The real wage of non-college workers in the U.S. has grown by about 20 per cent since the 1980s, which is less than half of the growth in aggregate labour productivity. This is rather puzzling because low-skill workers tend to work in sectors that have higher productivity growth, yet their wages are lagging behind those of high-skill workers and […]
In an environment with low migration costs and relevant tax rate differentials among countries, the net balance of top-income individuals’ flow is a crucial policy issue. For a single country or region, depending on people’s sensitivity to tax differentials, setting higher taxation rates may originate a leakage of highly productive workers, with a related reduction in fiscal revenue. On […]
“When it is unable to defend itself with the sword, Rome can defend itself by means of fever”. These are the words of the medieval chronicler Goffredo da Viterbo who, in 1167, told of how Rome, every summer, was plagued by malaria. The sting of the mosquito made no distinctions of wealth or birth and there were thousands of […]
In an increasingly uncertain world, the concept of ‘risk’ has come to the forefront of policy. We use it to describe the likelihood of a range of negative events occurring, from car accidents, to illnesses, to flooding. Derived from risicare – the vulgar Latin verb for ‘sailing a ship off a cliff’ – the modern usage of risk originates […]
In October, the US Department of Justice launched a federal antitrust lawsuit against Google, accusing the technology giant of abusing its dominance in the market for internet search. We invited both the US and European panels of the IGM Forum at the University of Chicago to express their views on some of the issues surrounding this case. We asked […]
Overall, the pandemic has been bad – often very bad – for business in the short term. In the long term, however, it creates opportunities for innovation and efficiencies in richer nations and unprecedented growth and development in poorer ones.
This does not detract from how bleak the immediate picture can be. COVID restrictions have meant that many businesses, particularly […]
Since Keynes, the benefits associated to countercyclical fiscal policies have been recognised by the greater part of the economics community. Indeed, the global financial crisis and, especially, the current COVID-19 crisis saw massive increases in public debt in order to support households and firms’ viability while getting the economy back in gear.
In particular, several papers have studied the effects […]
The negative impact of the pandemic on small enterprises is well documented. In a two-month period, from February to April 2020, the number of active business owners in the US fell by 3.3 million, or 22 per cent, the highest change in recorded history. To mitigate the impact of these changes, economies implemented numerous crisis response measures, including revising their procurement procedures to […]
The regulatory changes introduced after the 2007-08 global financial crisis require banks to have contingency plans in case of distress. However, it is still not clear how such plans could be effective in resolving banks’ problems and mitigating systemic risk. The COVID-19 crisis and the drastic policy response that followed has produced an army of companies limping along in […]
By all accounts, trust in the corporate sector is at an all-time low, and perhaps – for the first time in the history of humankind – it is a global phenomenon. While stock markets worldwide, and particularly in the United States, continue to rally, this is accompanied by an unprecedented economic contraction, conservatively estimated at 5 to 10% of […]
On September 22, 2020, in a forum jointly hosted by the CBI and the LSE, my co-author Ron Milo, from Israel’s Weizmann Institute of Science, and I presented a strategy to return to work in COVID-19 times in a way that will improve both health and economic outcomes. In this article I present the “big picture” and the possibility […]
Essentially, all environmental problems are scale problems. It is difficult to imagine that the human impact on the global climate system would be a top priority in a world with a global population of 8 million. Even with substantially higher fossil fuel consumption per capita, this hypothetical economy would emit only a small fraction of current carbon emissions. However, […]
“We know what can end poverty. But how come poverty never diminishes?” was the reply I received from Harry, who works as a gig worker in a city in Scotland when we were discussing poverty. The reason I specify his identity is because it is significant to what I am about to elaborate.
Indonesia’s rural poverty has always been higher […]
The Planning for the Future white paper tackles one costly feature of the British planning system: its peculiar reliance on case by case, essentially political, decision making for all significant development (see here). Tall office towers are significant developments, so whether or not to permit them is subject to this political process. In Chicago it is straightforward. There are rules. […]