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When short-time work works

Short-time work programmes aim to preserve jobs at firms that are experiencing temporarily low revenues, for example during a recession. This column assesses how the short-time work programme implemented in France during the Great Recession affected employment. Results confirm that the programme saved jobs and increased hours worked, and that participating firms recovered faster than non-participating firms.

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How creditor lawsuits are reshaping sovereign debt markets

For centuries, sovereign debt was assumed to be ‘above the law‘ and non-enforceable. This column shows that this is no longer the case. Building on a new dataset on sovereign debt lawsuits, it documents the erosion of sovereign immunity since the 1970s and argues that legal disputes can disrupt government access to international capital markets, as foreign courts impose a financial embargo on defaulting sovereigns. These legal develop

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Next steps after the Euro Summit

EU leaders addressed euro area reform at the Euro Summit on 29 June. In this column, which we add to the VoxEU debate on euro area reform, the group of 14 French and German economists behind the recent CEPR Policy Insight on the topic argue that the summit statement represents a constructive first step and crosses red lines that were considered taboos only a few months ago. However, the summit‘s commitments still fall short of a comprehensi

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Decomposing globalisation

The number of US firms that export increased dramatically over the past few decades. This column argues that while foreign market entry costs have been stable over time, declines in telecommunications costs, free trade agreements, and economic growth abroad have been vital drivers of the globalisation of US firms.

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Low voter turnout? Increasing household income may help

Political scientists have shown conclusively, at least in the US, that richer people vote more, which has troubling implications. Using data from a government cash transfer programme, this column shows that children who grew up in households in the bottom half of the income distribution that received extra income were more likely to vote as adults compared to their counterparts who did not receive the transfers.The results suggest that efforts to

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Currency unions mean more trade, but not for everyone

Currency unions usually go hand in hand with deeper economic integration. But does that automatically mean more international trade? This column shows that since the end of WWII, currency unions have on average been associated with 40% more trade between member countries. The ‘thin‘ relationships between countries who do not trade much with each other benefit the most from currency unions, with little in the way of a boost for more es

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Trade agreements and global production

The making and unmaking of trade agreements affects global production. This column reveals how deeper agreements have boosted countries‘ participation in global value chains and helped them integrate in industries with higher levels of value added. Investment and competition now drive global value chain participation in North-South relationships, while removing traditional barriers remains important for South-South relationships.

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Regional inequality in Europe

Regional economic divergence has become a threat to economic progress, social cohesion, and political stability in Europe. Market processes and policies that are supposed to spread prosperity and opportunity are no longer sufficiently effective. This column argues that a different approach to economic development is required one that would strengthen Europe‘s strongest regions, but with new methods and instruments to unleash the economic p

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The Commission‘s Summer Interim Forecast

Next week, after ten days of swift, flat riding, the Tour de France reaches the Alps. The European economy, meanwhile, has been pedalling uphill since the beginning of this year. 2017 was easy riding as strong global growth boosted domestic investment, but economic growth has had to move into lower gear in the first half of 2018 as this transmission is no longer working properly, and escalating trade conflicts could derail it. This column present

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Children and gender inequality

Despite considerable convergence over time, substantial gender inequality persists in all countries. Using Danish data, this column argues that this gap persists because the effects of having children on the careers of women relative to men are large and have not fallen over time. Additional findings suggest this effect may be related to inherited gender identity norms.

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Declining responsiveness and the productivity slowdown

Job reallocation is an important determinant of productivity. This column uses US data to show that a decline in the degree of job reallocation in response to shocks is behind the overall fall in the rate of reallocation over the past decades. Weakening responsiveness became a drag on aggregate productivity for high-tech businesses in the 2000s, but in other sectors the problem dates back to the 1980s.

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Will we see central bank digital currencies?

Central banks are concerned about the impact of cryptocurrencies. In this Vox Talk, Tim Phillips talksto Beatrice Weder di Mauro about the sources of this concern, and whether the disappearance of cash and a desire to escape the zero lower boundwill lead to central banks issuingtheir own digital currencies.

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Globalisation and inequality in a more educated world

Average education levels are increasing in developing countries, but not in high-income countries. The column argues that this ‘education wave‘ in developing countrieswill reduce global inequality by 2030, with average incomes up to the 90th percentile all benefitting from the trend. However, this equalising effect relies on continued globalisation.

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The term structure and recessions before the Fed

Many market commentators are worried that the gradual flattening of the US term structure in recent months is indicative of an increased risk of a recession. This column argues that the term structure contained information about the likelihood of a future recession even before the establishment of the Federal Reserve, suggesting that the information content does not arise solely as a consequence of countercyclical monetary policy.

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