Recent VoxEU Content en Evidence – and an explanation – for the recent surge in inflation inequality Families across the UK are struggling with inflation. This column asks whether low-income households have been disproportionately affected, using micro-data on food products to examine the rate of inflation for different income groups. Though firms passed rising upstream costs on to retailers at similar absolute rates, the increases for low-end products are disproportionately large when measured in percentages – a pattern with real consequences for consumers. This difference in product-level prices was responsible for up to two-thirds of the gap in food-at-home inflation rates between the lowest and highest income quintiles. 2023-12-03T00:00:00+0000 Kunal Sangani a614bbb4-6a94-4f00-8a2a-28cb878302c6 VoxEU Column Trade and trees: How contingent trade agreements can reduce deforestation Deforestation levels tend to peak during and after the signing of regional trade agreements. This column argues that if tariffs are contingent on forest cover, trade can actually motivate conservation. The EU and Mercosur, which are currently pushing to end two decades of trade talks, have already specified tariff reductions that are contingent on the number of years since the treaty is ratified, which suggests it would be relatively straightforward, on paper, to let tariffs be contingent on forest cover – or changes in the forest cover. 2023-12-02T00:00:00+0000 Bård Harstad 39104ce0-005a-4604-86be-1faf54c69eda VoxEU Column Artificial intelligence and its short-term effects on employment Much attention has been paid recently to the potential for generative AI to disrupt labour markets in the long term, rendering certain professions redundant whilst enhancing the productivity of human labour in others. However, relatively little attention has been paid to the impact AI has already had on the labour market. This column investigates the effect of generative AI models on affected professions, using data from an online labour platform showing that AI has diminished the potential earnings of exposed writers and image-related professionals across skills distribution. 2023-12-01T00:00:00+0000 Xiang Hui, Oren Reshef, Luofeng Zhou c3cb1896-ff26-49cd-bf14-c2f28eb89a6d VoxEU Column Making banking safe Our financial system is supposed to be more resilient than before the global financial crisis, but that didn’t save Silicon Valley Bank, Signature Bank or First Republic. So what went wrong, and can we fix it? Steve Cecchetti and Kim Schoenholtz suggest to Tim Phillips how regulators can make banking safer. 2023-12-01T00:00:00+0000 2873508a-fae9-434c-a6ae-072c147f50be VoxEU Talk Banking on knowledge: Technology expertise and loan costs High-tech innovative firms often face difficulties in obtaining bank loans due to technological uncertainties and information asymmetries. This is because banks traditionally specialise in specific industry domains to mitigate risks. This column uses comprehensive patent data and syndicated bank loan data to show that banks also acquire technological expertise that extends beyond industry lines. This expertise is robustly related to lower loan spreads, and benefits both banks and future borrowers. Fostering collaboration between banks and innovative firms can boost productivity and can ultimately benefit both the economy and society. 2023-12-01T00:00:00+0000 Mingze Gao, Yunying Huang, Steven Ongena, Eliza Wu b5883611-2c76-430d-a496-7e340bea9096 VoxEU Column Transmission of interest rate hikes depends on the level of central bank reserves held by banks Banks with substantial central bank reserves are earning income from their reserve holdings in the ECB’s recent rate hiking cycle. This column uses new data from AnaCredit, a credit register harmonised across the euro area, to show that the credit supply of banks with higher reserves reacts less strongly to interest rate hikes than that of other banks. The effect is more pronounced among smaller banks and banks with lower equity ratios. 