A gift that keeps on giving: The contributions of Martin Weitzman to environmental economics (VOX)

Environmental economist Martin Weitzman passed away in August. This short intellectual biography and personal remembrance, by his long-time co-host of the Harvard Seminar on Environmental Economics and Policy, outlines how his contributions have advanced the thinking of environmental economists and policymakers on many fundamental issues, including policy instrument choice, discounting, species diversity, and environmental catastrophes. Across the board, the example of his rigorous and often ingenious work set high standards for theorising in environmental economics and thereby served to elevate the entire field.

https://voxeu.org/article/martin-weitzman-s-contributions-environmental-economics

Robert Stavins

Trump’s China tariffs: Lessons from first principles of classic trade policy welfare analysis (VOX)

Traditional analysis of tariffs in a partial equilibrium setting can tell us much about the welfare consequences of the US-China trade war. The column argues that, as tariffs ratchet up, welfare costs for both sides increase disproportionately. The cost of trade diversion in the US to less-efficient suppliers likely overwhelms any terms-of-trade gain the US might enjoy. In all cases, exporters in the rest of the world benefit.

https://voxeu.org/article/welfare-effects-trumps-china-tariffs

Daniel Gros

How the IMF can ‘raise its game’ on monetary policy advice (VOX)

Unconventional monetary policies were used extensively to deal with the Global Crisis. This column presents the results of a study by the IMF’s Independent Evaluation Office which assessed the value provided by the IMF in its advice on unconventional monetary policies over the past decade. While in many ways the IMF’s response to an unprecedented challenge to monetary policymakers was impressive, limited depth of expertise on monetary policy issues and high turnover of country teams were an issue. The IMF could have also done more to explore alternative policy mixes and to support better smaller advanced economics and emerging markets.

https://voxeu.org/article/how-imf-can-raise-its-game-monetary-policy-advice

Charles Collyns, Prakash Loungani

The role of political connections in public employment dynamics (VOX)

 Emanuele Colonnelli, Mouno Prem, Edoardo Teso

Puzzling exchange rate dynamics and delayed portfolio adjustment (VOX)

The forward premium puzzle is one of many ways in which exchange rate behaviour can contradict economic theory. This column introduces a model in which delayed portfolio adjustment by investors can address six such puzzles of exchange rate movements. The findings show that slowness in the reactions of investors has the potential to influence asset prices.

https://voxeu.org/article/puzzling-exchange-rate-dynamics-and-delayed-portfolio-adjustment

Philippe Bacchetta, Eric van Wincoop

Refugees and irregular migrants in Europe: Self-selection and sorting (VOX)

About 1.4 million refugees and irregular migrants arrived in Europe in 2015 and 2016, but little is known about their socio-demographic characteristics and motivations. This column presents the first large-scale evidence on why those who crossed the Mediterranean in 2015 and 2016 had left their home countries. While the vast majority were escaping conflict, the main motivation for a significant number of migrants from countries such as Algeria, Egypt, Morocco, and Pakistan was a desire to seek out better economic opportunities. People who are educated to secondary or tertiary level are more likely to migrate than people with lower levels of education, particularly when fleeing a major conflict, and these people are more likely to head for countries that have more comprehensive migrant integration policies.

https://voxeu.org/article/self-selection-and-sorting-among-refugees-and-irregular-migrants-europe

Cevat Giray Aksoy, Panu Poutvaara

Costs of employment and flexible labour demand: Evidence from maternity and parental leave reforms (VOX)

One factor exacerbating gender gaps in employment is the cost of affording maternity and parental leave to women as primary caregivers. This column analyses the relationship between the costs of providing parental leave and labour demand for childbearing-age women. As evidenced by a series of reforms in Japan in the last two decades, reducing the burden of parental leave costs from firms to social insurance systems increases both labour demand and starting wages for such workers.

https://voxeu.org/article/costs-employment-and-flexible-labour-demand

Yukiko Asai

Economists at war (VOX)

The World Wars precipitated unprecedented economic problems in all countries. This column, part of a Vox debate on the economics of WWII, describes how economists played a larger role in WWII than in any previous conflict. They advanced the methods of public finance and influenced the directions of the war effort. By the end of the war, economists were widely embedded in government and policymaking.

https://voxeu.org/article/economists-war

Alan Bollard

The impact of Brexit on UK firms (VOX)

The UK’s decision to leave the EU in the June 2016 referendum was a largely unexpected event that has generated a large, broad, and long-lasting increase in uncertainty. It has also affected some firms more than others depending on the strength of their links to Continental Europe. This column exploits these features and uses a major new survey of UK firms to show that the anticipation of Brexit has already made its mark on the UK economy. It has gradually reduced investment by about 11% and decreased productivity by about 2% to 5% over the three years since the referendum.

https://voxeu.org/article/impact-brexit-uk-firms

Nicholas Bloom, Philip Bunn, Scarlet Chen, Paul Mizen, Pawel Smietanka, Gregory Thwaites

The effectiveness of cross-border cooperation in banking supervision (VOX)

Following the Global Crisis, countries have significantly increased their efforts to cooperate on bank supervision, the prime example being the euro area’s Single Supervisory Mechanism. However, little is known about whether such cooperation helps improve the stability of the financial system. Using panel data for a large sample of cross-border banks, this column examines whether a higher incidence of supervisory cooperation is associated with higher bank stability. It finds that supervisory cooperation is effective, working through asset risk, but not for very large banks, which are the ones that pose the highest risk to financial stability.

https://voxeu.org/article/effectiveness-cross-border-cooperation-banking-supervision

Thorsten Beck, Consuelo Silva-Buston, Wolf Wagner