The Unassuming Economist

Source: VoxEU CEPR

Abstract:

The real pay of typical workers has grown much more slowly than productivity over recent decades in several developed economies. This column uses data from the US and Canada to examine whether productivity growth actually benefits typical workers by raising their pay. The authors find strong evidence of linkage between productivity and pay in the US but more mixed evidence for Canada, possibly due to it being a smaller, more internationally open economy. Overall, the findings suggest that measures to boost productivity growth are important for raising pay for the average and typical worker.

From the IMF’s latest report on North Macedonia:

“The authorities emphasized that the health and stability of the banking system has been preserved through the pandemic, and they continue to closely monitor risks. Regulatory flexibility, temporary restrictions on dividend payments, and economic policy support helped maintain credit to the economy during the pandemic. The NBRNM has strengthened the reporting frequency and data requirements for monitoring credit quality, introduced a comprehensive and consistent bottom-up stress testing, and increased the focus on risks such as cyber risks, which are being taken into account when setting bank-specific Pillar-II capital requirements. Given high growth in new mortgages and rising house prices, a targeted assessment is underway. Moreover, the NBRNM is closely monitoring deposit-driven euroization, which increased during the pandemic, against the plan set out in the denarization strategy.

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Banking system strength has held up well during the pandemic, but continued vigilance is essential. The banking system overall remains well capitalized and profitable. Initiatives to improve the framework for stress tests of banks are welcome, together with intensified supervisory efforts to ensure that banks recognize any problem assets and provision adequately for potential loan losses on a forward-looking basis. Given the still high share of FX or FX-linked loans in household loans, with possibly limited hedging of borrowers, the NBRNM should maintain carefully calibrated measures to limit FX lending. Moreover, rising private sector debt, albeit from low levels, and the high growth in mortgage lending, coupled with an acceleration in house prices, warrant further scrutiny.”

From the IMF’s latest report on Spain:

“Continued efforts to address housing affordability challenges would support growth, facilitate labor mobility across regions and reduce inequality. Prior to the pandemic, limited rental housing supply hampered by relatively inefficient building regulations contributed to a surge in rental prices, creating affordability problems and limiting labor mobility (especially for young people and other vulnerable groups). The draft housing law and the national housing plan aim to address the existing challenges. To limit increases in rent prices in stressed areas, the law introduces rent caps on large landlords and tax incentives for small landlords to keep rents low. While these may benefit tenants in the short term, rent caps could introduce inefficiencies and restrict the availability of properties for future tenants. Further evaluation of these measures would be useful to gauge their impact. The envisaged targeted rent support programs for vulnerable groups are welcome. However, they should be combined with effective supply measures to avoid further pressures on rent prices. The increase of taxes on empty properties and the expansion of the social housing stock, which are contemplated in the proposed reform, should help increase rent supply. The RTRP envisages €1 billion for the construction of new public social rental dwellings in 2022–23. Additional policies to increase housing supply could include simplifying land use regulations and accelerating licensing processes at the regional government level.”

New VoxEU.org post by Laura Coroneo, Fabrizio Iacone, Alessia Paccagnini, Paulo Santos Monteiro published on 16 February 2022.

“For policymakers and healthcare providers, prediction of the evolution of an epidemic is extremely important (Manski 2020, Castle et al. 2020). Timely and reliable projections are required to assist health authorities, and the community in general, in coping with an infection surge and to inform public health interventions such as enforcing (or facilitating) local or national lockdowns (Heap et al. 2020). Weekly forecasts of the evolution of the COVID-19 pandemic generated by various independent institutions and research teams have been collected by the Centers for Disease Control and Prevention (CDC) in the US.¹ These forecasts are intended to inform the decision-making process for public health interventions by predicting the impact of the COVID-19 pandemic for up to four weeks. However, this wealth of forecasts also poses a problem: how to act when confronted with heterogeneous forecasts and, in particular, how to select the most reliable projections.

Forecasting teams, methods, and assumptions

The forecasting teams include data scientists, epidemiologists, and statisticians. They use different methodologies and approaches (e.g. the susceptible-exposed-infectious-recovered (SEIR), Bayesian, and deep learning models) and combine a range of data sources and assumptions concerning the impact of non-pharmaceutical interventions on the spread of the epidemic (such as social distancing and the use of face coverings). In Table 1, we report the eight teams that continuously submitted their predictions since the start of the pandemic, for the period 20 June 2020 to 20 March 2021. “

Read more here.

Source: VoxEU CEPR

Despite the commitments of the 2021 UN Climate Change Conference, countries’ climate mitigation policies are not enough to meet their ambitious emissions reduction targets. This column puts forward a framework for designing comprehensive decarbonisation strategies that promote growth and social inclusion. A policy mix based on three components is needed: (1) emission pricing, (2) standards and regulations, and (3) complementary policies that offset distributional effects. A robust and independent institutional framework and credible communications campaigns are key to managing policy constraints and enhancing public acceptance of mitigation policies.