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Silver mining‘s deadly dividend

Studies have found that the occurrence of natural resources can increase the risk of civil war and interstate conflict. This column uses data from 50 countries beginning in 1890 to show that silver mining can also have substantial effects on interpersonal violence during peacetime. Across many different countries and periods, an economy‘s increasing dependence on silver has increased the homicide rate.

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Assessing the incidence of value-added taxes

In the wake of the Global Crisis, some governments sought to stimulate demand through VAT cuts. This column assesses the success of these measures by investigating who benefited from a VAT cut on sit-down restaurant meals in France. The results show that restaurant owners captured the lions‘ share of the tax cut, while employees and consumers benefited substantially less. Further, following subsequent tax increases, restaurant owners increa

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Drivers of pension reform measures in the OECD

Population ageing means that many current pension regimes are unsustainable, but the timing of pension reform measures is a political as well as an economic decision. This column uses new data on OECD pension reforms since 1970 to show that their timing has not been driven by projected demographic developments or political change, but by the state of the economy at the time when reforms were legislated. Pension systems have expanded more frequent

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The origins of the Industrial Revolution

The Industrial Revolution is arguably the most important economic event in world history, and successful industrialisation continues to elude many developing countries today. This column argues that an important driver of industrialisation in England was the development of markets that allowed division of labour, innovation and, ultimately, social change. Institutional change, rather than advantageous geography, is the main driver of successful i

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Corporate governance and strategic shareholders

Strategic shareholding companies holding minority shares in other companies for the sake of business relations can be used for anticompetition purposes or to reduce pressure from shareholders. This column explores strategic shareholding in Japan. Roughly one third of shareholders are found to be strategic, with three quarters of these being business corporations. However, in Japanese corporate culture it is not uncommon for such shareholding to

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Parent firms‘ resources and productivity of foreign subsidiaries

Several studies have examined the profitability and productivity of foreign subsidiaries, but less is known about the determinants of success. This column looks at the contribution of resources from 3,800 Japanese parent firms to the business activities of their 20,000 overseas subsidiaries. The results suggest a positive contribution of parent firms‘ intangibles to subsidiaries‘ production, in particular for smaller subsidiaries.

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How European integration builds up state capacity

The many benefits and costs of economic integration are notoriously difficult to pinpoint. This column introduces new institutional measures for 17 EU candidate countries since 1997 to explore whether deep integration helps the build-up of state capacity. Estimates highlight the relationship between judiciary capacity and bureaucratic independence as the key engine behind state capacity-building engendered by the prospect of EU membership.

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Economics gets out more often

Economics, and economists, are often accused of insularity and hubris, and of talking primarily to themselves in their research. This column uses a recent analysis of citations to and from other disciplines to show that this is no longer the case. Economics papers increasingly cite non-economic research, and other disciplines cite economists more often too. The data suggest that the rising quantity and quality of empirical research in economics h

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The productivity slowdown and labour‘s income share

Many countries have experienced both a slowdown in aggregate productivity growth and a decline in labour‘s share of national income in recent years. This column argues that the productivity slowdown may have caused the decline in labour‘s income. Calibrating the authors‘ model to US data suggests that a one percentage point decline in the productivity growth rate accounts for between half and all of the observed decline in the U

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The digital wealth management revolution

Despite specialised press coverage, little is known about the potential wider socioeconomic implications of digital wealth management solutions. This column examines how ‘robo-advisors‘ offer an opportunity to democratise finance and decrease wealth inequality. These algorithmic investment advisors stand to disrupt the wealth management sector through their ‘low-cost, accessible to most‘ business models. However, the entra

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Does Gentrification Reduce Crime?

Separating cause from effect is notoriously difficult when it comes to gentrification and neighbourhood amenities, including public safety. This column exploits the sudden ending of a rent control regime in Cambridge, MA to examine whether and by how much gentrification affects crime. In the years immediately following the end of rent control, crime fell significantly more in neighbourhoods that had been heavily rent controlled. However, those ne

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Venture capital networks: An analysis

Venture capital firms use a variety of accumulated resources to inform their investment activities, but do the rely solely on their own resources or do they employ other firms‘ resources to complement their own? This column examines the pattern of co-investments among venture capital firms and discusses the economic implications. Past experience of co-investments increases the likelihood of future co-investments among firms when the returns

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Population diversity and long-term prosperity

Research on the economic impact of migration on hosts and the migrants themselves has tended to focus on the short term. This column traces the economic impact of population diversity in the US resulting from the Age of Mass Migration of the late 19th and early 20th centuries. High levels of population fractionalisation have had a strong, positive influence on economic development, while high levels of polarisation have undermined development.Des

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Survivors in export markets

Economists have recently tried to identify why some firms survive longer than others in export markets. This column examines the firm-level determinants of the duration of Japanese manufacturing firms‘ exporting. It suggests that the degree to which products are differentiated matters for firms‘ survivability, and that policies to support R&D activities thus indirectly contribute to increasing firms‘ chances of survival in forei

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Artificial intelligence and the stability of markets

Artificial intelligence is increasingly used to tackle all sorts of problems facing people and societies. This column considers the potential benefits and risks of employing AI in financial markets. While it may well revolutionise risk management and financial supervision, it also threatens to destabilise markets and increase systemic risk.

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How to measure the global business cycle

Global commodity prices surged across the board after 2003, with some observers claiming that this reflected a permanent increase in global real economic activity. This column argues that this was a persistent but transitory phenomena tied to rising commodity demand from Asia. It presents evidence of a global economic slowdown since 2011, with low real commodity prices likely to persist.

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Inequality and property in Russia, 1905-2016

Russia has undergone a dramatic economic and political transformation since the fall of the Soviet Union in 1990-1991, yet the consequences on the distribution of income and wealth are not very well documented and understood. This column attempts to combine the various available data sources in order to provide consistent series on the accumulation and distribution of income and wealth in Russia from the Soviet period until the present day.

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The European Commission‘s autumn forecast

The Eurozone economy is growing at its fastest rate in a decade, but the recovery remains incomplete. This column presents the European Commission‘s autumn forecast, and derives some policy considerations. Accommodative macroeconomic policies are still appropriate for now. The column also highlights the need for structural policies to increase the potential for growth and help to share the benefits more fairly.

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Banking on capital

Prudential supervision of banks has increasingly relied on capital requirements. But bank capital played a relatively minor role in predicting bank solvency during the Global Crisis, except for scarcely capitalised banks. This column argues that while capital is a helpful tool to support bank financial stability, it is complex for supervisors to calibrate it precisely. Macroprudential authorities should be able to complement capital-based tools w

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