Dealing with the threat of climate catastrophe

Rick van der Ploeg, Aart de Zeeuw, 31 July 2014

Many ecological systems feature ‘tipping points’ at which small changes can have sudden, dramatic, and irreversible effects, and scientists worry that greenhouse gas emissions could trigger climate catastrophes. This column argues that this renders the marginal cost-benefit analysis usually employed in integrated assessment models inadequate. When potential tipping points are taken into account, the social cost of carbon more than triples – largely because carbon emissions increase the risk of catastrophe.

Can large primary surpluses solve Europe’s debt problem?

Barry Eichengreen, Ugo Panizza, 30 July 2014

For the debts of European countries to be sustainable, their governments will have to run large primary budget surpluses. But there are both political and economic reasons to question whether this is possible. The evidence presented in this column is not optimistic about Europe’s crisis countries. Whereas large primary surpluses for extended periods of time did occur in the past, they were always associated with exceptional circumstances.

Trans-Pacific Partnership negotiations and rulemaking to regulate state-owned enterprises

Tsuyoshi Kawase, 29 July 2014

The regulation of state-owned enterprises in international trade dealings has been cited as a major stumbling block to progress on the Trans-Pacific Partnership negotiations. This column explains the issues of contention, and argues that state-owned enterprises require an explicit and deliberate regulatory treatment. Given their unique properties, a coherent approach to state-owned enterprise regulation would promote progress in negotiations better than the piecemeal of overlapping rules currently considered.

Research quality assessment tools: Lessons from Italy

Graziella Bertocchi, Alfonso Gambardella, Tullio Jappelli, Carmela A. Nappi, Franco Peracchi, 28 July 2014

Assessing the quality of academic research is important – particularly in countries where universities receive most of their funding from the government. This column presents evidence from an Italian research assessment exercise. Bibliometric analysis – based on the journal in which a paper was published and its number of citations – produced very similar evaluations of research quality to informed peer review. Since bibliometric analysis is less costly, it can be used to monitor research on a more continuous basis and to predict the outcome of future peer-reviewed assessments.

Financial stability and monetary policy

Gabriel Chodorow-Reich, 27 July 2014

The monetary policies implemented by the Federal Reserve since late 2008 have raised concerns about the risk taking of financial institutions. This column discusses the effect of some of these policies on life insurance companies and market mutual funds. While the effect on life insurance companies has been stabilising, money market funds did not actively reach for yield.

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