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Centre for Economic Policy Research @cepr.org · 2h

Ignazio Visco writes for #Europe2050 to argue that Europe lacks the institutions to turn private wealth into productive investment. He proposes a permanent European safe asset built by transferring the portion of national debt into a common European debt-management vehicle. cepr.org/publications...

Europe is not short of savings, its households hold one of the world's largest stocks of private financial wealth, but Ignazio Visco (former Governor, Bank of Italy) argues in this contribution to CEPR's Europe 2050 series that it lacks the institutions to turn that wealth into productive investment. Too much of it sits in deposits and low-risk domestic assets while innovative, technology-intensive firms struggle to find late-stage financing and increasingly turn to foreign investors instead. Visco's central proposal is a permanent European safe asset, built by transferring the portion of national debt exceeding the Maastricht threshold of 60% of GDP, more than €4 trillion in total, into a common European debt-management vehicle that continuously refinances it through highly liquid securities. Crucially, this is not debt mutualisation: a "tax lock" mechanism would keep each member state responsible for servicing its own share through dedicated revenue streams, addressing fears about moral hazard that have stalled previous proposals such as Blue Bonds or Blanchard and Ubide's fixed-share Eurobond scheme. He argues that political resistance to financial integration is often self-defeating, since the countries most concerned about fiscal discipline are precisely those with the strongest interest in a credible, well-designed common safe asset. Drawing a direct parallel with the Cecchini Report, which built momentum for the 1992 Single Market by quantifying the "cost of non-Europe", Visco calls for a similar exercise for finance, then sets out a three-stage sequence: first removing barriers through convergence in insolvency and tax procedures, then deepening the Savings and Investment Union via the proposed 28th regime, and only then introducing the safe asset as culmination rather than starting point. His closing argument is what he calls the sovereignty paradox: in a world of continental-scale capital markets, pooling financial capacity may be what allows member sta...

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VoxEU @ CEPR @voxeu.org · 3h

@sebastienfmjean.bsky.social & Jean-Pierre Landau argue that China's widening trade surplus reflects not just macroeconomic imbalances but a growth model aiming at industrial & technological dominance, sustained by high saving, capital controls and exchange-rate management. cepr.org/voxeu/column...

Figure shows the average of subsidies by firms' headquarters location in the automotive sector (percentage of annual firm revenue). Subsidies comprise government grants, income-tax concessions, and below-market borrowings.

China's trade surplus is widening, its manufactured exports are surging, and the political backlash is intensifying. This column argues that the widening trade surplus reflects not just macroeconomic imbalances but a growth model aiming at industrial and technological dominance, sustained by high saving, capital controls and exchange-rate management. The resulting comparative advantage, engineered through scale, subsidies and learning, is self-reinforcing and hard to challenge. Partners should coalesce around a common agenda combining renminbi appreciation alongside stricter international disciplines on subsidies and market access.

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VoxEU @ CEPR @voxeu.org · 3h

When undergraduates in Italy received either causal-reasoning training, ChatGPT, both, or neither, students with ChatGPT access scored better on the assignment but only those who received causal-reasoning training produced unique ideas. Chiara Fumagalli, Alfonso Gambardella cepr.org/voxeu/column...

Whether teaching a cognitive skill remains valuable in this era of AI is a crucial question in education and for firms. This column reports on an experiment in which around 1,000 undergraduates in Italy received either (1) causal-reasoning training, (2) access to ChatGPT, (3) both, or (4) neither. While students with ChatGPT scored better in an assignment to write a 180-word recommendation on a real-world problem, only those who had received causal-reasoning training produced unique ideas. The findings highlight the benefits of combining training in first-principles thinking with large language models.

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Centre for Economic Policy Research @cepr.org · 23h

@baldwinre.bsky.social writes for #Europe2050 contending Europe should not try to restore the old, American-led trading order, but instead become the strongest centre of gravity in the new one by playing to its strengths of economic mass, rule-based order & predictability. cepr.org/publications...

Twenty-five years from now, Richard Baldwin (IMD Business School) argues, the world trade system will not have collapsed but been rebuilt, into three blocs, Europe, the US and China, none strong enough to dominate the others. Writing for CEPR's Europe 2050 series as a "future history" looking back from 2050, he contends Europe should not try to restore the old, American-led order but instead become the strongest centre of gravity in the new one, using what he calls trade clout: economic mass multiplied by rule quality multiplied by predictability, all three levers within Europe's own control. He credits Europe's advantage partly to social cohesion, arguing a "muscular social policy" that keeps both winners and losers from economic change invested in the project gives Europe a stability the US bloc lacks, where populist swings remain a structural feature rather than a passing phase. Reviewing the EU's actual conduct since the tariff shock of April 2025, accepting an asymmetric deal with Washington rather than retaliating, building deterrent "bunkers" like the Anti-Coercion Instrument without firing them, and striking a rapid run of trade deals with India, Mercosur and Mexico, he reads this as disciplined strategy rather than weakness, given Europe's continued security dependence on the US. He traces the wider pattern to what he calls domino regionalism, in which countries outside the US-China conflict organise themselves into a "system of solar systems" with the EU as its largest sun, and sets out ten steps to reinforce this: completing the single market, enlarging to Ukraine and the Western Balkans, pursuing interoperability rather than merger with the CPTPP, and organising a "leadership herd" to negotiate a transparency and disciplines compact on Chinese industrial subsidies. His closing argument is that none of this is fully achievable without the last item on his list: an independently defended Europe, since trade policy can never be entirely autonomous while ...

