https://cepr.org/ en https://cepr.org/voxeu/columns/how-french-firms-navigated-inflation-surge-lessons-expectations-and-decision-making As inflation surged globally, economists and policymakers focused their attention on the expectations of households and financial markets – but relatively little was known about the inflation expectations of firms. Using a survey of French firms from 2020 to 2024, this column examines how inflation expectations form, evolve, and affect decisions, as well as their potential to pass through onto wages. The findings offer cautious reassurance to central bankers. While anchoring expectations remains crucial, structural features such as wage bargaining institutions, policy interventions, and even inattention shape how firms respond to shocks. 2025-06-04T00:00:00+0100 Erwan Gautier, Frederique Savignac, Olivier Coibion 633447c7-5f10-44dc-97d6-7a129f3447e1 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-06/AdobeStock_806955930.jpeg?itok=PF6Pj3Ko https://cepr.org/voxeu/columns/private-safe-asset-supply-and-financial-instability Safe assets are financial instruments that maintain a stable value even after adverse macroeconomic shocks. This column explores how banks supply safe assets through securitisation and evaluates the consequences for financial stability. As safe assets become scarcer, banks increasingly rely on securitisation to produce safe assets, relaxing screening standards in the process. This lowers loan quality, undermines financial stability, and harms real economic activity. Crucially, banks do not internalise how loan quality affects their ability to create safe assets, underscoring the need for policy intervention. Policy tools such as risk retention requirements can be effective in addressing this inefficiency. 2025-06-03T00:00:00+0100 Madalen Castells-Jauregui 3781efa1-ba68-47d7-9d12-87fd4d70eed7 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-06/AdobeStock_73872974.jpeg?itok=5oWmVyr9 https://cepr.org/voxeu/columns/home-charging-and-plug-hybrid-electric-vehicles-strategy-real-world-emissions Plug-in hybrid electric vehicles can use either fossil fuels or electricity and offer potential emission reductions, depending on the driver’s usage. This column examines how access to charging at home influences the share of driving that employees with company cars in Germany do using electricity. Access to home charging reduces the users’ fossil fuel consumption by 38% and thus cuts CO2 emissions, which fall even where there are no binding caps on emissions from the electricity sector. Access to home charging also increases the likelihood that users will switch to fully electric vehicles in the future. 2025-06-03T00:00:00+0100 Johannes Gessner, Wolfgang Habla, Ulrich Wagner 7735767c-e063-4bde-9400-563528f4417b VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-06/AdobeStock_578633650.jpeg?itok=6yGKX4Js https://cepr.org/voxeu/columns/missing-tariffs-how-flawed-data-turn-trade-policy-analysis-herculean-task When the Trump administration pledged to impose “reciprocal tariffs” on countries with “unfair” trade practices, trade economists scrambled to determine what such tariffs might look like. But modelling any tariff-based intervention requires reliable data on what countries actually impose, and this column argues that the tariff data we rely on are incomplete and often wrong. The author introduces a Global Tariff Database based on a novel algorithm which provides a valuable resource for empirical analysis and for any policy analysis that depends on accurate information about tariff rates. 2025-06-02T00:00:00+0100 Feodora Teti 02a79345-e5ad-4579-9c8a-5eacd769e53b VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-06/AdobeStock_1326899338.jpeg?itok=5F2Z2Ksn https://cepr.org/voxeu/columns/fiscal-stagnation Public debt-to-GDP ratios have climbed to historic highs in most advanced economies. This column studies the connection between productivity growth, fiscal policy, and public debt. Using a theoretical model, it argues that a feedback loop is possible between fiscal policy and growth. Large primary surpluses are associated with fiscal distortions which depress investment and productivity growth, and lead to further pressure on public debt-to-GDP ratios. A fall into fiscal stagnation can result from hysteresis effects or pessimistic animal spirits. Meanwhile, exiting fiscal stagnation requires large policy interventions that reduce the public debt-to-GDP ratio, such as credible pro-growth strategies. 2025-06-02T00:00:00+0100 Luca Fornaro, Martin Wolf cd3a38f2-fa8c-4b60-8017-1ec80ca4907b VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-06/AdobeStock_1201846377.jpeg?itok=k2FcNuwF https://cepr.org/voxeu/columns/fully-remote-work-expands-recruitment-and-boosts-productivity The Covid-19 pandemic sparked a large and lasting shift to remote work. This column draws on detailed administrative data from a major call centre in Türkiye to show that a permanent shift to fully remote work can expand recruitment and raise productivity without compromising service quality. The transition increased the share of women, including married women, as well as employees from rural areas and smaller towns. Productivity gains were driven by quieter home environments and more efficient communication. But the benefits of in-person onboarding persist, even in a permanently remote work model. 2025-06-01T00:00:00+0100 Cevat Giray Aksoy, Nicholas Bloom, Steven Davis, Victoria Marino, Cem Özgüzel 6425ec80-ae3f-417d-805b-32f4d2da26cc VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_346755324.jpeg?itok=IGn-SYJz https://cepr.org/voxeu/columns/global-impact-ai-mind-gap Artificial intelligence is widely seen as a transformative force for productivity and innovation. Yet, its macroeconomic implications remain uncertain, especially from a global perspective. This column shows how structural differences in AI exposure, preparedness, and access in advanced economies, emerging markets, and low-income countries shape the distribution of AI-induced productivity gains. While improvements in AI preparedness and access can mitigate some disparities between countries, they are unlikely to fully offset them. AI-driven productivity gains could reduce the traditional role of exchange rate adjustments due to AI’s large impact on the non-tradable sector. 