2023-11-30T00:00:00+0000 Daniel Fricke, Stefan Greppmair, Karol Paludkiewicz 23952abf-3bd1-4503-baad-0514d0b33cce VoxEU Column Global R* Recent increases in interest rates around the world have intensified debate on their long-run prospects. This column studies the long-run drivers of the global trend interest rate, Global R*, in the 70 years up to the pandemic. Global R* fell by more than three percentage points from its peak in the mid-1970s, driven by falling productivity growth and increased longevity. Without a reversal in these trends, or new forces emerging to offset them, long-run Global R* appears likely to remain low. 2023-11-30T00:00:00+0000 Ambrogio Cesa-Bianchi, Richard Harrison, Rana Sajedi 02cc56d4-aba9-48da-8843-0659152d3478 VoxEU Column Trends and inequality in lifetime earnings in France Sharp increases in earnings and income inequality in the late 20th century generated heated policy debates and academic enquiry into the causes of distributional change. But most of these analyses provide snapshots of income distribution at a given point in time without considering the trajectories of individuals’ earnings over their lifecycle. This column discusses recent evidence on the dynamics of lifetime earnings across cohorts, comparing results for the US and France. The authors find marked differences across countries, particularly in the distribution of income and the gender earnings gap. 2023-11-29T00:00:00+0000 Bertrand Garbinti, Cecilia García-Peñalosa, Frederique Savignac, Vladimir Pecheu 899527b1-e1a6-49a9-a38f-c1a0db162d35 VoxEU Column Supply chain disruptions: Shocks, links, and hidden exposure Supply chain disruptions are routinely blamed for things ranging from elevated inflation to shortages of medical equipment in the pandemic. But how should exposure to foreign supply chains be measured? Using a global input-output database, this column shows that the full exposure of US manufacturing to foreign suppliers (especially China) is much larger than face value measures indicate. Moreover, it argues that the big change in supply chain disruptions in recent years stems from changes in the nature of the shocks (from idiosyncratic to systemic), not the nature of the supply chains. 2023-11-29T00:00:00+0000 Richard Baldwin, Rebecca Freeman, Angelos Theodorakopoulos 3d168860-9e66-448d-bc9b-f055d6bdce42 VoxEU Column Inferring society’s favourites from tariff policy Trade policies often create winners and losers within a society. Rather than testing a theory of political economy based on its predictions for tariffs, this column looks at actual tariffs to directly infer who the politically favoured are. Redistributive motives account for about one-third of the total variation in US import tariffs in 2017, most of which is explained by sector-based motives. Region-based considerations are relatively minor. The monetary transfers caused by redistributive trade protection are large. The sectors that lobby most intensively are clear winners from redistributive trade protection. 2023-11-28T00:00:00+0000 Rodrigo Adao, Arnaud Costinot, Dave Donaldson, John Sturm Becko 06b8111d-c7cf-44de-b8c3-6372d8758e7f VoxEU Column Climate and conflict: Why COP needs to be reformed Climate change is a global common, but its impact across the world is not common – it is very uneven. Mitigation of climate change also involves distributional issues since historic, current, and future emissions are highly unequally distributed across the globe. This creates conflict lines that are increasingly blocking progress under the Conference of the Parties. This column argues that the disparity in future emissions rights inherent in the Paris Agreement is another major stumbling block. COP needs a new, comprehensive deal that integrates both mitigation commitments and more equitable distribution. The inequities are increasingly not between Global North and Global South, but between the ‘poor’ and ‘rich’ in terms of future emissions rights. 2023-11-28T00:00:00+0000 Beatrice Weder di Mauro 3662940b-e8f7-40f8-8036-5b30a039fe30 VoxEU Column Inflation then (1979-85) and now (2020-23): Why it is easier to fight inflation today The current period of inflation has been dominated by a positive demand shock and favourable initial conditions, such as low inflation expectations. This column argues that these two factors make the job of central banks today much easier than during the 1979-85 period. Provided no new disruptive shocks occur, the policies of disinflation since 2021 should lead to a swifter and much less costly path towards price stability compared to the 1970s–1980s. Monetary authorities both in the euro area and in the US should not raise interest rates too high and for too long, producing an unnecessary recession. 2023-11-28T00:00:00+0000 Paul De Grauwe, Yuemei Ji 4d515072-12a5-4836-8f8b-67eee6785d18 VoxEU Column Government redistribution and development: A global perspective on taxes, transfers, and inequality Despite a renewal of public and scholarly attention to inequality, little is known about the role of government taxes and transfers in shaping inequality across countries and over time. Based on a database on the distribution of taxes and transfers in 151 countries, this column uncovers a number of new results on the evolution of fiscal progressivity around the world since 1980. The bulk of cross-country differences in inequality appear to be explained by differences in the distribution of pre-tax incomes, not redistribution. This fact calls for much more research on the drivers of pre-tax inequality. 