Online Articles

The recent paper “Fifty Shades of QE: Conflicts of Interest in Economic Research” by Fabo et al. investigates the possible biases of economic research when analysing QE effectiveness. Part of the research efforts on this subject is led by economists who work at the very central banks that design and put into operation unconventional monetary policies. Comparing their results to those obtained by academic economists may shed some light on the drivers of scientific consensus.

Populism Italian Style and some bizarre ideas about representative democracy came to an end when prime minister Giuseppe Conte resigned and Mario Draghi took his place. Draghi has become a national hero and people have been changing their minds. They no longer trust that bombastic stories could replace lack of content, and that MPs can be appropriately selected through a fanciful internet-based contest where candidates would flaunt their qualities and air their promises.

In a new IREF Working Paper Stefano Adamo of the University of Banja Luka turns to a young genre of Italian literature. Adamo analyzes four novels that revolve around the financial crises of the year 2008 and the government debt crises of the 2010s. What is special is that the authors of the novels can look back at a career in finance. As insiders they can illustrate processes within banks and on financial markets in Italy from first hand experience. In the working paper, Adamo unpacks in detail how the authors depict the financial industry. The industry as well as its protagonists do not fare well. According to the authors, the world of finance is populated by irrational, overly risk-loving individuals. Many of them are questionably entangled with politics. In a sentence, all the novels contain a strong plea for more regulation.

A year ago this month, Boris Johnson took to the stage in Greenwich to deliver a paean to free trade. His central message was that, thanks to Brexit, the UK was finally “re-emerging after decades of hibernation as a campaigner for global free trade”. Twelve months on, it is appropriate to reflect on how far this rhetoric has turned into reality or not. Of course, the intervening period has been marked by two huge trade shocks: Brexit, which could be foreseen, and the Covid-19 pandemic, which could not. In their different ways, these two events have proved the difficulties inherent in the UK’s ability to fulfil the promise of being a free trade champion.

In 2018, the African heads of state signed an agreement that has eventually brought to life the African Continental Free Trade Area (AfCFTA). In July 2019, 54 of the 55 African Union states signed the Agreement, with Eritrea the only country staying out. Finally, on January 1st, 2021, the African Union officially launched the African Continental Free Trade Area, a step towards continental integration and the main target of the African Union Agenda 2063. It will be the world’s free trade area with the largest number of member countries, and is expected to be a game-changer in how Africans trade with each other and the rest of the world.

According to a recent survey across 34 countries, more people worry about income inequality than about the current COVID-19 pandemic. Pessimism with regard to inequality appears to be particularly widespread in France, followed by Spain, Greece, and Germany.

Global inequality increased until the 1970s/80s. Yet, more recent historical developments show a different picture. In fact, global income inequality decreased significantly during the past decades. Those who care about decreasing global inequalities should advocate better institutional contexts, to enhance growth in poorer countries and ease migration flows on a global scale.

When we see social interactions that seem unfair, people usually demand legislation that would prohibit the behavior they dislike. But this kind of intervention does not come without a price and has unintended consequences.
On October 28th, the European Commission initiated a legislative procedure to ensure “adequate minimum wages” across the EU member states in response to the coronavirus pandemic. The Commission thought that this would help the workers affected by the crisis. The proposed legislation would require that EU countries set their minimum wages by taking into account a number of national parameters, such as the cost of living, house prices, and GDP per capita.

Gallup conducted a panel survey in the very days the Pfizer and BioNTech COVID-19 vaccine was certified as effective. According to the survey, only 63% of Americans agree to be vaccinated against Covid-19. Things are similar in other Western countries. An article published by Nature Medicine last October (Jeffrey V. Lazarus et al, A global survey of potential acceptance of a COVID-19 vaccine) surveyed 13,426 people in 19 countries, and examined potential acceptance rates and factors influencing acceptance of a COVID-19 vaccine. Only 71.5% of participants reported that they would be likely to take a COVID-19 vaccine.

Young people’s attitudes towards retirement are contradictory: on the one hand, they don’t trust public pay-as-you-go pensions. According to recent surveys, around half of the respondents do not expect significant retirement income from this source. On the other hand, private efforts are insufficient to close the expected pensions gap.

The term meritocracy describes a social and political context in which merit is the key criterion to evaluate the distribution of rewards. If such distribution reflects individual merit, it is fair. It is unfair in the opposite case. The term was coined in 1958 by British sociologist Michael Young, according to whom meritocracy describes a dystopia, not something necessarily desirable. Young was affiliated to the labor party. In fact, the term maintained a negative connotation for a long time within the leftist culture. Since the 90s of the last century, however, the world of politics took at different view, possibly encouraged by egalitarian theories that sought to combine egalitarianism and personal responsibilities.