2025-05-31T00:00:00+0100 Eugenio Cerutti, Antonio Garcia Pascual, Yosuke Kido, Longji Li, Giovanni Melina, Marina M. Tavares, Philippe Wingender 1fd3c375-71de-4a8a-becf-f5fd2dcfd304 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1171203954.jpeg?itok=LeTHN7rq https://cepr.org/multimedia/grievance-doctrine What if trade policy wasn’t really about trade at all? What if it was about revenge, power, and punishment, tariffs as tantrums and diplomacy as drama? You won’t find the Grievance Doctrine in economics textbooks, but there is one book that explains what it is, what its policies are, and the way it is currently being implemented. Richard Baldwin of IMD Business School in Lausanne, the founder and the Editor-in-Chief of VoxEU is also the author of “The Great Trade Hack”. In it, he sets out the way the Grievance Doctrine has been weaponised by this US administration, how the rest of the world could respond, and what might happen next. Richard joins Tim Phillips to explain the thinking that guides policy one of the most extraordinary periods in the history of trade – and why the rest of world will do just fine without the US as an ally. 2025-05-30T00:00:00+0100 73b93d4f-0ef1-42b8-830c-cd776da2f1a8 VoxEU Talk https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/Grievance%20Doctrine-1%20%281%29.png?itok=ZpVZTTOT https://cepr.org/voxeu/columns/tariffs-across-supply-chain Tariffs disrupt trade flows and influence prices, but their broader impact depends on how they are structured and the type of goods targeted. This column examines the economic implications of tariffs across the supply chain, with a particular focus on how different modes of retaliation to US tariffs impact economic activity, inflation, and trade. The authors find that the effects vary significantly. A broad retaliation strategy targeting both final and intermediate goods would result in a more pronounced contraction in GDP and more persistent inflation than retaliation that targets only final goods. 2025-05-30T00:00:00+0100 Nicolò Gnocato, Vanessa Gunnella, Carlos Montes-Galdon, Tobias Schuler, Giovanni Stamato c90d460b-8432-490d-9e10-9a802dd8bc5b VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1361028741.jpeg?itok=_FpSTXPX https://cepr.org/voxeu/columns/migration-and-regime-change-outflows-follow-democratic-decline-inflows-fuel-illiberal Recent years have seen a global shift towards illiberal forms of governance. Migration is often a central force in these dynamics. This column investigates the two-way interaction between international migration and political regime change. The author shows, first, that substantial immigration into politically fragile democracies can exacerbate institutional weaknesses. Second, democratic decline tends to increase emigration, potentially hindering prospects for institutional recovery. Third, international economic integration – particularly through EU accession – facilitates emigration from weak democratic countries. Finally, the data reveal a significant relationship between emigration from other countries and improvements in domestic legal governance. 2025-05-29T00:00:00+0100 Assaf Razin 2e347215-1616-4906-aba7-729f21f0b4e0 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_327249235.jpeg?itok=0UDoTi8d https://cepr.org/voxeu/columns/risks-and-benefits-high-speed-internet-socioemotional-wellbeing-adolescence-and-youth The world has experienced a digital revolution that has affected countless aspects of our lives, posing both potential benefits and risks to our wellbeing. This column examines the impact of high-speed internet in Uruguay on young people’s socioemotional wellbeing. Young people report increased worry but reduced loneliness as access to high-speed internet grows. Dissatisfaction with oneself and increased risky behaviours are behind the detrimental effect. Educational and health systems should take preventive actions so that youth can take advantage of the internet while reducing emerging risks. 2025-05-29T00:00:00+0100 Karina Colombo, Elisa Failache, Martina Querejeta 7756b387-03f8-4a82-be8f-bfb2ba0463b5 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_271098437.jpeg?itok=6MKQ9hAL https://cepr.org/voxeu/columns/geopolitical-risks-and-effectiveness-eu-cohesion-policy Geopolitical issues are flooding current political and economic debate, but evidence is limited on their interplay with structural policies. Combining information on geopolitical risks and the EU cohesion policy, this column evaluates the costs of geopolitical tensions in terms of reduced effectiveness of structural funds. The results indicate that the impact of the cohesion policy is reduced once considering geopolitical risks originating from the US and China, with asymmetries across European countries. Evidence claims for the coordination between structural and other EU-wide policies in Europe. 