2023-11-27T00:00:00+0000 Matthew Fisher-Post, Amory Gethin 463decc6-6286-4e12-9ddd-56f47cbbb1b3 VoxEU Column Minimum wage policy and labour tax evasion Rising income inequality has prompted policymakers in Europe to revisit the prospect of minimum wage hikes. Such reforms remain controversial, not least because of the uncertain interaction between minimum wage policies and tax evasion. This column studies the firm-level employment effects of a minimum wage increase in Latvia, where wage underreporting is widespread. By converting previously undeclared cash payments into legal wages, tax-evading firms spared themselves any real shock. Thus, although increasing the minimum wage improved tax enforcement, it did so at a higher cost to already compliant firms. 2023-11-27T00:00:00+0000 Nicolas Gavoille, Anna Zasova 290e3ccd-3865-4738-8caa-fa384d6dfbe7 VoxEU Column The political economy of social media: A new eBook The emergence of social media has reshaped the way humans communicate, interact and coordinate with each other. Assessing the impact of this transformation on politics has been one of the great social science questions of the last or decade or so, and will continue to occupy researchers for a long time to come. A new CEPR eBook provides a snapshot of how economists have been trying to answer this question. 2023-11-27T00:00:00+0000 Filipe Campante, Ruben Durante, Andrea Tesei b983b64c-2299-43a8-8338-062df400f76a VoxEU Column Inflation is not equal for all In 2022, energy prices increased at an unprecedented pace in advanced economies. This column shows how this shock has affected vulnerable households more, due to the higher weight of those goods in their consumption basket. Raising the policy rates, which is necessary to curb inflation, contributes to widening inflation inequality, given the low price elasticity of energy goods to the business cycle. These results call for the need to complement the monetary policy response with fiscal measures targeted at the most affected households. 2023-11-26T00:00:00+0000 Francesco Corsello, Marianna Riggi 550c71af-de8c-4665-a458-7436dbe0d6f6 VoxEU Column Making our homes greener: Impact of minimum energy efficiency regulations Residential buildings are responsible for 22% of global energy consumption and 17% of greenhouse gas emissions. Regulations mandating minimum levels of energy efficiency in buildings aim to enhance both energy efficiency and environmental performance. This column examines the effects of the UK Minimum Energy Efficiency Standard. The regulation improved energy efficiency for rental properties relative to owner-occupied properties but showed no improvements in environmental performance. Coordinated policies targeting emissions directly on both the consumption and production sides may be more effective than cost-based regulatory interventions. 2023-11-25T00:00:00+0000 Nuno Clara, João F. Cocco, Lakshmi Naaraayanan, Varun Sharma 88d84fe4-1ec1-4429-9bbf-b6d28c9ba81f VoxEU Column The transition to global circular economies: Waste batteries and extended producer responsibility Extended producer responsibility is a policy requiring producers to handle their products’ end-of-life and cover waste management costs. This column explores the effect of this policy on waste-battery flows. The adoption of the policy by an exporting country is followed by a significant increase in exports of waste batteries, mainly to developed countries and countries with higher levels of technological endowments. Improvements are seen in waste-battery collection rates and tracking waste-battery trade flows. The policy appears effective in supporting the marketisation of waste. 2023-11-24T00:00:00+0000 Marco Compagnoni, Marco Grazzi, Fabio Pieri, Chiara Tomasi 4bfdfc73-0755-4d12-baaa-7768a53cadcb VoxEU Column What a puzzle! Unravelling the instabilities in UK Phillips curves Understanding the relationship between unemployment and inflation (price or wage) has been a critical challenge over the past 60 years. This column shows that UK Phillips curves relating wage inflation to the unemployment rate have sub-period slopes from strongly negative, slightly negative, flat, slightly positive, and strongly positive over the period 1860 to 2021. However, these outcomes are predicted by an econometric model of real wages expressed in terms of nominal wages. The authors argue that it is the absence of shifts in the explanatory variables that account for the instabilities in the Phillips curve. 