Economics & Finance

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    COVID-19 makes inclusion a strategic imperative for companies and investors

COVID-19 makes inclusion a strategic imperative for companies and investors

To quote Singapore’s senior minister Tharman Shanmugaratnam from his national address last month, “the future begins now”. That future will be dramatically different not only for governments and individuals but also for big business and big finance. A silver lining to the devastation of COVID-19 could be the onset of a new era for both stakeholder capitalism and sustainable investing.

The future […]

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    UK economic problems: diagnosing is easier than coming up with solutions

UK economic problems: diagnosing is easier than coming up with solutions

With Boris Johnson’s launch of his “New Deal” and Michael Gove’s speech on “the privilege of public service”, the government has made clear its intention to press ahead with the domestic agenda of “levelling-up” and reform of government on which it was elected. There was little surprise in either announcement, with all of the elements to be found previously […]

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    Financial crises and right-wing populism: how do politics and finance shape each other?

Financial crises and right-wing populism: how do politics and finance shape each other?

The current health crisis, with its long-term repercussions on the political structure of countries, offers new avenues for researchers to understand how political systems interact with financial actors. The topic was recently discussed in the first London Political Finance (POLFIN) workshop, which reached an international audience of more than 200 scholars interested in the topics at the intersection of […]

Do structural reforms yield growth?

“History doesn’t repeat itself, but it often rhymes.” This quote is attributed to Mark Twain who, born in 1835, lived through the turn of the 20th century: an era of great transformation. Likewise, the turn of our decade promises to be an era of great change, most notably due to the way the coronavirus epidemic will reshape our economies and […]

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    COVID-19 is an opportunity to challenge problematic VC culture

COVID-19 is an opportunity to challenge problematic VC culture

In the midst of the global COVID-19 pandemic, Sequoia Capital, one of the largest and most influential venture capital (VC) firms in the world, issued a grim letter of warning. They warned their portfolio companies of deals falling through, with slowing sales and a tough fundraising environment. They encouraged reducing expenses, spending “wisely” and “raising productivity” by reducing headcount.

There […]

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    Deglobalisation post COVID-19 could spell trouble for the European Monetary Union

Deglobalisation post COVID-19 could spell trouble for the European Monetary Union

The COVID-19 crisis led to severe restrictions in mobility across borders, concerning both individuals and goods. Borders were closed, international travel made almost impossible, and final and intermediate goods were unable to get from one country to another. Massive disruptions of global value chains were caused by inputs not being manufactured due to lockdowns or not being delivered.

While the […]

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    Spreading out: COVID-19 and the changing geography of consumption

Spreading out: COVID-19 and the changing geography of consumption

An important message throughout the COVID-19 crisis has been to “stay home”. Our analysis based on debit card purchase data until 15 June shows that this has a profound impact on where consumers spend their money. Cities have been hit hard, while in peripheral commuting zones, consumption expenditures have been even higher than in 2019. An interesting side-effect of staying […]

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    Twenty-six per cent of EU+UK workers risk losing their jobs in the COVID-19 crisis

Twenty-six per cent of EU+UK workers risk losing their jobs in the COVID-19 crisis

Many businesses across the world have already laid off their workers, furloughed them, or shortened their work hours. Governments have used a variety of job retention programs, most fashioned after the German Kurzarbeit program of the previous Eurozone crisis. These require massive budget allocations and are hardly sustainable over a longer period of time. Differentiated policies to deal with […]

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    Manufacturing matters for the UK economy — more than people commonly think

Manufacturing matters for the UK economy — more than people commonly think

The UK is largely seen as a ‘service-based’ economy, which means that services – such as financial, legal, research & development (R&D), real estate and so on – account for the bulk of economic output and employment. Manufacturing, on the other hand, only formally accounts for around 10% of the economy and 9% of employment.