2025-05-28T00:00:00+0100 Roberta Arbolino, Paolo Di Caro ee5d4dfa-2553-488a-a5e7-87dcecbbf51a VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1432186893.jpeg?itok=QNfK0Rcc https://cepr.org/voxeu/columns/fed-communication-all-understood-few Central banks use communication to influence inflation expectations, with varying effectiveness. This column examines how professional forecasters and households respond to inflationary pressure warnings in the US. While professionals factor in the Federal Reserve’s policy response, revising expectations downwards, households place less weight on the central bank’s response to inflationary pressures. As a result, their expectations rise when members of the Federal Open Market Committee communicate concerns about inflation. This divergence may hinder the Federal Reserve’s ability to stabilise inflation and anchor expectations, highlighting both the importance of communication and the potential for improving it. 2025-05-28T00:00:00+0100 Eleonora Granziera, Vegard H. Larsen, Greta Meggiorini, Leonardo Melosi c11e6a7d-4a67-4b78-81a6-b2f34f340329 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/46385138651_667121447e_o.jpg?itok=x35X3znG https://cepr.org/voxeu/columns/tariffs-and-retaliation-macroeconomic-analysis Implementation of the “Liberation Day” tariffs on the US’ trading partners would have far-reaching consequences for international trade patterns and the US and global economies. This column models the effects of an unanticipated permanent unilateral tariff imposed by the US and an assumed equal reaction on the part of the rest of the world. The findings suggest that tariffs of the size being currently proposed and the assumed retaliation may have significant short-run and long-run costs on output levels, inflation rates, and welfare. They also emphasise the importance of sticky prices and the monetary policy response to the tariff shock in shaping the short-run responses to the tariff shock and the global retaliation. 2025-05-27T00:00:00+0100 Stephane Auray, Michael B Devereux, Aurélien Eyquem 1df4b700-50d5-4e29-9110-19b77eb6a0d5 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1101934651.jpeg?itok=6NfB0Ijf https://cepr.org/voxeu/columns/when-upskilling-good-not-enough-understanding-labour-shortages-through-job-quality Advanced economies are still experiencing labour shortages in the aftermath of the COVID-19 pandemic. This column examines the high labour shortages across OECD countries, focusing on wage and non-wage job quality. Real wages have generally increased, but with differences between countries and industries. Beyond pay, job insecurity, poor working conditions, and exposure to health risks reduce the attractiveness of high-vacancy jobs, especially in sectors with high proportions of women and migrant workers. Policy interventions are needed to promote equal opportunities, improve job quality through social dialogue, and support workforce mobility. 2025-05-27T00:00:00+0100 Orsetta Causa, Emilia Soldani 85236afb-f1b4-46c5-b63b-4736a6d73aad VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_270956069.jpeg?itok=BZ_MDltC https://cepr.org/voxeu/columns/assessment-performance-inflation-targeting Since 1989, most central banks around the world have adopted an inflation targeting regime. This column argues that credit for how much inflation targeting (IT) contributed to the pre-2021 decades of low inflation has run ahead of the evidence. Forces such as globalisation and simple ‘regression to the mean’ should be taken seriously, alongside inflation targeting adoption, as explanations for low inflation between 1989 and 2021. Going forward, inflation targeting must evolve to survive and maintain credibility in the face of shocks such as financial crises and supply disruptions. 2025-05-26T00:00:00+0100 Surjit S. Bhalla, Karan Bhasin, Prakash Loungani 73ebcdb6-1e27-4c5a-9d45-279a444ead4f VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1372698991.jpeg?itok=q7IFDP2j https://cepr.org/voxeu/columns/navigating-sudden-stops-how-credit-support-policies-can-replace-shrinking-capital Sudden stops in international capital flows pose significant challenges for policymakers, especially in emerging markets. These abrupt halts in cross-border flows disrupt firms' access to external financing, leading to liquidity shortages that can severely undermine economic activity and growth. This column examines how credit support policies in the form of credit guarantees and central bank credit lines can help firms substitute the evaporating external credit for domestic borrowing, using the case of Chile during the COVID-19 pandemic. The analysis provides strong evidence that the interventions were effective in mitigating the impact of the shock. 2025-05-25T00:00:00+0100 Miguel Acosta-Henao, Andrés Fernández Martin, Patricia Gomez-Gonzalez, Ṣebnem Kalemli-Özcan f626a729-f234-4c14-96b2-9ac0c1d039f0 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1208386884.jpeg?itok=lDgZ3O98 https://cepr.org/voxeu/columns/when-lights-go-out-power-trust-and-future-europes-energy-transition The blackout on 28 April 2025 that left all of Spain and Portugal in the dark was a stark reminder of the fragility of our energy systems and also the risk of renewables being turned into a scapegoat. This column argues that public trust is foundational to Europe’s energy transition and shows that support for climate policies is lower in high-income countries than in lower-income ones, with part of the trust deficit due to blurred institutional accountability. The blackout also underscored the urgent need to modernise Europe’s power grids, including digitalisation, expanded storage, and above all, interconnection. 2025-05-24T00:00:00+0100 Cristina Peñasco 7116e93a-e6a2-4499-bedb-f6aaafe98f4a VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1445207799.jpeg?itok=QxBy94H8 https://cepr.org/voxeu/columns/anchored-troubled-waters-why-economic-and-monetary-union-membership-less-bad-you Recent events, such as tariff announcements, illustrate that even global shocks may feature important country-specific components. This column finds that a monetary union shapes the impact of economic uncertainty on its member countries by substantially mitigating the adverse effects of country-specific shocks. It does so by providing a nominal anchor that effectively eliminates price level risk arising from country-specific uncertainty. This finding also implies heterogeneous exposure to uncertainty can reduce the need for policy interventions at the country level, whether by the common central bank or by national fiscal policy. 