Lightnews — Scholar-powered news

VoxEU @ CEPR @voxeu.org · 19h

@enghin-atalay.bsky.social, Ali Hortacsu, Nicole Kimmel, & Chad Syverson argue that standard measurements understate true #productivity growth in the US #manufacturing sector, especially in industries were it is difficult to track changes in quality growth.
cepr.org/voxeu/column...
#EconSky

A chart showing measured and corrected total factor productivity growth in various sectors of US manufacturing.

Manufacturing is a locus of innovation, yet standard industry data show manufacturing productivity stagnating in the US. This column argues that standard measurements understate true productivity growth in the sector, especially in industries where it is difficult to track changes in quality growth. Comparing producer and consumer price indexes, the authors show that ‘missing’ quality growth in standard industry output deflators is substantial in manufacturing and results in total factor productivity growth being understated. This is heavily driven by the Computer and Electronic Products industry, which is highly innovative and produces goods that have rapid turnover in product characteristics.

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VoxEU @ CEPR @voxeu.org · 19h

Nan Li, Sergii Meleshchuk, & @zymek.bsky.social introduce the new Bilateral Trade in Services (BiTS) database, which tracks services flows between countries over time and at the detailed sector level. They document a declining distance elasticity for services trade.
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#EconSky

Graph of the Bilateral Trade in Services (BiTS) database coverage.

While trade debates focus on tariffs and goods, services have quietly defied deglobalisation and become an increasingly important driver of growth. Services trade not only generates productivity spillovers and labour-market gains, but it is also where future policy tensions could emerge. Yet services trade remains under-measured and under-studied. This column introduces the new Bilateral Trade in Services (BiTS) database, which tracks services flows between countries over time and at the detailed sector level. It documents a declining distance elasticity for services trade in recent years, which is driven by the growing importance of less distance-sensitive service categories.

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VoxEU @ CEPR @voxeu.org · 20h

Nobel Laureate Joel Mokyr, Avner Greif, & Guido Tabellini discuss their recent book in which they argue institutions and culture played a key role in setting Europe and China on divergent paths of economic and political development.
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#EconSky

Avner Grief, Joel Mokyr, and Guido Tabellini

The starkly different paths of economic and institutional development followed by China and the West is often attributed largely to the Industrial Revolution. This column argues that institutions and culture played a key role in setting Europe and China on divergent paths well before the onset of the Industrial Revolution, but the role they played was mediated by a critical difference between the two civilisations: the nature of their prevalent social organisations. A key factor behind China’s remarkable economic resurgence has been its capacity to adapt traditional institutions and cultural practices to the needs of a modern economy.

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VoxEU @ CEPR @voxeu.org · 1d

European scholarly networks in the Middle Ages and early modern period were a key channel for the spread of knowledge across time and space. The long-lasting academic institutions made the difference.
David De La Croix, Rossana Scebba, Chiara Zanardello
cepr.org/voxeu/column...
#EconSky

A network graph of European scholarly affiliations in 1730. Red nodes mark scholars in the largest connected subnetwork and grey nodes are members of smaller components or isolates.

Since the Middle Ages and throughout the early modern period, European universities and academies established dense webs of interpersonal connections among scholars. Using historical data on European scholars and their academic affiliations, this column argues that such networks were a key channel for the spread of knowledge across time and space. Especially without the dense networks offered by academies, where scholars could simultaneously hold multiple affiliations, ideas would spread only locally and fade. It was not the ideas themselves but the long-lasting institutions around them (or lack thereof) that made the difference.

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VoxEU @ CEPR @voxeu.org · 1d

Data from Japanese firms from 1997 to 2015 show that rising imports have led many firms to reduce their workforce, but firms that engaged in product switching experienced less severe employment losses.
Tadashi Ito, Toshiyuki Matsuura
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#EconSky

Graph of the share of manufacturing employment in Japan from 1995 (20.8%) to 2015 (15.3%).

As global trade has expanded, many studies have documented the level of impact of import competition on employment, but we know less about how firms adapt. This column uses data on Japanese firms from 1997 to 2015 to show that rising imports have led many firms to reduce their workforce, but firms that engaged in product switching experienced less severe employment losses than those that did not. Offshoring also plays a crucial role in mitigating the adverse effects of import competition.

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VoxEU @ CEPR @voxeu.org · 1d

Pollution registers can provide an actionable picture of climate transition and physical risks in a simplified and cost-effective framework, ultimately fostering a more resilient and sustainable global economy.
Szilard Erhart, Sándor Szabó, Kornél Erhart
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#EconSky

Map of heat risk of industrial company sites in the sample. Australia, Southern Europe, and much of the United States faces significant heat risk.