2023-11-24T00:00:00+0000 Jennifer Castle, David Hendry 4ce0e41e-2548-4e6c-9303-59eb7b949ede VoxEU Column Later-life mortality and the repeal of prohibition In the 1930s we didn’t know that drinking alcohol during pregnancy could affect the health of a baby. David Jacks of the National University of Singapore has used the repeal of Prohibition to investigate the impact on the long-term health of adults who were in utero when some mothers could drink alcohol, and some could not. 2023-11-24T00:00:00+0000 de0c110f-00c9-4dcc-8f71-c1d8761ebd32 VoxEU Talk The environmental impact of housing and heating Housing is a major component of energy consumption, yet residential emissions have typically received less policy attention than emissions from industry or transportation. This column combines the results of a household survey administered across a large sample of emerging markets with cross-country data on residential emissions. It shows how relatively low-cost, technologically straightforward improvements, such as installing (smart) meters and double-glazed windows, can help significantly reduce residential emissions, even taking the existing housing stock as given. 2023-11-23T00:00:00+0000 Maxim Chupilkin, Zsoka Koczan, Ireko Zamilov f1bd7530-d8c2-4a66-92f7-321fc9e4091d VoxEU Column Distributional consequences of technology shocks through labour reallocation The role of worker and job reallocation in an economy’s response to shocks and their impact on inequality is crucial, but less attention was paid to occupational reallocation. This column explores how occupational reallocation impacts job flows and wage disparities amidst technological and economic shifts using data from 1989 to 2019. The findings show a pronounced effect on bottom earners and routine jobs, with technology-driven economic booms reducing wage inequality and recessions exacerbating inequality. These insights suggest the need for targeted fiscal policies to mitigate the adverse effects of these economic cycles on wage inequality. 2023-11-23T00:00:00+0000 Ester Faia, Ekaterina Shabalina 612721b8-a577-4104-b833-032e39987953 VoxEU Column Labour markets in the green economy Many individuals are aware of climate change and its consequences; however, they are not necessarily willing to pay higher taxes or forgo growth and jobs to prioritise environmental policies. This column analyses attitudes and labour markets in the green transition, with a focus on emerging Europe. Despite the increasing demand for green skills, labour market adaptation remains sluggish in many countries. To maintain public backing for climate action, it is vital to ensure a just transition process and address the economic concerns of vulnerable groups. 2023-11-22T00:00:00+0000 Cagatay Bircan, Lucas Kitzmüller, Sehar Noor, Niharika Satish 6d60644a-1b95-4ba3-8c35-d3dec22ea0bf VoxEU Column A modest recovery ahead after a challenging year The European economy has lost momentum this year against the background of high costs of living, weak external demand and monetary tightening. A modest rebound in growth is expected going forward. The resilience of the labour market is the main force behind the growth outlook. This column presents the key factors that underpin the Autumn 2023 Forecast and discusses the drivers of the continued labour market tightness in the EU, despite the economic slowdown. 2023-11-22T00:00:00+0000 Maarten Verwey, Áron Kiss, Cristina Tinti, Kristine Van Herck 10070933-3728-47f2-97f2-8ae83b884e69 VoxEU Column The global AI regulation race: Why the EU should focus on data quality and liability rules At a recent global summit on AI safety, US Vice-President Kamala Harris claimed “[i]t is America that can catalyse global action and build global consensus in a way no other country can”. This column argues that it is the EU that is most advanced in adopting comprehensive and detailed legislation, with its ambitious AI Act. The proposed Act offers a blueprint for a risk-based approach that seeks to prevent harmful outcomes ex ante. The authors suggest that rather than requiring detailed risk declarations, enlightened (ex post) liability rules can offer space for open source innovation and incentivise investment in high-quality model inputs. 