iiinova — where your digital self keeps evolving

VoxEU @ CEPR @voxeu.org · 01/10/2026

@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 · 01/10/2026

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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VoxEU @ CEPR @voxeu.org · 30/09/2026

The authors also summarised the report for VoxEU where they briefly touch on the main points, as well as outline two different paths to the next decade dependent on the economic policy actions of the US, Europe, and China. cepr.org/voxeu/column...

cepr.org

Changing structure and challenges of the international financial system: Imbalances, currencies, and financial stability

Concerns are growing about the state of the global economic and financial architecture. The 29th Geneva Report on the World Economy focuses on four key pillars of the global economic order – global im...

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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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Reposted by VoxEU @ CEPR

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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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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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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VoxEU @ CEPR @voxeu.org · 25/09/2026

How far have US supply chains decoupled from China? @chadpbown.com joins Tim Phillips on #VoxTalks this week to examine US imports product by product, and why responses to the 2025 tariffs differed across consumer electronics, clothing and footwear. 🎧 Listen now: ow.ly/Usco50ZRvCI #EconSky #Trade

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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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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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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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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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VoxEU @ CEPR @voxeu.org · 21/09/2026

How does inheritance law shape who receives our wealth? Switzerland loosened its inheritance rules in 2023. Marius Brülhart joins Tim Phillips to discuss what almost 17,000 wills reveal about how people responded to greater freedom. 🎧Listen to the latest #VoxTalks now: ow.ly/3aTj50ZPBrP #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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VoxEU @ CEPR @voxeu.org · 21/09/2026

David Deming, Katrine Løken, Alexander Willén, & Yaling Xu use Norwegian survey data to show that workers who spend more time in meetings experience faster wage growth and that meetings are more common at firms with high wage premia and higher revenue. cepr.org/voxeu/column... #EconSky

This figure compares how time spent on different workday activities predicts wage rank growth. The figure reports, for each activity, the coefficient from a separate regression of wage rank growth on the standardised time a worker spent on that activity during their most recent in-office day, with its 95% confidence interval. All regressions include individual controls and sector, occupation, and firm fixed effects. Individual controls include gender, college education, age group, immigrant status, marital/cohabitation status, union membership, municipality of residence, and baseline wage. Standard errors are clustered by firm.

Few features of modern work are as widely criticised as meetings. Using data from over 9,000 workers in Norway, this column examines how meetings are organised and their effects on firm outcomes. The average worker in our survey spends 4.7 hours per week in meetings, with managers and professionals spending substantially more time in them than other workers. Meetings are substantially more common at firms with higher wage premia and higher revenue, while workers who spend more time in meetings experience faster wage growth, suggesting that meetings provide opportunities to exchange information and knowledge that may benefit not only the firm, but also the workers who participate in them.

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VoxEU @ CEPR @voxeu.org · 18/09/2026

Forecasts of AI-driven job destruction rest on automatable tasks. However, people are hired for occupations, not just tasks. 140 years of Swedish census data show that roughly 70% of workers today are in occupations whose core functions already existed in the late-19th century. ow.ly/Eq8I50ZP0Zy

Figure: Share of Swedish employment by technological occupational wave, 1880-2019.

Forecasts of AI-driven job destruction rest on counting automatable tasks. But labour markets hire, pay, and fire whole occupations, not tasks – and occupations have proved far more durable than task exposure implies. Drawing on 140 years of Swedish census and register data, this column shows that roughly seven in ten workers today are in occupations whose core functions already existed in the late-nineteenth century. The mass-unemployment fear is overstated; the subtler question is whether today’s technological wave still generates the durable, specialised new work that earlier ones did.

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VoxEU @ CEPR @voxeu.org · 18/09/2026

Fiscal sustainability should be assessed using the consolidated balance sheet of the federal government and central bank and the present discounted value of current and future primary deficits. The US federal government's non-monetary net worth is likely to be significantly higher. ow.ly/3gcc50ZP0Ee

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VoxEU @ CEPR @voxeu.org · 17/09/2026

High inventories, emergency stock releases, rerouting, and demand compression have bought time for global oil markets, with prices rising by less than the loss of physical supply alone would have suggested. But how long will these buffers continue to absorb the shock? cepr.org/voxeu/column...