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VoxEU @ CEPR @voxeu.org · 30/09/2026

Daniele Colombo and Francesco Toni show that a deterioration in expected future gas availability has a larger and more persistent effect on consumer prices than an interruption to current flows, even without an immediate physical shortage. cepr.org/voxeu/column...

Figure shows euro area supply instruments, allowing the authors to trace the effects of the different shocks separately over time and to estimate the short-run structural elasticities of gas demand and supply. Flow-supply surprises (blue) are gas-price revisions around realised flow disruptions; supply-security-news surprises (orange) are longer-dated futures-price revisions around news about future availability. Circled observations identify illustrative events. Values are percentage changes.

Europe’s output losses proved limited following the 2022 cutoff of Russian gas flows, yet inflation rose sharply. This column uses weather variation and gas-market events to distinguish gas-demand shocks from interruptions to current flows and news about future availability. A deterioration in expected future gas availability has a larger and more persistent effect on consumer prices than an interruption to current flows, even without an immediate physical shortage. Furthermore, lower gas use can coincide with weaker spending and production. Energy-security policy must make future availability credible by ensuring that alternative supplies and stored gas can be accessed under stress.

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VoxEU @ CEPR @voxeu.org · 30/09/2026

Though stock returns and consumption growth might appear disconnected, Carlo A. Favero, Alessandro Melone, Sean Myers, & Andrea Tamoni show that consumption helps identify the slow-moving component around which prices fluctuate. cepr.org/voxeu/column...

Debate over whether buoyant equity markets reflect durable economic gains or a widening gap between Wall Street and Main Street has intensified with the AI boom. This column argues that aggregate consumption provides a useful real-economy anchor for stock prices. Temporary departures from that anchor predict stock market returns from one quarter to two years ahead, including out of sample, but do not predict consumption growth. The evidence offers policymakers a real-time indicator of macro-financial dislocation, while stopping well short of a mechanical bubble test.

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Centre for Economic Policy Research @cepr.org · 29/09/2026

We're pleased to announce that CEPR's podcast, VoxTalks Economics presented by @talknormal.co.uk, is a finalist for a Signal Award two years in a row! Visit the link below to cast your vote for the Listener's Choice. Voting is open through 15 October. ow.ly/EFNy50ZSGQv @signalawards.bsky.social

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Centre for Economic Policy Research @cepr.org · 29/09/2026

The 1st Women in International Trade (WIT) European Conference starts tomorrow in Gerzensee, Switzerland. Programme: cepr.org/events/1st-w... Partners: @kiel.institute and the CAGE Research Centre Organisers: @estherboler.bsky.social, K Erhardt, @martinamagli.bsky.social @martasantamaria.bsky.social

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Centre for Economic Policy Research @cepr.org · 29/09/2026

P Aghion, @abergeaud.bsky.social , S Bunel, and A Roulet argue that there is no reason to expect that the net effect of AI on employment will be negative. However, as the direction of AI is yet unknown, they push for European-level "labour-enhancing" industrial policy. cepr.org/publications...

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VoxEU @ CEPR @voxeu.org · 29/09/2026

Geopolitical tensions are reshaping bank lending. Banks are shown to systematically curtail lending to firms exposed to geopolitical risk, with the strongest effects linked to sanctions and lending across geopolitical blocs. By: Dennis Reinhardt, Rhiannon Sowerbutts, Julian Reynolds

Geopolitical tensions are increasingly reshaping the flow of trade, investment and capital flows. This column documents that the same process is also reshaping bank lending. Using confidential supervisory data on thousands of international bank lending relationships, the authors show that banks systematically curtail lending to firms exposed to geopolitical risk. The effects are strongest when risks are linked to sanctions and when lending crosses geopolitical blocs, suggesting that geopolitics is a key determinant not only of how much banks lend but also of where they lend – even to their largest clients.

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VoxEU @ CEPR @voxeu.org · 29/09/2026

Randomised access to an AI patent-writing product raised the quality of drafts and compressed performance differentials among junior lawyers. However, on a subsequent task without AI tools, expertise gained from previous AI use appeared only among senior lawyers with seasoned judgement.

Figure: Estimated impact of AI access on patent drafting and redlining quality. Results are reported for all lawyers (black squares), junior lawyers under 7 years of experience (blue triangles), and senior lawyers with 7+ years of experience (orange diamonds). All estimates account for differences across law firms and adjust for slight variations in how many ratings each lawyer received.

Professional judgement comes from learning by doing, but AI has the potential to disrupt this learning process. This column explores how randomised access to an AI patent-writing product affects the performance of lawyers on certain writing tasks. Using the AI tool raised the quality of the drafts and compressed performance differentials, especially among junior lawyers. However, on a subsequent task without AI tools, expertise gains from the previous AI use appeared only among senior lawyers with seasoned judgement.