2025-05-23T00:00:00+0100 Benjamin Born, Luis Huxel, Gernot Müller, Johannes Pfeifer 1f1cf02a-4d75-4072-9467-e4cb9dd3e561 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_188693111.jpeg?itok=anHY2vS8 https://cepr.org/voxeu/columns/rising-cost-motherhood-germany Reductions in women's labour supply after childbirth remain a persistent driver of gender earnings inequality. Using data from West Germany from the 1960s to 2013, this column explores the evolution of the ‘child penalty’ – post-birth earnings reductions for mothers – in Germany. The child penalty increased over time because women are earning more, so the opportunity cost of motherhood has grown. Family policies can affect gender inequality through changing post-birth earnings decisions. Future research should examine how policies influence pre-birth choices and interact with gender norms over the long run. 2025-05-23T00:00:00+0100 Ulrich Glogowsky, Emanuel Hansen, Dominik Sachs, Holger Lüthen b50a1225-03b5-4553-a8c5-d4742879bf62 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_33641600.jpeg?itok=ATStBJiD https://cepr.org/multimedia/rise-china-academic-research China’s growth as an economic superpower has been based in a large part on its increasing ability to design and manufacture sophisticated, hi-tech goods. But, until recently, it was far from a superpower when it came to creating new knowledge and cutting-edge academic research. Luc Laeven of the ECB and CEPR and his co-authors recently published an analysis of the research output in top journals from Chinese academics over the last two decades, and the results are startling: in many areas of science, China is now clearly the world leader. Luc talks to Tim Phillips about how China’s plan was created, why the quality as well as the quantity of research should make us take notice, and whether research establishments in Europe and the US can learn from China’s single-minded pursuit of success. 2025-05-23T00:00:00+0100 2cf1b014-4beb-4180-ba4a-14de199d9650 VoxEU Talk https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/Academic%20research%20and%20China-1.png?itok=SyXzYm4v https://cepr.org/voxeu/columns/real-effects-brexit-labour-demand The implementation of Brexit produced markedly different experiences for Northern Ireland, which effectively remained within the EU’s Single Market for goods, and the rest of the UK. This column exploits this contrast to investigate the impact of Brexit on UK firms. Firms located further from the Irish border, and thus more exposed to the full economic consequences of Brexit, experienced significantly greater negative effects, reducing their workforce by up to 15.7% relative to less exposed firms. These firms also reported lower growth expectations but increased investment in R&D. Importantly, firms with prior international trade exposure could mitigate these adverse effects better. The findings emphasise the critical roles of trade integration and innovation in firms’ adaptation to Brexit-induced disruptions. 2025-05-22T00:00:00+0100 Hang Do, Kiet Tuan Duong, Luu Duc Toan Huynh, Nam Tuan Vu e3261747-007e-4585-a41f-99874b2d1136 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_187161079.jpeg?itok=uiWJej7L https://cepr.org/voxeu/columns/foreign-returns-nations-puzzle Global external assets exceeded 200% of world GDP in 2020. Comparing the performance of foreign investments for 13 advanced economies between 1975 and 2023, this column finds that some countries consistently earn up to four percentage points higher average nominal returns than other countries. The large differences in investment performance abroad have substantial effects on national wealth accumulation, of up to 100% of GDP over two decades. The drivers of the large differences in how nations invest abroad and in their real and nominal returns require future research. 2025-05-22T00:00:00+0100 Franziska Maruhn, Maximilian Konradt, Moritz Schularick, Christoph Trebesch, Julian Wingenbach 8e4f96e8-fb0a-42c0-ae7c-87648514be54 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1448804362.jpeg?itok=vxBOadA8 https://cepr.org/voxeu/columns/moderate-growth-amid-global-trade-uncertainty-commissions-spring-2025-forecast President Trump’s sweeping “reciprocal tariffs” announced on 2 April sent shockwaves through the global economy. This column introduces the European Commission’s Spring Forecast, which depicts a resilient EU economy. Yet growth is set to remain modest, reinforcing the image of a continent buffeted by external shocks and mired in low growth. Tariffs, and even more so, heightened uncertainty and tightening financial conditions weigh on trade and investment. While the labour market remains strong and inflation recedes, households still hesitate to spend, dimming prospects for a more substantial improvement in economic conditions. With policy buffers constrained, the margin for countercyclical support is limited. Still, by fully leveraging its strengths and addressing structural gaps, the EU can move beyond resilience – and thrive even in a more fragmented, volatile, and at times hostile world. 2025-05-21T00:00:00+0100 Maarten Verwey, Kristian Orsini b13f4f39-3652-4b1a-afdf-e119e8a4ff0c VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/P066900-4376.jpg?itok=UIx2GIjR https://cepr.org/voxeu/columns/disentangling-trade-policy-uncertainty-and-equity-market-performance Despite headlines dominated by threats and implementations of US and retaliatory tariffs since President Trump’s inauguration, it was not until his “Liberation Day” announcement on 2 April that equity prices fell significantly. This column asks why equity prices reacted so slowly to the elevated trade policy uncertainty that followed immediately after Trump’s election. Historical evidence shows that such a delayed reaction is not unusual, because the overall economic consequences of trade policy uncertainty can be complex and may only materialise over time. Uncertainty about actual implementation of announced trade restrictions may have been an important factor behind temporary and lagged responses of equity prices. 