Figure shows oil prices and crack spreads.

The 2026 Middle East conflict and the disruption of traffic through the Strait of Hormuz generated the largest physical supply disruption in the history of global energy markets. This column examines why energy prices rose by less than the loss of physical supply alone would have suggested. High inventories, emergency stock releases, rerouting, and demand compression have bought time. The key policy question is how long these buffers can continue to absorb the shock.

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VoxEU @ CEPR @voxeu.org · 17/09/2026

US VC-backed Swedish startups experience deeper operating losses, receive more follow-on capital, and achieve higher subsequent sales. Europe needs to ensure that startups can access sufficiently deep pools of capital and investor networks. cepr.org/voxeu/column... #EconSky

High-growth startups often lose money before they make it. This column examines whether differences in financing capacity are reflected in the cash flow and growth trajectories of startups in Sweden, where US and non-US venture capitalists invest in the same institutional environment. The authors find that US VC-backed Swedish startups experience deeper operating losses, receive more follow-on capital, and achieve higher subsequent sales. The test for the Scaleup Europe Fund, intended to support growth-stage investments of €100 million or more, is whether it mobilises additional private capital and provides credible continuity of finance, not simply whether it deploys its initial commitment.

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VoxEU @ CEPR @voxeu.org · 17/09/2026

Data from 45 countries show that currency undervaluation, combined with reserve accumulation under capital controls, expands manufacturing employment, firm entry, and domestic sourcing of intermediate inputs. Paul Bergin, Woo Jin Choi, Ju Hyun Pyun cepr.org/voxeu/column... #EconSky

Global current account imbalances are widening again. This column argues that currency undervaluation, supported by reserve accumulation under capital controls, can permanently reshape industrial structure and raise manufacturing productivity. Panel evidence from 45 countries shows that this policy mix expands manufacturing employment, firm entry, and domestic sourcing of intermediate inputs. A model with firm dynamics and trade hysteresis explains why: sustained exchange rate policy can induce firm entry and exit, reallocating firms across countries and expanding the domestic capture of supply chains. The effect of the policy on the trading partner hinges on whether foreign firms are pushed to exit.

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VoxEU @ CEPR @voxeu.org · 16/09/2026

Gilbert Cette, Giuseppe Nicoletti, & Océane Vernerey show that AI adoption is weaker where the age distribution of a workforce is tilted towards young or elderly workers. However, higher AI exposure in an industry moderates these demographic effects. cepr.org/voxeu/column... #EconSky

Numerous studies have analysed the effects of AI on productivity, growth and employment. Few of these focus on the factors that promote or hinder the uptake of AI. Drawing on the results of a European survey, this column analyses these factors, including the role of the age structure of the workforce. The authors find evidence of an inverted U-curve between workforce age and AI adoption, with adoption being weaker where the age distribution is tilted towards young or elderly workers. However, higher AI exposure in an industry moderates these demographic effects, perhaps due to a skill-levelling effect of the new technology.

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VoxEU @ CEPR @voxeu.org · 16/09/2026

Mapping the Italian automotive supply chain, L Brugnara et al. find 40% of the value added of the supply chain is from car manufacturers. The remaining 60% is split between direct & indirect suppliers. The supplier network is diverse across sectors & regions. cepr.org/voxeu/column... #EconSky

Figure: Share of automotive-related value added on total provincial (NUTS-3) value added in the non-financial, non-real-estate private sector.

Europe’s automotive industry is undergoing a significant transformation. This column uses firm-to-firm data to map the Italian automotive supply chain, covering both direct suppliers and firms connected through indirect linkages. Around 40% of the value added of the supply chain is generated by car manufacturers, with the remaining 60% split between direct suppliers and indirect suppliers. The supplier network is diverse across sectors and regions of Italy, reflecting both agglomeration forces and long-standing patterns of industrial specialisation. It estimates that demand shocks to the automotive sector would propagate through the supply chain and lead to large network multipliers.

