VoxTalks Economics
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Learn about groundbreaking new research, commentary and policy ideas from the world's leading economists. Presented by Tim Phillips.
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S9 Ep63: Inflation and the polarisation of reality
In recent years, shoppers in Türkiye do not need the evening news to tell them prices have been rising, because they see it at the till. But the till only tells you about the history of inflation. When they …
Shownotes
In recent years, shoppers in Türkiye do not need the evening news to tell them prices have been rising, because they see it at the till. But the till only tells you about the history of inflation. When they turn on the television, the news might tell them what to expect next, and which channel they choose will matter.
Orkun Saka (City St George's, University of London) and his co-authors matched a monthly household survey to the transcripts of prime-time news on 13 Turkish channels. He tells Tim Phillips about how the way a channel talks more about inflation, and how often it mentions the word, affects what viewers expect will happen next. Do polarised TV channels lead to a "polarisation of reality"?
The research behind this episode:
Demiralp, Selva, Orkun Saka, and Michael Weber. 2026. "Polarized Media and Inflation Expectations." CEPR Discussion Paper 21747. Paris and London: Centre for Economic Policy Research.
To cite this episode:
Phillips, Tim, and Orkun Saka. 2026. “Inflation and the polarisation of reality.” VoxTalks Economics (podcast).
About the guest
Orkun Saka is a Reader in Economics at City St George's, University of London. He is also affiliated with the London School of Economics and the CESifo Network. His research spans financial intermediation, international finance and political economy.Research cited in this episode
Turkey's 2022 inflation peak. Annual consumer price inflation in Turkey reached 85.5% in October 2022, according to the Turkish Statistical Institute, its highest level in 24 years. It followed a run of interest rate cuts while inflation was rising. Orkun uses the episode to explain why expectations in Türkiye became so detached from the official figures. See Al-Monitor (2022).Heterodox monetary policy. For several years the Turkish government argued that lower interest rates would bring inflation down, the reverse of the textbook view. In the experiment, respondents were asked whether they agree that "lower interest rates are needed to curb high inflation"; neutral-channel viewers whose inflation expectations rose became less likely to agree.
Freedom House press rating. In 2014, Freedom House downgraded Türkiye's press from "partly free" to "not free" in its annual Freedom of the Press report. The paper uses this, with evidence on media ownership and regulation, as background to its classification of 13 channels as pro-government, neutral or pro-opposition.
Koç University Household Inflation Expectations Survey (KUHIES). Koç University. 2024. Koç University Household Inflation Expectations Survey. A nationally representative monthly survey of about 2,500 Turkish adults, launched in January 2024. It asks respondents what inflation was over the past 12 months, what it will be over the next 12, which channel they watch for prime-time news and how they voted in 2023. In the paper's sample, mean expected inflation was 101%.
News selection as a signal. Nimark, Kristoffer P., and Stefan Pitschner. 2019. "News Media and Delegated Information Choice." Journal of Economic Theory 181: 160-196. Newsrooms decide what is important enough to report, so the choice to cover a topic tells the audience something before they hear a word of the story. Orkun's finding that the amount of inflation coverage matters more than its tone fits this idea.
The 2024 local elections. Turkey held local elections on 31 March 2024. In the run-up, election news crowded economic news out of prime time, so inflation coverage fell for reasons unrelated to viewers' beliefs. The authors use this as a natural experiment; as coverage fell, expectations fell with it.
Bayesian updating. A way of describing how people revise beliefs; they start from a prior, see new information, and arrive at a posterior that weighs the two. People with weak priors move further when new information arrives. In the experiment, the test is whether the usual close link between a respondent's prior and posterior inflation expectation weakens after reading a news story.
Experimenter demand effects. de Quidt, Jonathan, Johannes Haushofer, and Christopher Roth. 2018. "Measuring and Bounding Experimenter Demand." American Economic Review 108 (11): 3266-3302. Survey participants may give the answer they think the researcher wants. To reduce this, the experiment asked about posterior expectations using a differently worded question from the first.
The polarisation of reality. Alesina, Alberto, Armando Miano, and Stefanie Stantcheva. 2020. "The Polarization of Reality." AEA Papers and Proceedings 110: 324-328. People with different political views hold systematically different beliefs about the same facts. Orkun argues that inflation is a particularly worrying place for this to happen, because monetary policy depends on a shared view of where prices are going.
More VoxTalks Economics episodes
How should we measure expected inflation? Ricardo Reis on which measures of inflation expectations are reliable, and how well they anticipated the surge in European inflation from 2021.Social media polarization. Yves Zenou on when social media pulls opinions apart and when it brings people together, the open question Orkun raises at the end of this episode.
Related reading on VoxEU
When the news you watch shapes the inflation you expect, a VoxEU column summarising the panel and experimental evidence from this research.Household inflation expectations: Taking stock of the recent research insights for monetary policy, a VoxEU column by Francesco D'Acunto, Evangelos Charalambakis, Dimitris Georgarakos, Geoff Kenny, Justus Meyer and Michael Weber on how households form and act on inflation beliefs.
Monetary policy in the news: The FOMC's media coverage and inflation expectations, a VoxEU column showing that hawkish media coverage of the Federal Reserve lowers households' inflation expectations, especially when inflation is high.
S9 Ep62: How well do bug bounties work?
For three decades years, software makers have paid bug bounty hunters to break their code so they can make it more secure. Recently, some software companies have decided that bug bounties programmes aren't …
Shownotes
For three decades years, software makers have paid bug bounty hunters to break their code so they can make it more secure. Recently, some software companies have decided that bug bounties programmes aren't useful any more: Curl shut its bounty in January, and Intel suspended its own in September. And the discovery of the PHP flaw that sent websites offline in October came from researchers working with AI, not from a bounty hunter's report.
Tobias Kretschmer (Imperial College London, CEPR) and his co-authors followed 86 programmes on Bugcrowd to discover how they work best. Do you run closed programmes, open only to invited hackers, or open them to all comers? And what happens now that AI is making a bug report cheaper to produce? Tim Phillips asks Kretschmer how well bug bounties are working.
The research behind this episode:
Zrahia, Aviram, Sarit Markovich, and Tobias Kretschmer. 2026. "Platform Openness: Evidence from Bug Bounty Programs." CEPR Discussion Paper 21970 (gated).
To cite this episode:
Phillips, Tim, and Tobias Kretschmer. 2026. "How well do bug bounties work?" VoxTalks Economics (podcast).
About the guest
Tobias Kretschmer is Professor of Strategy, Technology and Organisation at Imperial College Business School and a Research Fellow at the Centre for Economic Policy Research. He joined Imperial in 2025 from LMU Munich. His research spans competitive strategy in digital industries, platform markets, and the digital transformation of organisations.Research cited in this episode
Bug bounties. Netscape launched the first technology bug bounty on 10 October 1995, offering rewards for flaws found in the Navigator 2.0 beta. Jarrett Ridlinghafer, a technical support engineer, proposed the idea after he saw enthusiasts finding bugs for free. In this paper's data, the average reward for a unique vulnerability is about $566 in private programmes and $209 in public ones. High-priority flaws average about $1,440.Bugcrowd connects organisations with independent security researchers. It gave the authors anonymised records of more than 480,000 submissions to 2,483 programmes, from mid-2012 to mid-2021. The data predates the widespread use of AI-generated submissions, so the paper measures the effect of openness, not the effect of AI. The authors argue that AI sharpens the same problem.
Triage. Each submission is classified as rejected, duplicate, or unique. A unique report identifies a flaw nobody has reported before. Only the first valid report generally earns a reward, so a duplicate can be good work that arrived late. It must still be reviewed.
Wisdom of the crowd. Francis Galton's "Vox Populi" (Nature, 1907) reported that the median of about 800 guesses at an ox's dressed weight, made at a Plymouth livestock show, was remarkably close to the true figure. Eric Raymond gave software its version in "The Cathedral and the Bazaar": "given enough eyeballs, all bugs are shallow". Maillart and co-authors tested that idea on bug bounties in 2017. Kretschmer's point is that real attackers differ in their objectives and methods; a varied crowd resembles them more closely than one employee can.
Open and closed programmes. Anyone can join a public programme; a private one is by invitation. Bugcrowd and many other bounty platforms leave that choice to the software company rather than setting one rule for all. Many other platforms keep far tighter control, which makes this the governance decision worth studying. Kretschmer and co-authors set out the wider argument about platforms as organisations in 2022. Among programmes that never switched, public ones were 7.6% of programmes but drew about half of all submissions. Private ones accounted for about 59% of unique discoveries and nearly 80% of dollar rewards.
Comparing like with like. Firms choose their regime deliberately, so comparing open with closed programmes misleads. The authors focus on the 86 programmes that switched once from private to public, and compare them with programmes that stayed private. The main estimates are about 23 more submissions a week, nearly six more unique vulnerabilities, 10 more new researchers, and seven more duplicates. An alternative estimator built for staggered timing gives smaller figures: about 15, three, seven, and six. The effect is front-loaded. Weekly submissions averaged about five before opening, reached about 70, then settled near 20 within 10 weeks. Opening is a choice, not an experiment, and the authors say so.
Quality mix. This is the share of incoming submissions that are unique. It is about 16 percentage points higher in private programmes, and it falls by about 17 points when a programme opens. Opening produces more discoveries in absolute terms and a smaller share of useful reports.
Monitoring. The authors cannot see how much firms spend on review, so they count verdicts per submission. One more weekly verdict is associated with about $139 more in weekly rewards in public programmes and about $508 in private ones; this is an association, not a causal estimate. A rough calculation in the paper suggests that opening pays only when a programme's discoveries have fallen to fewer than about 3.5 a week, before review costs. Programmes that opened averaged about 2.2. The authors say they do not identify the best moment to open, and Kretschmer makes the same point in the episode.
Programmes that have closed. Curl ended its bounty on 31 January 2026 after paying more than $100,000 for 87 confirmed vulnerabilities since 2019. Its creator, Daniel Stenberg, reported that the confirmed rate fell from more than 15% of submissions to below 5%, which he blamed in large part on AI slop. Intel suspended its programme in September 2026, which paid up to $100,000 per flaw, and replaced it with one that pays nothing. It gave no reason. Google stopped accepting product vulnerability reports to its open source reward programme on 1 October 2026, a change it calls temporary.
PHP2Shell. Two critical flaws, CVE-2026-109618 and CVE-2026-109619, were patched in PHP on 21 October 2026. PHP runs about 69% of websites whose server-side language is known, and many operators took sites offline as a precaution. Calif found the first route to an attack during an audit under OpenAI's Patch the Planet programme, and Wiz and OpenAI reported further ones; all used AI tools. The PHP Foundation says a core developer first saw signs of one flaw in 2024, then the fix stalled, and it calls that delay "a structural failure" of process and resources. It reports 15 CVEs and 106 reports closed as invalid, duplicate, or non-reproducible since 1 July, and says "the models don't make the calls".
Open source software. Both curl and PHP are open source, maintained by small teams on which much of the web depends. Kretschmer argues that no single model fits. A firm may keep tight control of its core code and open the rest to its users. A related CEPR paper by Miklos Koren and co-authors, "Vibe Coding Kills Open Source", models how AI could weaken the user engagement that sustains these projects.
More VoxTalks Economics episodes
How well does patent screening work? Mark Schankerman on another system that depends on experts sorting good claims from bad ones.Will AI transform economic growth? Anton Korinek on what happens if AI starts to automate AI research.
Related reading on VoxEU
Platform regulation: What policymakers can and cannot learn from utility industries, a VoxEU column by Sven Werner and Tobias Kretschmer arguing that rules for digital platforms must account for the independent participants those platforms oversee.Cybersecurity vulnerabilities and their financial impact, a VoxEU column showing that firms with high cyber exposure earn about 0.42% lower excess returns per month.
A brief look of the economics of open source software, a VoxEU column from 2011 by Neil Gandal on why volunteers contribute and how firms came to mix open and closed code.
S9 Ep61: Cooperatives in the 21st century
Go to work, follow orders all day, and your living standards will rise. That is the deal behind the capitalist economy. In his forthcoming book, Cooperatives in the twenty-first century, Francesco Caselli (LSE …
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Go to work, follow orders all day, and your living standards will rise. That is the deal behind the capitalist economy. In his forthcoming book, Cooperatives in the twenty-first century, Francesco Caselli (LSE, CEPR) argues that the deal has been broken for two generations. Pay at the top keeps climbing. Pay in the middle and at the bottom has barely moved.
The usual fixes for spiralling inequality are higher taxes on the rich and stronger unions. Francesco's answer is to change who owns the firm. In a worker cooperative there are no outside shareholders, so the profits stay with the people who produce them. In conversation with Tim Phillips, he explains which of the economic objections to cooperatives are red herrings, and which ones are more serious.
The research behind this episode:
Caselli, Francesco. 2026. "Worker-Managed Firms Can Curb Inequality and Protect Free Markets." VoxEU.org, 7 October.
Caselli, Francesco. Forthcoming. Cooperatives in the Twenty-First Century: How Worker-Managed Companies Can Curb Inequality and Support Free Markets. Cambridge, MA: Harvard University Press.
To cite this episode:
Phillips, Tim, and Francesco Caselli. 2026. "Cooperatives in the 21st century." VoxTalks Economics (podcast).
About the guest
Francesco Caselli is Norman Sosnow Professor of Economics at the London School of Economics and Director of the Macroeconomics and Growth Programme at the Centre for Economic Policy Research. He is a Fellow of the British Academy and of the Econometric Society. His research spans growth, technical change and inequality, the sources of economic development, the economic and political effects of natural resource wealth, and how voters select politicians.Research cited in this episode
The labour share. The labour share is the part of national income paid to workers as wages; the rest goes to the owners of capital as profit. Caselli's point is that profits flow mostly to people at the top of the income distribution, so when the labour share falls, inequality rises even if pay within firms stays the same. That is why he argues ownership, not executive pay, is the bigger part of the story.Wealth taxes. Tim raises Thomas Piketty, who argues for higher taxes on top incomes and on wealth. Caselli agrees in principle, but says any victory is temporary because concentrated wealth funds the campaign to reverse it. For evidence on how people respond to a wealth tax in practice, listen to Marius Brulhart on Switzerland's cantons, linked below.
Worker bargaining power. The other standard fix, associated with labour economists such as Suresh Naidu of Columbia University, is to strengthen unions and give workers more power to bargain. Caselli puts it in the same category as wealth taxes; desirable, but vulnerable to the same political erosion.
Mondragon. The Mondragon group of cooperatives in the Basque Country of Spain is the best known example of worker ownership at scale. Caselli cites its rules that let members keep a stake in the returns to investment after they leave, which answers the worry that departing workers will vote against investing in a future they will not share.
WBO Italcables. When the owners of a steel wire plant in Caivano, on the outskirts of Naples, gave up on it, the workers bought it and ran it as a cooperative. Il Manifesto reported its reopening in December 2015. Caselli says the firm has since grown, invested in new equipment and exports worldwide, and uses it to question whether closures are always healthy creative destruction.
The residual claimant. The residual claimant keeps whatever is left after the bills are paid. In a conventional firm that is the shareholder; in a cooperative it is the workers. Armen Alchian and Harold Demsetz (1972) used the idea to explain why firms have owners who monitor effort. Caselli turns it round: when a slacking colleague costs you money, you watch your colleagues.
The compensating differential. A compensating differential is the pay people will give up for a job with other rewards, such as meaning or status; the idea goes back to Adam Smith's The Wealth of Nations (1776). Caselli says it is how cooperatives keep their most able members, and accepts there is a limit to it.
The talent drain. Gabriel Burdin (2016) found that in Uruguay's worker-managed firms, where pay is more equal, the highest-ability members are more likely to quit. This is the objection Caselli treats as serious, and his answer may surprise listeners who expect a defence of strict pay equality.
Pro-worker AI. Daron Acemoglu, David Autor and Simon Johnson argue that AI can be designed to complement workers rather than replace them, in CEPR Policy Insight 123, "Can We Have Pro-Worker AI?" (2023). Caselli argues that AI developers build what their customers want, and that cooperative customers would want something different.
More VoxTalks Economics episodes
Wealth taxes. Marius BrÃulhart uses Switzerland's cantonal wealth taxes to show what happens when the rich are taxed on what they own, the fix Caselli fears will not last.Inequality and creative destruction. Richard Blundell on how to get innovation-driven growth without letting the churn widen inequality.
Related reading on VoxEU
Worker-managed firms can curb inequality and protect free markets. Francesco Caselli's column sets out the argument of the book and answers the classic objections to cooperatives.Labour in the boardroom: The effects of codetermination on firm performance and wages. Simon Jager, Benjamin Schoefer and Joerg Heining find that giving workers seats on German company boards does little for wages, which suggests a minority voice is not the same as ownership.
How AI can become pro-worker. Daron Acemoglu, David Autor and Simon Johnson propose policies to steer AI towards complementing workers rather than automating them away.
S9 Ep60: The challenges to the international financial system
The 29th Geneva Report on the World Economy examines three pressures on the international financial system at once: global imbalances, the status of the dollar, and the stability of bond markets. Two of its …
Shownotes
The 29th Geneva Report on the World Economy examines three pressures on the international financial system at once: global imbalances, the status of the dollar, and the stability of bond markets. Two of its authors, Valentina Bruno (American University, CEPR) and Cédric Tille (Geneva Graduate Institute, CEPR), tell Tim Phillips why stocks, the dollar and US Treasuries all fell on Liberation Day in April 2025, why that could happen again, and what we should do about it.
So is this a rupture, or a transition in the world's financial system?
The research behind this episode:
Bruno, Valentina, Steven B. Kamin, Angel Ubide, and Cedric Tille. 2026. "Changing Structure and Challenges of the International Financial System: Imbalances, Currencies, and Financial Stability." Geneva Reports on the World Economy 29. Geneva: International Center for Monetary and Banking Studies; Paris and London: CEPR Press. Free to download.