2025-05-21T00:00:00+0100 Jakob Feveile Adolfsen, Thomas Harr 5566a8d6-dc5a-43d4-954a-8fc3c90ddd27 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1373739349.jpeg?itok=dv77QHJq https://cepr.org/voxeu/columns/living-la-vida-loca-remote-investing-latin-america-1869-1929 Foreign stock exchange listings have become increasingly popular during the last 80 years. This column examines companies that were governed and listed in London during 1869-1929 but operated in Latin America and asks how this separation affected the firm value. The findings suggest that the location of governance for the firm has a more material impact on valuation than the location of operations. The valuation of firms is heavily affected by where they are headquartered, even if they operate elsewhere. 2025-05-20T00:00:00+0100 Gareth Campbell, Áine Gallagher, Richard Grossman 85c5c61b-1eab-4415-beeb-be620e22ad32 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/London_Stock_Exchange_Stock_Exchange_in_London_in_the_19th_century_Engraving_Pri_-_%28MeisterDrucke-972127%29.jpg?itok=owKYqYl0 https://cepr.org/voxeu/columns/expanding-private-insurance-long-term-care-reduce-public-spending As populations age, the demand for long-term care will increase dramatically. This column argues that markets for long-term care insurance in the US have failed to expand, despite nearly five decades of development in part because individuals too often rely on self-insurance or Medicaid – a means-tested programme that requires they spend down their assets to qualify. However, some states have introduced long-term care partnership contracts that protect a portion of participants’ assets while still allowing them to qualify for Medicaid. These partnerships have increased insurance uptake and reduced Medicaid spending. 2025-05-20T00:00:00+0100 Joan Costa-i-Font, Nilesh Raut 18d1d05a-07f4-4304-9a4a-a91e7678a147 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_479530272.jpeg?itok=t_89zc-8 https://cepr.org/voxeu/columns/new-ebook-trumps-great-trade-hack President Trump’s 2025 tariffs mark the onset of the post-American leadership era. This column introduces The Great Trade Hack, a new CEPR Rapid Response book arguing that Trump’s trade policy, driven by a ‘Grievance Doctrine’, is emotionally coherent but economically incoherent. Despite their failure to deliver real solutions, tariffs persist as ‘policy placebos’ that deflect blame from domestic failures onto foreign villains. The book traces the bipartisan entrenchment of protectionism since 2008, examines risks of cascading protection, and outlines pragmatic pathways for sustaining the world trade system in this new era. 2025-05-19T00:00:00+0100 Richard Baldwin 39888c63-fa23-42fb-886f-86dbe41da865 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/Untitled.png?itok=w7oTRt7X https://cepr.org/voxeu/columns/trade-imbalance-network-and-currency-fluctuations In recent years, concerns over global financial fragmentation have grown amid rising geopolitical tensions. This column integrates a network structure in a multi-country model with imperfect financial markets to study how currency risk premia are connected to financiers’ risk bearing capacity. Guided by the theory, it constructs a centrality-based characteristic that gives a direct role to the centrality of countries’ trade imbalance network in determining their riskiness. The authors find that this centrality-based characteristic embeds strong predictive power in the cross-section of currency movements in the data, reflecting a novel source of exchange rate predictability. 2025-05-19T00:00:00+0100 Ai Jun Hou, Lucio Sarno, Xiaoxia Ye be5f4a9c-2c7d-42e7-8cf0-0d08393f2274 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1019942205.jpeg?itok=8EBYRjs8 https://cepr.org/voxeu/columns/chinese-banks-and-their-emde-borrowers Although Chinese banks have remained the top lenders to emerging markets and developing economies (EMDEs), their growth has slowed and their lending patterns have changed since the pandemic. This column shows that while cross-border lending by Chinese banks to their EMDE borrowers was highly correlated with bilateral trade flows between both countries prior to the pandemic, there has since been a marked correlation shift from cross-border lending and trade, to lending and FDI. However, Chinese banks have continued to exhibit higher levels of risk tolerance relative to other bank nationalities, as borrower country risk variables are positively correlated with Chinese banks’ market shares but not with their amounts of cross-border lending. 2025-05-19T00:00:00+0100 Catherine Casanova, Eugenio Cerutti, Swapan-Kumar Pradhan d0fca2ac-9f16-4a4e-8b90-eec7e73b28ed VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_624353979.jpeg?itok=SDt7I_0T https://cepr.org/voxeu/columns/nordic-model-wage-coordination-crossroads Strong coordination of wage setting has been maintained in Nordic countries through pattern bargaining. The tradables sector sets the first agreement, which then serves as the nationwide norm for subsequent wage increases. This column outlines that a key motivation for this model is to maintain international competitiveness and keep the wage share constant over time. This approach may come into conflict with the future needs of labour reallocation, for example due to ageing populations and higher demand for military personnel. An independent body of experts could help the pattern setting become more flexible and recommend changes to address labour market imbalances. 