidence that children lost ground academically as a consequence of the pandemic, but less research into how the effects varied by school district and household demographics. Using test data from 2.1 million students across the US, this column finds that remote instruction was a primary driver of widening achievement gaps by race and poverty. The authors argue that low-income districts that taught remotely in 2020-21 will need to spend nearly all of their federal aid on academic recovery to help students recover from pandemic-related achievement losses.

Striking a bargain: narrative identification of wage bargaining shocks

07/27/2022 European Central Bank Central banks

Labour market developments are important drivers of the business cycle and are therefore closely watched by monetary policymakers. One process with significant macroeconomic ramifications are wage negotiations, where workers and employers bargain over the surplus income generated by an employment relationship. Bargaining power determines how this surplus is split between negotiating parties. However, it is unobserved, and can be driven by a number of factors.

Neighbourhoods won’t be improved by banning the unemployed

07/27/2022 Voxeu Analysis

Recently, a range of countries have introduced laws prohibiting disadvantaged individuals from moving into public housing in specific areas, for example because they are unemployed or have too low an income, in an attempt to avoid the formation of ghettos and unwanted spatial disparities in the standards of living. This column studies one such law in the Netherlands and finds that it has not been effective in attracting households with higher income levels to targeted neighbourhoods.

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