To cite this episode:
Phillips, Tim, Valentina Bruno, and Ceric Tille. 2026. "The challenges to the international financial system”. VoxTalks Economics (podcast).
About the guests
Valentina Bruno is Professor of Finance at the Kogod School of Business, American University, where she holds the Arlene R. and Robert P. Kogod Eminent Scholar Chair in Finance. She is a Research Fellow of the Centre for Economic Policy Research in the Banking and Corporate Finance programme. Her research spans macroeconomics and finance, with recent work on how the US dollar transmits global financial conditions. She has worked at the World Bank and been a visiting scholar at the Federal Reserve Board.Cédric Tille is Professor of International Economics at the Geneva Graduate Institute, where he heads the Bilateral Assistance and Capacity Building for Central Banks programme. He is a Research Fellow of CEPR in the International Macroeconomics and Finance programme. His research spans financial globalisation, the dynamics of countries' external assets and liabilities, and the currencies used to invoice international trade. He sat on the Bank Council of the Swiss National Bank from 2011 to 2023 and previously worked for nine years at the Federal Reserve Bank of New York.
Research cited in this episode
The triple decline of April 2025. After the US announced sweeping tariffs on 2 April 2025, which President Trump called "Liberation Day", US stocks, Treasuries and the dollar fell together. Bruno argues that foreign investors did not sell their US assets; they bought protection against a falling dollar, and that hedging pushed the currency down. Much of their US equity exposure remains unhedged, so a new shock that starts in the US could trigger the same response.Global imbalances. Large and persistent current account surpluses in some countries, mirrored by deficits in others. Imbalances were a major policy topic before 2008, faded after the global financial crisis, and are now back. Tille argues that the headline measures have risen only modestly; the concern is China, whose trade surplus is the largest ever recorded as a share of world GDP.
The China shock. Autor, David H., David Dorn, and Gordon H. Hanson. 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States." American Economic Review 103 (6): 2121-2168. Cheap imports from China benefited US consumers as a whole, but the job losses were concentrated in particular industries and places, furniture making among them. Tille uses it to explain why Germany's car workers see the current wave of Chinese competition differently from German consumers.
The coordinated policy package. International Monetary Fund. 2026. "2026 External Sector Report: Amid Rising Imbalances, the Case for Rebalancing." The standard prescription is US fiscal consolidation, more consumption in China and more investment in Europe. The report cites IMF estimates that a coordinated package would narrow global imbalances by 0.5% of world GDP over the medium term, compared with a widening of 0.4% under current trends. Nearly all the narrowing comes from China.
The renminbi debate. Brad Setser of the Council on Foreign Relations argues that China holds its exchange rate down and that a stronger renminbi is part of the solution. Tille notes that other economists treat the exchange rate as a sideshow to China's high savings and weak domestic demand.
The basis trade. Pension funds, insurers and asset managers often prefer to hold Treasury exposure through futures. Hedge funds take the other side; they sell the futures, buy the bonds and earn the small gap between the two prices, funded with overnight borrowing. In calm markets the trade links the futures and cash markets and helps the Treasury sell its debt. When lenders pull back, hedge funds must sell bonds at the same moment. The report cites estimates that Cayman Islands hedge funds alone held about $1.8 trillion of Treasuries.
March 2020 and the UK gilt crisis. In March 2020, the Covid shock set off a scramble for dollars in which even Treasuries were sold, and the Federal Reserve bought Treasuries to restore order. In September 2022, UK pension funds using liability-driven investment strategies had to sell gilts as yields rose, which pushed yields higher still, until the Bank of England stepped in. Bruno cites both as examples of safe assets at the centre of stress, where falling prices force more sales.
The 1970s and 2008. Bruno compares today with two earlier periods when imbalances, the dollar and bond markets came under pressure together: the collapse of the Bretton Woods system of fixed exchange rates in the early 1970s, when inflation also eroded bond values, and the years before 2008, when Asian savings and European bank lending flowed into US assets. In 2008 the stress sat in the banks. Today it sits with pension funds, insurers and hedge funds.
Exorbitant privilege. The phrase, usually attributed to Valéry Giscard d'Estaing as French finance minister in the 1960s, describes the advantage the US gets from issuing the world's main reserve asset; foreigners accept a low return to hold it. Tille points out that the US once ran a trade deficit while earning more on its foreign assets than it paid on its liabilities. That surplus on primary income has now gone.
The market-based trilemma. The old trilemma of international finance, associated with Robert Mundell and Marcus Fleming, says a country cannot have free capital flows, a fixed exchange rate and an independent monetary policy all at once. The report proposes a new one. Governments want to issue ever more debt, regulators want tight limits on bank balance sheets, and investors expect bond markets to work smoothly every day. You can have any two, but not all three all the time.
"Our currency, but your problem." John Connally, US Treasury Secretary, told European counterparts in 1971 that "the dollar is our currency, but it's your problem." The report updates the line; the dollar is no longer just a currency but the operating system of global finance.
Rupture or transition? The report opens with a remark by Mark Carney, Prime Minister of Canada, at the 2026 World Economic Forum, that the world is "in the midst of a rupture, not a transition." The authors test whether the same is true of the international financial system.
More VoxTalks Economics episodes
The Dollar Anchor Is Slipping. Tarek Hassan explains why the dollar became the world's safe haven and how tariffs weaken it.Addressing Global Imbalances. Gita Gopinath and Philip Lane on why today's imbalances put more risk on government debt and non-bank lenders.
Stablecoins and Global Imbalances. Gilles Moec on how dollar stablecoins could pull global savings into US Treasury bills.
Related reading on VoxEU.org
Changing structure and challenges of the international financial system: Imbalances, currencies, and financial stability, a VoxEU column in which the four authors summarise the report.Geopolitical tensions and international financial fragmentation: The 28th Geneva Report on the World Economy, a VoxEU column on how geopolitical rivalry is pushing global finance to split along political lines.
S9 Ep59: Life after divorce
Who gets the kids? Courts aim to decide custody in the child's best interests, but nobody has had the data to test how well those decisions work.Gordon Dahl (UC San Diego, CEPR), Costas Meghir (Yale, CEPR) and …
Shownotes
Who gets the kids? Courts aim to decide custody in the child's best interests, but nobody has had the data to test how well those decisions work.
Gordon Dahl (UC San Diego, CEPR), Costas Meghir (Yale, CEPR) and seven co-authors built the data themselves. They collected more than 56,000 Swedish custody rulings, scanning paper files by hand where no digital copy existed, and linked them to records of parents' earnings, prescriptions and children's school tests.
It seems Swedish judges do not agree on how often to award joint custody. Some award it in about 60% of cases; others in about 20%. But that decision makes a huge difference to the lives, and happiness, of both parents and children. They tell Tim Phillips whether joint or sole custody has, on average, better outcomes.
The research behind this episode:
Canessa, Stella, Gordon Dahl, Anna Hasselqvist, Costas Meghir, Susan Niknami, Marten Palme, Helmut Rainer, Olof Rosenqvist, and Pengpeng Xiao. 2026. "Life After Divorce: Effects of Joint Custody on Parents and Children." CEPR Discussion Paper 21780.
To cite this episode:
Phillips, Tim, Gordon Dahl, and Costas Meghir. 2026. "Life after divorce." VoxTalks Economics (podcast).
About the guests
Gordon Dahl is Professor of Economics at the University of California, San Diego, and a Fellow in the Labour Economics programme of the Centre for Economic Policy Research. His research spans the family, public policy and the labour market, including how family income shapes children's achievement, peer effects among co-workers and family members, the effects of incarceration on employment, and how welfare use passes between generations.Costas Meghir is the Douglas A. Warner III Professor of Economics at Yale University and a CEPR Fellow in the Labour Economics, Development Economics and Public Economics programmes. His research spans labour supply and welfare programmes, marriage markets and how resources are shared within households, informal labour markets, and early childhood development.
Research cited in this episode
The best interests of the child standard. Since the 1970s, most custody law has told judges to decide in the child's best interests rather than weigh the parents' claims. Most countries now read this as keeping both parents involved, which is why joint custody is the default in many jurisdictions. The standard leaves wide discretion to judges, and Meghir says judges get little systematic evidence on what works. Elizabeth Scott and Robert Emery examine why the standard has persisted despite this criticism in "Gender Politics and Child Custody: The Puzzling Persistence of the Best-Interests Standard" (Law and Contemporary Problems, 2014).The tender years doctrine. Before the mid-19th century, English law treated children as their father's property. The Custody of Infants Act 1839, passed after a campaign by Caroline Norton, let mothers petition for custody of children under seven, and the presumption that young children belong with their mother spread across Europe. Dahl raises it to show how far the legal default has moved in less than two centuries, from father, to mother, to both.
Random assignment of judges. Families who end up with joint custody differ from those who do not, so a simple comparison cannot separate the effect of the arrangement from the effect of the family. In Sweden, custody disputes go to judges at random, and judges differ in how often they award joint custody. Comparing families who drew a lenient judge with families who drew a strict one isolates the effect of the ruling itself. Economists have used the same design to study prison sentences, for example Jeffrey Kling in "Incarceration Length, Employment, and Earnings" (American Economic Review, 2006). The method only measures effects for cases where judges could disagree; it says nothing about cases where every judge would reach the same decision.
Swedish court archives. Custody rulings are public records in Sweden, but no national database holds them. The authors requested files from all 48 district courts and received documents from 45. Digital archives covered cases from about 2010; for earlier years, the team visited court archives and scanned 19,491 paper rulings by hand. Dahl estimates that 80% of the project's time went on collecting data.
Swedish administrative registers. Statistics Sweden registers cover the whole population and record earnings, employment, family links and place of residence. The authors linked these to prescription records, which show who takes antidepressant, anti-anxiety and ADHD medication, and to records of intimate partner violence. This is why the research could follow mothers, fathers and children for years after each ruling.
National tests and school quality. All Swedish pupils sit the same national tests in Swedish and mathematics in grades three, six and nine. The authors use these scores to measure children's achievement, and build a measure of school quality from how much better or worse a school's pupils score than their backgrounds predict. In the paper, joint custody raises test scores by 0.47 of a standard deviation, which Meghir likens to about two extra years of schooling.
More VoxTalks Economics episodes
Helping fathers to acknowledge paternity. Anna Raute on what happens to mothers and children when fathers do not formally recognise their child, and which policies change that.Love, money and parenting. Fabrizio Zilibotti on what economic research tells us about parenting, and about raising children who thrive.
Related reading on VoxEU.org
The effect of joint custody on marriage and divorce, a VoxEU column by Martin Halla using US state reforms to show that joint custody laws raised marriage rates without a clear effect on divorce.The effect of parental divorce on children's long-term outcomes, a VoxEU column using Austrian data to estimate how divorce affects children's education, employment and health as adults.
S9 Ep58: Not wearing Prada
Since March 2022, it has been harder to buy an iPhone in Russia, because Apple chose to stop selling there. So did Prada, Renault, Starbucks, Nike and more than 1,000 other firms. These private sanctions added …
Shownotes
Since March 2022, it has been harder to buy an iPhone in Russia, because Apple chose to stop selling there. So did Prada, Renault, Starbucks, Nike and more than 1,000 other firms. These private sanctions added to the official sanctions imposed by 45 countries.
Beata Javorcik (EBRD, Oxford, CEPR) and her co-authors wanted to know if private sanctions did anything more than generate good headlines. To do this, they matched millions of Russian customs records to the trademarks on the goods, so they could tell an iPhone from a Samsung phone and a Gucci scarf from a Gucci bag. Would imports of goods under voluntary sanctions stop? Would the brands cheat? Would importers find an other way to get goods into the country through the back door? She tells Tim Phillips what private sanctions on Russia have achieved.
The research behind this episode:
Chupilkin, Maxim, Beata Javorcik, Alexander Plekhanov, and Aleksandra Peeva. 2026. "Not Wearing Prada: Do Private Sanctions Reinforce Official Sanctions?" CEPR Discussion Paper 21774.
To cite this episode:
Phillips, Tim, and Beata Javorcik. 2026. "Not wearing Prada." VoxTalks Economics (podcast).
About the guest
Beata Javorcik is Chief Economist of the European Bank for Reconstruction and Development, on leave from the University of Oxford, where she is Professor of Economics and a Fellow of All Souls College. She is a Fellow of the Centre for Economic Policy Research in the International Trade and Regional Economics programme. Her research spans foreign direct investment, shocks to production networks, trade under sanctions and the evasion of import duties.Research cited in this episode
Official sanctions on Russia. After the full-scale invasion of Ukraine in February 2022, 45 economies, including the US, the EU and the UK, imposed sanctions on Russia. They cut selected Russian banks off from the SWIFT payment messaging system, immobilised the reserves of Russia's central bank, limited Russia's earnings from hydrocarbon exports and banned exports of arms, dual-use goods, advanced technology, industrial equipment and luxury goods. By the end of 2022, around 40% of product lines were at least partly covered. The luxury ban explains some odd entries. Ski suits and sports clothing priced above €300 are sanctioned, and champagne is banned while prosecco is not. Enforcement sits with several bodies: in the US, the Office of Foreign Assets Control and the Commerce Department; in the EU, individual member states; in the UK, the Office of Financial Sanctions Implementation and the Office of Trade Sanctions Implementation.Private sanctions and public opinion. Oliver Hart, David Thesmar and Luigi Zingales surveyed 2,915 Americans, a representative sample, in May and June 2022. Of these, 61% agreed that doing business in Russia is like being an accomplice to the war, and that firms should sever ties whatever the consequences. Javorcik raises the study to explain why firms with no legal obligation to leave Russia chose to go anyway: reputation, the threat of boycotts, pressure from investors, employees and business partners, and sometimes the values of managers. Hart, Oliver, David Thesmar, and Luigi Zingales. 2024. "Private Sanctions." Economic Policy 39 (117): 203-268.
"The business of business is business." The phrase is a popular summary of the view Milton Friedman set out in a 1970 essay in the New York Times Magazine, "The Social Responsibility of Business Is to Increase Its Profits." Hart and his co-authors found that only a minority of their respondents treated the decision to leave Russia as a purely commercial one.
The Yale list. A team at the Yale Chief Executive Leadership Institute, led by Jeffrey Sonnenfeld, has tracked what more than 1,500 major companies said about their Russian operations since the invasion. To qualify, a firm must have revenue above $100 million, be majority owned from outside Russia and Belarus, and have meaningful operations in its home country, in Russia and in at least one other country. The team grades firms from full withdrawal to "digging in," and keeps a separate record of firms that reneged on their promises to leave. Javorcik and her co-authors use the list to classify the owners of 1,657 Western trademarks. Only 11 firms moved from strict private sanctions to doing little or nothing.
Customs data with trademarks. The paper draws on transaction-level records of Russian imports from 2016 to 2023, about 12 million records in 2022 alone. Each record shows the product code, the value, the quantity, the trading partner and the trademark. The products are classified at the six-digit level of the Harmonized System, which has more than 5,600 categories. The trademark field contained more than 1.2 million spellings; the authors used a large language model to standardise them, which merged 600 versions of "Samsung" into one.
Trade diversion through neutral countries. Countries that do not participate in sanctions, including China, Turkey and the UAE, do not monitor re-exports to Russia. After the invasion, the share of imports arriving via traders in these neutral jurisdictions rose by an additional 16 percentage points for brands whose owners announced private sanctions. The same authors traced a related route in "The Eurasian Roundabout: Trade Flows into Russia through the Caucasus and Central Asia" (Chupilkin, Javorcik, and Plekhanov 2026, European Economic Review).
Tariff equivalent. Trade economists often express a barrier to trade as the ad valorem tariff, a tax set as a percentage of the value of the goods, that would cause the same fall in trade. On this measure, private sanctions against Russia equal a tariff of between 9% and 84%. The range is wide because the answer depends on the trade elasticity, which measures how strongly trade responds to a change in costs.
The Clark Center Forum surveys. On 8 March 2022, the Kent A. Clark Center for Global Markets at Chicago Booth asked its panels of leading economists if the sanctions already in place would lead to a deep recession in Russia. Of the respondents, 93% of the US panel and 94% of the European panel agreed. A deep recession did not follow. In June 2025, a majority of the European panel agreed that, on the evidence of the past 10 years, Western-led economic sanctions do not substantially deter target countries. Javorcik, a panel member, agreed, citing trade diversion and sanctions circumvention.
The UN vote. On 2 March 2022, 141 countries in the UN General Assembly voted for a resolution that condemned Russia's invasion and demanded its withdrawal from Ukraine. Javorcik contrasts this with the 45 economies that impose sanctions. The effectiveness of sanctions depends on how many countries take part.
More VoxTalks Economics episodes
Do sanctions work? Moritz Schularick takes the long view of the evidence on sanctions of every type, and asks if policymakers will impose the ones that bite.Trading around geopolitics Giancarlo Corsetti, Banu Demir and Beata Javorcik on whether Turkish exporters filled the gap in the Russian market, and an earlier sighting of the balloon.
What impact have trade sanctions had on Russia? Dzhamilya Nigmatulina uses railway shipments, company accounts and procurement records to measure what official trade sanctions did inside Russia.
Related reading on VoxEU
Beyond mandated sanctions: Western firms' voluntary departure from Russia, a VoxEU column by Tetyana Balyuk and Anastassia Fedyk on how shareholder pressure drove Western firms out of Russia.Export bans that weren't really bans: How Russia kept importing military goods, a VoxEU column by Lisa Scheckenhofer, Feodora Teti, David Torun and Joschka Wanner on the gaps, transit loopholes and third-country routes that kept military components flowing.
Economic consequences of Russia's invasion of Ukraine: Views of leading economists, Romesh Vaitilingam's March 2022 report on the Clark Center survey that predicted a deep Russian recession.