2025-05-18T00:00:00+0100 Lars Calmfors e04573d9-c966-4dd3-a1e8-64eca2a20c27 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1452429834.jpeg?itok=nwr7866Y https://cepr.org/voxeu/columns/digital-access-and-gender-representation-case-major-connectivity-shock-sub-saharan Women remain strikingly underrepresented in the public sphere worldwide, whether in traditional news media or in politics, and particularly so in many fragile democracies. This column uses data on almost 9,000 parliamentary races since 2001 to study how the provision of free access to a social media platform, Facebook, impacted female political representation in 17 sub-Saharan African countries. The findings suggest that the deployment of free access significantly increased female political representation. Political parties realigning their endorsement strategy to shifting gender norms is an important explanation for this. 2025-05-17T00:00:00+0100 Sophie Hatte, Jordan Loper, Thomas Taylor 9b8ed804-8d2b-4ef7-9a1c-9dc0a01ed8c8 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_525848316.jpeg?itok=OYHu80I6 https://cepr.org/voxeu/columns/overcoming-constraints-how-banks-helped-us-firms-reroute-their-supply-chains Rising trade tensions and the pandemic have forced importers to reconfigure their supply chains – a complex and costly process. This column highlights the underappreciated role of financial intermediaries in supporting supply chain resilience during global disruptions. Commercial banks – especially those specialising in Asian trade finance – played a crucial role in helping firms manage this transition after the 2018–2019 tariffs. By meeting importers’ increased demand for credit and offering valuable information about potential suppliers, specialised banks helped tariff-hit firms diversify away from China faster and more successfully. 2025-05-16T00:00:00+0100 Laura Alfaro, Mariya Brussevich, Camelia Minoiu, Andrea Presbitero 3987d439-c218-4aa1-9350-727721aa2071 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1266576484.jpeg?itok=dQaQFGzm https://cepr.org/multimedia/growth-and-trust-government Does economic growth inspire us to trust our governments? A new paper finds a surprisingly strong and consistent relationship between trust and economic growth – not for this quarter, or this year, but over our lifetimes. Tim Besley of the London School of Economics tells Tim Phillips how we can measure trust in a government around the world, and the strong and consistent relationship between long-run growth and trust. 2025-05-16T00:00:00+0100 f62b0894-caf2-4f19-98e0-6917af553b8f VoxEU Talk https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/Trust%20in%20government-1.png?itok=DdIbIFw2 https://cepr.org/voxeu/columns/big-techs-ai-empire Advances in AI are transforming the economy. Behind this wave of visible innovation lies a less visible but significant trend: the role of large technology firms – commonly referred to as ‘big techs’ – across the AI supply chain. This column analyses the AI supply chain and the market structure of every input layer, highlighting the economic forces shaping the provision of AI and the role of big techs in each input market. The authors illuminate challenges that big techs pose to consumer choice, innovation, operational resilience, cyber security, and financial stability. 2025-05-16T00:00:00+0100 Leonardo Gambacorta, Vatsala Shreeti 69b03c02-2a6a-4093-a24e-f8d438d9213f VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_788882542_Editorial_Use_Only.jpeg?itok=bvlcEYQA https://cepr.org/voxeu/columns/majority-influencer-advertising-undisclosed Social media influencers have become a powerful advertising channel, but social media advertising is still little regulated, with limited enforcement of disclosure regulations. This column analyses over 100 million tweets from 2014 to 2021 for disclosure rates. The findings suggest that the vast majority of commercial content on social media is not appropriately disclosed by the influencers who post it. Consumers are not able to distinguish commercial and non-commercial content absent disclosure labels. These results indicate the need for additional regulatory scrutiny of undisclosed advertising online. 2025-05-15T00:00:00+0100 Daniel Ershov, Yanting He, Stephan Seiler e9635160-6433-43ba-b1fe-ce26166ddf62 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1080925176.jpeg?itok=TmRqt9wt https://cepr.org/voxeu/columns/what-financial-sector-needs-know-about-climate-related-risks-next-five-years The immediate effects of climate-related risks are particularly relevant for the financial sector. Climate stress tests, which are often carried out over three to five-year periods, have become crucial for assessing the impact of shifting weather patterns and evolving climate policies on both the economy and the financial system. This column highlights the key findings for Europe from the first release of short-term climate scenarios by the Network for Greening the Financial System. These scenarios support the analysis of how climate policies and extreme weather events might affect the financial system and the economy through 2030. 2025-05-14T00:00:00+0100 Tina Emambakhsh, Mario Morelli, Livio Stracca, Agnieszka Trzcinska b9c8c1bc-3c70-455c-afb9-42d091433dce VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1254750651.jpeg?itok=7OgUeYg1 https://cepr.org/voxeu/columns/agreed-and-disagreed-uncertainty-rethinking-macroeconomic-impact-uncertainty The conventional wisdom is that uncertainty leads to economic contractions, but recent evidence challenges this assumption. This column introduces two novel concepts of uncertainty – agreed and disagreed uncertainty. It shows that when uncertainty is accompanied by widespread consumer disagreement about economic conditions (disagreed uncertainty), the economy remains stable despite the elevated uncertainty. In contrast, when uncertainty coincides with low consumer disagreement (agreed uncertainty), economic activity falls in response to high uncertainty. These findings have important implications for policymakers and forecasters, particularly as they navigate periods of economic stress. 