When Public Money Multiplies, and when It Does Not: A Guide to the Catalytic Effect of Blended Finance
Meeting the Sustainable Development Goals demands trillions of dollars annually, far beyond official aid budgets, prompting a shift toward blended finance where concessional public funds crowd in private capital. Development finance institutions now channel over $250 billion a year—about four times the level a decade ago—using subsidised loans and credit guarantees. A new paper by Panizza (2026) introduces the catalytic multiplier, measuring how much total project size expands per dollar of public spend, and reveals that multipliers shrink as market failures intensify. The study also clarifies when guarantees outperform loans and when full de‑risking is justified.
Using Global Shocks as a Laboratory to Study Executive Pay
A new NBER study merges principal‑agent and assignment models to examine how global trade shocks reshape executive compensation. Using two decades of Danish firm‑level data, the authors find that exogenous increases in exporting and offshoring boost firm value and raise...
When Privacy Protects but Excludes: The Hidden Costs of Data Restrictions in Digital Lending
A 2019 Google privacy rule barred Android apps from accessing call detail records, cutting off a key enforcement tool for one of India’s largest digital lenders. The restriction sparked a 26% surge in loan applications from Android users but forced...
Who Really Drives Innovation
In a new macro‑economic study, Paolo Surico and co‑authors use detailed patent records to trace the impact of publicly funded research in the United States since World War II. Their analysis shows that the National Institutes of Health and the National...
Who Really Drives Innovation
A new CEPR study finds that publicly funded patents make up just 2% of U.S. filings yet account for roughly 20% of productivity growth, underscoring the outsized impact of government‑backed research. The analysis, based on patent‑level data, shows that agencies...
How a Nation Was Born: Lessons From Four Centuries of Brazilian Growth
A new CEPR paper reconstructs Brazil’s GDP per capita from 1574 to 1920 using 30,000 archival price and wage observations. The study finds Brazil enjoyed relatively high incomes in the late‑1500s, followed by two centuries of near‑zero growth despite commodity...
Central Bank Independence: An Update
Recent research reviewed by Eijffinger and de Haan (2026) confirms that while legal independence reduces inflation, it does not shield central banks from political interference. Studies show that roughly 10% of central banks experience annual political pressure, and 39% have...
Air Service Liberalisation and Carbon Dioxide Emissions
A new CEPII working paper finds that air service agreements (ASAs) significantly increase international passenger traffic—by 12.7% between 2012 and 2019—while reshaping routes toward more direct flights. These changes cut average flight distance by 1.4% and reduce the number of...
Revisiting Labour Supply Trends Across Countries
Recent research shows that the once‑wide gap in hours worked between the United States and other advanced economies has roughly halved by the late 2010s. While U.S. labor‑supply fell after 2000, driven largely by the expansion of non‑employment benefits such...
Rebalancing the Chinese Economy
China is shifting its growth model from an investment‑ and export‑driven engine to a more consumption‑focused, high‑tech economy. Over the past decade the investment share of GDP fell from 47% to 41%, while consumption rose to about 57% of output....
Improving Competitiveness or Meeting Climate Targets: The Draghi Dilemma
EU policymakers, urged by Draghi, are weighing a €5 billion‑per‑year ($5.5 billion) subsidy package for energy‑intensive industries across the Netherlands, Germany and France. A recent CPB‑PBL study using the GREENR model shows that cost‑reducing subsidies improve industrial competitiveness but increase EU emissions,...
Defence Spending – No Free Lunch
OECD countries are rapidly increasing defence budgets, with spending returning to Cold‑War‑era levels and outpacing GDP growth in most members in 2024. New research by Conigrave and Shin estimates that higher military outlays provide a modest near‑term boost to output...
Fiscal Institutions Matter Big Time for Foreign Direct Investment in Developing Economies
IMF research finds low‑income countries capture less than 1 % of global FDI, with inflows skewed toward low‑R&D sectors. Empirical analysis shows that robust fiscal institutions and disciplined public finances are the strongest predictors of both the quantity and the R&D...
An Olympic Opportunity for Social Housing Policy: Lessons From the Athens 2004 Olympic Village
The 2004 Athens Olympic Village was built from the start as a post‑Games social‑housing estate, costing roughly €300 million (about $330 million) and delivering 2,300 units for 10,000 residents. A lottery assigned 2,000 working families to the new neighbourhood, allowing a randomized...
Cross-Border Payment Technologies, Innovations, and Challenges: Lessons From Domestic and Cross-Border Payments
Cross‑border payments, vital for global trade and remittances, lag behind domestic systems in speed, cost, and accessibility. While wholesale transfers have become relatively efficient, retail and remittance flows still rely on costly correspondent‑banking networks, despite fintech front‑end innovations like Wise...