Corporate climate risk disclosures are costly and often a mere box-ticking exercise. In November 2024, the Omnibus Environmental, Social and Governance Regulation was announced in Europe to consolidate and simplify the phasing-in of corporate sustainability reporting requirements while maintaining strong ESG commitments. This column discusses how leveraging pollution registers can provide an actionable picture of climate transition and physical risks in a simplified and cost-effective framework, ultimately fostering a more resilient and sustainable global economy.

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VoxEU @ CEPR @voxeu.org · 4d

What if Europe had a Carbon Central Bank to finance future carbon removal?

Matthias Kalkuhl (@pik-potsdam.bsky.social) joins @talknormal.co.uk to discuss how such an institution could work — and why bold policymaking is needed.

🎧 Listen here:
cepr.org/multimedia/e...

#EconSky

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VoxEU @ CEPR @voxeu.org · 5d

Bartosz Mackowiak finds that, in a model of rational inattention, the balance of two counteracting effects, attention-in-daily-life and attention-during-the-survey, are crucial to determine the treatment effect from information provision experiments.
cepr.org/voxeu/column...
#EconSky

Surveys with information provision experiments have become popular in economics. This column introduces an information provision experiment in a model of rational inattention – where information requires paying attention, which is costly – to study the implications of experimental findings for behaviour outside the survey. It highlights that the balance of two counteracting effects, attention-in-daily-life and attention-during-the-survey, are crucial to determine the treatment effect from information provision. Furthermore, it shows how the model can be used to interpret findings from existing experiments, derives implications for behaviour outside the survey, and suggests implications for central bank communication.

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VoxEU @ CEPR @voxeu.org · 6d

Maddalena Ferranna et al. find from 2020 to 2050, #health burdens will cost South American countries $7.3 trillion in lost GDP, equivalent to a 4% annual tax on GDP. Prevention, healthcare reform, & age-friendly policy can turn this burden into a longevity dividend.
cepr.org/voxeu/column...
#EconSky

A diagram of the macroeconomic model of how non-communicable diseases and mental health conditions impact economic growth via three channels: morbidity, mortality, and health expenditure.

As populations age, noncommunicable diseases and mental health conditions are draining South American economies, reducing labour supply and diverting resources from investment. This column presents a macroeconomic model for ten South American countries to examine the effects of noncommunicable diseases and mental health conditions on healthcare costs and human capital. The findings suggest that from 2020 to 2050, health burdens will cost these countries $7.3 trillion in lost GDP, equivalent to a 4% annual tax on GDP. Investing in prevention, healthcare reform, and age-friendly policies can turn this burden into a longevity dividend.

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VoxEU @ CEPR @voxeu.org · 7d

Do banks' climate commitments represent real change or simply greenwashing? M Bernad, @ralphdehaas.bsky.social, & J Pablo Rud find patterns that suggest voluntary climate initiatives can represent meaningful organisational differences and not just cheap talk.
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#EconSky

The low-carbon transition requires substantial financial mobilisation, yet it is unclear whether banks' public climate commitments represent real change or simply greenwashing. This column uses unique survey data from 335 banks across 33 emerging markets to examine their internal green practices and lending approaches. The authors find that climate-committed banks score substantially higher on green management and lending practices, their borrowers are more likely to make green investments, and environmentally oriented firms preferentially match with green banks locally. These patterns suggest voluntary climate initiatives in emerging markets can represent meaningful organisational differences and not just cheap talk, though uneven adoption also reveals the limits of voluntary approaches.

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VoxEU @ CEPR @voxeu.org · 8d

When plants or animals move, or are moved, to a place they don't belong, there is a risk of damage to natural habitats and an economic cost too.
@franckcourchamp.bsky.social talks to @talknormal.co.uk about how we estimate the size of this risk and what we can do about it

cepr.org/multimedia/h...

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VoxEU @ CEPR @voxeu.org · 8d

Alberto Nonnis, Felix Roth, & Ahmed Bounfour highlight significant differences in intangible capital investment between France and Germany. Investment in software appears to be 3x higher in France than in Germany, impacting the measurement of German GDP.
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#EconSky

Chart showing intangible capital investment as a percentage of gross value added, 1995-2021.

Closing the productivity gap between the US and Europe will require large investments in intangible capital and new technologies. Using 1995-2021 data from the 2025 EUKLEMS/INTANProd release, this column highlights significant differences in intangible capital investment between France and Germany. Investment in software appears to be three times higher in France than in Germany, while organisational capital is two-and-a-half times larger. Since software, unlike organisational capital, contributes to official GDP calculations, such discrepancies in measurement impact the level of GDP – most notably for Germany, where reported software investment appears unrealistically low.