2023-11-22T00:00:00+0000 Martin Kretschmer, Tobias Kretschmer, Alexander Peukert, Christian Peukert 1d271e56-2d3b-4260-94de-8f14bd81d82c VoxEU Column The green transition and geopolitical tensions A successful transition to a green economy depends crucially on the availability of various critical raw materials. Currently, China dominates the production and processing of many of these materials, and most of the reserves are in countries that are not politically aligned with the Western economies. This column discusses the current situation and potential policy solutions. 2023-11-21T00:00:00+0000 Beata Javorcik, Lucas Kitzmüller, Sushil Mathew, Helena Schweiger, Xuanyi Wang 230a9a87-083f-4fee-bbbb-876d919b87fb VoxEU Column The origins of monetary policy disagreement: The role of supply and demand shocks The Covid-19 pandemic and the war in Ukraine have represented strong supply shocks to the economy, leading to a sharp increase in inflation since 2021. This column investigates how differences in the nature of economic shocks and central bank objectives affect disagreement over the conduct of monetary policy. Supply shocks increase the likelihood of disagreement over monetary policy decisions in central bank committees with a dual mandate. Demand shocks are associated with less disagreement. This effect is present in US monetary policy committee votes since 1957, but absent in central banks with a single mandate, such as the Bank of England. 2023-11-21T00:00:00+0000 Carlos Madeira, João Madeira, Paulo Santos Monteiro 44e99bd2-6c29-45a9-a07e-a4100329d107 VoxEU Column Going low for long: The reversal rate is real Many central banks introduced negative policy rates in the past decade to stabilise output and bring inflation back to target. The ECB entered negative territory in June 2014 and in 2016 introduced its ‘low for long’ policy, a commitment to keep rates at current or even lower levels for an extended period. This column discusses how these policies transmitted to bank lending rates. It finds that the policy transmission became less efficient below zero, particularly for loans with short maturities. It also empirically identifies reversal in the pass-through during the low-for-long period as banks raised their lending rates as monetary policy eased. 2023-11-20T00:00:00+0000 Zuzana Fungáčová, Eeva Kerola, Olli-Matti Laine 3d4ee1ff-fc4b-45d9-894d-9df6e9ff9801 VoxEU Column Globalisation and servitisation of firms drive entry into cross-border data transfers With the expansion of digital trade, firms are actively collecting and utilising data. This column uses a survey of Japanese firms in 2019 and 2021 to examine the dynamics of corporate activities related to cross-border data flows. The authors find a significant increase in cross-border data collection activities, led by high-productivity firms. In addition to productivity and firm size, globalisation and servitisation are especially useful for explaining firms’ entry into overseas data collection activities. 2023-11-19T00:00:00+0000 Banri Ito, Eiichi Tomiura e93079de-eb60-4ee6-9204-135eac256a91 VoxEU Column The role of children in shaping gender gaps in Latin American labour markets Claudia Goldin's Nobel Prize-winning work sheds light on gender disparities in the labour market, particularly the transformation of women's roles. This column examines this phenomenon within the Latin American context, uncovering a substantial 35% reduction in women's income after becoming mothers. The findings underscore how the negative impact of motherhood contributes significantly to the persistent income inequality between men and women in the region. Overcoming such barriers demands policy-driven solutions addressing the deeply embedded challenges of gender roles and caregiving responsibilities. 2023-11-18T00:00:00+0000 Inés Berniell, María Edo, Mariana Marchionni 44ed12cd-f076-41e1-8e29-e6f2b3833fc2 VoxEU Column Violence against women in politics In today’s polarised atmosphere, violent attacks on politicians are not unusual, and women are more likely to be the victims. Are they victimised because they choose different policies, or just because of their gender? Gianmarco Daniele has investigated violence against women in Italian politics, and he talks to Tim Phillips about his disturbing findings. 2023-11-17T00:00:00+0000 32389ddf-d68d-405b-93cf-d148900956df VoxEU Talk Tackling gender gaps in the Italian labour market: Evidence and policy implications Italy has one of the lowest female labour force participation rates in the EU and the lowest employment rate. This column identifies three primary areas where gender gaps are most pronounced and warrant policy interventions. Gender gaps in earnings are already large just one year after individuals complete their education, with women choosing lower-paying university majors than men. Gender gaps widen when women have children, and women are severely under-represented in top professional positions. Policy interventions include combating cultural barriers and stereotypes, increasing the supply of childcare facilities for young children, and reinforcing women’s presence in middle management, including through quotas. 