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VoxEU @ CEPR @voxeu.org · 15/09/2026

Providing free access to Le Monde for French high-school students led to a persistent increase in news consumption, and a large increase in news knowledge among students enrolled in disadvantaged high schools in particular. cepr.org/voxeu/column... #EconSky

The figure plots the responses to the question: “What type(s) of news interest you the most?” in the baseline survey in October 2024. The categories, in decreasing order, are: Sport, Politics, People, International, Culture, Social issues, Sciences, Environment, Economics. An observation is a student who has completed both the baseline and the endline surveys (N = 7, 091).

Is declining news consumption among young people inevitable? This column reports on a large-scale randomised controlled trial in France to test whether free access to a major newspaper and teacher training in media education can boost newspaper reading among high-school students. Providing free access to Le Monde led to a persistent increase in news consumption, and a large increase in news knowledge among students enrolled in disadvantaged high schools in particular, suggesting that access to high-quality news and media education can contribute to reducing socioeconomic inequalities in news knowledge.

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VoxEU @ CEPR @voxeu.org · 14/09/2026

As the Bank of England approaches the 30th anniversary of operational independence, a wide-ranging review is likely. Sushil Wadhwani suggests five measures for the Bank of England that might reduce the losses associated with quantitative easing in the future. cepr.org/voxeu/column... #EconSky

The Bank of England is approaching the 30th anniversary of operational independence and a wide-ranging review is likely. With growing political interest in the issue, this column suggests five measures that might reduce the losses associated with quantitative easing in the future. Given that, two years after the Bernanke Review, markets continue to doubt that the Bank will achieve its inflation target, the author also proposes some measures that might help strengthen credibility.

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VoxEU @ CEPR @voxeu.org · 14/09/2026

Marvin Amann, @ygorodnichenko.bsky.social, & Oleksandr Talavera show that Ukrainian allocative productivity is down approx. 20% from its 2021 level by 2024, with roughly half of the wartime output loss attributable to misallocation rather than destruction. cepr.org/voxeu/column... #EconSky

The figure shows that allocative productivity in Ukraine was roughly flat through 2021, then fell sharply after February 2022. By 2024 it stood ~20% below its 2021 level, while none of the peer economies deteriorated comparably.

Estimates of the cost of Russia’s war on Ukraine are dominated by what the war destroys. This column measures a second cost: the labour and capital that survive but end up stuck in low-value uses. Firm-level financial statements filed throughout the full-scale invasion show allocative productivity approximately 20% below its 2021 level by 2024, with roughly half of the wartime output loss attributable to misallocation rather than destruction. Attack intensity, not distance from the front, determines where the damage falls. Unlike destroyed capital, this loss can in principle be recovered without new investment.

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VoxEU @ CEPR @voxeu.org · 14/09/2026

L Kilian & K Patel use the 2026 Iran war as a natural experiment to estimate the price elasticity of US shale oil supply. The monthly & quarterly elasticities are effectively zero, providing indirect support for the view that oil prices are driven by demand shocks. cepr.org/voxeu/column... #EconSky

Figure: WTI futures curve, 31 March 2026

The 2026 Iran war provides a natural experiment that allows model-free estimation of the price elasticity of US shale oil supply. This column argues that the monthly and quarterly elasticities are effectively zero. This finding is supported by data on well completion times, survey data, and economic theory. The analysis contradicts higher oil supply elasticity estimates from recently proposed non-standard panel regression specifications, which attribute the supply response to shale oil producers strategically reducing inventories of drilled but uncompleted wells. The findings provide indirect support for the view that oil prices are mainly driven by demand, rather than supply, shocks.

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VoxEU @ CEPR @voxeu.org · 14/09/2026

In countries where intellectual property protections are weak, firms may instead turn to contractual exclusivity by limiting the number of manufacturers their suppliers can serve, reducing the suppliers' customer base and bargaining power. cepr.org/voxeu/column... #EconSky

Figure: Each dot is a country. The weaker its legal protection for trade secrets, the higher the share of car-parts contracts in that country that are exclusive.