2025-05-13T00:00:00+0100 Luca Gambetti, Dimitris Korobilis, John Tsoukalas, Francesco Zanetti bffbc67a-6429-42e6-a4f5-e0c86b96f93f VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1131555195.jpeg?itok=NjDFWlJz https://cepr.org/voxeu/columns/when-illusions-wealth-shape-economy-understanding-pseudo-wealth-macroeconomic Pseudo-wealth is a perception of wealth that is not backed by real economic resources. When people have widely different beliefs, they create ‘wealth’ through betting. This column describes how this perceived wealth can rapidly inflate or deflate without changing real economic fundamentals, leading to volatility in spending and potential economic instability. It raises the question whether societies should promote markets that enhance the capacity of individuals to trade based on their own beliefs or intervene to protect societal welfare. 2025-05-13T00:00:00+0100 Martin Guzman, Joseph Stiglitz 2856cd15-3982-45b9-95de-60cececb3ea5 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_217695877.jpeg?itok=SiTXfqw9 https://cepr.org/voxeu/columns/recent-trade-policy-actions-insights-multiple-models Recent tariff measures by the US and countermeasures by its trading partners have dominated global policy debates. Using three economic models, this column shows how the tariffs impact trade flows, output, and welfare, especially in North America and China. In the short term, tariffs act as negative supply shocks for tariffing countries (depressing output while raising consumer prices) and negative demand shocks for targeted countries (depressing both output and prices). In the long term, output losses could reach 1% of global GDP, underscoring the need for renewed cooperation on trade policy. 2025-05-12T00:00:00+0100 Diego A. Cerdeiro, Rui Mano, Dirk Muir, Rafael Portillo, Diego Rodriguez-Guzman, Lorenzo Rotunno, Michele Ruta, Elizabeth Van Heuvelen, Philippe Wingender 008bc80c-9e83-4115-864a-1267cebc1f02 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1399592614.jpeg?itok=J1ecFPjQ https://cepr.org/voxeu/columns/exchange-rate-uncertainty-tariff-hikes-and-adjustment-costs The recent shift in trade policy by the new US administration is impacting global trade and creating volatility in financial markets. This column quantifies the economic impact of the 2nd April tariffs on Europe, discusses the financial market response to the announcement, and looks at the role of the exchange rate response for the transmission of the shock. The authors provide different scenarios for the exchange rate going forward. While economic theory would imply an appreciation of the US dollar, its recent weakening must be seen in the broader policy context. Implications are derived for the case that the weakness of the US dollar vis a vis the euro persists. 2025-05-12T00:00:00+0100 Roberta Cardani, Michael Kühl, Jemima Peppel-Srebrny, Rolf Strauch 8833d8f3-587d-45dc-b57e-1fa34312bd44 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1320993607.jpeg?itok=tb_Rcslx https://cepr.org/voxeu/columns/human-capital-formation-key-component-europes-defence-build Government spending on defence, particularly defence R&D, can have significant economic spillovers. This column argues that the forthcoming European defence build-up must include a long-term strategy to develop high-quality human capital. Military human capital development serves a dual-purpose role: it is crucial for the modern (largely non-combat) battlefield, and also valuable for long-run productivity growth. Israel provides a good example of how military service can become a driver of innovation, by giving recruits intensive technical training and providing an open intellectual property environment. Economists can contribute by designing effective procurement systems and helping address collective action problems. 2025-05-12T00:00:00+0100 Manuel Trajtenberg ca02ec09-f403-4d62-b361-762694e750f6 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_891358397.jpeg?itok=j6cxgi4n https://cepr.org/voxeu/columns/big-news-missing-big-picture-stock-market-performance-news The performance of stock markets often appears worse in the daily news than it actually is. This column argues that this negative news bias arises from two factors: (1) journalists tend to focus on major events, and (2) the daily performance of stock market indices is negatively skewed. It shows that about half of the negativity bias in news can be explained by the distribution of stock returns, even when the negative reporting bias is not explicitly present. Media consumers should be aware of the big news bias and look beyond the daily news cycle to stay informed. 2025-05-11T00:00:00+0100 Antonio Ciccone, Felix Rusche c79f197d-8b4d-49f4-bf3a-5ca2780fdc9e VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_78702875.jpeg?itok=Cy0oQULi https://cepr.org/voxeu/columns/working-home-boosted-growth-expanding-disability-employment Individuals with a disability have remarkably low employment rates compared to the rest of the population. This column examines whether the rapid rise in the ability to work from home post-pandemic has improved disability employment. The authors estimate that in the US working from home has already increased full-time disability employment levels by over a quarter of a million people. Given population ageing, the longer-run impact could be far larger as more working Americans acquire disabilities as they age. Hybrid and fully remote working could increase labour supply in North America by perhaps a million or more, with similar gains possible in Europe. 