2023-11-17T00:00:00+0000 Francesca Carta, Marta De Philippis, Lucia Rizzica, Eliana Viviano 0f1b2c61-fa33-46a7-a29c-c78627ef0032 VoxEU Column The rise of foreign investment screening in advanced economies In recent years, most advanced economies have adopted or tightened existing foreign investment screening mechanisms, which empower national authorities to restrict foreign takeovers in strategic sectors. This column develops a composite index suitable for comparing the main features of such mechanisms. It shows how country-specific macroeconomic characteristics and geopolitical factors are correlated with the restrictiveness of national investment screening mechanisms. However, it also shows how the mechanisms can coexist alongside otherwise liberal investment regimes. 2023-11-16T00:00:00+0000 Lorenzo Bencivelli, Violaine Faubert, Florian Le Gallo, Pauline Négrin ee6b07ca-dfd9-475b-80a7-88df12e5f817 VoxEU Column Drinking water quality and its impact on health and education The UN recognises access to clean drinking water as a fundamental human right, yet even residents of high-income countries are regularly exposed to unsanitary drinking water. Each year, an estimated 16.4 million cases of acute gastroenteritis in the US are attributed to contamination in community water systems. This column provides new estimates of the impact that substandard drinking water has on health, education, and the perpetuation of socioeconomic disparities. It also highlights the importance of accurate public information and timely notification about water contamination to mitigate its ill effects. 2023-11-16T00:00:00+0000 Michelle Marcus 2fea1620-d9f9-4d9d-bbda-419968b2c02c VoxEU Column Zero-sum thinking and political divides An individual’s views on economic policy could be shaped by ‘zero-sum thinking’: the view that any gain by one party necessitates a corresponding loss by another. This column explores the prevalence of zero-sum thinking in the US and its impact on policy preferences, through a survey of over 20,000 individuals. A zero-sum mindset is associated with more support for redistribution, greater endorsement of affirmative action, and less support for immigration. It is only weakly associated with political alignment. Zero-sum thinking can be traced to experiences with mass immigration, intergenerational economic mobility, and the legacy of enslavement. 2023-11-15T00:00:00+0000 Sahil Chinoy, Nathan Nunn, Sandra Sequeira, Stefanie Stantcheva 6a59c50d-c7cd-45e6-a3fe-be966fc852ea VoxEU Column Skills to ‘race with the machines’: The value of complementarity Artificial intelligence can create unemployment and labour shortages simultaneously due to the mismatch of skill sets. As workers are constantly urged to reskill, how can they determine which skills to invest in? This column examines this question using data from one of the world’s largest online freelancing platforms. The results show the importance of complementarity. Skills rarely stand alone; their value depends on how well they complement other skills. Understanding and harnessing this complementarity is key to adapting to the changing work landscape. 2023-11-15T00:00:00+0000 Fabian Stephany, Ole Teutloff b36e928a-49d1-41eb-b3bd-7ebc07c234b0 VoxEU Column The other China shock: How surging Chinese imports transformed global agriculture The impact of China’s liberalisation on global goods markets has been extensively documented. However, the parallel shock to global food markets has been neglected. This column shows that Chinese demand for food imports resulted in a significant increase in global cropland and higher profits for farmers exposed to this demand shock. It further highlights that this Chinese food shock served as the main impetus for global deforestation over the period. 2023-11-14T00:00:00+0000 Casper Worm Hansen, Asger Wingender a559b345-ba1a-4d0d-beb2-48a9dcf2a9e5 VoxEU Column Is there a market for biodiversity? Climate change will have an impact on the natural environment, and the natural environment will affect the rate of climate change. Is biodiversity risk reflected in asset prices? Is it possible to use private capital to finance biodiversity conservation and restoration, and what can that achieve? Alissa Kleinnijenhuis and Tim Phillips talk to Johannes Stroebel and Caroline Flammer. 