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VoxEU @ CEPR @voxeu.org · 8d

Shunsuke Managi summarises evidence on some of the benefits #AI can bring and also the complex challenges it presents, and highlights the need to create a system that will allow AI and other new tech to contribute to solving global challenges and social issues.
cepr.org/voxeu/column...
#EconSky

Quantitative analysis of how AI impacts our professional lives, the integrity of organisations, and even our cognitive skills is essential to harness the power of these new technologies. This column summarises evidence on some of the benefits AI can bring and also the complex challenges it presents, and highlights the need to create a system that will allow AI and other new technologies to contribute to solving global challenges and social issues.

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VoxEU @ CEPR @voxeu.org · 8d

Alignment in central bank communication matters. Speeches from #Fed Chairs that echo the preceding Chair's post-FOMC press conference reinforce #monetarypolicy, while dissonant voices weaken it.
M Djourelova, F Ferroni,‪ @leonardo-melosi.bsky.social, A Villa
cepr.org/voxeu/column...
#EconSky

Central banks rarely speak with one voice. At the Federal Reserve, for instance, each official brings a distinct perspective, and markets parse every speech for hints of where policy is headed. Different views may help make better decisions, but do they also help when explaining those decisions to the public? And what happens when voices diverge? This column shows that alignment in communication matters: speeches that echo the preceding Chair’s post-FOMC press conference reinforce monetary transmission, while dissonant voices create noise that weakens it.

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VoxEU @ CEPR @voxeu.org · 11d

Administrative data from US workers' paycheques and firms' payrolls show considerable monthly fluctuations in earnings. Pay instability is widespread and represent a genuine, welfare-relevant risk.
@ganong.bsky.social, P Noel, C Patterson, J Vavra, A Weinberg
cepr.org/voxeu/column...
#EconSky

Graph of the heterogeneity of earnings volatility for salaried and hourly workers measured as a change from the previous month.

Over the past decade, cities and states in the US have enacted ‘fair workweek’ laws to stabilise worker schedules. This column uses administrative data on US workers’ paycheques and firms’ payrolls to document considerable monthly fluctuations in earnings. Pay instability is widespread, disproportionately hits lower‑paid hourly workers, and is largely driven by firms’ labour demand rather than worker-related determinants such as childcare demands. These fluctuations represent genuine, welfare-relevant risk that materially shapes household decisions and has attendant effects on the economy.

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VoxEU @ CEPR @voxeu.org · 12d

China's Belt and Road Initiative has reshaped Japan's overseas infrastructure engagement and diplomacy with participants of the initiative. Shuhei Nishitateno and Yasuyuki Todo find that Japanese project counts fell and foreign leaders visited Japan less often.
cepr.org/voxeu/column...
#EconSky

Infrastructure diplomacy has become a central arena for strategic competition. This column examines how China’s Belt and Road Initiative has reshaped Japan’s overseas infrastructure engagement and diplomacy with participants of the initiative. It finds that Japanese project counts fell and foreign leaders visited Japan less often. To be successful, Western initiatives such as Build Back Better World and the EU’s Global Gateway need coordinated strategies and rapid deployment mechanisms. They should also integrate infrastructure finance with strategic diplomacy, ensuring that development efforts reinforce political engagement instead of attempting to replace it.

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VoxEU @ CEPR @voxeu.org · 13d

Steven Kamin analyses how, in the months following 'Liberation Day', the dollar switched from rising during periods of market volatility to falling, and thus appeared to switch from a safe-haven to a 'risk-on' currency.
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#EconSky

Graph of the VIX volatility index and DXY dollar index from 1 January to 26 August 2025. A dashed vertical line identifies 'Liberation Day'.

There is general agreement that a currency’s safe-haven status can be gauged by its response to changes in financial volatility. This column documents how, in the months following the Trump administration’s “Liberation Day” announcement, the dollar switched from rising during periods of market volatility to falling, and thus appeared to switch from a safe-haven to a ‘risk-on’ currency. Its reversion to traditional flight-to-safety behaviour in recent months may indicate that this ‘risk-on’ episode was a one-time event, but it is also possible that even as financial markets have calmed down, foreign entities are taking steps to reduce their dependence on the dollar for trade, payments, and investment.

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VoxEU @ CEPR @voxeu.org · 14d

Rie Matsumoto introduces recent approaches to identifying innovative and disruptive technologies from academic literature. The methods can help policymakers discuss which fields should receive intensive support and identify areas of risk.
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#EconSky

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VoxEU @ CEPR @voxeu.org · 15d

M Henrekson, L Jonung, & M Lundahl argue that Europe needs a more pluralistic, socially grounded, & inclusive system for the training of economists. They discuss a two-track approach for PhD training that balances frontier research and applied economics and policy.
cepr.org/voxeu/column...
#EconSky

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VoxEU @ CEPR @voxeu.org · 15d

Michele Ca' Zorzi, Gianluigi Lopardo, and Ana-Simona Manu @ecb.europa.eu use firm earnings calls and find that early engagement with #AI topics boosted stock market performance beyond the immediate impact on expected earnings.
cepr.org/voxeu/column...
#EconSky

Average GenAI exposure across the sample of earnings calls and the sentiment analysis of GenAI in those calls.