Modern manufacturing often requires firms to share confidential information with outside suppliers, some of whom also supply their competitors. Using more than 160,000 contracts from the global automotive industry, this column examines how manufacturers respond to this risk and the costs of doing so. The findings suggest that when legal protection is weak, firms may instead turn to contractual exclusivity by limiting the number of manufacturers their suppliers can serve, reducing the suppliers’ customer base and bargaining power and potentially weakening their incentives to invest. Stronger legal protection reduces the need for this contractual response and can therefore support broader supplier networks.

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VoxEU @ CEPR @voxeu.org · 11/09/2026

⚽ Does sacking the manager work? On #VoxTalks Economics, Jan van Ours and Tim Phillips explore the “new-manager bounce”. Using Dutch football data, he asks whether teams improve because they replace their manager or if they would have improved anyway. 🎧 Listen now: ow.ly/ucqm50ZMAxW #EconSky

⚽ Calling all football fans! The season is back underway, so what better time to ask: Does Sacking the Manager work?

When a football team is underperforming, replacing the manager can seem like the obvious response. And results often do improve after a new manager arrives.

But would they have improved anyway?

In the latest episode of #VoxTalks Economics, Tim Phillips speaks with Jan C. van Ours (Erasmus School of Economics) about his research on managerial replacements in Dutch football.

Looking at seven seasons of the Eredivisie, van Ours uses bookmaker odds and expected goals to distinguish poor performance from bad luck, and to examine what happens when struggling clubs replace their manager.

He finds that performance tends to improve after a manager is replaced. But when he compares these clubs with similar cases in which the manager stayed, performance improves there too.

So how much of the “new-manager bounce” can really be attributed to the new manager?

And if you’re not a football fan, there’s still plenty here for you. The conversation explores what football can tell us about managerial turnover in business, why managers may become scapegoats for poor performance, and why there can be pressure to act even when the benefits of doing so are uncertain.

🎧 Listen now: https://ow.ly/3pnQ50ZMAxX

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VoxEU @ CEPR @voxeu.org · 11/09/2026

French data show that firms become large primarily through occasional, large 'innovation bursts' rather than innovating at persistently higher rates. Industrial policy that entrenches the position of incumbents may slow down the churn that sustains aggregate growth. cepr.org/voxeu/column... #EconSky

Industrial policy is back on the agenda across advanced economies, with a growing channelling support towards large incumbent firms on the premise that they are the most capable innovators. This column uses data on French manufacturing firms to argue that this premise deserves scrutiny. Firms become large primarily through occasional, large 'innovation bursts' rather than by innovating at persistently higher rates. The arrival of these bursts involves an element of chance, so a firm's current size says little about how much it will innovate in the future. Policies that entrench the position of incumbents may therefore slow down the churn that sustains aggregate growth.

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VoxEU @ CEPR @voxeu.org · 10/09/2026

As return-to-office mandates have intensified, occupational inflexibility has re-emerged as a significant predictor of employment declines - and only for women. By: Stefania Albanesi cepr.org/voxeu/column... #EconSky

Figure: Bars report annual averages of same-month differences in the employment rate, conditional on age, educational attainment, and two-digit SOC occupation. Error bars are 95% confidence intervals. ‘With children’ denotes co-residence with a child under 12. Note the strong recovery through 2023 and the visible retrenchment in 2024–2025 for women with children.

The labour force participation of women in the US peaked in 1997 and has stagnated since. This column argues that workplace inflexibility is the common thread running through this puzzle, using COVID-19 as a natural experiment. Women were hit harder than men in the initial downturn due to both over-representation in high-contact and inflexible service occupations and school closures. When remote work relaxed flexibility constraints, mothers’ employment rebounded strongly above pre-pandemic levels. But as return-to-office mandates have intensified, occupational inflexibility has re-emerged as a significant predictor of employment declines – and only for women.