S9 Ep57: Merit, masters and China's imperial exam
For more than 1,300 years, China chose its top officials by written exam. Its top officials were chosen meritocratic ally -- or were they?When the results came out, each successful candidate went to pay his …
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For more than 1,300 years, China chose its top officials by written exam. Its top officials were chosen meritocratic ally -- or were they?
When the results came out, each successful candidate went to pay his respects to the men who had marked his exam. He called the examiner master, and the bond lasted for life.
Ruixue Jia (UC San Diego, CEPR) and her co-author Ying Bai followed 24,269 graduates of the Qing dynasty's imperial examination, from 1644 to 1905, to see who reached the top of the imperial state. A high mark in the examination was important, but so did an examiner who later rose to power. Jia tells Tim Phillips how merit and patronage worked together.
The research behind this episode
Bai, Ying, and Ruixue Jia. 2026. "Meritocracy and the Networks It Forged: China's Imperial Examination." CEPR Discussion Paper 21814. Prepared for The ANNALS of the American Academy of Political and Social Science.To cite this episode
Phillips, Tim, and Ruixue Jia. 2026. "Merit, masters and China's imperial exam." VoxTalks Economics (podcast).
About the guest
Ruixue Jia is Professor of Economics at the School of Global Policy and Strategy, University of California San Diego, where she co-directs the China Data Lab. She is also a Visiting Professor at the University of Hong Kong, a Fellow of the Centre for Economic Policy Research in its Political Economy and Economic History programmes, and co-editor of the Review of Economics and Statistics. Her research spans elite formation, the politics of education and science, and the historical roots of China's development. She is co-author, with Hongbin Li and Claire Cousineau, of The Highest Exam: How the Gaokao Shapes China (Belknap Press, 2025).Research cited in this episode
The imperial examination. China's system for recruiting officials through competitive written exams on the Confucian classics and literary composition. It began around 605 CE, expanded under the Song dynasty around 1000 CE, and was abolished in 1905. In the Qing dynasty it had three levels. The entry (prefectural) exam was held twice every three years; the provincial and national exams once every three years. About 240 candidates passed each national exam, earning the title of jinshi. Bai and Jia study all 112 national exams held between 1644 and 1905.How many took part. Every man could sit the exam in principle, but preparation cost years of study and lost income. Jia says that in the 18th century about two million men registered for the entry-level exam, roughly 2% to 3% of men aged 15 to 50, and that families often pooled resources to put one son forward. By her calculation, even a man who tried five times had less than a 1% chance of passing the entry level. These are her figures from the conversation.
Fan Zhongyan. The Northern Song statesman and poet (989 to 1052) whose story Jia uses to show how the exam sold itself. He lost his father as an infant and grew up in modest circumstances, passed the national exam in 1015, and rose to become one of the empire's most senior officials. Stories like his, Jia argues, sustained belief in the system. What mattered was perceived mobility, not the realised rate.
The high and low categories. Successful national candidates were ranked and divided at a cutoff. The top two groups received the jinshi degree; the third and largest group received the lesser tong jinshi ("similar to jinshi") degree. Bai and Jia compare the cutoff to the admission thresholds of elite universities today. Candidates just above it started their careers in better positions.
Top office. Bai and Jia define top office as rank three or above in the nine-rank system, which covered ministers, governors general and provincial governors. Only about 12.6% of jinshi reached it, on average 16 years after passing the exam. In practice, appointments were shaped by a handful of Grand Secretaries and Grand Ministers of State; on average seven people held these posts in any year.
The master and disciple relationship. Each national exam was overseen by one or two chief examiners and two or three vice examiners, all serving officials. After the results, graduates visited their examiners, called them "master teacher" and called each other "classmates". The historian Ichisada Miyazaki describes it as "a pledge between them to assist each other to weather the storms of political life" (Miyazaki, Ichisada. 1981. China's Examination Hell: The Civil Service Examinations of Imperial China. Yale University Press, p. 56). Philip Kuhn called the system "a veritable faction factory" (Kuhn, Philip A. 2003. Origins of the Modern Chinese State. Stanford University Press). Because papers were anonymous, the link between a candidate and his examiners was set by chance, which lets Bai and Jia treat it as a natural experiment.
Power or mentoring. Bai and Jia measure ties to powerful examiners by counting how many years a candidate's examiners held key central posts in the decade after the exam. To separate a good teacher from a well-placed patron, they compare an examiner's power before and after the exam. Power that came later mattered more, which points to patronage rather than instruction alone.
Merit and connections in modern China. Jia found a similar pattern in an earlier study of provincial leaders after 1993, in which neither strong economic performance nor links to the top leadership was enough for promotion on its own. Jia, Ruixue, Masayuki Kudamatsu, and David Seim. 2015. "Political Selection in China: Complementary Roles of Connections and Performance." Journal of the European Economic Association 13 (4): 631-668.
More VoxTalks Economics episodes
The Success of the Embedded State. James Robinson on how unpaid local elites ran British government two centuries ago, and why they were more efficient than salaried officials.Related reading on VoxEU
Who becomes a top politician in China? Ruixue Jia, Masayuki Kudamatsu and David Seim on why Communist Party leaders need both connections and a strong record to reach the top.Institutions and power structure: Imperial China and feudal Europe compared. Gérard Roland, Yang Xie and Ruixue Jia on why Chinese emperors had reason to keep the route into the elite open to ordinary people.
It's not what you know, but who you know: The role of connections in academic promotions. Manuel Bagues and Natalia Zinovyeva on randomly assigned evaluators in Spanish academic promotions, and how much a link to the committee was worth.
S9 Ep56: Decoupling from China after Trump's Trade Wars
In March 2025, Apple chartered cargo flights to deliver 600 tonnes of iPhones from India to the United States. A year earlier, four in five smartphones that imported to the US came from China. One of the aims …
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In March 2025, Apple chartered cargo flights to deliver 600 tonnes of iPhones from India to the United States. A year earlier, four in five smartphones that imported to the US came from China.
One of the aims of US trade policy has been to decouple the US economy from China. So is the strategy working? Chad Bown (PIIE, CEPR) tells Tim Phillips how he examined the US import data product by product to see how American importers coped with Trump's second trade war. In consumer electronics, many firms quietly built a second supply chain in tariff-exempt countries before 2025, and switched sourcing away from China almost overnight in 2025. But clothing and footwear did not switch, because alternative source countries like Vietnam faced tariffs almost as high. When the US taxes imports from every country, the decoupling strategy gets lost.
The research behind this episode:
Bown, Chad P. 2026. "How Did Trump's 2025 Trade War Affect the Decoupling of US-China Supply Chains?" CEPR Discussion Paper DP21801 (gated). Forthcoming in Asian Economic Policy Review.
To cite this episode:
Phillips, Tim, and Chad P. Bown. 2026. "Decoupling from China after Trump's Trade Wars." VoxTalks Economics (podcast).
About the guest
Chad P. Bown is the Reginald Jones Senior Fellow at the Peterson Institute for International Economics and a Fellow in the International Trade and Regional Economics programme of the Centre for Economic Policy Research. He was chief economist at the US Department of State from January 2024 to January 2025, and senior economist for international trade and investment on President Obama's Council of Economic Advisers. His research spans trade policy, industrial policy, economic security and supply chains. He co-created the Trade Talks podcast with Soumaya Keynes in 2017, and with Keynes he is co-author of How to Win a Trade War (Simon & Schuster, 2026).Research cited in this episode
The 2018-19 Section 301 tariffs. In Trump's first term the US imposed tariffs on imports from China in stages, on product lists set under Section 301 of the Trade Act of 1974. Lists 1, 2 and 3, mostly intermediate inputs such as auto parts, ended at 25%. List 4A began at 15% and was cut to 7.5% in February 2020 under the Phase One agreement. List 4B, mostly consumer goods such as smartphones, laptops and toys, was delayed "for Christmas season" and never imposed. By the end of the first trade war, roughly two thirds of US imports from China faced new tariffs. Bown's point is that the goods spared in 2018-19 were the ones hit hardest in 2025.The 2025 IEEPA tariffs on China. In February and March 2025, before Liberation Day, the US imposed two rounds of 10% tariffs on all imports from China under the International Emergency Economic Powers Act, justified by concerns over fentanyl. For the first time this covered smartphones and other List 4B goods. One of the two was removed in November 2025 after Presidents Trump and Xi met in South Korea.
Liberation Day. On 2 April 2025 the US announced tariffs on most of its trading partners, at rates that varied by country. A long list of products, including smartphones, was exempt under Annex II. On 9 April the country rates were paused and a 10% baseline applied while countries negotiated. China's rates escalated after retaliation on both sides; the Liberation Day actions on China alone reached 125% before a truce in Geneva in May. The exemptions matter to the episode. A tariff on China changes sourcing only if the alternatives face a lower one.
The August 2025 tariffs on India. The US raised tariffs on India by a further 25 percentage points in August 2025, citing India's purchases of Russian oil. Smartphones were again exempt, so Apple's Indian supply chain stayed tariff free. For some clothing, India ended up facing a larger tariff increase than China.
The Supreme Court ruling on IEEPA tariffs. On 20 February 2026 the US Supreme Court ruled that the country-level tariffs imposed under IEEPA were illegal. The Section 232 sectoral tariffs and the Section 301 tariffs on China were not part of the case. The administration removed the IEEPA tariffs and began imposing new ones under other legal authorities, which is why Bown warns that some of the 2025 effects may yet reverse.
Apple's alternative supply chain in India. Apple and its contract manufacturers, including Foxconn and Tata Electronics, spent several years building iPhone assembly in India. Patrick McGee tells the story in Apple in China: The Capture of the World's Greatest Company (Simon & Schuster, 2026). Over the last nine months of 2025, 40% of US smartphone imports came from China and 46% from India. Laptops, monitors and video game consoles moved in a similar way, mostly to Vietnam.
Inputs for AI. The paper defines AI inputs using the product codes that Nvidia publishes for export control compliance: certain semiconductors, printed circuit boards, servers and other data centre hardware. These made up about 14% of US imports in 2025. They grew by $183 billion that year, more than the $144 billion rise in total US goods imports. A separate classification by Michael Waugh (2026) finds a larger share, at 23%.
US tariffs on Chinese electric vehicles. In 2024 the Biden administration raised US tariffs on electric vehicles from China to 100%, using the authority of the 2018 Section 301 action. China exported 40% of the world's electric vehicles in 2024, according to the International Energy Agency, but almost none to the United States.
China's export restrictions on rare earths. In April 2025 China restricted exports of rare earths and permanent magnets, of which it produces about 90% of world supply. Bown did not include these products in the paper, but they are the reverse of the decoupling story. They are goods for which the US found no alternative supplier.
Tariff pass-through to consumer prices. Bown suggests that firms with an alternative supplier may explain why some prices, such as the iPhone's, did not rise. He points to work by Alberto Cavallo, Paola Llamas and Franco Vazquez (2025), "Tracking the Short-Run Price Impact of U.S. Tariffs," NBER Working Paper 34496, which tracks how the 2025 tariffs reached retail prices.
How to Win a Trade War. Soumaya Keynes and Chad P. Bown. 2026. How to Win a Trade War: An Optimistic Guide to an Anxious Global Economy. New York: Simon & Schuster. The authors argue that the conflict with China will not reverse, and that other economies are now dealing with China-related shocks of their own.
More VoxTalks Economics episodes
Making sense of the US-China trade war, in which Bown explained the first trade war in 2021, as it ended. It is the "before" to this episode's "after".Tariff Confusion, in which Kalina Manova explains how the frequency of tariff announcements in 2025 cut trade by more than the tariffs themselves.
Related reading on VoxEU.org
US-China decoupling: Rhetoric and reality, a VoxEU column showing that after the first trade war US imports from China slowed, but supply chains for strategic products stayed intertwined with China.What comes next for global supply chains might be complicated, a VoxEU column on why a falling Chinese share of US imports does not mean Chinese firms have left the supply chain.
Tariff confusion, a VoxEU column by Kalina Manova, Dennis Novy, Thomas Sampson and Aaron Tang on how confusion about current US tariffs reduced trade in 2025.
S9 Ep55: Loosening inheritance law
In most of the world you do not get to choose who inherits your money. Across continental Europe, Latin America, and countries governed by Islamic law, a minimum share of your estate will be reserved for your …
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In most of the world you do not get to choose who inherits your money. Across continental Europe, Latin America, and countries governed by Islamic law, a minimum share of your estate will be reserved for your children, your spouse, and in some places your surviving parents. Write a will that ignores them and the law overrules you.
If you want a head start in life, choose your parents carefully.
Switzerland changed the rules in January 2023. The compulsory share for children fell by one third and the share reserved for surviving parents disappeared altogether. In this week's VoxTalk, Marius Brülhart (University of Lausanne, CEPR) tells Tim Phillips how he had been following the reform with no way of observing its effects, until a website that helps Swiss people write their wills online offered him its anonymous data. People who were handed more freedom gave less to their children and their parents, and more to spouses and partners. About one third of every liberated franc went to recipients outside the family altogether. Liberalising the law spreads wealth without taxing anyone: politically, though maybe not democratically, attractive.
The research behind this episode:
Brulhart, Marius, and Laia Soler. 2026. "Unfree Wills: Inheritance Rules, Bequest Motives, and Wealth Diffusion." CEPR Discussion Paper 21811. The CEPR version is gated.
To cite this episode:
Phillips, Tim, and Marius Brulhart. 2026. "Loosening inheritance law." VoxTalks Economics (podcast).
About the guest
Marius Brulhart is Professor of Economics at HEC Lausanne, University of Lausanne, and a Research Fellow of the Centre for Economic Policy Research. His research spans public finance, regional and urban economics, and international trade, with a long-running interest in how Swiss taxpayers and testators respond to the rules they are given. He has advised the World Bank, the OECD, the European Commission, and the Swiss government.Research cited in this episode
Protected heirs. Swiss law, like that of most civil-law countries, reserves compulsory minimum shares of an estate for close family. Before 2023 those categories were children and other direct descendants, spouses, and surviving parents. An unmarried testator with children could freely allocate only 25% of their estate; the rest belonged to the children by law.The 2023 reform. Parliament passed the change in December 2020 and it came into force on 1 January 2023. Minimum shares for direct descendants were cut by one third, those for surviving parents were abolished, and the share reserved for a surviving spouse was left alone. Averaged across family types in the data, the freely attributable portion of an estate rose by 19 percentage points, from 39% to 58%.
DeinAdieu.ch. The Swiss online service that generated the data, funded by charities seeking legacies. Users answer questions about their family situation, the tool limits their choices to what the law allows, and they set the shares with a set of sliders. The sample covers 16,887 completed forms submitted between January 2020 and March 2024, which straddles the reform.
Bunching. Before the reform, a large share of testators gave their protected heirs exactly the legal minimum and not a franc more; 52% of testators with children and 72% of those with living parents had been giving more than they wanted to. When the minimum fell, so did their allocations.
Reference dependence. The whole distribution moved, not just the people who had been pinned to the legal floor. Testators who had voluntarily given their children more than the law required also gave less after the reform, which suggests the legal minimum works as a mental benchmark for generosity even when it is not binding.
Marginal diffusion propensity. Brulhart and Soler's term for the share of each newly discretionary franc that goes to nonrelatives and charities. Their central estimate is 0.33. Applied to the whole population it implies that the reform moved more wealth outside family dynasties than Switzerland's inheritance taxes do, though Swiss inheritance tax is unusually light, with children inheriting tax free in most cantons.
More VoxTalks Economics episodes
Wealth Taxes. Marius Brulhart's earlier conversation with Tim Phillips, on what Switzerland's cantons reveal about how people respond when wealth rather than income is taxed.Political inequality. Julia Cagé on what concentrated wealth does to democratic politics, which is the other half of the question Brulhart raises about who decides where wealth goes.
Related reading on VoxEU.org
Wealth taxation: The Swiss experience, by Marius Brulhart, Jonathan Gruber, Matthias Krapf, and Kurt Schmidheiny, on how Swiss wealth holders respond to the rate they pay.How inheritances influence wealth inequality, by Mikael Elinder, Oscar Erixson, and Daniel Waldenstrom, using Swedish register data covering every heir of every decedent over several years.
The intergenerational transmission of wealth in rich countries, by Salvatore Morelli and co-authors, on how large transfers push up wealth inequality across seven countries.
S9 Ep54: Does sacking the manager work?
Your football team keeps losing. The season is slipping away. One thing can be changed by Friday, and the crowd is already singing about it: sack the manager.Jan van Ours (Erasmus School of Economics, CEPR …
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Your football team keeps losing. The season is slipping away. One thing can be changed by Friday, and the crowd is already singing about it: sack the manager.
Jan van Ours (Erasmus School of Economics, CEPR, Feyenoord fan) has looked at seven seasons of the Dutch top flight and 31 managers who were sacrificed mid-season. To work out whether any of them deserved it, he uses bookmaker odds and expected goals to distinguish bad play from bad luck.
The new-manager bounce is real: results improve after a new manager walks in. But also, not real: clubs that don't sack the manager have an upturn too. The message for the boardroom, in football and business, is that not doing anything might often be the best course of action.
The research behind this episode:
van Ours, Jan C. 2026. "Dust in the Wind: Causes and Consequences of Managerial Replacements." CEPR Discussion Paper DP21850, Centre for Economic Policy Research. The paper is gated.
To cite this episode:
Phillips, Tim, and Jan van Ours. 2026. "Does sacking the manager work?" VoxTalks Economics (podcast).
