by Martina Lawless, Zuzanna Studnicka (March, 2018)
This paper examines the patterns of cross-border trade on the island of Ireland, focusing on the role of supply chain links, measured by the extent of trade in intermediate products and the contribution to overall trade of two-way trading firms (those simultaneously importing and exporting). We use detailed firm-level trade records to examine the composition, specialisation and dynamism of trading firms. This data is provided by the Central Statistics Office (CSO) and is based on detailed statistics on merchandise exports and imports of manufacturing firms. A number of case studies on specific firms are also included to illustrate the empirical patterns. The analysis is motivated by the key role that trade plays in overall economic performance across both parts of the island and, in the more immediate policy context of potential changes in the trading environment posed by the UK exit from the EU, by the importance of understanding and quantifying the cross-border linkages both in terms of direct trade in final products and also in firms’ supply chains.
by Roger Farmer, Pawel Zabczyk (March, 2018)
We refer to the idea that government must ‘tighten its belt’ as a necessary policy response to higher indebtedness as the household fallacy. We provide a reason to be skeptical of this claim that holds even if the economy always operates at full employment and all markets clear. Our argument rests on the fact that, in an overlapping-generations (OLG) model, changes in government debt cause changes in the real interest rate that redistribute the burden of repayment across generations. We do not rely on the assumption that the equilibrium is dynamically inefficient, and our argument holds in a version of the OLG model where the real interest rate is always positive.
by Sylvain Bouyon, Simon Krause (March, 2018)
The growing choice of payment services should be good news for consumers, but only if they have complete information about the products being sold and the prices charged by each firm.
Several policy options are under discussion for better regulation of the dynamic currency conversion (DCC) payment service, each of which offers specific advantages but also poses distinct challenges. Enhancing transparency, for example, will require creative solutions. The imposition of fixed price caps would call for the design of robust criteria to determine the level of the caps. And the adjustment of the payment card chip would necessitate the adoption of common standards between card providers. From a consumer protection perspective, a ban on DCC makes sense only if all other options have been exhausted and if consumers can find satisfactory alternatives. Overall, despite the challenges it presents, the first option – enhancing transparency – is the most promising. The mandatory disclosure of an indicative spread seems to be the best way for most consumers to truly understand what is at stake and how much they are paying for what.
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Time and place: 31/05/2018 in Dublin, Ireland
Seminar Topic: The speaker will present a paper which proposes a new channel to explain the medium- to long-term effects of banking crises on the real economy. It embeds a banking sector prone to runs in a stylized growth model to show that episodes of bank distress affect not only the volume, but also the … Continued
Time and place: 26/04/2018 in Brussels, Belgium
Digital comparison tools commonly known as price comparison sites allow consumers to compare prices for almost any product in a matter of seconds, free of charge, using just a few clicks to search the Internet. While at face value this looks like a positive, empowering development, many consumer watchdog organisations have started to raise questions … Continued
Time and place: 26/04/2018 in Dublin, Ireland
Kalina Manova will present a paper which quantifies the origins of firm size heterogeneity when firms are interconnected in a production network. The study was co-authored by Professor Manova, Andrew Bernard, Emmanuel Dhyne, Glenn Magerman and Andreas Moxnes. They document new stylized facts about the universe of buyer-supplier relationships among all firms in Belgium during … Continued
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