Results

CEP discussion paper

Brief yet effective: group counseling and college access for disadvantaged students

Large socioeconomic gaps in higher-education access and completion persist even among similarly talented students with access to generous funding, pointing to an important role for information frictions and unequal suppo...Read more...

CEP discussion paper

Growth insured: export credit insurance and trade

We estimate the causal effect of short-term export credit insurance (ECI) on firm-level exports using administrative data from China?s export credit agency merged with customs and tax records. Exploiting quasi-random var...Read more...

CEP discussion paper

How ICT shapes wages, working conditions, and job satisfaction

We study how the widespread diffusion of ICT affects wages, working conditions, and job satisfaction. We frame our empirical investigation with a model in which ICT can improve both wages and working conditions by increa...Read more...

Blog

Bank Underground:

Forbearance lending as a crisis management tool

The Bank of England Agenda for Research (BEAR) sets the key areas for new research at the Bank over the coming years. This post is an example of issues considered under the Prudential Architecture Theme which focuses on ...Read more...

Blog

LSE Business Review:

Workers in finance from lower socio-economic backgrounds don't have equal voice

Employee voice refers to the informal and voluntary sharing of ideas, suggestions, concerns or opinions about work-related matters, with the goal of driving improvement or change. When voice is suppressed or marginalised...Read more...

Journal article

Journal of Economic Literature:

Temporary employment in markets with frictions

Temporary employment has spiked in OECD countries over the last 40 years and is now a common feature of their labor market landscape. A large body of empirical literature examines the spread of temporary employment, but ...Read more...

CEP discussion paper

Beyond the enrolment gap: Financial barriers and high-achieving, low-income students' persistence in higher education

Little is known about what influences high-achieving, low-income students' persistence in higher education, despite extensive work on their enrolment decision. This paper investigates the role of credit constraints. Usin...Read more...

Journal article

Journal of Economic Behavior & Organization:

Does growing up in economic hard times increase compassion? The case of attitudes towards immigration

There is some evidence that people who grew up in economic hard times more strongly favor government redistribution and are more compassionate towards the poor. We investigate how inclusive this increase in compassion is...Read more...

Journal article

PLoS ONE :

Access to digital finance: Equity crowdfunding across countries and platforms

Financing entrepreneurship spurs innovation and economic growth. Digital financial platforms that crowdfund equity for entrepreneurs have emerged globally, yet they remain poorly understood. We model equity crowdfunding ...Read more...

CEP discussion paper

Has financial fair play changed European football?

In 2011 UEFA, the governing body of European football, introduced the Financial Fair Play Regulation (FFPR), consisting of a set of financial restraints to be met by clubs as a prerequisite for participation to its compe...Read more...

Journal article

Sports Economics Review:

Has financial fair play changed European football?

In 2011 UEFA, the governing body of European football, introduced the Financial Fair Play Regulation (FFPR), consisting of a set of financial restraints to be met by clubs as a prerequisite for participation to its compe...Read more...

Journal article

Journal of Labor Economics :

Testing means-tested aid

We estimate the effect of an unexpected institutional financial aid (IFA) award on student outcomes using administrative data collected from nine universities, exploiting variation in IFA schedules within and across univ...Read more...

Journal article

AEA Papers and Proceedings:

The local labor market effects of modern manufacturing capital: evidence from France

Using an event study methodology and comprehensive micro data from the French manufacturing sector, we analyze the local labor market effects of investments in modern manufacturing capital, including modern automation te...Read more...

CEP discussion paper

The signaling value of legal form in debt financing

We examine if a startup's legal form choice is used as a signal by credit providers to infer its risk to default on a loan. We propose that choosing a legal form with low minimum capital requirements signals higher defau...Read more...

CEP discussion paper

Import competition, trade credit and financial frictions in general equilibrium

We analyze the role of trade credit and financial frictions in the propagation of international trade shocks along the supply chain. First, we show empirically that exposure to import competition from China increased the...Read more...

Journal article

Journal of Operations Management:

Working from home and firm resilience to the Covid-19 pandemic

The COVID-19 pandemic has disrupted firms' operations. To cope with the crisis, many firms have allowed their employees to work from home (WFH). We examine whether a firm's WFH capacity has increased its resilience durin...Read more...

Blog

Vox EU:

Financial crises as drivers of populism: a new channel

Financial crises have severe economic costs. This column shows that they also entail major political costs. It argues that the global financial crisis, and associated Great Recession, represents a watershed for populism ...Read more...