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VoxEU @ CEPR @voxeu.org · 29/09/2026

As the EU's role as a borrower evolved, so did the availability of relevant statistics. Martin Larch & Alice Lucius show that the EU's debt issuance on behalf of its member states increased 5x from 2020-2025 as well as highlight the implications associated with this trend. cepr.org/voxeu/column...

The EU’s far-reaching response to a series of major shocks has turned it into a major borrower on international financial markets. Debt issued by the EU on behalf of its member states now stands at close to 5½% of GDP, almost twice as much as six years ago. This column highlights two crucial issues associated with this trend. It reviews implications for conventional debt statistics and looks at debt servicing obligations.

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Centre for Economic Policy Research @cepr.org · 28/09/2026

Thank you to all of the attendees, speakers, and organisers for joining us in Barcelona for the 2026 joint workshop on Incentives, Management and Organization (IMO) and Entrepreneurship, Strategy and Firm Dynamics (ESF)!

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Centre for Economic Policy Research @cepr.org · 28/09/2026

CEPR Discussion Papers Week Ending 27/09/2026 - ow.ly/ClqU50ZS94u

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Centre for Economic Policy Research @cepr.org · 28/09/2026

The private sector has been slow to build in front-end interfaces that would let Europeans use the TIPS system. @agnesbq.bsky.social argues that the forthcoming digital euro will break the deadlock, neutralising the network effects entrenching Visa and Mastercard. #Europe2050

In August 2025, two European judges on the International Criminal Court lost access to Paypal, Visa and Mastercard after being sanctioned by the US administration over arrest warrants for Israeli officials. Writing for CEPR's Europe 2050 series, Agnès Bénassy-Quéré (Banque de France) treats this as the wake-up call it should have been: as of 2026, thirteen of the euro area's 21 member countries remain entirely reliant on non-EU networks for card payments, and even the domestic schemes that do exist are not interoperable across borders. This is despite the euro area having had a sovereign instant payment system, TIPS, since 2018, now extended to Sweden and Denmark; the problem, she argues, has been a private sector too slow to build the front-end interfaces that would let citizens actually use it at the till or online. Her central case is that the forthcoming digital euro, expected around 2029, can break this deadlock precisely because it will be legal tender: merchants will have to accept it, neutralising the network effects that entrench Visa and Mastercard, while a "waterfall" mechanism keeps wallets useable for payments without turning them into a competing store of value that drains bank deposits or the data banks rely on. She then extends the argument to wholesale finance, where a second wake-up call is looming: if tokenised securities end up settling in privately issued stablecoins rather than central bank money, the ECB could lose its role as lender of last resort over wholesale transactions, with financial stability and seigniorage both at risk. Her account of the Eurosystem's response, the Pontes and Appia projects, an expanding TIPS network reaching India and Switzerland, and participation in the BIS's Agorà initiative, reads less as a wish list than a project tracker: the infrastructure exists or is being built, and the outstanding question is less technical than one of urgency and adoption.

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Centre for Economic Policy Research @cepr.org · 28/09/2026

Join us on 16 October for an insightful conversation on European competition with Anthony Whelan, Director General of DG Competition, @cristinacaffarra.bsky.social & @tomasoduso.bsky.social 📆5:00 PM - 6:30 PM (CEST) | Online Register now: ow.ly/uWVn50ZS7Qk

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VoxEU @ CEPR @voxeu.org · 28/09/2026

In emerging markets, capital inflows raise output by strengthening domestic demand and easing financing conditions. Equity-type inflows have larger and more persistent effects, while inflow reversals impose disproportionally large costs.

This figure shows the cumulative responses of real GDP to a one-percentage-point increase in capital inflows relative to annualised trend GDP over an eight-quarter horizon. “Base” denotes our baseline estimates based on capital inflow shocks purged of expectation-driven components. “Net Capital Flows” uses net rather than gross capital inflows; “Excluding Post-Pandemic Period” excludes observations after 2020Q1; “IV” shows estimates using measures as external instruments; and “Actual inflows (OLS)” reports estimates from a regression using actual capital inflows. Shaded areas indicate 68 and 90 percent confidence intervals for the baseline specification in the left panel and the 90 percent confidence interval in the right panel.

Emerging market economies that are expected to perform well may attract more foreign capital, making it difficult to establish the causal effects of capital inflows on output. Using professional forecasts to account for expectations about future economic conditions, this column constructs an expectations-based measure of capital inflow shocks. The results suggest that capital inflows raise output by strengthening domestic demand and easing financing conditions; equity-type inflows have larger and more persistent effects, while inflow reversals impose disproportionally large costs.

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VoxEU @ CEPR @voxeu.org · 28/09/2026

Frontier AI models turn the EU's reliance on foreign-controlled technology into a strategic dependence, widening asymmetries. Eric Törnqvist & Jerzy Kopiński argue that rather than more regulation, the EU must mobilise risk capital, retain talent, and help frontier technologies emerge and scale.

Figure shows the cycle of fragility. Technological debt and limited access to frontier AI models as means of defence would lead to higher risk and less operational resilience. Higher risk means higher funding costs, which in turn reduce margins for investments and reinvestments, slowing and reducing innovation, and widening the technological gap with better-protected jurisdictions. Over time, this would reduce EU financial sector competitiveness, causing business to gradually shift its flow and financial institutions to relocate.