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VoxEU @ CEPR @voxeu.org · 10/09/2026

Geopolitical risk can increase the demand for gold relative to sanctionable sovereign assets. K Arvai, N Coimbra, & M Pinchetti find evidence of active portfolio adjustment consistent with this mechanism, w/ stronger adjustment in countries less aligned with the US. cepr.org/voxeu/column... #EconSky

Figure: gold share of reserves, indexed to 100 in January 2013.

US Treasuries remain the world’s dominant reserve asset, but geopolitical risks can change how central banks assess the trade-off between liquidity and protection from foreign jurisdictions. This column argues that geopolitical risk can increase the demand for gold relative to sanctionable sovereign assets, putting upward pressure on the gold price and sovereign bond yields. It finds evidence of active portfolio adjustment consistent with this mechanism and shows that the adjustment is stronger in countries less aligned with the US. The results suggest that geopolitical considerations are becoming increasingly relevant alongside the traditional financial determinants of reserve allocation.

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VoxEU @ CEPR @voxeu.org · 09/09/2026

Economic research is constrained by time & labour and access to data & methods. AI helps to dissolve those constraints, but may also exacerbate challenges that the profession is already grappling with, and risks raising volume without necessarily increasing insight. cepr.org/voxeu/column... #EconSky

For centuries, economic research has been throttled by scarcity of time, labour, and access to data and methods. This column argues that while AI helps dissolve that constraint, it can also exacerbate challenges the profession is already grappling with. And by blurring the traditional distinction between observing the world and modelling it, AI may even challenge our definition of good research.

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VoxEU @ CEPR @voxeu.org · 08/09/2026

K Manova, D Novy, @thomsampson.bsky.social, & A Tang show that confusion about the current state of tariff policy led to a decline in US imports similar in size to the reduction caused by tariff increases alone. Confusion doubled the negative impact of tariffs. cepr.org/voxeu/column... #EconSky

This figure plots the decline in US imports by origin country due to higher tariffs (blue) and tariff confusion (number of announcements, orange) in the month with each country’s highest average US tariff across products. Total import decline: mean 13%, standard deviation 8%. Share due to tariff confusion: mean 50%, standard deviation 15%.

The year 2025 was unprecedented in the frequency, complexity, and volatility of US trade policy interventions. This column uses a new database tracking US tariff announcements during the year to show that confusion about the current state of tariff policy led to a decline in US imports that was similar in size to the reduction caused by tariff increases alone, meaning that confusion doubled the negative impact of tariffs. Product customisation, relationship trust, and partner reputation can help firms maintain trade activity during information shocks.

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VoxEU @ CEPR @voxeu.org · 08/09/2026

Costas Arkolakis, Sun Kyoung Lee, & Michael Peters analyse how immigration shapes long-run growth through its contribution to innovation. Without the Age of Mass Migration from 1880-1920, US GDP per capita would have been 8.2% lower by 1940. cepr.org/voxeu/column... #EconSky

Figure: Panel (A) shows the number of natives and immigrants holding at least one patent, per 1,000 individuals. Panel (B) shows patents per capita and the immigrant share across counties by quintile of urbanisation, each indexed to 100 in the least-urban quintile. Patents per capita are computed from the full population of geolocalised patents, not the subset matched to the US Census, so the urban gradient does not reflect differences in match rates.

US net migration turned negative in 2025 following a sharp tightening of immigration policies. This column turns to the Age of Mass Migration and the sharp policy reversal of the 1921 and 1924 Quota Acts to examine how immigration shapes long-run growth through its contribution to innovation. The authors find that without the Age of Mass Migration, US GDP per capita would have been 8.2% lower by 1940, while the policy that ended mass migration harmed the US comparatively little. They also demonstrate the importance of geography: the impact of immigration on productivity depends not only on how many arrive and how skilled they are, but also where they settle.

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VoxEU @ CEPR @voxeu.org · 07/09/2026

A column summarising their Policy Insight was published by Edoardo D. Martino, Eric Monnet, and Enrico Perotti on VoxEU. They discuss various steps to reform the EU stablecoin framework so as to avoid multi-country issuance risks. cepr.org/voxeu/column... #EconSky

cepr.org

Automatic stabilisers for multi-country issuance stablecoins

Multi-country issuance allows the same stablecoin to be issued by legally separate entities in different jurisdictions while circulating as a single, technologically fungible token. This structure cre...