2023-11-14T00:00:00+0000 b583735d-6458-4f32-817b-9edb88833794 VoxEU Talk Unravelling the complexities of sanctions Sanctions have become a linchpin of foreign policy. But as they have grown more complex, understanding their true impact on targeted economies has become increasingly difficult, and evidence of their firm-level effects is scant. Using transcripts from the annual meetings of Iranian public firms, this column explores the nature of multifaceted sanctions. While they are economically hurtful, these sanctions often fail to affect the interests of political elites. The complexity of such sanctions raises questions about their nature as precise tools capable of targeting specific entities to achieve distinct policy objectives. 2023-11-14T00:00:00+0000 Javad Shamsi 22a043bc-eb49-4575-a87a-5680f9ac5d92 VoxEU Column The effects of government spending through the production network Government purchases of goods and services are composed of many transactions distributed across diverse industries. Using the universe of federal US procurement contracts, this column shows that sectoral spending results in higher employment, prices, and wages in industries that receive public procurement and in those supplying intermediate inputs to them. However, downstream in the production network, employment and output decline due to higher upstream prices and wages. At the aggregate level, the public procurement contract multiplier is positive. The multiplier is larger when the government buys from industries positioned downstream in the supply chain, when output prices are less flexible, and when the government accounts for a significant portion of the recipient industry's total sales. 2023-11-13T00:00:00+0000 Alessandro Barattieri, Matteo Cacciatore, Nora Traum ed66838f-833f-4a10-9639-40dc471a6154 VoxEU Column Why protectionists sometimes win: The narrative power of economic nationalism Economists know that international integration creates winners and losers. But we do not fully understand why the ‘losers’ so often set the policy agenda. This column argues that economists are only now beginning to grasp the influence of nationalist ideas in shaping the policy narrative. The impact of nationalism rests on its ability to weld disparate special interests together into coherent coalitions and present a unifying story of progress and community amid adversity. In the 19th century, just as now, these stories found easy multiplication in popular media and on the marketplace of ideas. 2023-11-12T00:00:00+0000 Marvin Suesse 1ba27cfb-bf21-4c60-947f-8f521da29ed4 VoxEU Column Female leadership and workplace climate At the very heart of a healthy work environment lies the quality of social interactions among colleagues and between leaders and subordinates. This column investigates the role of gender in transforming the relational atmosphere in the workplace. The results show that a fairer representation of female leadership may have benefits beyond efficiency and social justice concerns by creating a more inclusive and less segregated workplace, one in which employees and leaders form stronger inter-gender ties and female employees exhibit less voluntary quits. 2023-11-11T00:00:00+0000 Sule Alan, Gozde Corekcioglu, Mustafa Kaba, Matthias Sutter c02bfdc8-08cb-4d38-9bff-7cea17e2dfbc VoxEU Column AI’s impact on jobs By automating non-routine tasks, AI may have a profound effect on the jobs we do, and even whether those jobs exist. How much should we fear, and how much should we welcome this change? In the second of our podcasts from the 2023 Economic Experts Conference of the Kent A Clark Center for Global Markets at Chicago Booth, Tim Phillips speaks to John Van Reenen about how AI will affect our working lives. 2023-11-10T00:00:00+0000 ac40bb06-1df9-4514-bd4c-7675108912bd VoxEU Talk European business cycles and economic growth, 1300-2000 The modern business cycle features long expansions, short recessions, and significant international co-movement. This column explores the changing nature of the business cycle using historical national accounts for nine European economies between 1300 and 2000. The modern business cycle emerged at the end of the 18th century and the crucial change for long-run economic performance lay in the dampening of contractions rather than in the acceleration of expansions. Faced with a series of major contractions during the 21st century, policymakers need to pay as much attention to creating resilience to contractions as they do to the generation of new ideas driving expansions. 