The cyber threat landscape changed dramatically in April 2026 with the emergence of frontier AI models from OpenAI and Anthropic. Access to these models was initially limited, and the US imposed a de facto export ban, since lifted. This column argues that these models turn the EU’s reliance on foreign-controlled technology into a strategic dependence, widening asymmetries between jurisdictions, between attackers and defenders, and between less and more capable financial institutions. The result could be a self-reinforcing cycle of fragility. Rather than more regulation, the EU must mobilise risk capital, retain talent, and help frontier technologies emerge and scale.

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VoxEU @ CEPR @voxeu.org · 28/09/2026

Reaching net zero by 2050 would require a globally coordinated carbon tax of $1300 per tonne of CO2, 10x current prices anywhere. Costs are predicted by how exposed an industry is through its supply chain and not by how much it directly emits.

Figure shows the transition pathway of macroeconomic variables under laissez-faire and Paris Agreement scenarios (8.37% global emissions reduction per year). Variables: world emissions, carbon tax, temperature, and GDP.

Reaching net-zero CO2 emissions by 2050, as prescribed by the Paris Agreement, is hard to imagine without a carbon tax. This column estimates that reaching the goal by carbon taxation will require a tax path that peaks at around $1,300 per tonne of CO2, ten times current prices anywhere, and highlights how industries will bear very unequal transition costs. The intuitive smokestack principle, that the biggest direct emitters should pay the most, turns out to be false: costs are instead predicted by a simple statistic capturing how exposed an industry is through its supply chain.

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VoxEU @ CEPR @voxeu.org · 28/09/2026

Marijn Bolhuis, Jakree Koosakul, Neil Shenai, & Jie Yang analyse the role of financial repression in the reduction of debt burdens in advanced economies. It has been a persistent feature of modern policymaking, playing an important role post-WWII and rising again since 2008. cepr.org/voxeu/column...

Figure shows a time series of the use of fiscal repression. Measures are normalised relative to the minimum value for each country. Solid lines denote the mean across countries and dashed lines the 25th and 75th percentiles.

With public debt at high peacetime levels, how advanced economies can reduce debt burdens is again at the centre of policy debate. This column examines the role of financial repression, perhaps the least studied channel, by applying new quantity-based measures to more than a century of data for 17 advanced economies. The findings show that repression has been a persistent feature of modern policymaking, playing an important role in post-World War II debt reduction and rising again since the Global Financial Crisis. With several of the conditions historically associated with repression present today, its use may increase going forward.

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Centre for Economic Policy Research @cepr.org · 25/09/2026

📢 #CallForPapers - CEPR-IO Virtual Gathering PhD candidates at European institutions are invited to submit their job market paper between 26 and 30 October to present at the next CEPR-IO Virtual Gathering. ow.ly/I1kS50ZRkzW Organisers: Daniel Ershov, João Montez, & Jiekai Zhang #EconSky

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Centre for Economic Policy Research @cepr.org · 25/09/2026

Sandra Sequeira & Hillel Rapoport propose a three-tier system for migration policy for Europe: cities testing and reporting what they can absorb, states setting aggregate numbers informed by that evidence, & multilateral arrangements coordinating training & credential recognition. ow.ly/EWep50ZRpEn

Migration policy is being decided under conditions unusually hostile to deciding well, with debate narrowed to how many immigrants to admit rather than on what terms. Writing for CEPR's Europe 2050 series, Sandra Sequeira (LSE) and Hillel Rapoport (Paris School of Economics) identify five myths they argue are distorting Europe's approach. First, that the public has turned decisively against migration: two decades of survey data show attitudes have been broadly stable or rising since 2002, with support conditional on integration outcomes rather than hostile outright, even as media coverage of a declining irregular flow creates an illusion of consensus opposition. Second, that guest worker programmes offer an easy win-win: historically they outlive the conditions that justified them, prove hard to close once opened, and undermine their own fiscal rationale by keeping workers in low-discretion jobs below their skill level, since anyone genuinely expected to leave has little incentive to invest in language or credentials. Third, that migration solves ageing: stabilising Europe's dependency ratio through migration alone would require inflows several times larger than anything now contemplated, and each new cohort simply ages into the dependent population it was recruited to support. Fourth, that quantity and quality can be cleanly separated: restrictive rhetoric aimed at attracting only the highly skilled disproportionately repels exactly those workers, who have more destination choices, producing what the authors call a "vicious circle of xenophobia" in which a more low-skilled composition then fuels the populism that drove skilled migrants away. Fifth, that policy experimentation is politically unfeasible: it is in fact happening across Europe, from Spanish regularisation to Irish and Italian pilots, but almost never designed to be evaluated, leaving governments to learn, if at all, from data collected years later for other purp...