About the guest
Jan van Ours is Emeritus Professor of Applied Economics at Erasmus School of Economics, Erasmus University Rotterdam, and a core member of the Erasmus Centre for Applied Sports Economics. He is also Adjunct Professor at the Center for Health Economics, Monash Business School, and a Research Fellow of the Centre for Economic Policy Research. His research spans unemployment dynamics, labour market policy, health and well-being, and the economics of professional sport, where match data offer a rare chance to watch a labour market in the open.Research cited in this episode
The Eredivisie sample. Seven seasons of the top league of Dutch professional football, from 2018/19 to 2024/25, covering 4,136 match observations and 126 club-seasons. In that period 31 managers were replaced during a season; about 15% had gone by mid-season and 25% by the end of it.Points surprise. The cumulative gap, from the first match of the season, between the points a club has won and the points the bookmakers implied it should have won. Bookmaker odds are used as the benchmark because they already contain everything the market knows about squad quality, home advantage and the opposition; van Ours confirms this in the data, finding that recent results add nothing to the odds as a predictor of the next match.
Performance surprise. The same cumulative gap, but measured with expected points derived from expected goals rather than actual results. Points surprise catches a club that is losing. Performance surprise catches a club that is playing badly. A club can be one without being the other, which is how luck gets separated from ability.
Expected goals. The probability that a given shot becomes a goal, estimated from thousands of comparable attempts and conditioned on the distance and angle of the shooter, the body part used, and the type of pass and attack. Van Ours converts expected goals scored and conceded into a distribution of match outcomes, and from that into expected points. His data come from fbref.com; the paper notes that match-level expected goals were discontinued in January 2026 after a dispute between fbref and Opta.
The counterfactual replacement. The device that carries the paper. For each actual sacking, van Ours searches the same club in a different season for a moment when the sum of points surprise and performance surprise was almost identical, and the manager survived. Of the 31 replacements, 22 have a counterfactual, 19 of them unique. Clubs that sacked the manager gained 0.21 points per match afterwards. Clubs in the same trouble that did not sack the manager gained 0.38.
Scapegoating. William Gamson and Norman Scotch set out the idea in "Scapegoating in baseball" in the American Journal of Sociology in 1964, describing the sacking of a manager as an anxiety-reducing ritual that participants treat as an improvement whether or not anything improves. Van Ours returns to it to explain why a decision with no measurable effect keeps being taken.
Managers in regular firms. Stuart Gilson's 1989 study in the Journal of Financial Economics found that replaced executives were not employed by another firm for at least three years. Football managers are frequently back in work within weeks, which is one reason the job pays what it does. Hilger, Mankel and Richter reviewed 91 studies of top executive dismissals published between 1960 and 2010 and concluded that the effects of managerial turnover are not statistically different from zero.
Related reading on VoxEU.org
What we can learn about economics from professional sport during COVID-19, a VoxEU column on why sport keeps producing clean natural experiments for economists.Racial bias in newspaper ratings of professional football players, a VoxEU column using match ratings to test for discrimination in a labour market where output is measured in public every week.
S9 Ep53: Lessons from Populism in Latin America
The new episode of VoxTalks Economics traces the effects of South Americans populism, left and right. Alejandro Werner (Georgetown Americas Institute) is one of the authors of a new paper that traces populist …
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The new episode of VoxTalks Economics traces the effects of South Americans populism, left and right. Alejandro Werner (Georgetown Americas Institute) is one of the authors of a new paper that traces populist governments across Latin America back to 1970.
He argues that they follow a strikingly similar script: they expand spending, weaken the institutions built to restrain them, and ride the wave until inflation catches up with them. But the most recent generation of leaders -- Chávez and Maduro, the Kirchners, Correa, and Morales -- lasted longer than their predecessors. Why?
The research behind this episode:
Magud, Nicolás E., Antonio Spilimbergo, and Alejandro Werner. 2026. "Lessons from Populism in Latin America." Paper presented at the second Economic Policy: Papers on European and Global Issues Conference, June 2026. Forthcoming in Economic Policy.
To cite this episode:
Phillips, Tim, and Alejandro Werner. 2026. "Lessons from Populism in Latin America." VoxTalks Economics (podcast).
About the guest
Alejandro Werner is the founding director of the Georgetown Americas Institute and a nonresident senior fellow at the Peterson Institute for International Economics. He spent nine years as director of the International Monetary Fund's Western Hemisphere Department, and earlier held senior posts at Mexico's finance ministry and central bank. His research spans macroeconomic policy, fiscal sustainability, and financial crises across Latin America.Research cited in this episode
The Global Populism Database, built by political scientist Kirk Hawkins and colleagues, codes the rhetoric of presidents and prime ministers on a scale from zero (not populist) to two (highly populist), reading inauguration and campaign speeches for anti establishment language, appeals to "the people," and simple, direct phrasing. Magud, Spilimbergo, and Werner use this index, rather than a leader's policies, to decide who counts as a populist, which keeps their definition independent of the outcomes they go on to measure.Dornbusch and Edwards' "macroeconomics of populism," from their 1991 edited volume of the same name, was the first systematic account of how Latin American leaders combine expansionary spending with price controls, and how the resulting shortages and capital flight bring the cycle to an end. The new paper tests whether that pattern still holds three decades on.
Funke, Schularick and Trebesch (2023), published in the American Economic Review, built an alternative populism index from historical case studies rather than speeches, and found that populist leaders leave a drag on economic activity that can persist for up to fifteen years after they leave office. Werner and his coauthors use this index as a robustness check on their own results.
Local projections, a method developed by the economist Oscar Jorda in 2005, trace how a variable such as inflation or the real exchange rate evolves in the years after a shock, in this case the arrival of a populist government, without imposing the structure of a full macroeconomic model.
The commodity terms of trade windfall, a measure developed by Gustavo Adler and Magud, calculates the extra income a country earns when its export prices rise relative to its import prices. The paper uses this measure to show that the populist governments with the largest windfalls, including Venezuela, Bolivia, and Ecuador, stayed in power the longest.
More VoxTalks Economics episodes
Fiscal Populism and Monetary Policy, recorded at the same EP conference, in which Magud talks to Tim Phillips about how a government's fiscal stance interacts with the credibility of its central bank.The Dollar Anchor Is Slipping, Tarek Hassan talks to Tim Phillips about what happens when the dollar's role as the world's safe asset comes under strain.
Related reading on VoxEU.org
Four decades of terms of trade booms, a VoxEU column by Magud and Adler that introduces the income windfall measure used in this paper, and shows how much larger Latin America's most recent commodity boom was than those of the 1970s.Effects of commodity price windfalls on external debt: the role of political institutions, a VoxEU column by Rabah Arezki showing that commodity windfalls tend to be saved where executive power is constrained, and spent where it is not, a pattern that echoes this paper's account of institutional decay under populist rule.
S9 Ep52: The Dollar Anchor Is Slipping
April 2025: Liberation Day. President Trump announces sweeping new tariffs. And then, the dollar did something a safe haven currency is not supposed to do: it fell.Tarek Hassan (Boston University, CEPR) …
Shownotes
April 2025: Liberation Day. President Trump announces sweeping new tariffs. And then, the dollar did something a safe haven currency is not supposed to do: it fell.
Tarek Hassan (Boston University, CEPR), working with Thomas Mertens, Jingye Wang and Tony Zhang, has been investigating what makes a currency the global anchor. Being the world's biggest economy helps, but what really matters is how far an economy's shocks affect world prices. Tariffs reduce this effect. But are we near a tipping point, when the euro takes over as the global reserve currency? We might be closer than you think and, if a change happens, it might happen more quickly than you think too.
This is the third of four episodes drawn from papers commissioned for the second Economic Policy: Papers on European and Global Issues conference, held in Venice on 19 and 20 June 2026 and organised by CEPR, CESifo and Sciences Po.
The research behind this episode:
Hassan, Tarek A., Thomas M. Mertens, Jingye Wang, and Tony Zhang. 2026. "Openness, Integration, and the International Monetary Order." Conference draft, presented at the 2nd Economic Policy: Papers on European and Global Issues Conference, Venice, 19 to 20 June 2026. Forthcoming in Economic Policy.
To cite this episode:
Phillips, Tim, and Tarek A. Hassan. 2026. "The Dollar Anchor Is Slipping." VoxTalks Economics (podcast).
About the guest
Tarek A. Hassan is Professor of Economics at Boston University, a Research Fellow of the National Bureau of Economic Research, and a Research Fellow of the Centre for Economic Policy Research. His research spans international finance, macro-finance, and the political economy of growth, from measuring firm-level political risk with large language models to, in this paper, the size and openness that decide which currency the world treats as safe.Research cited in this episode
Liberation Day and the April 2025 tariffs. On 2 April 2025, the White House announced a sweeping set of import tariffs. Hassan and his co-authors treat the market reaction to that announcement, in which the dollar fell even as US interest rates rose and US stocks underperformed, as the anomaly their model is built to explain; a currency behaving that way in a crisis usually counts as risky, not safe. CEPR has gathered further commentary on the announcement and its aftermath on its Trump and Tariffs page.Exorbitant privilege. A term coined in the 1960s for the advantage the United States gets from issuing the world's reserve currency, since foreign investors will hold dollar assets at a lower return than they would demand elsewhere. Hassan uses it to explain why Americans can borrow more cheaply than almost anyone else, and why losing anchor status would raise the US government's own borrowing costs.
Effective size. The paper's central idea. It is not simply how big an economy is, but how much weight its shocks carry in setting world prices, which depends on both actual size and openness to trade and capital flows. Tariffs and capital controls both reduce a country's effective size without touching its GDP, which is how they can knock a currency out of contention as a global anchor.
The Budget Lab at Yale's tariff tracker. The paper draws its estimate that the current average tariff on US imports and exports, once retaliation is included, runs at around 12% from The Budget Lab at Yale (2025), Where We Stand: The Fiscal, Economic, and Distributional Effects of All US Tariffs Enacted in 2025 Through April 2, a running assessment of US trade policy maintained by the nonpartisan Budget Lab at Yale.
Ilzetzki, Reinhart, and Rogoff's exchange rate classification. Ilzetzki, Reinhart, and Rogoff. 2019. "Exchange Arrangements Entering the Twenty-First Century: Which Anchor Will Hold?" Quarterly Journal of Economics 134 (2). This dataset classifies the de facto exchange rate regime of 141 economies. Hassan and his co-authors use it to calibrate their model and to show that the share of countries pegging tightly to the dollar falls with country size almost exactly as their theory predicts.
The Chinn-Ito index of capital account openness. Chinn, Menzie D., and Hiro Ito. 2006. "What Matters for Financial Development? Capital Controls, Institutions, and Interactions." Journal of Development Economics 81 (1): 163 to 192. This widely used index scores how open a country's capital account is to cross-border investment. China scores close to the bottom, in the same range as India, Russia, Brazil and Pakistan, while the United States and the eurozone score close to the maximum, which is central to why Hassan treats the renminbi as a non-contender for anchor status while capital controls remain in place.
More VoxTalks Economics episodes
Tariffs, Uncertainty, and the Exchange Rate, the first episode in this series, in which Alfonso Merendino and Tommaso Monacelli offer another explanation of why the dollar fell rather than rose after the 2025 tariffs.How Exchange Rates Responded to Tariffs, in which Giancarlo Corsetti also tells Tim Phillips what happened to the dollar after Liberation Day, and why the textbook response did not show up.
Related reading on VoxEU.org
Tariffs and US Dollar Depreciations: Not So Surprising After All, a VoxEU column in which Giancarlo Corsetti, Simon Lloyd and Daniel Ostry argue that the dollar's fall after Liberation Day looks less puzzling once expected retaliation and long run risk are taken into account.Tariffs, Global Imbalances, and the Dollar, in which Oleg Itskhoki and Dmitry Mukhin examine whether tariffs aimed at shrinking the US trade deficit can actually work, and what trying would mean for the dollar.
S9 Ep51: Fiscal Populism and Monetary Policy
There is a saying in Spanish: get burned by hot milk, and the sight of a cow makes you cry. New research implies that, decades after a populist government leaves office, the central bank it once tried to …
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There is a saying in Spanish: get burned by hot milk, and the sight of a cow makes you cry. New research implies that, decades after a populist government leaves office, the central bank it once tried to control is still flinching.
Martín Uribe (Columbia) and Nicolás Magud (IMF) have investigated the long-run effect of populist governments that leaned on their central banks to print money and feed inflation. They find that these central banks raise interest rates more aggressively than others when inflation drifts above target, even decades later.
This is the second of four episodes drawn from papers commissioned for the second Economic Policy: Papers on European and Global Issues conference, organised by CEPR, CESifo and Sciences Po.
The research behind this episode:
Jácome, Luis, Nicolás E. Magud, Samuel Pienknagura, and Martín Uribe. 2026. "Fiscal Populism and Monetary Policy Rules." Conference draft, presented at the 2nd Economic Policy: Papers on European and Global Issues Conference, Venice, 19-20 June 2026. Forthcoming in Economic Policy.
To cite this episode:
Phillips, Tim, Martín Uribe, and Nicolás E. Magud. 2026. "Fiscal Populism and Monetary Policy." VoxTalks Economics (podcast).
About the guests
Martin Uribe is the Robert A. Mundell Professor of Economics at Columbia University and a Research Associate of the National Bureau of Economic Research. His research spans international macroeconomics and the theory of monetary and fiscal policy, with recent work on tariff shocks, fiscal dominance, and the long-run legacy of high inflation on how central banks set policy. He is editor-in-chief of the Journal of International Economics.Nicolás E. Magud is a Senior Economist in the International Monetary Fund's Western Hemisphere Department. His research spans open-economy macroeconomics, with a focus on fiscal policy, exchange rates, capital flows, and capital controls, much of it drawn from Latin America's long experience of inflation and central bank reform.
Research cited in this episode
The populist leaders database. Funke, Manuel, Moritz Schularick, and Christoph Trebesch. 2023. "Populist Leaders and the Economy." American Economic Review 113 (12): 3249-88. The authors classify a leader as populist if their rhetoric splits society into "the people" against "the elites," then divide populists into left-wing, whose target is economic elites, and right-wing, whose target is foreigners and minorities.Deficit monetisation and "unpleasant monetarist arithmetic." Sargent, Thomas J., and Neil Wallace. 1981. "Some Unpleasant Monetarist Arithmetic." Federal Reserve Bank of Minneapolis Quarterly Review 5 (3). The paper that established the mechanism this episode turns on: when a government's deficit is financed by its own central bank printing money rather than by selling bonds to the public, the result is inflation. It gives the paper's account of populism and central bank credit its theoretical backbone.
Local projections difference-in-differences. Dube, Arindrajit, Daniele Girardi, Oscar Jorda , and Alan M. Taylor. 2025. "A Local Projections Approach to Difference-in-Differences." Journal of Applied Econometrics 40 (7): 741-58. The statistical method behind the paper's headline charts. It compares countries that have just installed a populist government against "clean" control countries with no recent populist history, tracking central bank credit year by year after the change of regime.
The Central Bank Independence Extended (CBIE) index. Romelli, Davide. 2022. "The Political Economy of Reforms in Central Bank Design: Evidence from a New Dataset." Economic Policy 37 (112): 641-88. A dataset scoring central bank laws on their independence, including limits on lending to government. The paper uses it to show that countries with a populist past, especially a left-wing one, now have stricter legal limits on central bank lending than countries with no such history.
Argentina, Chile, and Mexico. The paper's three historical case studies. In Argentina, governments from Perón onward repeatedly rewrote central bank law to permit financing of the treasury, contributing to repeated bouts of high inflation and, eventually, hyperinflation in the 1980s. In Chile, the Allende government printed money to fund an expansion of the state, and inflation reached roughly 600% in 1973 before the government was overthrown. In Mexico, President EcheverrÃa's public investment drive in the 1970s was financed in part by the central bank, feeding an inflation and currency crisis that culminated in the country's 1982 default. Uribe and Magud point to these episodes as the historical template their statistical results describe.
Related reading on VoxEU
Central bank independence: An update, a VoxEU column in which Sylvester Eijffinger and Jakob de Haan argue that legal independence alone does not shield a central bank from political pressure to loosen policy.Recent trends in central bank independence, in which Davide Romelli, whose index this paper uses to track legal independence, documents a fresh wave of reforms strengthening central banks worldwide since 2016.
S9 Ep50: Tariffs, Uncertainty, and the Exchange Rate
Textbook economics says a tariff should strengthen a country's currency. Since the start of 2025, as US tariffs rose ... and the dollar fell.In the first of four episodes of Voxtalks based on papers presented …
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Textbook economics says a tariff should strengthen a country's currency. Since the start of 2025, as US tariffs rose ... and the dollar fell.
In the first of four episodes of Voxtalks based on papers presented at the second Economic Policy: Papers on European and Global Issues conference, Alfonso Merendino (Bocconi University) and Tommaso Monacelli (Bocconi University, CEPR) tell Tim Phillips what they found when they looked for reasons. Their conclusion: for tariffs, it's not size, it is how permanent people expect it to be. They call this structural trade policy uncertainty.
When that uncertainty is low, a tariff behaves exactly as the textbook says. When it's high, the same tariff can weaken the currency, shrink output and pull down inflation instead.
The research behind this episode:
Merendino, Alfonso, and Tommaso Monacelli. 2026. "Tariffs, Uncertainty, and the Exchange Rate." Conference draft, presented at the 2nd Economic Policy: Papers on European and Global Issues Conference, Venice, 19-20 June 2026. Forthcoming in Economic Policy.
To cite this episode:
Phillips, Tim, Tommaso Monacelli, and Alfonso Merendino. 2026. "Tariffs, Uncertainty, and the Exchange Rate." VoxTalks Economics (podcast).
About the guests
Tommaso Monacelli is Professor of Economics at Bocconi University and a Research Fellow of IGIER Bocconi and CEPR. His research spans international macroeconomics, monetary policy and the business cycle, with recent work on tariffs and monetary policy, supply chain uncertainty and inflation, and heterogeneous bank models of monetary transmission. He is co-editor of the Journal of International Economics and was managing co-editor of Economic Policy from 2016 to 2021.Alfonso Merendino is a PhD student in Economics at Yale University and a Research Fellow at the Social Economics Lab. He recently completed a research placement in macroeconomic modelling at the European Central Bank, and holds a Bachelor's and Master's degree in Economics from Bocconi University, where this paper was written.