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VoxEU @ CEPR @voxeu.org · 07/09/2026

Shane Byrne, Kenneth Devine, Michael King, Yvonne McCarthy, & Christopher Palmer show that inattention is a key friction in the transmission of monetary policy, but that direct communication by central banks can help counteract that. cepr.org/voxeu/column... #EconSky

Figure shows refinancing treatment effects. Blue bars report experimental treatment effects on internal refinancing. Red bars report model-implied effects of a 100-basis-point decrease in mortgage rates holding attention fixed. The green bar reports the US time-series correlation between rate gaps and prepayment. Error bars denote 95% confidence intervals.

Central banks can move policy rates, but transmission depends on households acting on them. This column shows that central banks can mitigate monetary policy’s ‘last-mile problem’ with direct communication. In Ireland, a mortgage refinancing reminder increased refinancing with borrowers' existing lender by up to 76% relative to the control group, from 8.9% to 15.7% of borrowers. The results suggest that inattention is a key friction and that central bank communication holds promise.

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VoxEU @ CEPR @voxeu.org · 07/09/2026

Using data from 118 countries over 1957-2007, Antonio Ciccone finds that a one standard deviation decline in world agricultural prices raised the risk of civil-war onset by around 30%, with larger effects in sub-Saharan Africa. cepr.org/voxeu/column... #EconSky

Falling agricultural prices have been found to generally increase armed civil conflict in producing regions, but not the risk of the most lethal conflicts – civil wars. This column shows that the evidence for civil-war onset is consistent with the broader evidence on armed civil conflict when agricultural price indices isolate changes in world prices from changes in countries’ exports. Across 118 countries over 1957–2007, a one standard deviation decline in world agricultural prices raised the risk of civil-war onset by around 30%, with larger effects in sub-Saharan Africa. The evidence points to falling producer incomes, rather than rising consumer food prices, as the mechanism.

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VoxEU @ CEPR @voxeu.org · 07/09/2026

The rollout of faith-based initiatives across US states from 1996-2009 led to increased church attendance among protestants, new faith-based organisations, & the hardening of views against abortion & homosexuality. The rest of the population continued to secularise. cepr.org/voxeu/column... #EconSky

The figure shows event-study estimates of church attendance for Protestants and non-Protestants, relative to the year before a state’s first faith-based initiative.

The White House Faith Office is expanding federal support for religious organisations. Can government policy change how religious citizens are, and what does blurring the line between church and state do to attitudes and polarisation? Exploiting the staggered rollout of ‘faith-based initiatives’ across US states from 1996 to 2009, this column shows that church attendance rose sharply among Protestants, new faith-based organisations multiplied, and social views hardened against abortion and homosexuality, while the rest of the population continued to secularise.

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VoxEU @ CEPR @voxeu.org · 07/09/2026

Bruno Merlevede & Bernhard Michel use data on the worldwide affiliates of European multinationals to show that foreign network restructuring has transitioned from expansion to contraction between 2010-2020, with an increase in nearshoring and friendshoring. cepr.org/voxeu/column... #EconSky

Figure: Number of foreign network restructuring episodes by type and end year. A restructuring episode consists of consecutive years during which the number of foreign affiliates changes. Episodes are classified according to the net change in foreign affiliates over the episode. The sample covers episodes ending between 2010 and 2019.

Geopolitical tensions have reshaped international trade and investment flows in recent years. This column uses data on the worldwide affiliates of European multinationals over 2010-2020 to study how these firms are restructuring their foreign networks. Foreign network restructuring has transitioned from expansion to contraction over this period, with an increasing share of episodes involving nearshoring, friendshoring, or both. Crucially, network contractions are not associated with higher home-country activity, contrary to expectations. By contrast, network expansions are shown to boost parent activity and domestic networks.

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