CEP discussion paper

The impact of mental health support for the chronically ill on hospital utilisation: evidence from the UK

Individuals with common mental disorders (CMDs) such as depression and anxiety frequently have co-occurring long-term physical health conditions (LTCs) and this co-occurrence is associated with higher hospital utilisatio...Read more...

CEP discussion paper

Firms and inequality

In the last few decades, dramatic changes have been documented in the US business landscape. These include rising productivity and pay dispersion between firms, higher aggregate markups (of price over variable costs), gr...Read more...

Journal article

Health and Place:

Income-related health inequality in urban China (1991-2015): the role of homeownership and housing conditions

Unprecedented economic growth has been experienced over the several decades worldwide, but such rapid economic growth wasn't accompanied by equally-substantial improvement in health, especially health inequalities betwee...Read more...

Journal article

European Economic Review:

Financial system architecture and the patterns of international trade

Countries differ in the extent to which their financial systems rely on banks or on financial markets. We offer a model featuring a complex relationship between countries? financial system architecture and their comparat...Read more...

Journal article

Scandinavian Journal of Economics:

Living in the shadow of the past: financial profiles and well-being

We consider the link between individual financial profiles over time and well-being, as measured by life satisfaction. In particular, we look at annual self-reported financial worsening and improvement information for mo...Read more...

Journal article

Journal of Economic Geography:

Local economic conditions and the nature of new housing supply

We explore the effects of local economic conditions on the type and size of newly constructed housing units in a city. Exploiting the 1984?2004 metro area samples of the American Housing Survey and US Census building per...Read more...

CEP discussion paper

Does growing up in a recession increase compassion? The case of attitudes towards immigration

Macroeconomic conditions during young adulthood have a persistent impact on people's attitudes and preferences. The seminal paper by Giuliano and Spilimbergo (2014) shows that people who grew up in a recession are more l...Read more...

Journal article

Health Economics (United Kingdom):

Childhood circumstances and young adulthood outcomes: the role of mothers' financial problems

We here consider the cognitive and noncognitive consequences on young adults of growing up with a mother who reported experiencing major financial problems. We use UK data from the Avon Longitudinal Study of Parents and ...Read more...

CEP discussion paper

Markups, intangible capital and heterogeneous financial frictions

This paper studies the interaction between financial frictions, intangible investment decisions, and markups at the firm level. In our model, heterogeneous credit constraints distort firms' decisions to invest in cost-re...Read more...

Journal article

Journal of Population Economics:

Children, unhappiness and family finances

The common finding of a zero or negative correlation between the presence of children and parental well-being continues to generate research interest. We consider international data, including well over one million obser...Read more...

CEP discussion paper

Gravity in international finance: evidence from fees on equity transactions

We shed light on the impact of institutional quality and information barriers on trade in financial services using a novel panel data set on revenue earned on domestic and cross-border equity securities underwriting tran...Read more...

CEP discussion paper

International financial flows and misallocation

We study the impact of international financial flows on credit allocation exploiting the early 2000s boom of capital inflows in Italy. Using detailed bank-firm matched data we compare the patterns of credit allocation of...Read more...

Journal article

The Economic Journal:

Merger policy in a quantitative model of international trade

In a two-country international trade model with oligopolistic competition, we study the conditions on market structure and trade costs under which a merger policy designed to benefit domestic consumers is either too toug...Read more...

CentrePiece article

In brief... The long-term effects of financial distress in childhood

Is there a relationship between childhood circumstances and outcomes later in life? Andrew Clark and colleagues consider the cognitive and non-cognitive consequences for young adults whose families experienced major fina...Read more...

Blog

LSE British Politics and Policy:

Residential mobility in the UK: how distance and local economic conditions drive residential choices

Monica Langella and Alan Manning find that high unemployment in an area induces people to move away, and has an even stronger effect on the attractiveness of that area to potential movers. They also find that younger and...Read more...

Journal article

Economics of Education Review:

The end of free college in England: implications for enrolments, equity, and quality

Despite increasing financial pressures on higher education systems throughout the world, many governments remain resolutely opposed to the introduction of tuition fees, and some countries and states where tuition fees ha...Read more...

Journal article

European Economic Review:

Host-country financial development and multinational activity

This paper evaluates the influence of host-country financial conditions on the global operations of multinational firms. Using detailed U.S. data, we establish that financial development in a country is associated with r...Read more...

CEP discussion paper

Childhood circumstances and young adulthood outcomes: the role of mothers' financial problems

We here consider the cognitive and non-cognitive consequences on young adults of growing up with a mother who reported experiencing major financial problems. We use UK data from the Avon Longitudinal Study of Parents and...Read more...