2025-05-10T00:00:00+0100 Nicholas Bloom, Gordon Dahl, Dan-Olof Rooth 33c4f831-15fb-40d0-960a-30624e5b52e6 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_353491053.jpeg?itok=ESvzIP1u https://cepr.org/multimedia/do-friendships-change-our-political-opinions Recently, students all over the world have been demonstrating in solidarity with Palestinians in Gaza or in support of the policies of the Israeli government. At times, police have been required to keep the two sides apart. Protests, sit-ins and encampments are scenes familiar on many campuses. Sciences Po in Paris, is one of the locations where protests have made national news. But a decade ago, a natural experiment on the effects of friendship at Sciences Po showed that there is potential for students to bridge political gaps simply by getting to know each other better for a short time. Yves Zenou of Monash University, also a CEPR fellow, is one of the authors of a new discussion paper that describes the experiment and its results. We spoke to him about how friendship can close political gaps, and how to create dialogue on campus and in society. 2025-05-09T00:00:00+0100 6fc0e8af-df1d-4739-a55c-a955dd6cf9a6 VoxEU Talk https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/Opinions%20at%20university-1.png?itok=tTW7SEBY https://cepr.org/voxeu/columns/impact-international-economic-sanctions-informal-employment Economic sanctions have become an increasingly common instrument of foreign policy, promoted as a non-violent alternative to military intervention. However, their effects on labour markets remain underexplored. This column examines the case of Iran following the unprecedented international sanctions imposed in 2012 to investigate how sudden and extreme shocks to market access affect the allocation of workers across informal and formal employment. Following the sanctions, workers in industries with greater pre-sanctions exposure to international trade experienced a significant rise in informal employment compared to workers in less-exposed industries. This highlights the role of informal employment as a buffer in absorbing external economic shocks. 2025-05-09T00:00:00+0100 Ali Moghaddasi Kelishomi, Roberto Nisticò d494d175-cb8b-4520-bf8e-de6775063a9d VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/29053476448_c2161f742a_k.jpg?itok=Dlv22RTg https://cepr.org/voxeu/columns/how-refugees-continue-positively-shape-greek-economy-over-century-after-they-arrived From 1922 to 1923, over 1.2 million Greek Orthodox migrated from Anatolia to Greece. This column examines whether the human capital decisions of refugees differ from natives, and how they continue to impact the Greek economy today. While in 1928, literacy rates and primary school completion rates were lower among refugees and refugee settlements compared to native ones, refugees caught up and eventually surpassed the natives. In addition, college graduates from refugee settlements are more likely to pursue a tertiary degree with transferable skills than college-educated Greeks, suggesting that forced relocation can have lasting impacts by altering the value placed on transferable human capital investments. 2025-05-08T00:00:00+0100 Stelios Michalopoulos, Elie Murard, Elias Papaioannou, Seyhun Orcan Sakalli 93f5106b-d861-4415-894c-297230922396 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/Greek_and_Armenian_refugee_children_near_Athens%2C_1923.jpg?itok=NJYhj4Bn https://cepr.org/voxeu/columns/effects-fiscal-aid-health-outcomes-during-covid-19-pandemic As governments around the world combatted COVID-19, the US witnessed unprecedented levels of funding transfers from the federal government to state and local municipalities. This column examines how the influx of federal aid affected the population’s health. Leveraging the fact that states with excess representation in Congress received more assistance than underrepresented states, the authors show that federal subsidies significantly improved individual health outcomes. At the same time, aid to state and local governments evinced fewer economic benefits, suggesting that federal subsidies are more constructively channelled toward critical health care inputs. 2025-05-07T00:00:00+0100 Jeffrey Clemens, Anwita Mahajan f1fdb0f7-1d83-4dba-a124-fc7b3ee0db27 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_349263571.jpeg?itok=T-8SEijV https://cepr.org/voxeu/columns/roaring-tariffs-global-impact-2025-us-trade-war Sweeping US tariff increases in 2025 are upending global trade. This column draws on new data and simulations to show that, even with partial suspensions, the measures are set to trigger sharp contractions in trade, significant welfare losses (especially for the US), and major disruptions to global supply chains. Direct trade between the US and China may collapse, while indirect exports of Chinese products to the US will be far less affected. The tariff escalation could also distort production patterns and drive a sharp reconfiguration of global value chains, resulting in a less efficient and more opaque trade system. 2025-05-06T00:00:00+0100 Francesco Paolo Conteduca, Michele Mancini, Alessandro Borin 9c1c16ab-0610-481b-9bdb-0f521960593f VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_1387378027.jpeg?itok=sPhWVdwf https://cepr.org/voxeu/columns/avoiding-kindlebergers-trap-dollar-coalition-willing In the event of dysfunction in dollar funding markets, the Federal Reserve can supply liquidity through standing central bank swaps. This column considers a scenario in which the Fed declines to extend such credit. It argues that 14 major central banks hold roughly $1.9 trillion in US safe assets. They could form a dollar coalition of the willing by pooling their dollar holdings and swapping them when needed. An inferior international lender of last resort beats no international lender of last resort. 2025-05-05T00:00:00+0100 Robert N McCauley dacbd866-45ac-4f5e-9625-e9ef63567d72 VoxEU Column https://cepr.org/sites/default/files/styles/rss_featured_image/public/2025-05/AdobeStock_687822.jpeg?itok=aYyGzMQ1