Research cited in this episode
Structural trade-policy uncertainty (S-TPU). The paper's central measure, capturing uncertainty not about the size of a tariff but about how persistent the trade-policy regime behind it will be. Merendino and Monacelli split observed US tariff rates from 1990 to 2025 into a persistent component and a short-lived transitory one, using a state-space model with separate volatility for each, and define S-TPU as the volatility of the persistent component.The 2017 US withdrawal from the Trans-Pacific Partnership. The authors' example of a pure S-TPU shock. The withdrawal changed no tariff rate on impact, but it reshuffled expectations about the durability of US trade policy, and their index of structural uncertainty spikes at this point.
"Liberation Day" tariffs, April 2025. The sweeping tariff package announced by the Trump administration on 2 April 2025. The paper treats this, alongside the 2018 Section 301 tariffs on China, as one of two clearly identified tariff shocks used to anchor its statistical model.
Aggregate trade-policy uncertainty index. Caldara, Dario, Matteo Iacoviello, Patrick Molligo, Andrea Prestipino, and Andrea Raffo. 2020. "The Economic Effects of Trade Policy Uncertainty." Journal of Monetary Economics 109: 38-59. This newspaper-based index of trade-policy uncertainty mixes announcement noise with genuine regime change; Merendino and Monacelli show that conditioning on it, rather than on their narrower S-TPU measure, erases the state-dependent pattern they document.
Narrative-dominance identification. The technique the authors use to isolate tariff shocks in their statistical model, adapted from Juan Antolín-Díaz and Juan F. Rubio-Ramírez. 2018. "Narrative Sign Restrictions for SVARs." American Economic Review 108 (10). Rather than imposing a full statistical model, the method anchors identification to a small number of clearly documented policy events, such as the 2018 and 2025 tariff rounds, and lets everything else, including the sign of the exchange-rate response, be estimated freely from the data.
More VoxTalks Economics episodes
The second Economic Policy: Papers on European and Global Issues conference follows the first, held in Paris in December 2025. Three earlier VoxTalks Economics episodes from that Paris conference asked what comes next for Ukraine's economy.What's next for Ukraine: Investment, in which Yuriy Gorodnichenko and Maurice Obstfeld argue that forgiving Ukraine's war debt, rather than treating it as an obstacle, is essential to attracting the $40 billion a year that reconstruction needs.
What's next for Ukraine: Reconstruction, in which Edward Glaeser, Martina Kirchberger, and Andrii Parkhomenko argue that postwar Tokyo, not Warsaw or Berlin, is the right model for rebuilding Ukraine's cities.
What's next for Ukraine: The labour market, in which Giacomo Anastasia documents the surprising resilience of Ukraine's wartime labour market.
Related reading on VoxEU
Tariffs and US dollar depreciations: Not so surprising after all, a VoxEU column in which Giancarlo Corsetti, Simon Lloyd, and Daniel Ostry argue that the dollar's fall after Liberation Day is explained by foreign retaliation, a different mechanism from the persistence channel that Merendino and Monacelli identify.Tariffs, the dollar, and equities: High-frequency evidence from the Liberation Day announcement, in which Jonathan Hartley and Alessandro Rebucci show that the dollar depreciated on impact on 2 April 2025, against the standard prediction, and trace this to foreign investors rebalancing away from US equities.
S9 Ep49: Combatting sexual harassment in the military
Norwegian conscripts arrive at boot camp straight out of school. They are assigned at random to a shared room and they live in it for the next eight weeks. Whatever the culture of that room turns out to be …
Shownotes
Norwegian conscripts arrive at boot camp straight out of school. They are assigned at random to a shared room and they live in it for the next eight weeks. Whatever the culture of that room turns out to be, they are stuck with it.
We know that the military everywhere has a poor record on sexual harassment. Johanna Rickne (Stockholm University, CEPR) and her co-authors wanted to reduce its acceptance, and the number of incidents.
Compulsory training, standing a in a room a showing a PowerPoint, has a poor record. It can even inspire a backlash. Instead, they included two pieces of information in a 20-minute enrolment survey. One fact was about how women score on the army's own end-of-service assessments. The other was about what last year's recruits really thought about crude sexual jokes. Eight weeks later, the researchers came back to see what had changed for the 949 recruits.
The research behind this episode:
Olle Folke, Torbjørn Hanson, Åshild A. Johnsen, Andreas Kotsadam, and Johanna Rickne. 2026. "Targeting Attitudes to Combat Sexual Harassment: A Randomized Intervention in the Norwegian Military." CEPR Discussion Paper 21475. The discussion paper is gated. It is also published in the Journal of Economic Behavior and Organization.
To cite this episode:
Phillips, Tim, and Johanna Rickne. 2026. "Combatting sexual harassment in the military." VoxTalks Economics (podcast).
About the guest
Johanna Rickne is Professor of Economics at the Swedish Institute for Social Research (SOFI) at Stockholm University, and holds part-time chairs at the University of Nottingham and the Stockholm School of Economics. She is affiliated with the Centre for Economic Policy Research. Her research spans labour economics, political economics and gender economics, with sustained work on sexual harassment as a workplace hazard, on who ends up in political office, and on what makes work meaningful. She won the Assar Lindbeck Medal in 2023.Research cited in this episode
The Sexual Experiences Questionnaire is the behavioural instrument used to measure prevalence here. Rather than asking people whether they were sexually harassed, a term that different people read very differently, it presents a list of specific behaviours and asks whether each one happened. The version used in Norway runs to 14 items and is adapted from the questionnaire developed for the US military.Gender harassment is one of three categories in the standard model of sexual harassment, alongside unwanted sexual attention and sexual coercion. It covers hostile or demeaning conduct based on someone's sex or gender that is not necessarily sexual in nature, including remarks that a person is not suited to the job. In this boot camp it was the most common behaviour reported by women.
Backlash from compliance training is the reason the intervention avoids looking like training at all. Mark Roehling, Dongyuan Wu, Mahl Geum Choi and James Dulebohn's 2022 meta-analysis in Personnel Psychology gathers the evidence on what harassment training does and does not shift; other studies find that employees most inclined to harass become more tolerant of the behaviour after being told how to behave. Voluntary sessions have the opposite problem, in that those employees do not turn up.
Misperceived social norms supply the mechanism for the second piece of information. Leonardo Bursztyn, Alessandra Gonzalez and David Yanagizawa-Drott's study of Saudi Arabian husbands showed that men privately supported their wives working outside the home while badly underestimating how many other men agreed; correcting the misperception changed what those men did. The boot camp version asks recruits what their predecessors thought about sexualised jokes, then tells them the answer.
The Norwegian Armed Forces service statement is the source of the first piece of information. Recruits are assessed at the end of service on leadership, responsibility, collaboration, professional competence and judgement. Average scores show no gender gap; the graph was shown to the treated recruits in this experiment.
The vignette holds the harassment event constant across everyone who answers. Recruits read a short scenario set in a room like their own and rate six statements about it, covering whether the conduct counts as harassment, what the woman should do, and what any bystanders owe her. Because the incident is fixed, differences in the answers cannot be explained away by differences in what people happened to experience.
Sexual harassment and gender inequality is the wider agenda this episode sits inside. Olle Folke and Johanna Rickne's 2022 paper in the Quarterly Journal of Economics uses Swedish survey and administrative data to show that harassment risk falls hardest on whichever sex is in the minority in a workplace, and that it pushes people out of jobs.
More VoxTalks Economics episodes
Violence against women in politics. Gianmarco Daniele on why women who win office in Italy are far more likely than men to be attacked, and what that does to who stands for election in the first place.Violence against women at work. Abi Adams-Prassl on Finnish police records linked to employment data, and what happens to the careers of the victim and the perpetrator after one colleague assaults another.
Related reading on VoxEU.org
Discrimination in work conditions: The case of sexual harassment, a VoxEU column by Johanna Rickne and Olle Folke arguing that economists should treat sexual harassment as gender discrimination in working conditions, and showing that both men and women carry the risk when they are the gender minority.S9 Ep48: What price to save Japan's ghost towns?
In the oldest Japanese municipalities, close to half the residents are already over 65. As young people move to cities, the retailers close, then the clinics, then the bus that used to reach the next town …
Shownotes
In the oldest Japanese municipalities, close to half the residents are already over 65. As young people move to cities, the retailers close, then the clinics, then the bus that used to reach the next town. Rural Japan is not simply ageing: it is emptying.
Elisa Giannone (CREI, CEPR) and her co-authors have analysed Japan's 1,741 municipalities from 1980 onwards. The oldest quarter of them lost around 26% of their population by 2010; the youngest quarter grew by 22%, and the gap between them is still widening.
Taxing city dwellers could reverse the trend. But that's a century-long policy, that would also lower national income per head by about 1.3%. There is no version of this without a bill attached, she warns.
The research behind this episode:
Giannone, Elisa, Yuhei Miyauchi, Nuno Paixão, Xinle Pang, and Yuta Suzuki. 2026. "Living in a Ghost Town: The Geography of Depopulation and Aging." CEPR Discussion Paper 21447 (gated).
To cite this episode:
Phillips, Tim, and Elisa Giannone. 2026. "What price to save Japan's ghost towns?" VoxTalks Economics (podcast).
About the guest
Elisa Giannone is a researcher at CREI, an Adjunct Professor at Universitat Pompeu Fabra, an Affiliated Professor at the Barcelona School of Economics. She works on internal migration, regional income divergence, the spatial consequences of local shocks and the question of why people move.Research cited in this episode
Social and natural population change. Demographers separate population movements through migration, known as social change, from births and deaths, known as natural change. Giannone's team runs both counterfactuals separately. Shut down migration and the oldest municipalities still age, but the population loss between 1980 and 2010 falls from nearly 0.3 log points to under 0.1. The framework follows Stanley Smith, Jeff Tayman and David Swanson's standard treatment of state and local population projections.Scale economies in local public services. A 1% increase in local population is associated with a 0.53% fall in municipal government spending per head. Roads, schools, clinics and administration carry a large fixed cost, so the cost of serving each remaining resident rises as a town shrinks. This is the fiscal arithmetic that makes depopulation expensive.
Consumption-equivalent flow utility. The paper's measure of quality of life, amenity-adjusted real income. It captures what the residents of a place can actually buy and enjoy rather than what they earn on paper, which matters when the shops and the doctors are leaving.
The five oldest prefectures. Kochi, Shimane, Tokushima, Tottori and Yamagata, ranked by elderly share in 2015. They are the target group in every policy simulation, and their combined elderly share reaches nearly 60% by 2215 under the baseline projection.
Municipal extinction. Hiroya Masuda's 2014 book Chiho Shometsu warned that unipolar concentration in Tokyo would drive hundreds of rural municipalities out of existence. It set the terms of Japan's regional revitalisation debate, and the paper's projections give that warning a number.
United Nations World Population Prospects. Giannone's figures for the global picture, including the count of countries that have already passed peak population and those projected to do so by the mid 2050s, come from the UN projections rather than from the paper itself.
More VoxTalks Economics episodes
Economic decline and the rise of populism. Andrés Rodríguez-Pose explains what happens politically in the places this episode watches emptying, and why long term regional decline shows up at the ballot box.Related reading on VoxEU.org
Living in a ghost town: The geography of depopulation and ageing. The authors' own column, with the charts behind this episode.Japan's age wave: Challenges and solutions, a column by Andrew Stawasz, Paige Kirby, JP Sevilla and David Bloom on the national scale of the problem this episode breaks down by region.
Mobile seniors and local economic development. Marco Badilla-Maroto, Benjamin Faber, Antoine Levy and Mathilde Munoz find that retirees moving into poorer French regions bring economic gains with them, a useful counterweight to the Japanese story.
Population shrinking and the future of European municipalities, in which Friedrich Heinemann, Alexander Kalb and Benny Geys set out the scale economies problem for Europe's own shrinking towns.
S9 Ep47: The Next Generation: PSE 2026
Travel broadens the mind. So the Voxtalks visits a conference, we find the most interesting research from economists just starting out, and hand three of them a microphone. Ad that is today's episode, recorded …
Shownotes
Travel broadens the mind. So the Voxtalks visits a conference, we find the most interesting research from economists just starting out, and hand three of them a microphone. Ad that is today's episode, recorded at the CEPR Paris School of Economics Policy Forum 2026.
Listen to hear three findings that undercut conventional wisdom. Guido Lamarmora (University of Nottingham) argues that the usual policy prescription for developing economies that want to industrialise of raising agricultural productivity can deepen their reliance on farming rather than break it. Costanza Tomaselli (Imperial College London) studies what an energy price shock in Mexico does to employment: she finds that firms without access to credit hire rather than fire. Mushegh Tovmasyan (University of Paris-Saclay) follows Armenia after Russia was sanctioned in 2022, where trade doubled but the gains went to incumbents and their workers, not to new firms.
The research behind this episode:
Lamarmora, Guido. 2026. "The Food Problem in an Open Economy."
Tomaselli, Costanza, and Armando Rangel Colina. 2026. "Energy Shocks, Employment Response, and Heterogeneous Credit Access."
Tovmasyan, Mushegh. 2026. "Trade and Firm-Level Adjustments to Geopolitical Shifts: Evidence from Armenia."
To cite this episode:
Phillips, Tim, Guido Lamarmora, Costanza Tomaselli, and Mushegh Tovmasyan. 2026. "The Next Generation: PSE 2026." VoxTalks Economics (podcast).
About the guests
Guido Lamarmora is completing his PhD at the University of Nottingham, with research on international trade, macro development, and structural transformation. Soon you will find him at Johannes Gutenberg University Mainz as a postdoc.Costanza Tomaselli is a PhD candidate at Imperial College Business School, with research spanning financial economics, industrial organisation, and energy economics.
Mushegh Tovmasyan is a PhD candidate at University Paris-Saclay, RITM, with research spanning international trade, sanctions, and firm and worker outcomes, built on newly accessible Armenian administrative microdata.
Research cited in this episode
The food problem. The long-standing account of why poor countries keep so many workers in agriculture; households spend most of their income on food, and low farm productivity means many workers are needed just to feed the population. Lamarmora's point is that the standard fix, raising farm productivity or opening to trade, need not hold once you model the economy as open and put land into the picture.Land as a fixed factor. Agriculture uses land, which is fixed, as well as labour. Ignore it and a country with many workers per hectare looks unproductive when it is not. Once land is accounted for, low-income countries turn out to have relatively high agricultural productivity, which flips the conventional diagnosis.
Input-output linkages. Industry is wired into the rest of the economy through supply chains, so a rise in industrial productivity or cheaper industrial imports lowers costs everywhere, including on the farm. In Lamarmora's estimates the gains from industry run roughly twice those from raising agricultural productivity.
Storm Uri. The February 2021 winter storm that damaged the natural gas pipeline supplying Mexico's electricity, producing a sharp and spatially uneven jump in power prices. Tomaselli uses distance to gas-fired capacity as the source of variation to isolate the labour-market effect of an energy shock.
Credit access as a shock absorber. Mexico gave firms no fiscal support after the shock, which let Tomaselli see what finance alone can do. Firms with credit did not change production or employment; they borrowed to smooth the shock. The suggestive model implication is that easing credit frictions could do the work of a blanket energy subsidy at lower cost to the public purse.
Sanctions and the neutral economy. Sanctions destroy trade between the sanctioning and target countries but open opportunities for neutrals. Armenia, a landlocked transition economy with trade near 100% of GDP and Russia as its largest partner, saw trade double to triple after 2022. Tovmasyan uses Armenian customs and matched employer-employee microdata to ask whether this is new production, rerouting, or just higher prices.
Incumbent-led intermediation. The trade boom was driven by existing large firms scaling up relationships and adding sanctioned goods such as electronics and machinery, not by broad new entry. Employment barely moved; gains showed up as more hours and higher wages for existing workers, which Tovmasyan reads as intermediation rents shared with labour.
More VoxTalks Economics episodes
Previous next generations:Paris 25: Ali Bakhtawar, Lucie Giorgi, and Alishuba Philip discuss Lawfare, single sex schooling, and slum clearance.
PSE 25: Pelin Ozgul, Deepakshi Singh, and Nathan Vieira on AI in call centres, female employment in India, and short-time work in Europe.
Paris 24: Laura Arnemann, Gustavo Julio García Bernal, and Matyas Molnar tall Tim about performance-related pay, intergenerational wealth, and international exhibitions.
PSE 24: Alice Chiocchetti, Yuan Hu, and Christoph Semken describe their research on profit-shifting, green tech, and the effect of changing to a greener lifestyle.
Follow VoxTalks to discover more of yesterday’s stars of tomorrow.
S9 Ep46: Absorbing shocks since 1891
Recorded at the PSE-CEPR Policy Forum 2026.A country wants a stable exchange rate, it wants money to move freely across its borders, and it wants to set its own interest rates. It's a well-known trilemma …
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Recorded at the PSE-CEPR Policy Forum 2026.
A country wants a stable exchange rate, it wants money to move freely across its borders, and it wants to set its own interest rates. It's a well-known trilemma. Central bankers must pick any two, because you cannot have all three.
History, it turns out, did not read that memo.
Eric Monnet has spent years reading the balance sheets that central bankers kept on each other. Since 1891 the Bank of France paid teams of multilingual economists to copy out the weekly and monthly accounts of every other central bank in the world. Those ledgers, now digitised, show that central banks have been far more than interest-rate setters. For more than a century they have quietly expanded their balance sheets to cushion their economies against shocks arriving from abroad. In this week's VoxTalk, Monnet argues we have seriously underestimated how much room to manoeuvre they have used since the 19th century.
The research behind this episode:
Bazot, Guillaume, Eric Monnet, and Matthias Morys. 2024. "Central Banks and the Absorption of International Shocks (1891-2019)." CEPR Discussion Paper No. 19646. (Gated.)
