The speed at which events in Ukraine are unfolding is astounding. This column argues that the real goal of Russian President Putin is to make the February 2014 changes look like a failure. Root causes of the Ukrainian protest also exist in Russia and a victory of reform forces in Kiev could encourage stronger protest movement in Russia than that of 2011-2013 and potentially lead to a similar outcome.
Recent research has sought to quantify the magnitude of the welfare gains from trade. One of the main findings from this literature is that the gains from trade are relatively modest. This column suggests a channel that the standard approach typically abstracts from. It argues that trade induces changes in domestic productivity through a more efficient organisation of production within the supply chain.
Firms hoping for regulatory favours may direct their business purchases towards firms controlled by politicians, who benefit from the additional revenue. This column provides evidence from Italy consistent with this channel. It shows that the share of advertising on Berlusconi’s televisions increased while he was in power, and this even more so in the most regulated industries.
Excessive drinking during pregnancy is known to harm the foetus, but estimating the effects of moderate prenatal alcohol consumption is difficult, since mothers who choose to drink may differ systematically from those who do not. This column presents recent research showing that a genetic variant in a maternal alcohol-metabolising gene (ADH1B) is negatively related to prenatal alcohol exposure, and unrelated to any of the background characteristics associated with prenatal drinking. Using this genetic variant as an ‘instrumental variable’, the authors find strong negative effects of prenatal alcohol exposure on child educational achievement.
The surge in unemployment in many EU countries has prompted concerns that the underlying structural unemployment has shifted upwards, so that high rates of joblessness could persist also once the recovery is on a solid footing. In this column we draw on recent analysis (European Commission, 2013) and focus on two issues: to what extent the reduced efficiency of labour market matching is contributing to growing structural unemployment? Which are the main drivers of matching efficiency across the EU?
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