The relationship between high public debt and low interest rates is once again at the forefront of debate.This column shows that countries with high debt levels pay a risk premium. This creates the potential for self-reinforcing loops of high debt and high risk premia, which can become explosive.
Experimental economists must tackle the generalisability and applicability of the evidence they produce. This column discusses principles to enhance these when designing and conducting experiments or reporting findings. Good practice is especially important when policy recommendations are made based on experimental results.
Even when the central government is committed to a jobs guarantee, rationing of work opportunities can arise under decentralised implementation in poor places. This column examines India’s efforts to implement such a scheme and finds that there are two main drivers of this rationing: local administrative costs and local corruption. Partial administrative reforms by the centre can have perverse effects. Deeper policy reforms are needed to assure that stipulated rights for poor people are attained in practice.
Pre-negotiation interactions, such as shared meals, are viewed as a valuable means to build trust and rapport so as to improve the outcomes of the negotiation. Even tax authorities acknowledge this – business meals tend to be tax-deductible, at least in part. This column puts this folk wisdom to the test using a controlled negotiation simulation experiment with MBA students. It finds that there is no difference in negotiation outcomes whether or not pre-negotiation socialising took place.
Concerns have been raised that outward foreign direct investment may reduce domestic employment and lead to the ‘hollowing-out’ of the manufacturing industries at home. This column uses a unique dataset of Japanese firms’ overseas activities to show that going abroad does not necessarily lead to a reduction of domestic employment. Investment by Japanese firms into other Asian countries has a positive impact on domestic job creation and a negative impact on job destruction, whereas the impact of investment into European and North American countries is negative for both job creation and destruction in Japan.
Other Recent Columns:
- Social facilitators for negotiations
- Unconventional monetary policy: A tale of heterogeneity
- Outward FDI and employment in Japanese manufacturing firms
- Cross-border banking supervision for Central, Eastern and South Eastern Europe
- International evidence for Keynesian economics without the Phillips curve
- The new globalisation and income inequality
- Side-by-side demonstrations persuade farmers to adopt new technologies
- Long-term and intergenerational effects of education
- Promises to repay and sovereign spreads
- The declining opportunities for white, non-college-educated Americans
- Globalisation and state capitalism
- Nature versus nurture in economic outcomes and behaviours
- How the structural transformation triggered the fertility transition
- Pecuniary and non-pecuniary motivations for tax compliance
- Licensing of standard essential patents
- Child penalties across countries: Evidence and explanations
- Speculation and the price of virtual currency
- The sound of many funds rebalancing
- Evolution or revolution: An afterword
- The roots of health inequality and the value of intra-family expertise
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3 - 4 June 2019 / Royal Society of Medicine, 1 Wimpole St, London, W1G 0LZ / Financial Conduct Authority and Imperial College Business School
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3 - 5 June 2019 / Florence, Italy / Florence School of Banking and Finance, European University Institute
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10 - 10 June 2019 / DePaul University, Chicago, IL (USA) / MoFiR and DePaul University
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12 - 12 June 2019 / Barcelona / UPF
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13 - 14 June 2019 / Barcelona / UPF