The launch of ChatGPT in late 2022 marked a turning point in how firms and investors view generative artificial intelligence. This column measures the extent and tone of firms’ discussions of GenAI in earnings calls, and finds that early engagement with AI topics boosted stock market performance beyond the immediate impact on expected earnings.

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VoxEU @ CEPR @voxeu.org · 15d

Chinese investment platform data show digital nudges and financial education via the platform increase stock market participation, portfolio diversification, and risk-adjusted returns, even among older, less educated, less affluent individuals.
X Guo, Q Sun, B Yeung
cepr.org/voxeu/column...
#EconSky

Graph of response rates to digital nudging across repeated nudging horizons of one month intervals.

Stock market participation remains low, especially among the older, less affluent, and less educated households, despite its clear benefits for wealth preservation and growth. Although digitisation has reduced some barriers, many households remain disengaged. Using data from a Chinese investment platform, this column shows that digital nudges and financial education via the platform increase stock market participation, promote portfolio diversification, and improve risk-adjusted returns, even among the older, less educated, and less affluent individuals. Digital platforms can help democratise finance by delivering scalable, low-cost financial education.

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VoxEU @ CEPR @voxeu.org · 18d

Data of 48 US states and over 120 industries from 1880 to 2007 show strong unconditional convergence in manufacturing productivity. Poorer states grew faster, closing gaps at an average rate of 7.6% per year.
Alexander Klein, Miguel León-Ledesma, Nicholas Crafts
cepr.org/voxeu/column...
#EconSky

Graph of unconditional convergence rates in US manufacturing by decade.

Economic historians have long debated whether lagging regions can catch up in productivity with industrial leaders. This column shows that, under the right conditions, such catch-up can be remarkably rapid. Using newly digitised US Census of Manufactures data covering 48 states and over 120 industries from 1880 to 2007, it finds strong unconditional convergence in manufacturing productivity: poorer states grew faster, closing gaps at an average rate of 7.6% per year. This far exceeds the 'iron law' of 2% conditional convergence often found in GDP per capita studies, and it accelerated dramatically in the 1940s.

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Reposted by VoxEU @ CEPR

Centre for Economic Policy Research @cepr.org · 19d

🎉VoxTalks Economics, presented by @talknormal.co.uk, is a finalist for a Signal Award in the education category!

🗳️Cast your vote before 9 October at the link below.
vote.signalaward.com/PublicVoting...
#EconSky

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VoxEU @ CEPR @voxeu.org · 19d

Data from Japanese primary and secondary schools show that heat exposure lowers student test scores, with disadvantaged students experiencing a greater loss. Access to AC in schools offsets these adverse effects.
Mika Akesaka & @hitoshishigeoka.bsky.social
cepr.org/voxeu/column...
#EconSky

A graph of the average impact of cumulative heat/cold exposure on test scores with and without school air conditioning. Schools without air conditioning see a more negative impact on test scores in hot weather.

Extreme heat events are becoming more frequent and intense with climate change. Children are particularly vulnerable to such environmental stressors. This column uses nationwide exam data from Japanese primary and secondary schools to explore how heat exposure affects student learning. Heat exposure lowers student test scores, with disadvantaged students experiencing a greater reduction in scores. Access to air conditioning in schools substantially offsets these adverse effects and especially benefits lower performers. Investing in school air conditioning could promote both efficiency and equity.

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VoxEU @ CEPR @voxeu.org · 20d

Despite the paths to social advancement being different, strong welfare systems in Western Europe and communism + bureaucratic shortcomings in the East created a landscape where welfare distribution equality was similar.
J Costa-i-Font, A Nicińska, M Rossello Roig
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#EconSky

Graphs showing self-reported health across age cohorts of individuals exposed and unexposed to Soviet communist regimes.

Inequality is a major concern for many economies, prompting the question of whether some regimes are more effective at reducing inequality than others. This column uses measures of welfare including health status and living space to show that, despite Soviet communism’s aim of radical egalitarianism, it failed to eliminate inequality as effectively as promised. While communism did lead to higher upward mobility, strong welfare systems in Western Europe and bureaucratic shortcomings in the East created a landscape where equality in welfare distribution was broadly similar, despite the paths to social advancement being markedly different.

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