Alberto Prati, Charlotte Saucet

The paper estimates the causal effect of a health treatment on patients’ beliefs, preferences and memories about the treatment. It exploits a natural experiment which occurred in the United Kingdom during the COVID-19 vaccination campaign. We surveyed a sample of UK residents about their beliefs on the different COVID-19 vaccines before and after receiving their jab. At the aggregated level, the results show that random assignment to a health treatment predicts a polarization of opinions about its quality. At the individual level, these findings provide evidence in line with the predictions of motivated beliefs and over-inference from weak signals in a real-world health setting.

Bilyana Petrova, Marco Ranaldi

This article explores the drivers of income composition inequality (ICI). Contrary to recent studies, which show that the composition of government has ceased to shape redistribution and income inequality dynamics, this article posits that left-wing parties are associated with lower income composition inequality. We test this expectation with data from thirty European countries between 2003 and 2017. Our results suggest that the polarization between capital and labor income holders declines under left-wing governments. We establish that this is mainly because left-wing parties seek to broaden access to capital income.

Esin Yoruk, Slavo Radosevic, and Bruno Fischer

We investigate the dynamic and qualitative nature of technological change in 96 countries between 1980 and 2021 from a structuralist technology upgrading perspective. We find a significant association between growth dynamics and country-level specific technology clusters that is driven by the ongoing ICT-based technological revolution and enabling nanotechnology, biotechnology and automation tools.

Randolph Luca Bruno, Maria Cipollina, and Silvia Dal Bianco

The article explores and quantifies the intertwined relationship between trade sanctions, Global Value Chains (GVC) participation and revealed comparative advantage (RCA). It presents an original theoretical framework exploring the interaction between sanctions, RCA, and GVC.

L. Bauluz, P. Bukowski, M. Fransham, A. Lee, M. López Forero, F. Novokmet, S. Breau, N. Lee, C. Malgouyres, M. Schularick, G. Verdugo

The rise of economic inequalities in advanced economies has been often linked with the growth of spatial inequalities within countries, yet there is limited comparative research that studies the relationship between national and subnational economic inequality. This paper presents the first systematic attempt to create internationally comparable evidence showing how different countries perform in terms of geographic wage inequalities.

Alberto Prati

In terms of well-being, how costly is inflation? To answer this question, empirical evaluations have typically studied average inflation rates at the national level, thus disregarding the role of inflation inequalities within a country. In this article, we relax the assumptions that heterogeneous consumers face homogeneous inflation rates, and study the correlation between price changes and self-reported satisfaction with living standards.

Marco Ranaldi and Elisa Palagi

This work presents a framework to jointly study individuals’ heterogeneity in terms of their capital and labour endowments (endowment heterogeneity) and of their saving and consumption behaviours (behavioural heterogeneity), from an empirical perspective. By adopting a newly developed synthetic measure of compositional inequality, this work classifies more than 20 economies across over two decades on the basis of their heterogeneity characteristics.

Pawel Bukowski, Stephen Machin, and Brian Bell

The evolution of rent sharing is studied. Based on a panel of the top 300 publicly quoted British companies over thirty-five years, and using excess stock market returns to patenting activity as an instrument for economic rents, the paper reports evidence of a significant fall over time in the pass-through from rents to wages. It confirms that wages do respond to firm-level shocks and to economic rents, but by significantly less after 2000 that they did during the 1980s and 1990s. The evidence of decline is a robust finding, corroborated with alternative instruments and industry-level analysis for the US and EU.

Marco Ranaldi

This paper uses fractal mathematics to describe the distribution of income among individuals. It shows the existence of a stochastic fractal relationship between a country’s output and income inequality: the higher the level of income inequality, the lower the country’s output, all else being equal. (Stone Center on Socio-Economic Inequality Working Paper)

Paul De Grauwe & Yuemei Ji

We analyze how trust affects the transmission of negative demand and supply shocks. We define trust to have two dimensions: there is trust in the central bank’s inflation target and trust in the future of economic activity. We use a behavioural macroeconomic model that is characterized by the fact that individuals lack the cognitive ability to understand the underlying model and to know the distribution of the shocks that hit the economy. We find…

Nauro F. Campos, Fabrizio Coricelli & Marco Frigerio

This paper throws new light on the relationship between income and democracy. Using data for 162 countries over 1960-2018, we show that the causal relationship between political and economic development is U-shaped: "intermediate" political regimes significantly lead to inferior economic performance vis-à-vis both "democracies" and "autocracies."

Paweł Bukowski & Filip Novokmet

We construct the first consistent series on the long-term distribution of income in Poland by combining tax, household survey and national accounts data. We document a U-shaped evolution of inequalities from the end of the nineteenth century until today: (1) inequality was high before WWII; (2) abruptly fell after the introduction of communism in 1947 and stagnated at low levels during the whole communist period; (3) experienced a sharp rise with the return to capitalism in 1989.

Luca J. Uberti & Elodie Douarin

The Feminisation U describes the tendency of female labour force participation (FLFP) to first decline and then rise in the process of economic development. While the Feminisation U is often presented as a ‘stylised fact’ of development, empirical support for it is mixed. Here, we show that cultural norms inherited from ancestral plough use exert a moderating influence on the shape of the Feminisation U. Specifically, we find a significantly U-shaped path of FLFP only in countries whose ancestors employed a plough-based agricultural technology.

Marco Ranaldi & Branko Milanović

The paper investigates the relationship between compositional inequality (how the shares of capital and labor income vary along income distribution) and inter-personal income inequality. Using a new methodology and data from 47 countries covering the period 1995–2018, we show that higher compositional inequality is associated with higher inter-personal inequality.

Randolph Luca Bruno, Julia Korostelevea & Slavo Radosevic

We explore how digitalization impacts young firms’ growth. A longitudinal panel analysis of the EU’s new ventures during 2010–2018 reveals that digital sectoral capabilities affect young firms’ growth autonomously and via interaction with other sectoral capabilities.