CEP discussion paper

Monetary policy, product market competition and growth

In this paper we argue that monetary easing fosters growth more in more credit-constrained environments, and the more so the higher the degree of product market competition. Indeed when competition is low, large rents al...Read more...

Journal article

Journal of Housing Economics:

Housing in Europe: a different continent ? a continent of differences

This article provides the introduction to the special issue on `Housing in Europe: a different continent ? a continent of differences? in the Journal of Housing Economics in 2018. Europe is a large continent with a long ...Read more...

CEP industrial strategy paper

Unlocking SME productivity: review of recent evidence and implications for the UK?s industrial strategy

Improving productivity is one of the main goals of the government's Industrial Strategy. Since the UK is a nation of small and medium-sized enterprises (SMEs), the question arises whether SMEs have a role to play in indu...Read more...

CEP discussion paper

The end of free college in England: implications for quality, enrolments and equity

Despite increasing financial pressures on higher education systems throughout the world, many governments remain resolutely opposed to the introduction of tuition fees, and some countries and states where tuition fees ha...Read more...

CEP discussion paper

Equity crowdfunding and early stage entrepreneurial finance: damaging or disruptive?

Equity crowdfunding (ECF) offers founders of new ventures an online social media marketplace where they can access a large number of investors who, in exchange for an ownership stake, provide finance for business opportu...Read more...

Journal article

Research Policy:

The long-term effect of digital innovation on bank performance: an empirical study of SWIFT adoption in financial services

We examine the impact on bank performance of the adoption of SWIFT, a network-based technological infrastructure and set of standards for worldwide interbank telecommunication. We construct a new longitudinal dataset of ...Read more...

Journal article

The Economic Journal:

Are you happy while you work?

Using a new data source permitting individuals to record their well-being via a smartphone, we explore within-person variance in individuals? well-being measured momentarily at random points in time. We find paid work is...Read more...

Journal article

The Review of Economics and Statistics:

Survive another day: using changes in the composition of investments to measure the cost of credit constraints

We introduce a novel empirical strategy to measure the size of credit shocks. Theoretically, we show that credit shocks reduce the value of long-term relative to short-term investments. Empirically, we can therefore comp...Read more...

Journal article

Labour Economics:

Share capitalism and worker wellbeing

We show that worker wellbeing is determined not only by the amount of compensation workers receive but also by how compensation is determined. While previous theoretical and empirical work has often been preoccupied with...Read more...

CEP discussion paper

Financial system architecture and the patterns of international trade

Countries differ on the extent to which their financial system relies on banks or on the financial market. We offer a model featuring a possible two-way relationship between countries? financial system architecture and t...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Quantitative Easing of an International Financial Centre: How Central London Came So Well Out of the Post-2007 Crisis

This paper documents and seeks to explain the remarkably positive employment trends of a central area of London in the years since the onset of the financial crisis. The volatility of this economy since the 1980s had sug...Read more...

CEP discussion paper

Testing means-tested aid

Inequalities do not end once students enter higher education. Yet, the majority of papers on the effectiveness of higher education aid examine its impact on college enrolment. In this paper, we provide evidence on the ca...Read more...

CEP discussion paper

The persistence of a banking crisis

This paper analyses the effects of bank lending on GDP and employment. Following losses on international financial markets in 2008/09, a large German bank cut its lending to the German economy. I exploit variation in dep...Read more...

CEP discussion paper

The unbearable divergence of unemployment in Europe

Unemployment in Europe is not only ?too high?, it is also too different across countries that belong to a monetary union. In this paper we i) document this increasing heterogeneity, ii) try to explain it and iii) draw fr...Read more...

Journal article

The Economic Journal:

Immigration, housing discrimination and employment

We use a new data set on Italy and a novel identification strategy to analyse the relationship between migrants' employment status and the percentage of non-Italians living nearby. Our data contain information at the ver...Read more...

CEP discussion paper

Share capitalism and worker wellbeing

We show that worker wellbeing is not only related to the amount of compensation workers receive but also how they receive it. While previous theoretical and empirical work has often been pre-occupied with individual perf...Read more...

CEP discussion paper

Financial constraints in search equilibrium: Mortensen and Pissarides meet Holmstrom and Tirole

The Great Recession has indicated that firms' leverage and access to finance are important for hiring and firing decisions. It is now empirically established that bank lending is correlated to employment losses when cred...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Local Economic Conditions and the Nature of New Housing Supply

We present a modified open monocentric city model that assumes that land is available for conversion into new housing throughout the city. The model predicts that positive local income shocks (i) increase the city?s shar...Read more...

