The Swiss franc was created in 1850, but the Swiss National Bank wasn’t founded until 1907. The interim was a period of free banking, marked by two successive phases: one of free, unregulated note issue; and then one of strictly limited banking freedom. This column studies the Swiss banking market over this time. The number of banks is found to play an important role in determining the long-run money demand, and in the monetary adjustment process. Further, problems with harmonisation and common regulation created the incentives for monopolisation and centralisation.
Stefan Gerlach, Peter Kugler, 01 March 2016
Pablo Fajgelbaum, Eduardo Morales, Juan Carlos Suarez, Owen Zidar, 06 January 2016
Tax policy varies widely across countries and across regions within countries. This column presents evidence suggesting that in the case of the US, harmonising tax rates could lead to significant increases in aggregate economic output. EU policymakers should take note.
Matthew J. Bloomfield, Ulf Brüggemann, Hans B. Christensen, Christian Leuz, 17 December 2015
Labour mobility is an important prerequisite for the efficiency of labour markets. In the EU, however, different standards across countries present an implicit economic barrier for high-skilled professionals. This column examines how the recent EU harmonisation of professional standards in accounting affected cross-border migration relative to other professionals. The harmonisation had a strong positive effect on accountants’ cross-border migration. Harmonisation could thus be a potentially powerful tool for policymakers seeking to improve labour market efficiency.
Richard Baldwin, 20 January 2014
The global value chain revolution has changed trade and trade agreements. Trade now matters for making goods as well as selling them. Trade governance has shifted away from the WTO towards megaregional agreements. This column argues that 21st-century regionalism is not fundamentally about discrimination, and that its benefits and costs are best thought of as network externalities and harmonisation costs respectively. More research is needed to determine how the megaregional trade agreements across the Pacific and Atlantic will fit with the WTO.
Aaditya Mattoo, 10 October 2013
The recent launch of negotiations on a transatlantic trade and investment deal has been widely welcomed by policymakers. This column warns that the aspect of the deal that provokes the greatest excitement – its focus on regulatory barriers like mandatory product standards– should evoke the greatest concern. Regional harmonisation may increase intra-regional trade yet exports from excluded developing countries could be hurt.
Laurits R. Christensen, Federico Etro, 24 March 2013
The EU is planning to harmonise data protection. This column balances the benefits of harmonisation against the estimated costs to business – especially small and medium-sized enterprises – and the macroeconomic costs more generally. The net compliance costs will perhaps be larger than the EU predicts.