Internal migration and the spread of COVID-19 (VOXEU)

Many internal migrants returned to their place of origin after the initial outbreaks of COVID-19 and before national lockdowns were in place. Has this behaviour contributed to the further spread of the pandemic and to its heavy death toll? Looking at the case of Italy and using data on the place of origin and destination of internal migrants, this column finds that provinces more exposed to return migration from areas hit by the pandemic earlier on experienced considerably more COVID-19 deaths in the ensuing months.

https://voxeu.org/article/internal-migration-and-spread-covid-19

Michele Valsecchi, Ruben Durante

How to strengthen European industries’ leadership in vaccine research and innovation (VOX)

While EU countries have been able to rely on a more resilient social model and a science-based approach in managing the Covid crisis more successfully so far than the US, Europe has fallen short in matching the US effort to incentivise Covid vaccine innovation. This is due to a lower level of financial investment and also an inability to ensure coordination across different (national and European) funding schemes. This column calls for the creation of a European equivalent to the US Biomedical Advanced Research and Development Authority to tackle these problems, thereby strengthening European industries’ leadership in vaccine research and innovation.

https://voxeu.org/article/how-strengthen-european-industries-leadership-vaccine-research-and-innovation

Philippe Aghion, Sofia Amaral-Garcia, Mathias Dewatripont, Michel Goldman

Beyond imports: The supply chain effects of trade protection on export growth (VOX)

The rise of global supply chains means that many firms that import are also exporters. This column uses confidential firm-trade linked transaction data to identify the firms facing new US import tariffs in the period 2018-2019. It shows that product exports with higher firm-level exposure to new import tariffs had weaker export growth after 2018 than less exposed products. This impact on export growth is equivalent to an ad valorem tariff on US exports of 2-4% for the average product.

https://voxeu.org/article/supply-chain-effects-trade-protection-export-growth

Kyle Handley, Fariha Kamal, Ryan Monarch

The corona crisis and corporate bankruptcies: Evidence from Switzerland (VOX)

The corona crisis has hit the Swiss economy hard, with survey results showing that corporate profits and demand expectations collapsed and uncertainty about future business prospects has risen sharply. This column uses unique company bankruptcy data for Switzerland to assess the current bankruptcy trend using the concept of excess mortality. The corona crisis is not causing a wave of bankruptcies for the time being, but it is still too early to give the all-clear.

https://voxeu.org/article/corona-crisis-and-corporate-bankruptcies

Florian Eckert, Heiner Mikosch, Markus Stotz

COVID-19 and the effects of social distancing on the economy (VOX)

Social distancing policies are necessary from a public health perspective but can have negative effects on economic activity. Using a newly constructed dataset of sectoral dependence on the use and sale of intermediate goods, this column investigates whether social distancing policies can have negative spillover effects on sectors that are not directly targeted due to input-output linkages. It finds that firms that depend on the sale of intermediate goods to sectors affected by social distancing measures are more affected by the crisis.

https://voxeu.org/article/covid-19-and-effects-social-distancing-economy

Luc Laeven

The Federal Reserve and quantitative easing: A boost for investment, a burden on inflation (VOX)

Despite their pivotal role, the macroeconomic effects of large-scale asset purchases, known as quantitative easing, remain open to debate. This column provides insights from a structural investigation of the macroeconomic effects of the Federal Reserve’s quantitative easing programme during the Global Crisis. In line with the general consensus, the results suggest that asset purchases substantially eased borrowing conditions and facilitated new investment. The rise in investment led to an increase in the productive capacity which, in turn, lowered firms’ marginal cost. There were, however, inflationary effects as well.

https://voxeu.org/article/feds-quantitative-easing-boost-investment-burden-inflation

Gregor Boehl, Gavin Goy, Felix Strobel

The Federal Reserve needs the power to buy corporate bonds (VOX)

The economics of social data (VOX)

The rise of large digital platforms — from Facebook, Google, and Amazon in the US to JD, Tencent, and Alibaba in China — has led to the unprecedented collection and commercial use of individual data. This column argues that a central, underappreciated feature of those data is their social aspect: data captured from an individual user describe not only that individual, but other users with similar characteristics or behaviours. The policy implications of this insight include the need for privacy regulations focused less on personalised prices, and more on group-based price discrimination.

https://voxeu.org/article/economics-social-data

Dirk Bergemann, Alessandro Bonatti, Tan Gan

On concentration screens in horizontal merger review (VOX)

Concentration measures such as the post-merger Herfindahl-Hirschman index as well as the merger-induced change in the index are usually key determinants in the review of horizontal mergers by competition agencies and courts. This column studies whether the magnitude of the efficiencies required for a merger not to hurt consumers may be related to the change and the level of the Herfindahl-Hirschman index. On the basis of theoretical analysis substantiated by empirical evidence, it finds that while the critical level of efficiencies depends on the change in the index, it is independent of level of the index. Hence current guidelines should be changed so as to emphasise the change more and the level less.

https://voxeu.org/article/concentration-screens-horizontal-merger-review

Volker Nocke, Michael D. Whinston