To cite this episode:
Phillips, Tim, and Eric Monnet. 2026. "Absorbing shocks since 1891." VoxTalks Economics (podcast).
About the guest
Eric Monnet is Professor at the Paris School of Economics and EHESS, and a Research Fellow at CEPR. An economic historian, his work spans central banking, the international monetary system, and the history of European financial systems across the 19th and 20th centuries. He previously worked as an economist at the Bank of France, and his book Controlling Credit examines monetary policy in postwar France.Research cited in this episode
The Mundell trilemma. Formulated by Robert Mundell in the 1960s, the trilemma holds that an open economy cannot simultaneously maintain a fixed exchange rate, free capital movement, and an independent monetary policy; it can have any two. Mundell received the Nobel Prize in part for the idea.The global financial cycle and the dilemma. Helene Rey argues that even a floating exchange rate does not buy full monetary autonomy, because a common global financial cycle, driven by the risk appetite of large financial institutions, moves interest rates and exchange rates across countries at once. A shock in one emerging market prompts investors to demand higher compensation across others they treat as similar. The trilemma, in this view, is really a dilemma.
The Bank of France archive. The research department of the Bank of France was founded to track the financial operations of foreign central banks, collecting their weekly and monthly balance sheets from 1891 onward. The dataset assembled from these records covers 23 countries, essentially every central bank in existence by the late 1930s, and combines balance-sheet data with monthly figures on industrial production, consumer prices, and stock markets.
Discount loans, open market operations, and foreign exchange interventions. The specific tools have changed completely; the behaviour has not. In the 19th century central banks intervened by discounting commercial bills and holding gold or foreign deposits; today they conduct open market operations in government bonds and hold US Treasury bills. Across all these forms, the response to an external shock, expanding domestic assets to supply liquidity, has been consistent.
Taming the Global Financial Cycle. The predecessor study by the same authors: Bazot, Monnet, and Morys, "Taming the Global Financial Cycle: Central Banks as Shock Absorbers in the First Era of Globalization," Journal of Economic History 82(3), 2022, which established the pattern for the classical gold standard period.
More VoxTalks Economics episodes
The Bank of England's Capital Mistake. Former Bank insiders David Aikman and John Vickers argue that cutting equity capital requirements for UK banks could raise the odds of a financial crisis, a companion piece on what central bank balance sheets are for.Related reading on VoxEU.org
Central banks and the absorption of international shocks, the authors' own VoxEU column setting out the dataset and the two main findings in brief.S9 Ep45: Tariff Confusion
If you run a business that exports to the United States, how big is the tariff you have to pay? In 2025 that question was hard to answer. Between February and December, 53 separate announcements introduced …
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If you run a business that exports to the United States, how big is the tariff you have to pay? In 2025 that question was hard to answer. Between February and December, 53 separate announcements introduced, delayed, reinstated or changed US tariffs, with different countries and products pulled in or exempted each time.
Kalina Manova (UCL, CEPR) and her colleagues built a database of every one of those announcements, but they also measured the confusion that those announcements created. She tells Tim Phillips about how tariff confusion has become a second tax on trade, as confusion puts off exporters: but it's one that raises no revenue.
On average, uncertainty about the actual tariff doubled the damage done to trade by the tariff hikes themselves. For some countries it tripled it. Does this result mean that, if the US cleared up the confusion by not changing its tariffs regularly, it could double tariff income for the same impact on trade?
The research behind this episode:
Manova, Kalina, Dennis Novy, Thomas Sampson, and Aaron Tang. 2026. "Tariff Confusion." CEPR Discussion Paper DP21688 (gated).
To cite this episode:
Phillips, Tim, and Kalina Manova. 2026. "Tariff Confusion." VoxTalks Economics (podcast).
About the guest
Kalina Manova is Professor of Economics at University College London and a Research Fellow at the Centre for Economic Policy Research. Her work spans global production networks and multinational activity, firm productivity and management, trade policy, and the financial frictions that shape international trade and investment. She holds an AB, AM and PhD from Harvard, and has previously held posts at Stanford, Princeton and Oxford.Research cited in this episode
US Tariff Announcement Database (USTAD). The dataset Manova and her co-authors assembled by hand from US presidential executive orders and proclamations, recording all 53 tariff announcements of 2025 and tracing, for roughly 230 origin countries and more than 18,000 ten-digit product categories, the statutory tariff in place each month.The four confusion measures. With no direct way to measure confusion, the paper proxies it four ways: the cumulative number of relevant announcements a firm had to track; the number of possible tariff calculations those announcements could produce (labelled tariff mess, defined as two to the power of the number of announcements); the highest tariff a firm might infer if it heard only the bad news (tariff max); and how far that worst case sits above the true statutory rate (tariff miss).
The firm survey. A survey of roughly 4,500 firms in the US and Canada in March and April 2025 found that around 45% believed tariffs on Chinese goods were below 20%, when the true average was about 42%; at the same time, 87% underestimated how many announcements had postponed or rolled back tariffs. Firms were wrong in both directions at once.
Trade policy uncertainty. A prior literature on uncertainty about future tariffs, which tends to find that firms delay forming trade relationships when the future is unclear. The paper’s contribution is to separate confusion about current tariffs from uncertainty about future ones, and to show the former bites on its own.
Relationship-specific investment and trust. Trade in goods that require buyers and suppliers to customise to one another, or that sit in stickier supply relationships, proved more resilient to confusion; so did trade with countries whose populations report higher trust in foreigners. Informal trust, rather than formal contract enforcement, did the work of cushioning the shock.
The IEEPA ruling. In February 2026 the US Supreme Court ruled that the tariffs imposed in 2025 under the International Emergency Economic Powers Act were unlawful. The paper's data stops before the ruling, which generated fresh policy change and, presumably, fresh confusion.
More VoxTalks Economics episodes
World War Trade. Richard Baldwin on how the April 2025 tariffs settled into a trade Cold War, and why the rest of the world kept trading without the US.Europe in the Middle. Pol Antràs and Beata Javorcik on where redirected Chinese exports go when they can no longer sell in the US, and what that means for European firms and consumers.
How exchange rates responded to tariffs. Giancarlo Corsetti on why the dollar fell after Liberation Day when tariffs should, in theory, have pushed it the other way.
Related reading on VoxEU.org
Trump and Tariffs, a VoxEU debate page collecting research on how the 2025 tariffs are reshaping supply chains, trade relationships and market stability.S9 Ep44: How superpowers shape trade
Recorded at the PSE-CEPR Policy Forum, Paris School of Economics.Tariffs move trade around, but so does economic power. When one economy dominates, other countries fall into step with it. They trade with the …
Shownotes
Recorded at the PSE-CEPR Policy Forum, Paris School of Economics.
Tariffs move trade around, but so does economic power. When one economy dominates, other countries fall into step with it. They trade with the dominant economy, and also with each other.
Alberto Martin (Barcelona School of Economics, CEPR) is one of a team that has tracked the influence of hegemons, large dominant economies, on trade from the start of the 19th century. In our latest VoxTalk he tells Tim Phillips about how they used treaties (not necessarily about trade) as a proxy for alignment, and built a database of 77,000 of them signed between 1800 and 2020 to test their theory.
Hegemons sign a disproportionate share of these international agreements. After treaty-signing, trade links become stronger. But treaty-signing has fallen sharply over the past 15 years, as much as it did during the two world wars. If we are heading towards a multipolar world, might what will the absence of a global hegemony do to trade?
The research behind this episode:
Broner, Fernando, Alberto Martin, Josefin Meyer, and Christoph Trebesch. 2025. "Hegemonic Globalization." CEPR Discussion Paper 20339 (gated).
To cite this episode:
Phillips, Tim, and Alberto Martin. 2025. "How superpowers shape trade." VoxTalks Economics (podcast).
About the guest
Alberto Martin is a Senior Researcher at the Center for Research in International Economics (CREI), an Adjunct Professor at Universitat Pompeu Fabra, a Research Professor at the Barcelona School of Economics, and a Research Fellow at the Centre for Economic Policy Research, where he directs the International Macroeconomics and Finance programme. His research spans macroeconomics, finance, and international economics, including asset bubbles, credit cycles, sovereign debt, and the political economy of trade.Research cited in this episode
Global Treaty Database. The dataset at the heart of the paper, assembled by the authors from the United Nations Treaty Collection, the League of Nations archive, and country-specific historical sources. It records roughly 77,000 international agreements signed between 1800 and 2020, most of them bilateral, sorted into economic and non-economic categories such as trade, taxation, migration, borders, and military cooperation.Hegemonic stability. The idea, introduced by Charles Kindleberger in 1973, that an open and stable world economy needs a single dominant power to underwrite it. This paper builds a formal model of the mechanism Kindleberger described, and asks what happens to openness when dominance is contested.
Alignment and UN voting. The most common existing proxy for how closely two countries are aligned is whether they vote together at the United Nations. The authors' treaty measure correlates with UN voting in some periods and less in others, partly because many UN votes turn on narrow questions; treaties cover more policy areas and reach back 200 years, which UN voting cannot.
The recent decline in treaty-signing. Since 1800 treaty-signing has trended upward, interrupted by three sharp falls: the First World War, the Second World War, and a decline over the last 15 years that is proportionally comparable to the first two. The authors checked large-country sources directly to rule out a reporting lag, and the fall appears real.
More VoxTalks Economics episodes
The safety paradox. Isabelle Méjean on how, when countries impose trade restriction to protect themselves, it also makes conflict more likely.Related reading on VoxEU.org
Why globalisation needs a leader: Hegemons, alignment, and trade, the authors' own VoxEU column setting out the theory of hegemonic globalisation and what a shift from a unipolar to a multipolar world might mean for trade.From bilateralism to a system: Europe's early trade treaties and lessons for EU trade policy in a contested world, a VoxEU column by Laura Panza and Maria Ptashkina drawing on nearly 900 commercial treaties from 1815 to 1919 to argue for expanding networks of agreements even without universal multilateralism.
S9 Ep43: Navigating industrial policy
Recorded at the PSE-CEPR Policy Forum, Paris.In 2019 the IMF called the increasing adoption of industrial policy: "The return of the policy that shall not be named". No one is scared to name it in 2026 …
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Recorded at the PSE-CEPR Policy Forum, Paris.
In 2019 the IMF called the increasing adoption of industrial policy: "The return of the policy that shall not be named". No one is scared to name it in 2026. Governments in rich and poor economies alike are intervening to change what their countries produce, and the pace has picked up sharply.Zsóka Kóczán (EBRD) was one of the leads on the Transition Report 2024-25, which draws on a database of more than 31,000 industrial policies in 150 economies. She talks to Tim Phillips about who is using these policies, and the mistakes that happen when they aren't managed well. They multiply before elections, they discriminate against foreign interests, many are firm-specific - and until recently few had an end date, whether they worked or not. Picking winners is hard. Letting go of losers is even harder, she warns.
The research behind this episode:
EBRD. 2024. "Transition Report 2024-25: Navigating Industrial Policy." London: European Bank for Reconstruction and Development. The digital edition, with country assessments and interactive charts, is at 2024.tr-ebrd.com.
To cite this episode:
Phillips, Tim, and Zsoka Koczan. 2026. "Navigating industrial policy." VoxTalks Economics (podcast).
About the guest
Zsoka Koczan is Associate Director and Lead Economist in the Office of the Chief Economist at the European Bank for Reconstruction and Development, where she works on the Transition Report, edits the Regional Economic Prospects and runs the Life in Transition Survey. Before joining the EBRD she was an economist at the International Monetary Fund. She holds a PhD in economics from the University of Cambridge, and her research spans income disparities within countries, migration and inequality.Research cited in this episode
Moving the goalposts. The analysis of industrial policy objectives in the report is developed in Koczan, Zsoka, Victoria Marino, and Alexander Plekhanov. 2025. "Moving the Goalposts: The Changing Objectives of Industrial Policy." EBRD Working Paper No. 311. It codifies the stated objectives of more than 31,000 industrial policies using large language model processing; in the EBRD regions and other emerging markets, around 75% of policies pursue multiple objectives, and more than 10% pursue three or more.The Juhász, Lane, Oehlsen and Pérez dataset. The report builds on the industrial policy dataset assembled by Réka Juhász, Nathan Lane, Emily Oehlsen, and Verónica C. Pérez in "The Who, What, When, and How of Industrial Policy: A Text-Based Approach" (STEG Working Paper No. WP050, 2023), which uses natural language processing to identify industrial policies in the Global Trade Alert repository; the EBRD team extended its coverage of emerging markets.
The Global Trade Alert. An independent monitoring initiative that has documented policy interventions affecting international commerce since 2009; it is the underlying source for both datasets above.
The policy that shall not be named. Cherif, Reda, and Fuad Hasanov. 2019. "The Return of the Policy That Shall Not Be Named: Principles of Industrial Policy." IMF Working Paper No. 19/74. The title captures how unfashionable the subject was among economists before its recent revival, which is Koczan's point in raising it; the interventions themselves never went away.
Reagan's nine words. In 1986 President Ronald Reagan remarked that the nine most terrifying words in the English language were "I'm from the government and I'm here to help." Koczan cites the line as a marker of the era when industrial policy fell out of favour, and as a reminder that government failures can replace the market failures these policies are meant to correct.
The Industrial Accelerator Act. The European Commission's proposal, presented in March 2026, would introduce "Made in EU" and low-carbon requirements for public procurement and support schemes in strategic sectors. Koczan cites it as evidence that the upward trend in industrial policy adoption is continuing.
More VoxTalks Economics episodes
Europe in the Middle, recorded at the same forum, in which Pol Antras and Beata Javorcik ask how Europe should make policy when it is caught between the US and China in a realigning world trade system.Addressing Global Imbalances, also from the forum, in which Gita Gopinath and Philip Lane discuss the third wave of global imbalances and what central banks can and cannot do about it.
Related reading on VoxEU
The visible hand of the state: Industrial policies in emerging markets, a VoxEU column by the EBRD team presenting the Transition Report's findings on how emerging markets use industrial policy.The new economics of industrial policy, a VoxEU column by Réka Juhász, Nathan Lane and Dani Rodrik summarising the recent empirical literature on when these policies work.
The return of industrial policy in data, a VoxEU column introducing the New Industrial Policy Observatory and documenting the recent wave of interventions.
S9 Ep42: The Safety Paradox
Recorded at the PSE-CEPR Policy Forum, Paris School of Economics, June 2026.In 1941 the United States banned oil exports to Japan, to punish aggression without fighting a war. Historians now argue the embargo …
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Recorded at the PSE-CEPR Policy Forum, Paris School of Economics, June 2026.
In 1941 the United States banned oil exports to Japan, to punish aggression without fighting a war. Historians now argue the embargo did the opposite, and hastened Japan's entry into the war.Isabelle Méjean (Sciences Po, CEPR) calls this "The safety paradox". Trade between rivals makes war more expensive. Cut that trade to protect your interests, and you make conflict cheaper, for your rival as well as for you. In a new VoxTalk she talks to Tim Phillips about economic coercion, decoupling, and why Europe should treat its trade agreements as insurance.
Méjean and her co-authors simulated the US decoupling from China. Raising tariffs by 20 percentage points, roughly what the first Trump administration did, raises the probability of war by 2%, she estimates. That sounds small until you consider what a war between the US and China would mean.
The research behind this episode:
Mayer, Thierry, Isabelle Méjean, and Mathias Thoenig. 2025. "The Fragmentation Paradox: De-risking Trade and Global Safety." CEPR Discussion Paper 20564 (gated).
To cite this episode:
Phillips, Tim, and Isabelle Méjean. 2026. "The Safety Paradox." VoxTalks Economics (podcast).
About the guest
Isabelle Méjean is Professor of Economics at Sciences Po and a Research Fellow of the Centre for Economic Policy Research, where she directs the International Trade and Regional Economics programme and is a member of the Research Policy Network on Geoeconomics and Security. She is a scientific advisor at CEPII and a member of the French Conseil d'Analyse Économique, with research spanning international trade, firm-to-firm networks, and how shocks to individual firms move whole economies. In 2020 she was named Best Young Economist of France.Research cited in this episode
Make Trade Not War? Philippe Martin, Thierry Mayer, and Mathias Thoenig's 2008 paper in the Review of Economic Studies (75(3): 865-900) provided the first quantitative evidence that bilateral trade integration reduces the probability of interstate conflict; the diplomatic game in the new paper builds directly on it.Montesquieu, De l'esprit des lois (1748). The earliest statement of the idea, Méjean notes, that interdependence between nations raises the cost of conflict and strengthens the hand of diplomacy; what was trade dependence in the 18th century now includes finance and technology.
The US oil embargo on Japan, 1941. Méjean's historical example of the safety paradox in action; a policy designed to impose costs on Japan is widely credited by historians with accelerating its entry into the Second World War.
China's trade ban on Lithuania. After Lithuania allowed a Taiwanese representative office to open in Vilnius in 2021, China blocked Lithuanian products from its market; the episode's example of open economic coercion, and one that prompted the EU's Anti-Coercion Instrument, in force since 2023.
Liberation Day tariffs. The US tariffs announced in April 2025; Méjean points to the tariff on Brazil, justified by the treatment of former president Jair Bolsonaro, as a tariff with an explicitly geopolitical rather than economic purpose.
Rare earths. China holds a near monopoly across mining, refining, and magnet production; Méjean's example of where future trade agreements could act as insurance, because deposits outside China offer more scope for diversification than mining in Europe.
More VoxTalks Economics episodes
Europe in the Middle. Pol Antras and Beata Javorcik, recorded at the same forum, on what the US-China realignment means for European producers and consumers.World War Trade. Richard Baldwin on how world trade was weaponised, and where the trading order goes from here.
Trading Around Geopolitics. Giancarlo Corsetti, Banu Demir, and Beata Javorcik on why trade sanctions can be like squeezing a balloon.
