While there is substantial evidence that multinationals are more productive than domestic firms, the evidence on productivity spillovers remains mixed. This column estimates the effects of foreign presence on the innovation of local firms. It suggests that spillovers from foreign firms to domestic firms are limited to domestic firms immediately connected to foreign firms. Requirements for foreign firms to have significant local content may therefore be justified.
Yuriy Gorodnichenko, Jan Svejnar, Saturday, September 26, 2015 - 00:00
Aida Caldera, Mikkel Hermansen, Oliver Röhn, Saturday, September 19, 2015 - 00:00
The Global Crisis and its high costs have revived interest in early warning indicators of economic risks. This column presents a new set of indicators to detect vulnerabilities and assess country-specific risks of suffering a crisis. The empirical evidence confirms the usefulness of the vulnerability indicators in warning of severe recessions and crises in OECD countries. But indicators are no silver bullet and should be complemented with other monitoring tools, including expert judgement.
Neil Lee, Andrés Rodríguez-Pose, Tuesday, February 17, 2015 - 00:00
Plamen Iossifov, Jiří Podpiera, Monday, February 16, 2015 - 00:00
Hiroyasu Inoue, Kentaro Nakajima, Yukiko Umeno Saito, Wednesday, February 11, 2015 - 00:00
Hiau Looi Kee, Friday, November 21, 2014 - 00:00
Dennis Reinhardt, Cameron McLoughlin, Ludovic Gauvin, Wednesday, November 5, 2014 - 00:00
Aleksi Aaltonen, Stephan Seiler, Friday, October 31, 2014 - 00:00
Ruud de Mooij, Michael Keen, Victoria Perry, Sunday, September 14, 2014 - 00:00
Linda Goldberg, Signe Krogstrup, John Lipsky, Hélène Rey, Saturday, July 26, 2014 - 00:00
The dollar’s dominant role in international trade and finance has proved remarkably resilient. This column argues that financial stability – and the policy and institutional frameworks that underpin it – are important new determinants of currencies’ international roles. While old drivers still matter, progress achieved on financial-stability reforms in major currency areas will greatly influence the future roles of their currencies.
Paolo Giordani, Michele Ruta, Hans Weisfeld, Ling Zhu, Monday, June 23, 2014 - 00:00
Capital controls may help countries limit large and volatile capital inflows, but they may also have spillover effects on other countries. This column discusses recent research showing that inflow restrictions have significant spillover effects as they deflect capital flows to countries with similar economic characteristics.
Mark Mink, Jakob de Haan, Saturday, May 24, 2014 - 00:00
To date, much uncertainty exists about how large the spillovers would be from the default of a systemically important bank. This column shows evidence that the market values of US and EU banks hardly respond to changes in the default risk of banks that the Financial Stability Board considers globally systemically important (G-SIBs). However, changes in all G-SIBs’ default risk explain a substantial part of changes in bank market values. These findings have implications for financial-crisis management and prevention policies.
Theodore H. Moran, Lindsay Oldenski, Tuesday, March 4, 2014 - 00:00
The US has once again ranked among the top two recipient countries for foreign direct investment. This column examines the effects of these large FDI inflows on the US domestic economy. Foreign multinationals are – alongside US-headquartered American multinationals – the most productive and highest-paying segment of the US economy. In addition, they provide positive spillovers to US firms. About 12% of the total productivity growth in the US from 1987 to 2007 can be attributed to productivity spillovers from inward FDI.
Olivier Blanchard, Jonathan D Ostry, Atish R Ghosh, Friday, December 20, 2013 - 00:00
The world has just been through a period of unprecedented macro policy activism. More is set to come as central banks exit unconventional policies, governments fix their fiscal positions, and financial regulations are reformed. These national policies have undeniable international spillovers. This column argues that the setting is ripe for more cooperation and suggests some ways forward, even if international macro policy coordination may continue to be heard about more often than it is seen.
Olivier N. Godart, Holger Görg, Christiane Krieger-Boden, Monday, April 29, 2013 - 00:00
The positive spillovers from multinationals to the productivity of their host-country suppliers are empirically well established. Usually, it is assumed that multinationals aid their suppliers by voluntarily sharing knowledge and cooperating with them. This column argues the spillovers might rather result from blunt pressure by the multinationals, forcing their suppliers to adopt new practices and to adapt to new standards.
Aaditya Mattoo, Arvind Subramanian, Prachi Mishra, Friday, March 23, 2012 - 00:00
Do exchange rate movements in one country affect its competitors? This column suggests that a 10% appreciation of the renminbi increases other developing countries’ exports by about 2%. Where competition with China is especially intense, the increase could be as large as 6%. The results imply that an appreciation of the renminbi could provide a boost to developing country exports.
Peter Debaere, Joon H. Lee , Myungho Paik, Wednesday, June 3, 2009 - 00:00
Gains from agglomeration may explain why investors choose the same location when going abroad, but why do firms from the same country cluster together? This column examines evidence from South Korean firms investing in China and finds that investors of the same nationality benefit from stronger forward and backward linkages with each other.
Andrew K Rose, Mark M. Spiegel, Wednesday, July 2, 2008 - 00:00
Prospects for international environmental cooperation often seem dim, as agreement must hew to the lowest common denominator. This column identifies economic gains from environmental commitments via reputational spillovers and their impact on capital flows. The evidence suggests that nations have more to gain from cooperation than they may realise.
David B Audretsch, Oliver Falck, Maryann P. Feldman, Stephan Heblich, Tuesday, April 29, 2008 - 00:00
Economic geography models suggest various relationships between innovation and spatial concentration, from benefits of diversity in cities to agglomeration gains in specialised industrial parks. This column summarises empirical research that uses these theories to explain various stages of “regional lifecycles.” An important result is that supra-national EU policymakers are poorly positioned to address regions’ differing needs.
Tommaso Monacelli, Roberto Cardarelli, Alessandro Rebucci, Luca Sala, Saturday, April 26, 2008 - 00:00
Recent housing finance innovations have changed the relationship between house prices and the business cycle. This column suggests that these changes amplify spillovers from the housing sector to the rest of the economy and recommends that monetary policy respond more aggressively to the housing market.