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Centre for Economic Policy Research @cepr.org · 25/09/2026

@lucafornaro.bsky.social writes for CEPR's #Europe2050 and argues that Europe's transformation into an innovation leader depends less on structural reform alone than on getting the macroeconomic mix right. Robust productivity and strong demand can be mutually reinforcing. ow.ly/PqH850ZQZF9

The European Union faces a choice: keep competing in low-tech sectors by compressing wages, or become a genuine technological leader through innovation. Writing for CEPR's Europe 2050 series, Luca Fornaro argues that this transformation depends less on structural reform alone than on getting the macroeconomic mix right. His starting point is the "European stagnation trap" of the 2010s, when fiscal austerity and a monetary policy constrained by the zero lower bound produced a decade of weak demand and depressed investment, business investment took ten years just to recover its pre-2008 peak, and the productivity gap with the United States widened as a result. Fornaro's central argument is that robust productivity growth and strong demand can be mutually reinforcing rather than in tension: faster productivity growth is disinflationary, which gives central banks room to support demand without stoking inflation, which in turn encourages the business investment that drives further productivity gains. He argues this "virtuous cycle" means the composition of any economic expansion matters as much as its scale, with booms driven by high-tech, tradable sectors proving far more sustainable than those driven by construction or credit expansion in non-tradables. On fiscal policy, he points to evidence that public R&D investment can be self-financing, given estimated returns of 140 to 210%, and argues that high-debt countries in particular stand to benefit from redirecting spending towards such high-return public goods rather than treating debt as a reason to retrench. His final concern is that public debt overhangs risk splitting the EU into a fiscally sound bloc that invests and grows, and a fiscally stagnant one that cannot, with capital flowing from the latter to the former and widening the divide; joint EU-level financing of public goods, he argues, is one way to guard against this two-speed outcome.

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Centre for Economic Policy Research @cepr.org · 25/09/2026

Join CEPR and @piie.com for the launch of the 29th Geneva Report. 30 September from 9:00 AM to 10:00 AM EDT The report authors, Valentina Bruno, Steven B. Kamin, Cédric Tille, and Ángel Ubide, in conversation with moderator Caroline Atkinson. Register to join online: cepr.org/events/genev...

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VoxEU @ CEPR @voxeu.org · 25/09/2026

Data from France show that firms respond to increases in the minimum wage not only by employing fewer workers, but also by increasing training and flattening management hierarchies. Nicholas Lawson, Claire Lelarge, Grigorios Spanos cepr.org/voxeu/column...

Figure: Estimated firm responses to a 3.7% rise in minimum labour costs. Point estimates at average initial exposure to the GMR2 wage-guarantee group. Left panel: percentage changes. Right panel: percentage-point changes (pp). Revenue TFP is revenue-based total factor productivity, not physical productivity. The training estimate concerns production workers in relatively simple firms. Confidence intervals are not shown

How far can minimum wages rise without damaging jobs and output? This column uses evidence from France to show that firms respond not only by employing fewer workers, but also by increasing training and flattening management hierarchies. A quantitative model suggests that this reorganisation cushions the impact of moderate increases. Higher revenue productivity, however, is not a free efficiency gain, and the adjustment becomes less effective as wage floors rise.

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VoxEU @ CEPR @voxeu.org · 25/09/2026

The chat logs of AI companies are often used to measure what work AI actually does. A Bick, A Blandin, D Deming, & T Schumacher argue however that chat classifiers cannot see a user’s occupation and therefore classify use into a few generic activities and misattribute AI use across occupations.

Figure: Illustration of the classification chain for a chat asking for help analysing trends in data and showing how a task misclassification becomes an occupation misclassification.

The chat logs of AI companies are often used to measure what work AI actually does. This column uses a nationally representative US survey that links generative AI use to workers’ detailed tasks and compares them with task shares derived from Anthropic, Microsoft, and OpenAI chat data. The four sources disagree sharply, largely because chat classifiers cannot see a user’s occupation and therefore classify use into a few generic activities. Chat logs are informative but on their own can misattribute AI use across occupations and cannot substitute for measurement anchored in who the worker is.

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Centre for Economic Policy Research @cepr.org · 24/09/2026

Join us online for the next session of the Virtual Seminar on Monetary Economics. @ludwigstraub.bsky.social will present the paper "Exchange Rates and Monetary Policy with Heterogeneous Agents: Sizing up the Real Income Channel". 1 October 2026 | 17:00 CEST 🔗 ow.ly/4Yms50Z2zqW

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VoxEU @ CEPR @voxeu.org · 24/09/2026

The surge in data centre growth since 2021 has impacted electricity prices across US utility service territories. Data centres are found to raise electricity demand and prices, particularly for households. However, households served by nonprofit utilities see almost no increase in prices.

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VoxEU @ CEPR @voxeu.org · 24/09/2026

Giovanni Nicolazzo argues that, by 2050, Europe should aim for capital allocation that is low-friction but information-rich that can protect public allocation without imposing blanket controls on ordinary recipients. cepr.org/voxeu/column...

Europe's investment debate tends to ask how much capital can be mobilised and how quickly. Allocation quality also depends on who receives capital and on the spillovers their expansion creates. This column argues that for public allocation, Europe should combine simpler administration with stronger analytical capacity to recognise material anomalies in ordinary administrative information and transmit them early enough for competent authorities to assess and, where warranted, act.