Related reading on VoxEU
Why 'de-risking' may not deliver a large peace dividend, a VoxEU column estimating that a doubling of bilateral trade reduces the probability of militarised conflict by roughly 30%.How geopolitics is changing trade, a VoxEU column documenting the fragmentation of trade flows along geopolitical lines.
Geopolitical risk and supply chain diversification, a VoxEU column on how firms respond to geopolitical risk in their sourcing decisions.
S9 Ep41: Making teenagers read newspapers
French teenagers carry a smartphone with access to almost anything, but few of them have been using it to read the news.Julia Cagé (Sciences Po, CEPR) ran an experiment to test the one barrier everyone assumes …
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French teenagers carry a smartphone with access to almost anything, but few of them have been using it to read the news.
Julia Cagé (Sciences Po, CEPR) ran an experiment to test the one barrier everyone assumes matters most: the price of a newspaper. She and her co-authors gave free digital subscriptions to Le Monde and media education to thousands of French high school students for a year, and then tracked what the students actually read. It's a bit like persuading kids to eat vegetables when there are fries on the table, she tells Tim Phillips. Can a free subscription persuade France's teens to use their phones differently and eat their media greens, and what changes when they do?
The research behind this episode:
Briole, Simon, Julia Cagé, and Andrea Prat. 2026. "Making Teenagers Read Newspapers: A Nationwide Experiment in French High Schools." CEPR Discussion Paper 21706. Gated.
To cite this episode:
Phillips, Tim, and Julia Cagé. 2026. “Making teenagers read newspapers”. VoxTalks Economics (podcast).
About the guest
Julia Cagé is Professor of Economics at Sciences Po Paris and a Research Fellow at the Centre for Economic Policy Research (CEPR), where she leads the CEPR Research and Policy Network on Media Plurality. Her research spans media economics, political participation, and the economics of information, with a particular focus on how news markets shape political knowledge and democratic engagement. She is the author of several books on the media, including Saving the Media and The Price of Democracy.Research cited in this episode
Reuters Institute Digital News Report is an annual global survey that tracks how people find, consume, and pay for news across dozens of countries. Cagé cites its long-running data on declining time spent reading news online, a trend she says is sharpest among the young.Post-Broadcast Democracy, a book by the political scientist Markus Prior, argues that the shift from a small number of broadcast TV channels to an environment of unlimited media choice let people who were never especially interested in news opt out of it entirely. Cagé uses Prior's framework to argue that the internet did not create this problem; television did, and the internet simply deepened it.
Information inequality describes the finding that lower-income, less-educated citizens draw on fewer sources of political information than wealthier, better-educated ones, widening gaps in political knowledge. The concept draws on earlier work by Cagé's co-author Andrea Prat, and it motivates the experiment's focus on whether free access to quality journalism narrows that gap for teenagers from poorer backgrounds.
More VoxTalks Economics episodes
Misinformation and trust in news, in which Ruben Durante discusses a field experiment testing how AI-generated misinformation changes readers' trust in, and demand for, credible journalism.Related reading on VoxEU
Information inequality, a VoxEU column by Paul Kennedy and Andrea Prat setting out the cross-country evidence that poorer, less-educated voters consume fewer sources of political news, the pattern this episode's experiment sets out to address.S9 Ep40: Are net zero commitments greenwash?
Sixty-three percent of large companies worldwide had made a net zero commitment by 2023, up from close to none in 2018. But if the target date is 2050, that's several corporate lifetimes away, and the planet …
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Sixty-three percent of large companies worldwide had made a net zero commitment by 2023, up from close to none in 2018. But if the target date is 2050, that's several corporate lifetimes away, and the planet needs emission reductions today. What actually changes in the boardroom when a pledge is signed?
Simon Dietz (LSE, CEPR) has tracked climate management practices and emissions at nearly 2,000 companies to find out. He tells Tim Phillips that the picture is not the one that either side of the debate might expect. A net zero pledge doesn't usually signify an immediate cut in emissions, but there is a clear and early shift in how companies plan for net zero that has often started before the announcement. What is left is something is harder to spot: firms making a strategic pivot, of which the public commitment is only one part.
The research behind this episode:
Dietz, Simon, and Nikolaus Hastreiter. 2026. "Corporate Net Zero Targets: Have They Achieved Anything?" CEPR Discussion Paper 21441 (gated).
To cite this episode:
Phillips, Tim, and Simon Dietz. 2026. "Are net zero commitments greenwash?" VoxTalks Economics (podcast).
About the guest
Simon Dietz is Professor of Environmental Policy at the London School of Economics and Political Science, Research Director of the Grantham Research Institute on Climate Change and the Environment, and Research Director of the LSE Transition Pathway Initiative Global Climate Transition Centre. He is a Research Fellow of the Centre for Economic Policy Research. His research spans climate change economics, corporate sustainability, decision-making under uncertainty, and climate finance.
Research cited in this episode
The Paris Agreement and the 1.5°C target. The 2015 UN Paris Agreement on Climate Change set a goal of limiting global warming to well below 2°C, with a stretch target of 1.5°C. The Intergovernmental Panel on Climate Change subsequently concluded that meeting the 1.5°C goal requires global emissions to reach net zero by around mid-century, giving corporate net zero pledges their scientific rationale.
Science Based Targets initiative, UN Race to Zero, and the Glasgow Financial Alliance for Net Zero. These are among the organisations that encouraged corporations to adopt long-term net zero commitments following the Paris Agreement, helping drive the rapid diffusion of pledges that Dietz and Hastreiter document.
Trucost and the Transition Pathway Initiative (TPI). Dietz and Hastreiter combine two emissions datasets to overcome measurement problems in this area. Trucost provides broad coverage of around 1,600 large listed firms, combining self-reported data with modelled estimates. TPI provides sector-specific, physically normalised emissions intensity data for a smaller sample of roughly 200 companies in the highest-emitting sectors; Dietz is Research Director of the TPI Global Climate Transition Centre, which is based at LSE.
Difference-in-differences with matching. To separate the effect of a net zero pledge from the fact that greener firms are more likely to make one in the first place, the authors compare firms before and after adoption against similar firms that have not yet adopted, using propensity score matching to build a comparable control group.
The Task Force on Climate-related Financial Disclosures framework. The paper groups management practices into four pillars from this framework: governance, strategy, risk management, and metrics and targets. It finds no significant effect of net zero pledges on governance, risk management, or metrics and targets, but a significant and positive effect on strategy, including climate scenario planning and internal carbon pricing.
More VoxTalks Economics episodes
A big push for climate policy, in which Rick van der Ploeg argues that gradual policy change risks backsliding, and sets out what a genuinely transformative climate push would require.
Related reading on VoxEU.org
Corporate net zero targets: Neither greenwashing nor a gamechanger, in which Dietz and Hastreiter set out the findings behind this episode in their own words.
Corporate climate commitments: A profit-driven strategy, not just empty promises, in which Viral Acharya, Robert Engle, and Olivier Wang model when large firms and their investors have a financial incentive to follow through on climate pledges.
Business as usual: Bank net zero commitments, lending, and engagement, in which Parinitha Sastry, Emil Verner, and David Marques-Ibanez find that banks' net zero pledges predict decarbonisation of their loan portfolios, but not reduced lending to high-carbon sectors.
S9 Ep39: Europe in 2050
Recorded at the Paris School of Economics-CEPR Policy Forum 2026. Europe is under attack from the US, and under a different kind of attack from China.That is Olivier Blanchard's diagnosis. Blanchard (MIT, Paris …
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Recorded at the Paris School of Economics-CEPR Policy Forum 2026.
Europe is under attack from the US, and under a different kind of attack from China.That is Olivier Blanchard's diagnosis. Blanchard (MIT, Paris School of Economics, Peterson Institute) is one of four economists leading Europe 2050, a new CEPR initiative asking where Europe wants to be in 25 years, and how it gets there. Blanchard's overriding principle: a vision without plumbing goes nowhere, and plumbing without vision is just reacting to the next tweet.
Who can combine the vision and the plumbing, and produce ideas that we haven't seen before? Europe might be short of solutions to its current malaise, but it is not short of people with ideas: the project sent out 50 invitations for policy papers. Blanchard expected 30 replies. He got 48.
The research behind this episode:
Blanchard, Olivier, Pascal Lamy, Enrico Letta, and Beatrice Weder di Mauro. 2026. "Europe 2050: Geometries of Peace, Power, and Prosperity." VoxEU column, CEPR, 16 March 2026.
The CEPR Europe 2050 initiative launched by Blanchard, Lamy, Letta and Weder di Mauro is generating a rolling series of commissioned policy papers and shorter open call submissions. The full set of contributions can be found at cepr.org/europe-2050-geometries-peace-power-and-prosperity.
To cite this episode:
Phillips, Tim, and Olivier Blanchard. 2026. "Europe in 2050." VoxTalks Economics (podcast).
About the guest
Olivier Blanchard is the Robert M. Solow Professor of Economics emeritus at MIT, Professor of Economics at the Paris School of Economics, and Senior Fellow at the Peterson Institute for International Economics. He is a CEPR Distinguished Fellow. Blanchard's research spans macroeconomics, monetary and fiscal policy, and the economics of European integration; he was chief economist and director of research at the IMF from 2008 to 2015.
Research cited in this episode
Europe 2050: Geometries of Peace, Power, and Prosperity is the CEPR initiative behind this episode, launched by Blanchard, Lamy, Letta and Weder di Mauro. It commissions longer policy papers and runs an open call for shorter pieces, five to fifteen pages, on what Europe should aspire to become by 2050. Blanchard describes it as a box of tools rather than a single blueprint, deliberately open to contributors who disagree on fundamentals, including whether Europe should become a federation.
The Draghi report refers to Mario Draghi's 2024 report for the European Commission, The Future of European Competitiveness. It diagnosed Europe's weak productivity growth, fragmented capital markets and insufficient scale financing for innovative firms. Blanchard contrasts it with Europe 2050, which he says is not trying to produce a similarly prescriptive plan.
The Letta report refers to Enrico Letta's 2024 report Much More Than a Market, commissioned by the European Council, which set out proposals for deepening the EU single market. Letta is one of the four leaders of Europe 2050.
"Getting to Denmark" is a concept popularised by the political scientist Francis Fukuyama in his 2011 book The Origins of Political Order, describing the temptation to picture a distant, well governed destination without a plan for the institutional steps needed to reach it. Is this a risk for Europe 2050?
Schengen is raised by Blanchard as a working example of a "coalition of the willing": a group of countries, not all of them EU members, that agreed to abolish border controls between themselves without waiting for unanimous agreement across the whole Union. He points to it as a template for how Europe might make progress on other issues where full consensus is unlikely.
More VoxTalks Economics episodes
This episode was recorded at the Paris School of Economics-CEPR Policy Forum 2026, alongside a series of conversations with forum speakers.
Europe in the Middle, the previous episode, features Pol Antràs and Beata Javorcik on how the US-China trade war is reshaping trade flows into Europe, and who wins and loses from it.
Related reading on VoxEU
Europe's challenge and opportunity: Building coalitions of the willing, a VoxEU column by Blanchard and Jean Pisani-Ferry, sets out the coalition of the willing idea in more detail, working through how it might apply to climate, trade and tax policy.
Capitalising on Europe's strengths, a VoxEU column by Debora Revoltella and colleagues at the European Investment Bank, looks at what Europe already does well and how policy can build on it rather than only cataloguing weaknesses.
Addressing European competitiveness: Investment, integration, and simplification, another VoxEU column from the European Investment Bank, sets out the scale of Europe's investment gap and where past bursts of EU investment have come from.
EU capital markets reform should focus on innovation investment, a VoxEU column, argues that capital markets union, a project Blanchard mentions in the episode, should be judged by whether it gets money to innovative firms, not just by market integration for its own sake.
S9 Ep38: Europe in the Middle
China cannot sell as much as it used to in the United States. That trade has to go somewhere, and somewhere might be Europe.In this week's VoxTalk, Tim Phillips asks Pol Antràs (Harvard) and Beata Javorcik …
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China cannot sell as much as it used to in the United States. That trade has to go somewhere, and somewhere might be Europe.
In this week's VoxTalk, Tim Phillips asks Pol Antràs (Harvard) and Beata Javorcik (EBRD, Oxford) what this means for European producers and consumers.
Antràs and Andrea Presbitero have mapped which countries and sectors face the sharpest competition from redirected Chinese exports, and which stand to gain. Does cheap Chinese tech ease Europe's energy cost crisis, or squeeze European manufacturers of wind turbines and electric cars?
If Europe decides to take the gains where consumers and firms can get them, and compensate the producers who are legitimately hurt, how do they go about it? And can raising tariffs in a world of global value chains protecting one sector without damaging others?
New episode, recorded at the PSE-CEPR Policy Forum 2026 in Paris.
The research behind this episode:
Antràs, Pol, and Andrea F. Presbitero. 2026. "The Remains of the Trade: The U.S.-China Trade War and its Aftermath." Preliminary version
To cite this episode:
Phillips, Tim, Pol Antràs, and Beata Javorcik. 2026. "Europe in the Middle." VoxTalks Economics (podcast).
About the guests:
Pol Antras is Robert G. Ory Professor of Economics at Harvard University, a Research Associate at the National Bureau of Economic Research, and a Research Affiliate at the Centre for Economic Policy Research. His research spans global value chains, the organisation of multinational firms, and, most recently, the intersection of trade policy and geopolitics.
Beata Javorcik is Chief Economist of the European Bank for Reconstruction and Development, on leave from her position as Professor of Economics at the University of Oxford and Fellow of All Souls College. She is Director of the International Trade Programme at the Centre for Economic Policy Research. Her research spans foreign direct investment, industrial policy, and, increasingly, the economics of geopolitical fragmentation.
Research cited in this episode:
The Great Reallocation is the term coined by Laura Alfaro and Davin Chor for the reorganisation of United States sourcing away from direct imports from China and toward alternative suppliers such as Vietnam, Mexico, and Taiwan. Antràs and Presbitero's paper extends this idea to third countries, showing that Chinese exports displaced from the American market are increasingly landing in Europe and Asia rather than disappearing.
Geopolitical externality is a concept developed by Laura Alfaro, Maggie Chen, and Beata Javorcik in their working paper "The Battle over Knowledge: Multinationals, Diffusion, and Governance." It describes how knowledge transferred abroad by multinational firms can strengthen a rival state's strategic capability in ways the firm never intended and the market never prices, which is why governments increasingly restrict flows of codified, tacit, and organisational knowledge that would once have passed unremarked.
Voluntary export restraints were the mechanism used to defuse the United States' trade conflict with Japanese carmakers in the 1980s. Rather than imposing tariffs, Japan agreed to limit its car exports, and Japanese manufacturers responded by building plants directly in the United States. Javorcik cites this as the precedent for how the current standoff over Chinese electric vehicles and knowledge transfer might eventually be resolved.
The Draghi report on European competitiveness, published by the European Commission in September 2024, recommended conditioning Chinese investment in the European electric vehicle sector on mandatory knowledge transfer. Javorcik notes the difficulty of calibrating such requirements: demand too little and Europe gains nothing from the technology; demand too much and Chinese investors have no reason to come at all.
"Industrial Policies for Multi-stage Production: The Battle for Battery-powered Vehicles," by Keith Head, Thierry Mayer, Marc Melitz, and Chenying Yang, models how tariffs and subsidies reshape the location of battery and vehicle assembly plants across a multi-stage supply chain. Antràs cites the paper's finding that protecting the electric vehicle sector through tariffs can produce worse outcomes than the problem it was meant to solve.
Export controls and innovation, discussed by Javorcik with reference to Chinese firms such as DeepSeek and Huawei, illustrate a pattern in which restricting a country's access to a technology, in this case advanced semiconductors, can accelerate that country's innovation in adjacent areas rather than simply constraining it. She draws a parallel with rare earth export restrictions, which have historically spurred substitute technologies rather than suppressing them.
More VoxTalks Economics episodes:
In a conversation recorded at the CEPR Annual Forum in Paris called "What should Europe do about Trump?" Tim Phillips spoke to Beatrice Weder di Mauro and Ugo Panizza of the Graduate Institute Geneva, about how Europe should respond to the second Trump administration's trade policies.
Listeners interested in how firms navigate geopolitical trade disruption should also hear "Trading around geopolitics," in which Giancarlo Corsetti, Banu Demir, and Beata Javorcik discuss how Turkish exporters filled the gap left by sanctions on Russia.
Related reading on VoxEU:
"An update on the great reallocation in US supply chain trade" uses detailed United States import data through 2025 to track the scope and pace of the reallocation discussed in this episode.
"From tariffs to trade flows: Diversion effects and China's exports to the EU" examines the evidence for and against the trade deflection story that Antras and Javorcik discuss, and finds the picture more mixed than a simple diversion narrative suggests.
"China shock 2.0 and the euro area: Cheaper imports, tougher competition" decomposes the recent surge in Chinese exports to the euro area and argues that structural forces within China, rather than diversion from the American market, explain most of it.
"The impact of trade wars on firms in third countries" proposes a model of how bilateral trade shocks spill over to bystander economies, applying it to Italian firms during the 2018 to 2019 trade war.
S9 Ep37: Addressing Global Imbalances
Episode recorded on 19 June 2026 at the PSE-CEPR Policy Forum in Paris.Twice before, the world's savings and debts have piled up in the wrong places, and twice the imbalance broke something. The first time it …
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Episode recorded on 19 June 2026 at the PSE-CEPR Policy Forum in Paris.
Twice before, the world's savings and debts have piled up in the wrong places, and twice the imbalance broke something. The first time it took the Plaza Accord to fix it. The second time it took a global financial crisis.
Now we are in a third wave. Gita Gopinath (Harvard, former IMF Chief Economist and First Deputy Managing Director) and Philip Lane (European Central Bank, CEPR) join Tim Phillips to ask what is different this time.