2023-11-10T00:00:00+0000 Stephen Broadberry, Jason Lennard 0956fb3b-9323-4eaf-99dc-b591a87ff3ff VoxEU Column The economic costs of trade sanctions Following Russia’s full-scale invasion of Ukraine, it has become increasingly important to evaluate the economic costs of trade sanctions for both the sanctioned and sanctioning countries. This column introduces a new approach to assessing the consequences of trade sanctions that is easy to implement from available data and accessible to the public on a web-based dashboard. Applied to embargoes on Russian energy exports to the EU and EU exports to Russia, the analysis reveals substantial asymmetries. In particular, small European countries that were satellite economies of the Soviet Union suffer enormously more than large West European countries. 2023-11-10T00:00:00+0000 Jean Imbs, Laurent Pauwels d0d4b625-6a2f-4e1b-a9b0-f25feae701d1 VoxEU Column The productivity-employment nexus: Micro-to-macro insights from 13 countries The impact of productivity on employment stirs debate amid fears of the technology's negative effect on labour demand. This column discusses how productivity growth affects employment dynamics at various levels of aggregation, based on data from 13 countries spanning the last two decades. The findings uncover a positive association between productivity growth and employment as well as wage growth, both at the firm level and on a broader scale. Well-designed and complementary policies can also help convert technological and organisational change into higher labour demand. 2023-11-09T00:00:00+0000 Sara Calligaris, Flavio Calvino, Martin Reinhard, Rudy Verlhac 71f68982-e725-484f-a6c0-7ce675e33ae0 VoxEU Column The US economics profession’s socioeconomic diversity problem Women and racial and ethnic minorities are underrepresented amongst US economics undergraduates, PhDs, and academic faculty relative both to the US population and to many other academic disciplines. This column focuses on socioeconomic diversity, and documents that US economics PhDs have more highly educated parents than PhD recipients in other disciplines and that the lack of socioeconomic diversity in economics, compared to other disciplines, has worsened over time. Underrepresentation is particularly stark for Black and Hispanic students. A lack of socioeconomic diversity can affect the quality, breadth, and depth of the intellectual contributions of the profession. 2023-11-09T00:00:00+0000 Anna Stansbury 927ea7bc-f8d6-4b26-9e3e-2be8811513ba VoxEU Column Financial fraud in developing countries: Common scam detection tips do not help distinguish scam from non-scam messages The expansion of digital financial services raises serious consumer protection concerns, including fraud, especially in developing countries. This column reports findings from an online experiment in Kenya which suggest that conventional scam detection tips do not improve individuals' ability to distinguish between scams and genuine messages. Rather, they make people over-cautious – a result partly driven by official communication often including scam markers. 2023-11-08T00:00:00+0000 Elif Kubilay, Eva Raiber, Lisa Spantig, Jana Cahlíková, Lucy Kaaria 68d8c070-9e85-4869-9160-db3fcbf69c43 VoxEU Column Product market traps: The case of social media The effects of social media on the welfare of individual users are significant but deeply ambiguous. This column suggests that a large share of university students who use Instagram and TikTok are worse off emotionally than if the platforms did not exist. Still, the cost of non-consumption – including social exclusion and the fear of missing out – induces consumers to pay for items that do not benefit them. The authors reveal a ‘product market trap’ in which consumers continue to use social media platforms despite deriving negative welfare from them. 2023-11-08T00:00:00+0000 Leonardo Bursztyn, Benjamin R. Handel, Rafael Jiménez-Durán, Christopher Roth ff1c50c7-d121-4fcd-9732-96137eb9c19f VoxEU Column Unremunerated reserve requirements make the fight against inflation fairer and more effective The recent rate hikes to fight inflation have led to large transfers of central banks’ profits to commercial banks. This column argues, and provides evidence, that the remuneration of bank reserves reduces the effectiveness of interest rate increases. An interest rate hike by the central bank triggers large transfers to banks, increases the value of banks’ equity, and thus gives them incentives to raise the supply of loans. A two-tier system whereby part of the bank reserves would be converted into unremunerated minimum reserves (allowing for remuneration of excess reserves) can reduce the equity effect and enhance the effectiveness of monetary policies. 2023-11-07T00:00:00+0000 Paul De Grauwe, Yuemei Ji 4f640163-87be-45f7-971d-c17f964e1001 VoxEU Column