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Centre for Economic Policy Research @cepr.org · 23/09/2026

Abebe Aemro Selassie argues that Europe is cutting aid, narrowing legal migration channels, & overlooking Africa for investment precisely when demographics argue for closer ties. Europe's disengagement is a choice, and Africa can look elsewhere for partners. cepr.org/publications... #Europe2050

By 2050, one in four people on earth will be African, and the continent will account for nearly 80% of the net increase in the world's working-age population between now and mid-century. Writing for CEPR's Europe 2050 series, Abebe Aemro Selassie (Blavatnik School of Government) argues that Europe is walking away from the partner best placed to help it navigate this shift, cutting aid, narrowing legal migration channels and overlooking Africa for investment, at precisely the moment the demographic arithmetic argues for closer ties. The numbers are stark: the EU's working-age population will shrink from around 285 million to 230 million over the next 25 years, while Africa's grows by more than 700 million, a "demographic scissors" that leaves one continent short of workers and the other short of jobs for them. Selassie is careful not to oversell migration as a fix on its own, he estimates Europe would need some 150 million additional workers just to preserve its current ratio of active workers to retirees, and argues legal pathways could plausibly cover only 10-15% of that shortfall, but he insists Europe should build predictable channels now, before ageing rivals from Canada to the Gulf states intensify competition for the same mobile labour. He identifies climate finance as a second natural area for partnership: renewable energy projects in Africa cost two to three times more to finance than identical projects in Europe, purely because of currency and sovereign risk, a gap EU-backed guarantees and local-currency lending could narrow substantially. Finally, he argues Europe and Africa share an interest in defending a rules-based trading order against being squeezed as price-takers between Chinese manufacturing dominance and American financial and technological power, and should negotiate jointly rather than separately, including calibrating instruments like the EU's carbon border mechanism to reflect African im...

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Centre for Economic Policy Research @cepr.org · 23/09/2026

In their contribution to CEPR's #Europe2050 initiative, Marco Buti, Ivo Maes, & André Sapir argue that the EU's incremental, technocratic fixes have run their course and only explicit, citizen backed institutional reform can equip the EU to act. ow.ly/33sq50ZQ6y7

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Centre for Economic Policy Research @cepr.org · 23/09/2026

The CEPR Virtual Industrial Organisation Seminar #VIOS Series starts up again on 30 September at 15:00 CEST featuring Karam Kang presenting: 'Inefficiencies in Local Infrastructure: Evidence from Drinking Water in California' Discussant: Claire Lim Register: cepr.org/events/event... #EconSky

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Centre for Economic Policy Research @cepr.org · 17/09/2026

Register for online or limited in-person attendance for a high-level conference: "Everything, Everywhere, All at Once? Demography, Human Capital, and Economic Transformation". The conference will be held at the World Bank's Paris Office on 1-2 October. RSVP by 25 September. ✍️ ow.ly/VOvy50ZOIOJ

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Centre for Economic Policy Research @cepr.org · 23/09/2026

📢 #CallForPapers - 2027 WEFIDEV - RFS - CEPR Conference 📆6-8 May 2027 |📍 Milan, Italy ⌛Deadline: 15 November 2026 Theoretical and empirical submissions on financial markets in low and middle-income countries are invited. ow.ly/nwon50ZQ2Ty

To promote research on issues in this important area, the WEFIDEV network in Finance and Development, the CEPR, and the Review of Financial Studies will convene a research conference on finance and development.
The conference will be held in person on May 6th through 8th in Milan, Italy and will be hosted at the SDA Bocconi School of Management at Bocconi University. This will be the third annual conference in finance and development featuring a dual submission option with the RFS.

We invite the submission of empirical – both experimental and non-experimental – as well as theoretical work on financial markets in low and middle-income countries. We encourage submissions from early-career scholars including PhD students, and underrepresented groups.

The program will be organised by RFS Executive Editor Tarun Ramadorai of LSE, Imperial College Business School and CEPR, RFS Editor Viral Acharya of New York University and CEPR, and program chairs Giorgia Barboni, Kim Fe Cramer, Sean Higgins, and Nicola Limodio, along with the programme committee.

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VoxEU @ CEPR @voxeu.org · 23/09/2026

Natalia Fabra & Mar Reguant argue that the binding constraint on the energy transition is no longer technology but market design. Fixing it means rethinking how renewable energy investment is financed and how demand is brought along. cepr.org/voxeu/column... #EconSky

Figure shows economy-wide electrification rates in the EU, China, US, Australia, Japan, and South Korea. With an electrification rate of only 24%, well below China’s 34%, Europe still requires substantial additional clean generation to reduce its dependence on fossil fuels.

Solar and wind have become the cheapest sources of new electricity almost everywhere, yet Europe is now switching them off in record numbers. This column argues that the binding constraint on the energy transition is no longer technology but market design — and that fixing it means rethinking how renewable investment is financed and how demand is brought along.