Household and bank balance sheets are stronger than before 2008. But the fragility has moved to governments carrying much higher debt, and to non-bank financial institutions whose exposures and links to banks are only partly visible. Foreign investors hold US$40.7 trillion of US equities, 44% of world GDP outside the US, much of it riding on the AI boom.
Lane's overriding principle: central banks can calm bond markets under stress, but they must be just as clear about what they will not do if debt is unsustainable.
The research behind this episode:
Bai, Chong-En, Gita Gopinath, Hélène Rey, and Axel Weber. 2026. "G7 Economists Memo on Global Imbalances." Prepared for the French Presidency of the G7, 28 March.
The panel also draws on the fourth CEPR/Bruegel Paris Report, Paris Report 4: The New Global Imbalances, edited by Hélène Rey, Beatrice Weder di Mauro and Jeromin Zettelmeyer (CEPR Press and Bruegel, 2026), free to download at cepr.org.
Gopinath made the keynote presentation “The Third Wave: Addressing Global Imbalances” on 19 June at PSE.
To cite this episode:
Phillips, Tim, Gita Gopinath, and Philip Lane. 2026. "Addressing Global Imbalances." VoxTalks Economics (podcast).
About the guests
Gita Gopinath is the Gregory and Ania Coffey Professor of Economics at Harvard University, where her research spans international finance and macroeconomics, dollar dominance, exchange rates and sovereign debt. She was First Deputy Managing Director of the International Monetary Fund from 2022 to 2025, and the Fund's Chief Economist from 2019 to 2022.Philip Lane is Chief Economist and a member of the Executive Board of the European Central Bank, and a Fellow of CEPR's International Macroeconomics and Finance programme. He was Governor of the Central Bank of Ireland from 2015 to 2019, and remains an honorary professor of economics at Trinity College Dublin, where his research covered financial globalisation and European monetary integration.
Research cited in this episode
The three waves of global imbalances. Gopinath frames today's imbalances as the third episode since the 1970s in which national savings and investment have pulled badly out of line, a framing she titled "The Third Wave" in her Atlanta Fed presentation. The first, in the early 1980s, produced the 1985 Plaza Accord, when the US and its G5 partners agreed to talk the dollar down after years of a strong currency and a widening trade deficit. The second built through the 2000s and unwound in the 2008 global financial crisis. In both, the US was the deficit country; the surplus moved from Japan to China.Foreign holdings of US equities. Gross foreign holdings of US equities stood at US$40.7 trillion, 44% of world GDP excluding the US (Gopinath 2026, citing US Treasury data). Gopinath's slides show 54% of gross foreign inflows into US government debt since 2007 and estimate that 61% of the deterioration in the US net international investment position since the global financial crisis has been driven by valuation effects rather than trade deficits.
Non-bank financial institutions (NBFIs). Hedge funds, private credit funds, insurers and other institutions outside the regulated banking system now intermediate a large and growing share of global finance. Gopinath's slides show leveraged intermediation migrating from households and banks before the 2008 crisis toward government and non-bank financial institutions today, echoing the concerns set out in the G7 memo and the CEPR Paris Report.
The 2020 "dash for cash." In March 2020, US Treasury yields rose sharply even as investors would normally be expected to flee to safety, a sign that market functioning, not just prices, can break down under stress. Gopinath cites the episode as evidence that hedge funds, now bigger players in Treasury market-making, can amplify rather than absorb shocks.
ECB crisis tools: PEPP, OMT and TPI. Lane describes three instruments built since 2012 to separate monetary policy from market functioning: the Outright Monetary Transactions programme (2012), designed to backstop governments already in an ESM assistance programme; the Pandemic Emergency Purchase Programme (2020), the ECB's flexible, country-varying response to Covid-19; and the Transmission Protection Instrument (2022), intended to calm unwarranted bond market panic without financing unsustainable debt.
US federal debt and the fiscal deficit. Gopinath's slides put federal debt at 108% of GDP in 2025, up from 41% in 2007 and 39% in 2000 (source: Federal Reserve, FRED). In conversation she cites the US fiscal deficit at close to 7% of GDP, at a point in the cycle when the economy is strong. Note this is federal debt specifically; the G7 memo cites a broader measure, US general government debt, at around 120% of GDP, projected to reach around 140% by 2031. The two figures are not directly comparable and should not be conflated in the notes or on air.
More VoxTalks Economics episodes
This episode sits alongside three earlier VoxTalks Economics conversations built around the CEPR/Bruegel Paris Report 4, The New Global Imbalances.Global Imbalances Redux, in which Maurice Obstfeld sets out the history of the three waves of imbalances and what today's policymakers can learn from how the first two were resolved.
Rebalancing the Chinese Economy, in which Yiping Huang explains why decades of investment-led growth suppressed Chinese household consumption, and what it would take to reverse that.
Stablecoins and Global Imbalances, in which Gilles Moec examines how dollar-backed stablecoins help fund the US deficit, and the regulatory gaps that leaves behind.
Related reading on VoxEU
Why global imbalances matter again, and what to do about them, a VoxEU column drawn from Chapter 1 of Paris Report 4, setting out why imbalances have widened since 2018 and the risks of a disorderly unwind.Industrial policy, tariffs, and the return of global imbalances, which finds that tariffs are a weak tool for correcting current account imbalances and that industrial policy's effects run mainly through its impact on domestic saving and consumption.
S9 Ep36: Helping the over-50s find work
Lose your job at 25 and someone will help you find another. Lose it at 55 and the talk quietly turns to how you might wind down towards retirement.Policymakers tend to assume job search training works for the …
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Lose your job at 25 and someone will help you find another. Lose it at 55 and the talk quietly turns to how you might wind down towards retirement.
Policymakers tend to assume job search training works for the young and not the old, so they rarely spend money trying. Bas van der Klaauw (Tinbergen Institute) thinks they got that wrong.
In this week's VoxTalks Economics, he tells Tim Phillips about a Dutch experiment that put older unemployed workers through an intensive programme built on one idea: teach people over 50 to find work the way younger workers already do, by working their social network.
Participants left unemployment faster, there was a 10% increase in job finding, and the savings in benefits more than covered the cost. The catch: it helped the better educated most and was tested in a recession. Will it work just as well in today's labour market, where even the young and well-educated are struggling to find good jobs?
The research behind this episode:
de Groot, Nynke, and Bas van der Klaauw. 2026. "A Randomized Experiment on Improving Job Search Skills of Older Unemployed Workers." CEPR Discussion Paper 21464. (Gated)
To cite this episode:
Phillips, Tim, and Bas van der Klaauw. 2026. “Helping the over-50s find work.” VoxTalks Economics (podcast).
About the guest
Bas van der Klaauw is professor of economics at Vrije Universiteit Amsterdam and director of the Tinbergen Institute. An applied microeconometrician, he uses causal methods to study labour markets, education and health, and is a research fellow of CEPR and IZA. His work on unemployment insurance, active labour market programmes and job search includes several field experiments run with the Dutch benefits administration.The paper is co-authored with Nynke de Groot, an economist at the National Health Care Institute (Zorginstituut Nederland) who took her PhD at Vrije Universiteit Amsterdam. Her earlier work with van der Klaauw includes a study of how cutting the unemployment insurance entitlement period affects job finding.
Research and concepts discussed in this episode
Older workers and long-term unemployment. Older unemployed workers tend to have job finding rates around half those of younger workers, and during the recession the study covers, more than half of older job seekers risked becoming long-term unemployed. Van der Klaauw attributes the gap to a combination of factors rather than any single cause: more generous and longer benefit entitlements that weaken the incentive to take a lower-paid job quickly, and employers who favour younger hires expected to grow with the firm over a longer horizon.STEP (Successfully to Employment Program). A Dutch job search assistance programme developed during the post-2008 recession for unemployed workers aged 50 and above who had not found work within a few months of claiming unemployment insurance. It ran to 10 group sessions of around four hours each plus two individual meetings, covering interview practice, CV writing and social media, with a particular emphasis on activating the participant's social network. Participants were encouraged to have at least one conversation a week with a contact about possible work. The programme cost roughly 470 euros per participant.
The experiment. The study covers everyone aged 50 to 63 who entered unemployment insurance in the Netherlands between November 2014 and July 2015 and remained unemployed for three months, about 50,000 people. Assignment to treatment or control was based on the last digit of the social security number, putting roughly 20% in the control group. Because participation was voluntary (an encouragement design), the authors report both the effect of being offered the programme and, using random assignment as an instrument, the effect of actually taking part. Around 54% of those in the treatment group took up STEP.
What it did to job search behaviour. The job application register lets the authors watch how people searched. Participants made fewer applications to posted vacancies and did more networking, exactly the shift the programme was designed to produce. The change in method did not raise the number of job interviews, but it was accompanied by faster exits from unemployment.
Cost effectiveness. Participation cut cumulative benefit payments by about 715 euros within 18 months, comfortably above the 470 euro cost, making STEP cost effective for the benefits administration. For participants, the lost benefits were almost fully offset by higher earnings from working sooner, so there was no large income gain to the individual, but no loss either.
Who it helped. Effects were strongest for the better educated, those with higher pre-unemployment earnings and those not previously working through a temporary work agency. There was little or no effect on the lowest educated, who also had the lowest take-up. The authors find no significant difference by gender or by age band within the 50 to 63 range.
Trainers and group composition. Effectiveness varied significantly across trainers, but no observed characteristic (gender, age, experience, contract type) explained which trainers did better. Group composition mattered too: participants did better when their group contained some lower-educated members, which argues for mixed rather than streamed training groups. One reading is that trainers may concentrate their attention on the more employable members of a group.
Does it generalise? Two caveats. The programme was evaluated in a recession, when people were losing jobs through no fault of their own (frictional unemployment), and it may do less when work is easier to find. And it was designed for that kind of unemployment, not for the structural problem of workers whose skills no longer match available jobs, where van der Klaauw suggests training or retraining, rather than job search help, is the relevant tool.
S9 Ep35: The success of the embedded state
Who kept the courts sitting and the streetlights lit when the state had almost no money to pay anyone?Two hundred years ago, British local government ran on unpaid labour. In a parliamentary survey of the …
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Who kept the courts sitting and the streetlights lit when the state had almost no money to pay anyone?
Two hundred years ago, British local government ran on unpaid labour. In a parliamentary survey of the boroughs from 1835, two in three of the people doing local government work were not paid at all.
James Robinson (University of Chicago, CEPR) explains how this succeeded in this week's episode of VoxTalks Economics. Robinson and his co-authors call this the "embedded state". Members of the elite willingly took the unpaid jobs because the postings carried prestige and led to Parliament, promotion or a paid post. Less glamorous or dead-end postings -- the jailer for example -- had to be paid
But the unpaid officers were more productive than the paid ones.
Robinson argues this is not a quirk of England at that time. Rwanda runs a high-capacity state today on much the same basis, without ever raising the taxes the IMF says a proper government needs. The lesson for anyone trying to make government work: start with the society, not the tax code.
New episode of VoxTalks Economics. Link in bio.
Image: William Benjamin Watkins by George Patten / Manchester Town Hall.
The research behind this episode:
Heldring, Leander, Davis Kedrosky, James A. Robinson, and Matthias Weigand. 2026. "The Success of the Embedded State in England." CEPR Discussion Paper No. 21460. Centre for Economic Policy Research, London.
To cite this episode:
Phillips, Tim, and James A. Robinson. 2026. "The success of the embedded state." VoxTalks Economics (podcast).
Assign this as extra listening. The citation above is formatted and ready for a reading list or VLE.
About the guest
James A. Robinson is University Professor at the Harris School of Public Policy and the Department of Political Science, University of Chicago, and a Research Fellow at the Centre for Economic Policy Research. His research spans comparative political and economic development, state capacity, and the long-run relationship between institutions and prosperity, with fieldwork across sub-Saharan Africa and Latin America. He shared the 2024 Nobel Memorial Prize in Economic Sciences with Daron Acemoglu and Simon Johnson.Research cited in this episode
The 1835 parliamentary report. After the 1832 Reform Act, Parliament sent lawyers to roughly three hundred of the largest boroughs to record who worked for each borough government, what they did, whether they were paid, how much, and how well the job was done. The commissioners graded public goods directly; whether a jail existed, and if so whether its condition was satisfactory. The 3,500-page report is the factual basis for the paper, and it survives because Parliament itself did not know how these idiosyncratic, often medieval borough governments worked.The fiscal-military state. The dominant account of British state formation comes from John Brewer's The Sinews of Power (1989), which traces the rise of a tax-raising, salaried fiscal state after the Glorious Revolution of 1688. Robinson's point is that this describes 20,000 officials in London; across the rest of the country, where fiscal resources were thin, most government work was done for free.
Mark Goldie and the unpaid office-holder. The historian and political theorist Mark Goldie documented the scale of unpaid local office-holding in earlier work; Robinson and his co-authors took that observation and asked how to study it systematically, which led them to the 1835 report.
The embedded state. A state has high capacity when it can implement policy and provide public goods. The embedded state does this without the fiscal resources to fund a modern bureaucracy, by drawing on the social structure of the society it governs to motivate people to do government work unpaid. Because that social structure differs from place to place, embedding looks different in 1830s Britain, in modern Rwanda, and in 1970s South Korea; understanding the state means understanding the sociology beneath it.
Rwanda's state capacity. Robinson and Leander Heldring also study the organisation of the state in Rwanda, where most government workers are unpaid and the country has never raised the 15% of national income in taxes that the International Monetary Fund treats as the threshold for a functioning state, yet implements policy effectively.
Elinor Ostrom and the commons. Elinor Ostrom won the 2009 Nobel Memorial Prize for showing that communities can organise to provide and govern shared resources without the state. Robinson's argument is that the interface between such collective provision and the state is productive rather than antagonistic.
Somaliland and the Guurti. Somaliland has an elaborate clan structure, and its upper house, the Guurti, represents the clans. Robinson offers it as a case where anyone trying to improve public good provision should start from the existing social structure rather than from tax reform.
The History of British Local Government. Beatrice and Sidney Webb's nine-volume history of English local government documents the medieval charters, inherited land and bequests that determined how much fiscal capacity each borough had. That historically determined variation in whether a borough could afford to pay its officers is what the paper uses to identify the effect of pay on performance.
More VoxTalks Economics episodes
Nobel Special - James Robinson on antisocial norms. The saying “don’t be a toad” in Colombia tells people to mind their own business and not to tell on others. The warning that “snitches get stitches” is common to many societies. It’s easy to imagine why groups adopt prosocial norms like sharing and volunteering. But what sustains an “antisocial” norm?S9 Ep34: Making defence spending pay
Defence spending is rising whether voters like it or not. The UK has committed to 2.5% of national income and aims for nearer 3.5% over the next decade, £30bn a year for each percentage point. What does the …
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Defence spending is rising whether voters like it or not. The UK has committed to 2.5% of national income and aims for nearer 3.5% over the next decade, £30bn a year for each percentage point. What does the country get back? Can defence spending be pro-growth?
In this week's VoxTalk, John Van Reenen (LSE) argues that getting a return on investment based on innovation need not be left to luck. For example nuclear power, GPS and the internet all began as military projects. The spillovers can be planned for; the trick is to make defence spending innovation-rich, and make procurement work better.
Traditional top-down procurement mostly produces lock-in: the same firms winning over and over. Van Reenen's study of a project at the US Air Force shows the difference: when it asked firms what they could build, rather than telling them what to make, the competitions brought in startups, generated more original patents, and spilled ideas into the civilian economy.
The research behind this episode:
Moretti, Enrico, Claudia Steinwender, and John Van Reenen. 2025. "The Intellectual Spoils of War? Defense R&D, Productivity, and International Spillovers." The Review of Economics and Statistics 107 (1). An ungated version is available as NBER Working Paper No. 26483.
Howell, Sabrina T., Jason Rathje, John Van Reenen, and Jun Wong. 2025. "Opening Up Military Innovation: Causal Effects of Reforms to US Defense Research." Journal of Political Economy 133 (11). An ungated version is available as NBER Working Paper No. 28700.
To cite this episode:
Phillips, Tim, and John Van Reenen. 2026. “Making defence spending pay.” VoxTalks Economics (podcast).
Assign this as extra listening. The citation above is formatted and ready for a reading list or VLE.
About the guest
John Van Reenen is the Ronald Coase School Professor at the London School of Economics and Director of the Programme on Innovation and Diffusion at the Centre for Economic Performance. He chairs the Council of Economic Advisors to the Chancellor of the Exchequer and is a Research Fellow of the Centre for Economic Policy Research and the NBER. His research spans innovation, productivity, industrial organisation, and the public policies that shape them.Research cited in this episode
Crowding in, not crowding out. Moretti, Steinwender and Van Reenen tracked industries across twenty-three economies over several decades and found that higher defence R&D spending raised private R&D rather than displacing it, with knock-on gains for productivity growth in the following decades.The SBIR Open Topics reform. The US Air Force Small Business Innovation Research programme traditionally ran "conventional" competitions specifying the technology wanted; from 2018 it added "open" competitions inviting firms to propose any idea useful to the Air Force. Howell, Rathje, Van Reenen and Wong compared near-winners with near-losers and found the open awards produced new military technology, more original patents, and civilian spillovers such as venture capital funding; the conventional awards mostly produced lock-in.
Spin-offs from military research. Nuclear power, GPS and the internet each began as military projects before becoming civilian technologies; Van Reenen reaches back further to the claw of Archimedes, built to fend off the Roman fleet at Syracuse, as an early example of defence invention finding a wider use.
The Draghi report. Van Reenen worked with Mario Draghi on his 2024 report on European competitiveness; he draws on it to argue that fragmented standards and duplicated procurement across Europe waste money, and that common standards and joint procurement would let countries specialise where they hold a comparative advantage.
More VoxTalks Economics episodes
In January, Tim spoke to Moritz Schularick of the Kiel Institute for the World Economy about whether Europe can convert its industrial base into credible deterrence. Listen to Can Europe Defend Itself?
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