However, manufacturing’s importance for the […]

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    ‘Never let a crisis go to waste’: entrepreneurship in the age of coronavirus

‘Never let a crisis go to waste’: entrepreneurship in the age of coronavirus

“Never let a crisis go to waste!”, People may say this when facing some sort of significant challenge, and trying to turn it to their advantage. As COVID-19 has become a global crisis, it presents enormous opportunities to some people. In fact, this crisis is no idle time for many entrepreneurs. They are among the first to offer and […]

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    Recessions give businesses time to improve — if governments let them

Recessions give businesses time to improve — if governments let them

The Covid-19 lockdowns brought a huge drop in demand for goods and services and unprecedented levels of excess productive capacity – idle factories, machines, and workers. Excess capacity is normally harmful, but there can be a silver lining. When machines and workers are idle, their time can be put to alternative uses. In a healthy economy, time spent on […]

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    Less red tape, more local entrepreneurship and foreign direct investment: the path to recovery

Less red tape, more local entrepreneurship and foreign direct investment: the path to recovery

Fiscal crises such as the one spurred by the COVID-19 pandemic motivate regulatory reform, which in turn can speed up the economic recovery. Past evidence suggests that this acceleration takes place through two main channels: new local entrepreneurship and increased foreign direct investment (FDI).

Entrepreneurship is critical for the continued dynamism of the modern economy, as forcefully argued by Austrian […]

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    Young people exposed to an epidemic have less trust in political institutions for the rest of their lives

Young people exposed to an epidemic have less trust in political institutions for the rest of their lives

It is widely argued (by, inter alia, Fukyuama 2020) that the keys to success in dealing with COVID-19 are “whether citizens trust their leaders, and whether those leaders preside over a competent and effective state.” By way of example, Rothstein (2020) ascribes the greater success at containing the COVID-19 in the Nordic countries than in Italy in part to […]

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    The UK’s fresh produce supply under COVID-19 and a no-deal Brexit

The UK’s fresh produce supply under COVID-19 and a no-deal Brexit

In 2018, only 28% of adults were eating the recommended five portions of fruit and vegetables per day in the UK – and the average was 3.7 portions per day. Fewer men than women meet the five-a-day guideline, and young people aged 16 to 24 are also less likely than other adults to get their five-a-day. In 2018, 18% […]

COVID-19: an opportunity to digitise property transactions

Private property rights facilitate greater access to credit. Using data on Russian businesses, a recent study finds that private land rights increase access to external financing by 40 per cent and promote larger investment by as much as 60 per cent.

When property rights are not secure, fear of expropriation may drive entrepreneurs to delay or rescind investment decisions. Researchers […]

How to keep up wellbeing during the pandemic

The World Wellbeing Panel (WWP) promotes wellbeing as the ultimate purpose of all major decision-makers, particularly government. It routinely asks questions of relevance to wellbeing policy of its panel of 50 world experts. WWP’s latest survey asked for advice on “how to maintain wellbeing during isolation while facing huge emotional stress from the threat of the COVID-19 virus”.

Twenty-six members […]

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    Raising money from “the rich” doesn’t require increasing tax rates

Raising money from “the rich” doesn’t require increasing tax rates

A progressive tax system takes a larger amount from those most able to pay: someone who receives £100,000 should pay a larger share of that in tax than someone earning £10,000. A horizontally-neutral tax system takes the same amount from people with the same level of resources: two people receiving £100,000 should pay the same tax. The UK income […]

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    How to deal with higher debt levels and falling prices post-lockdown

How to deal with higher debt levels and falling prices post-lockdown

In response to the economic fallout from the coronavirus lockdown, public debt has soared in many advanced economies. Against this backdrop, many argued that we should not fear rising debt because inflation is an unlikely scenario and because of current low interest rates. Yet, less attention has been given to the potential implications of higher levels of debt and […]

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    Reshoring in the age of coronavirus: beware of the hurdles in leaving China

Reshoring in the age of coronavirus: beware of the hurdles in leaving China

We are in a global crisis. It’s a matter of life and death. There are still shortages of supplies and equipment around the world including acute shortages in America. We know there is plenty of manufacturing capability around the world for consumer goods, PPE, testing equipment, and medical devices such as ventilators. But flexing global supply chains is complicated […]

Regulatory reforms: the silver lining after COVID-19

Governments resort to regulatory reform in difficult times, when their fiscal balances deteriorate. The COVID-19 crisis has already resulted in large fiscal deficits for 2020. These deficits are likely to worsen by the end of the year as social distancing rules stay into effect for a further period. Few firms can survive a protracted lockdown or collapsed revenues due […]