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Centre for Economic Policy Research @cepr.org · 22/09/2026

Next week on the Autumn #WE_ARE Seminar Series, we will be focusing on Microeconomics & Applied Microeconomics! 🎙️Viola Salvestrini 📄Gender Diversity and Decision-Making in Teams 🎤Anne Boring Register 👉 ow.ly/KCRs50ZQeuF ⏰Monday 28th @ 4.15pm (GMT) #EconSky #WomenInEcon

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Centre for Economic Policy Research @cepr.org · 22/09/2026

@jafrieden.bsky.social & @stefwalter.bsky.social argue that Europe's problem is political: there is no consensus among member states about how far and how fast to integrate. Rather than waiting, Europe should move in coalitions in areas of high payoff and high political friction. ow.ly/iECq50ZQ5OU

The EU was built for a rules-based, Western-led international order that now looks like a relic. Writing for CEPR's Europe 2050 series, Jeffry Frieden (Columbia) and Stefanie Walter (University of Zurich and Bruegel) argue that Europe's problem in confronting an adversarial United States, an assertive China and a hostile Russia is not primarily economic but political: there is no consensus among member states, or within them, about how far and how fast to integrate. Drawing on survey data spanning the Eurozone crisis and party positions across the EU27, they show that political feasibility varies enormously by issue, from near-unanimous support for expanding the ESM to near-universal rejection of Commission pre-approval of national budgets, and that this feasibility rarely lines up with where the economic payoff from integration is largest. Their answer is differentiated integration: rather than waiting for unanimity, Europe should let coalitions of the willing move first in areas of high payoff and high political friction, such as a European safe asset or joint defence of the eastern border, while leaving areas like welfare or education policy at the national level and treating others, from grid integration to joint procurement, as low-hanging fruit. They point to Schengen's evolution from five founding members to near-universal EU membership as the template: a successful club creates its own momentum, making it increasingly costly for holdouts to stay outside. Beyond institutional design, they argue Europe's leaders need three habits it currently lacks: crafting reforms with built-in flexibility and lock-in effects rather than one-size-fits-all treaties, being honest with voters about the genuine trade-offs of compromises rather than pretending them away, and communicating in language citizens can actually parse, given that Commission press releases are, on average, harder to read than academic journal abstracts.

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Centre for Economic Policy Research @cepr.org · 22/09/2026

We'd like to congratulate CEPR VP and Distinguished Fellow @pgourinchas.bsky.social, the recipient of the 2026 Bernhard Harms Prize awarded by @kiel.institute. Pierre-Olivier has been an established member of the CEPR community since 1998. Full statement: ow.ly/eQk050ZPFlZ

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Centre for Economic Policy Research @cepr.org · 22/09/2026

#CallForPapers International Seminar on Trade (ISoT) – 3rd Edition 20-21 May 2027 | Munich, Germany Deadline: 10 Jan 2027 Organisers: Costas Arkolakis, Carsten Eckel, Lisandra Flach, Gianmarco Ottaviano, Claudia Steinwender, Daria Taglioni cepr.org/events/inter... @econmunich.bsky.social @cesifo.org

The Journal of International Economics, LMU Munich, ifo, CESifo, World Bank, and CEPR are pleased to organise the 3rd edition of the “International Seminar on Trade” (ISoT). The conference will feature a keynote address by Kalina Manova (UCL and CEPR).
20-21 May 2027 - ifo Institute, Munich, Germany
The organisers invite submissions for the 3rd edition. By submitting a paper in response to this call, authors agree that it may also be considered for publication in a special issue of the Journal of International Economics. Paper submitted to ISoT must therefore not be under consideration for publication in another journal.
The refereeing process for the special issue will be overseen by two Guest Editors, who will be Kalina Manova (UCL, CEPR) and Pol Antras (Harvard University, CEPR).
Organising Committee: Costas Arkolakis, Carsten Eckel, Lisandra Flach, Gianmarco Ottaviano, Claudia Steinwender, and Daria Taglioni.

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VoxEU @ CEPR @voxeu.org · 22/09/2026

Panel evidence from 23 emerging markets shows that those with a more independent central bank and lower levels of public debt experience lower portfolio outflows during periods of global financial stress. Annamaria de Crescenzio, Etienne Lepers cepr.org/voxeu/column... #EconSky

Figure shows monthly portfolio inflows to emerging markets (in billions of US dollars)
Source: OECD Monthly Capital Flow dataset.
Note: Covers 25 emerging markets. Equity flows not available for China in April 2026. See De Crescenzio and Lepers (2025) and OECD Monthly Capital Flow dataset for full data description and coverage.

Emerging markets are vulnerable to sudden shifts in investor sentiment, which can lead to pressure on exchange rates and financing conditions. Using panel evidence from 23 emerging markets, this column shows that the sensitivity of portfolio flows to global shocks has weakened since the Global Crisis. However, sensitivity varies widely across countries. Countries with more independent central banks and lower levels of public debt experience lower portfolio outflows during periods of global financial stress. The results highlight that although emerging markets cannot control global factors, they can influence their resilience to these shocks.

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VoxEU @ CEPR @voxeu.org · 22/09/2026

Data from Finland show that more productive firms are more likely to hire internally. The most productive firms may have an advantage because they are better at seeing the capabilities already inside their organisations. R Alonso, J DeVaro, A Kauhanen, N Valmari cepr.org/voxeu/column... #EconSky

When a job vacancy opens, the manager faces a choice: to hire from outside the organisation, or to fill the position with an existing employee through a promotion or horizontal move. This column uses data from Finland to show that more productive firms are more likely to hire from within. As technological change reshapes jobs and the skills they require, the ability to recognise and redeploy existing talent may become increasingly valuable. The most productive firms may have an advantage not only because they have better workers or better technology, but because they are better at seeing the capabilities already inside their organisations.

