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Shopping costs and one-stop shoppers intensify competition

Many consumers buy multiple types of goods from a single location (or firm) to save on shopping costs, turning these goods into pricing complements. Using data from the UK, this column shows that the internalisation of these complementary effects by supermarkets greatly improves the competitiveness of grocery supply. It also argues that one-stop shoppers have a greater pro-competitive impact on supermarket pricing than multi-stop shoppers.

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Credit misallocation during the European financial crisis

There is a widespread perception that under-capitalised banks can prolong crises by misallocating credit to weaker firms and restraining credit to healthy borrowers. This column explores the extent and consequences of credit misallocation in Italy during and after the Eurozone Crisis. Bank undercapitalisation may have been costly in terms of misallocation of capital and productive efficiency in the medium term due to the higher exit of healthy fi

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Agglomeration benefits versus firm selection

The large literature on agglomeration economies attests to the higher average productivity of firms in larger cities. However, this literature focuses on positive externalities, and a second potential mechanism selection against less productive firms has received little empirical attention. This column explores how these two mechanisms contribute to higher productivity in Japanese cities. Consistent with earlier work considering the case of Fra

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Slow productivity growth may not be the ‘new normal‘ for the US

Estimates of trend total factor productivity growth in the US have been significantly reduced, contributing to fears that the slowdown is permanent. This column provides an historical perspective on the relationship between estimated trends in total factor productivity growth and subsequent outcomes. It argues that In the past, trend growth estimates have not been a good guide for future medium-term outcomes, and ‘techno-optimists‘ sh

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The untapped potential of humanitarian economics

Economists can help better understand and address some of today‘s toughest humanitarian challenges. This column argues that the economics of war and disaster which includes foreign aid is largely untapped as a field of study and practice. While humanitarian economics has the potential to improve our knowledge of these problems, and the outcomes for those affected by them, it must take account of the ethical and epistemological issues, and

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What next for US-Europe trade policy?

The economies of Europe and the United States are inextricably linkedand in an ideal world,a number of factors motivate a trade deal such as the Transatlantic Trade and Investment Partnership. This column, taken from a recent VoxEU eBook, argues, however, thatgiven theBrexit referendum in the UK and the election of Donald Trump as US president, as well as a number of other pre-existing complications, achieving such agreementswill be highly conten

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Hospital competition and performance in France

It is widely believed that the goal of keeping health expenditures under control while increasing the quality of the healthcare system can best be achieved by giving a greater role to market forces. This column evaluates the effect of a pro-competition reform implemented in France over 2004-2008 on hospital quality. It finds that the impact on quality depends on the managerial autonomy of hospitals. And due to the French healthcare market structu

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Refugees have little effect on native worker wages

Sudden inflows of refugees have been shown to have little or no impact on native wages, but recent research has challenged this consensus, using instrumental variables to show uniformly large detrimental effects. This column argues that these new results were due to problems with the strategy used and, in the case of the Mariel boatlift, the composition of the sample. Correcting for these flaws, the impact of immigration on average native-born wo

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Incentives, effort, and performance in higher education

Feedback has been found to improve exam performance in the context of higher education, but demand for feedback is low among students when obtaining it requires unrewarded effort. This column evaluates how the provision of extrinsic incentives affects students‘ effort and performance. Having online learning assessments count towards final grades is found to trigger large participation increases, and better subsequent exam performance. Given

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Capital accumulation, private property, and inequality in China, 1978-2015

Between 1978 and 2015, China moved being from a poor, underdeveloped country to the world‘s leading emerging economy. But relatively little is known about how the distribution of income and wealth within the country changed over this period. This column presents the first systematic estimates of the level and structure of China‘s national wealth since the beginning of the market reform process. The national wealth-income ratio increas

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The US Treasury‘s missed opportunity

The US Treasury recently published the first in a series of reports designed to implement the seven core principles for regulating the US financial system announced in an Executive Order from President Trump. While Trump‘sstated principles provide an attractive basis for making the financial system both more cost-effective and safer, this column argues that, at least when considering the largest banks,adopting the Treasury‘s recommend

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Growth and volatility before and after the Global Crisis

The impact of the Global Crisis of 2008 played out differently in middle-income countries compared to developed countries. This column argues that the associations of growth level, growth volatility, shocks, institutions, and macroeconomic fundamentals have changed in important ways after the crisis. Educational attainment, share of manufacturing output in GDP, and exchange rate stability appear to increase the level of economic growth. Exchange

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Japan‘s ‘glass ceiling‘ and ‘sticky floor‘

Although the gender wage gap in Japan has been decreasing over the last 15 years, it remains large. This column shows that both the ‘glass ceiling‘ and the ‘sticky floor‘ exist in the Japanese labour market. The country‘s human resource management system and a culture which rewards those who are willing to work outside of regular hours are to blame.

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Endogenous growth and lack of recovery from the Global Crisis

Around the world, growth has yet to recover to its pre-Global Crisis trend. This column uses the crisis as a quasi-natural experiment to test the endogenous growth hypothesis, which suggests that output has not recovered because the crisis affected the rate of technological progress. Firms that preferred a bank that was more severely affected by the crisis experienced a large fall in R&D investment and a persistent fall in output in subsequent ye

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Completing EMU

Despite much being done to strengthen the Economic and Monetary Union, it remains incomplete and this is one of the main reasons for the Eurozone‘s lacklustre economic performance in the recent years. While there are still diverging views on how to "cross the river", there is also a political and economic window of opportunity to complete the EMU architecture. This column discusses the ideas presented in a new European Commission Reflection

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