http://www.VoxEU.org Recent articles added to VoxEU.org en http://www.VoxEU.org/index.php?q=node/5483 Takatoshi Ito, Satoshi Koibuchi, Kiyotaka Sato, Junko Shimizu, 8 September 2010

Why do so many Japanese firms risk their profits by invoicing their exporters in foreign currencies? This column, based on firm-level interview data, suggests that such invoicing may be motivated by the fact that many Japanese firms export their goods to foreign subsidiaries facing local competitors. Invoicing in foreign currencies concentrates currency risk at the company headquarters.

Full Article: Why don’t Japanese exporters use the yen?]]> Wed, 08 Sep 2010 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/5483 http://www.VoxEU.org/index.php?q=node/5476 Richard S. Grossman, Masami Imai, 7 September 2010

One of the striking features in the buildup to the global crisis was the extent of risk taken on by highly leveraged financial institutions. This column blames such behaviour on the limited liability status of these institutions. Using data on British banks from 1878 to 1912, it finds that the banks with greater liability for their debts took on less risk.

Full Article: Liability and excessive risk taking: Historical evidence from Britain’s banks]]> Tue, 07 Sep 2010 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/5476 http://www.VoxEU.org/index.php?q=node/5474 Lucian Cernat, 7 September 2010

This autumn, the European Commission will set out the future direction for the EU’s trade policy. In this column its Chief Trade Economist calls on Vox contributors to engage in the debate about what that direction should be.

Full Article: Shaping the future of EU trade policy: How to maximise the gains from trade in a globalised world? A new VoxEU.org debate]]> Tue, 07 Sep 2010 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/5474 http://www.VoxEU.org/index.php?q=node/5473 Christoph Moser, Dieter M. Urban, 6 September 2010

Is international trade a source of widening wage inequality in industrial countries? This column shows that export activity in Germany contributes to wage inequality among workers with different levels of skill, but diminishes wage gaps in German manufacturing between men and women and between German citizens and non-citizens.

Full Article: Does the winner take it all? Wage inequality and exports]]> Mon, 06 Sep 2010 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/5473 http://www.VoxEU.org/index.php?q=node/5468 Paul Brenton, Gareth Edwards-Jones, Michael F Jensen, 5 September 2010

Is offsetting your carbon footprint always a good thing? This column questions the criteria used to label carbon footprints, arguing they can disadvantage developing countries. It suggests a variety of ways to overcome that problem.

Full Article: Can carbon labelling be development friendly?]]> Sun, 05 Sep 2010 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/5468 http://www.VoxEU.org/index.php?q=node/5472 Yeon-Koo Che, Rajiv Sethi, 4 September 2010

The role of naked credit default swaps in the global crisis is an ongoing source of controversy. This column seeks to add some formal analysis to the debate. Its model finds that speculative side bets can have significant effects on economic fundamentals, including the terms of financing, the likelihood of default, and the scale and composition of investment expenditures.

Full Article: Economic consequences of speculative side bets: The case of naked CDS]]> Sat, 04 Sep 2010 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/5472 http://www.VoxEU.org/index.php?q=node/5469 Anton Brender, Florence Pisani, 4 September 2010

Are low interest rates storing up more trouble for the future? This column argues that low interest rates have been necessary to sustain large current-account imbalances. With global imbalances unlikely to be redressed any time soon, low interest rates may be the best option for a while longer – but this policy is not without its risks.

Full Article: “Low for long”: A risky but necessary interest rate policy ]]> Sat, 04 Sep 2010 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/5469 http://www.VoxEU.org/index.php?q=node/5462 Alan J Auerbach, Yuriy Gorodnichenko, 3 September 2010

The return from a fiscal stimulus – the fiscal multiplier – remains one of the most controversial topics in economics today. This column considers the influence of expectations, of variation in recessions and expansions, and of different components of government spending. It finds that the size of the multiplier varies considerably over the business cycle: between 0 and 0.5 in expansions and between 1 and 1.5 in recessions.

Full Article: Measuring the output responses to fiscal policy]]> Fri, 03 Sep 2010 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/5462 http://www.VoxEU.org/index.php?q=node/5457 Richard Baldwin, Dany Jaimovich, 2 September 2010

As WTO trade talks languish, what’s driving the surge in regional trade agreements? This column says that regionalism is being driven in large part by the domino effect, in which nations excluded from a trade agreement launch their own negotiations to redress trade diversion. This dynamic is more of a challenge to the WTO than a threat at the moment, but it should not be neglected.

Full Article: Contagious FTAs: New evidence on the domino theory of regionalism]]> Thu, 02 Sep 2010 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/5457 http://www.VoxEU.org/index.php?q=node/5454 Simon Dietz, Geoffrey Heal, Antony Millner, 1 September 2010

The answers to “How much should people sacrifice today for the benefit of those living several decades from now?” vary widely. This column suggests that people’s distaste for uncertainty – ambiguity aversion – favours immediate, rapid cuts in greenhouse gas emissions.

Full Article: Ambiguity is another reason to mitigate climate change]]> Wed, 01 Sep 2010 00:00:00 GMT http://www.VoxEU.org/index.php?q=node/5454