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Stefanie Walter @stefwalter.bsky.social · 21/09/2026

1/3 How can Europe thrive in a fragmenting world and reform despite political divisions between and within countries? In our @cepr.org Europe 2050 contribution, @jafrieden.bsky.social & I argue that political feasibility must be a central consideration in any reform design. cepr.org/publications...

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Centre for Economic Policy Research @cepr.org · 21/09/2026

Europe has spent a quarter of a century building a financial architecture it has never agreed to finish. Florian Heider, Loriana Pelizzon, & Claudia Schaffranka set out 10 specific decisions that could keep a genuinely convergent Europe reachable within 15 years. ow.ly/mIZ350ZPBUS #Europe2050

Europe has spent a quarter of a century building a financial architecture it has never agreed to finish. Writing for CEPR's Europe 2050 series, Florian Heider, Loriana Pelizzon and Claudia Schaffranka (all SAFE, Goethe University Frankfurt) argue that the usual framing of the choice ahead, completion versus collapse, is a false binary. The likelier outcome, they contend, is a third state they call mediocrity: an architecture in which every institution formally exists, every directive has been transposed, and none of it binds. Twenty-seven insolvency regimes, no common safe asset, and a Banking Union missing its deposit insurance pillar leave capital and liquidity trapped inside national borders, even as European households export around €300 billion a year into more liquid American markets. Mediocrity has genuine beneficiaries, from national supervisors to domestic banks with captive deposit bases, which is precisely why it persists: each element of completion imposes concentrated, immediate costs on organised incumbents while its benefits are diffuse and go to firms and savers who do not yet exist. But the authors insist mediocrity is not a stable resting point. It is a state built for calm conditions that decays into fragmentation under stress, and the conditions that made it survivable for twenty-five years are ending: tokenisation, stablecoins and AI are standard-setting contests that Europe cannot win by abstaining, and a fragmented Europe's fallback is not national self-sufficiency but deeper dependence on American capital markets and dollar-denominated digital money. They set out ten specific, largely already-drafted decisions, from a permanent EU safe asset to completing deposit insurance, that could keep a genuinely convergent Europe reachable within fifteen years, arguing that this is a hard ask but a precise one: not what Europe should aspire to, but which of ten known files it is prepared to conclude.

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Centre for Economic Policy Research @cepr.org · 21/09/2026

23 September @17:00 CEST International Macro History Online Seminar #IMHOS 🗣️Barry Eichengreen presents 'Money Beyond Borders' Chair: Rui Esteves ✍️ cepr.org/events/event... #EconSky

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VoxEU @ CEPR @voxeu.org · 21/09/2026

Paul Beaudry, Paolo Cavallino, & Tim Willems show that narrow windows around nonfarm payroll releases and speeches by prominent Federal Reserve policymakers capture 80-90% of the observed increase in long-term US yields, despite covering only 24% of trading days. cepr.org/voxeu/column... #EconSky

The figure graphs the 10-year US Treasury yield, the 5-year/5-year forward rate, and the average expected short rate over the next 10 years.

The sharp rise in long-term interest rates since 2020 is difficult to explain from slow-moving fundamentals. This column shows that narrow windows around nonfarm payroll releases and speeches by prominent Federal Reserve policymakers capture 80-90% of the observed increase in long-term US yields, despite covering only 24% of trading days. These events primarily shift expectations about the policy-rate path rather than the natural rate of interest. This suggests that natural rate of interest may anchor long-term rates less firmly than standard theory assumes, allowing shifts in monetary policy perceptions to generate persistent, and potentially self-validating, movements in yields.

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VoxEU @ CEPR @voxeu.org · 21/09/2026

The US-China trade war reshaped manufacturing activity far beyond the two directly targeted economies, but not in one uniform direction. Industries in the intermediate stages of global supply chains were squeezed from two sides while the most upstream and downstream industries gained on average.

The figure shows the four tariff channels separately for North America excluding the United States, Asia excluding China, Europe, and the rest of the world. The regional panels underline that there is no single third-country effect of the trade war. The balance between trade diversion, higher input costs, and disrupted supplier-customer relationships differs markedly across regions. Asia and North America were, on average, more negatively exposed, while Europe was broadly insulated on average.

Trade wars do not simply redirect exports; they also reshape the costs of production, disrupt supplier-customer relationships, and trigger adjustments within multinational firms’ global affiliate networks. This column uses data covering millions of manufacturing plants in 50 major economies to show that the US-China trade war reshaped manufacturing activity far beyond the two directly targeted economies, but not in one uniform direction. Industries in the intermediate stages of global value chains were squeezed from two sides: higher costs when they relied on US or Chinese inputs, and weaker demand from customers affected by the trade war. The most upstream and most downstream industries, by contrast, tended to gain on average.

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Centre for Economic Policy Research @cepr.org · 21/09/2026

The winter conference in December 2025 of the EP:PEGI brought together economists to discuss Ukraine's wartime economy and reconstruction. That work is now out on Oxford University Press (Vol. 41, Issue 125): ow.ly/ihla50ZKl9f

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