Journal article

The Economic Journal:

Bankers and their bonuses

We analyse the role of financial sector workers in the huge rise of the share of earnings going to those at the very top of the pay distribution in the UK. Rising bankers' bonuses accounted for two-thirds of the increase...Read more...

CEP occasional paper

Medium and long run prospects for UK growth in the aftermath of the financial crisis

The productivity performance of the UK economy in the period 1990-2007 was excellent. Based entirely on pre-crisis data, and using a two-sector growth model, I project the future growth rate of GDP per hour in the market...Read more...

CEP discussion paper

Neighbors, Knowledge, and Nuggets: Two Natural Field Experiments on the Role of Incentives on Energy Conservation

There is increasing research on the exogenous impact of descriptive social norms on economic behavior. The research to date has a number of limitations: 1) it has not de-coupled the impact of the norm and the knowledge r...Read more...

CEP discussion paper

The financial resource curse

This paper presents a model of financial resource curse, i.e. episodes of abundant access to foreign capital coupled with weak productivity growth. We study a two-sector, tradable and non-tradable, small open economy. Th...Read more...

CEP occasional paper

Bankers and their bonuses

The pay of financial sector workers (?bankers?) is a focus of public concern especially since the onset of the financial crisis. We document the remarkable rise in the share of aggregate pay going to those at the very to...Read more...

CEP discussion paper

Survive Another Day: Using Changes in the Composition of Investments to Measure the Cost of Credit Constraints

We introduce a novel empirical strategy to measure credit shocks. Theoretically, we show that credit shocks reduce the value of long term investments relative to short term ones. Under the (conservative) assumption that ...Read more...

CEP discussion paper

Long and Short-Term Effects of the Financial Crisis on Labour Productivity, Capital and Output

The behaviour of labour productivity in the United Kingdom since the onset of the recession in early 2008 constitutes a puzzle. Over four years after the recession began labour productivity is still below its previous pe...Read more...

CEP occasional paper

Has the growth of real GDP in the UK been overstated because of mis-measurement of banking output?

If official figures overstated the growth of banking output in the UK in the recent boom, does this mean that GDP growth was overstated too? The answer is no. It is truer to say that if banking output was overstated then...Read more...

SERC/Urban and Spatial Programme Discussion Paper

The Causal Effect of Credit Guarantees for SMEs: Evidence from Italy

We evaluate the effectiveness of a partial credit guarantee program implemented in a large Italian region using unique microdata from a broad set of firms. Our results show that the policy was effective to the extent tha...Read more...

CEP discussion paper

Optimal Policy for Macro-Financial Stability

In this paper we study whether policy makers should wait to intervene until a financial crisis strikes or rather act in a preemptive manner. We study this question in a relatively simple dynamic stochastic general equili...Read more...

CentrePiece article

The doomsday cycle turns: who's next?

Peter Boone and Simon Johnson believe that there are more and worse financial crises to come....Read more...

CEP discussion paper

Reserve Accumulation, Growth and Financial Crises

We present a model that reproduces two salient facts characterizing the international monetary system: i) Faster growing countries are associated with lower net capital inflows and ii) Countries that grow faster accumula...Read more...

CEP discussion paper

Capital Controls or Exchange Rate Policy? A Pecuniary Externality Perspective

In the aftermath of the global financial crisis, a new policy paradigm has emerged in which old-fashioned policies such as capital controls and other government distortions have become part of the standard policy toolkit...Read more...

CEP report

Fiscal consolidation during a depression

In 2009-10, the UK's budget deficit was about 11 per cent of GDP. A credible plan for fiscal consolidation was introduced in the UK over the fiscal years 2011-12 to 2016-17. In this paper, we assess the impact of the sca...Read more...

CentrePiece article

Policy uncertainty: a new indicator

The damaging impact of economic uncertainty on growth has been reasonably well studied - but what happens when there is uncertainty about economic policy-making? Nicholas Bloom and colleagues have developed a measure of ...Read more...

CEP discussion paper

Paying for Performance: Incentive Pay Schemes and Employees' Financial Participation

We present new comparable data on the incidence of performance pay schemes in Europe and the USA. We find that the percentage of employees exposed to incentive pay schemes ranges from around 10-15 percent in some Europea...Read more...

CEP discussion paper

Portfolio Allocation and International Risk Sharing

Recent contributions have shown that it is possible to account for the so-called consumption-real exchange anomaly in models with goods market frictions where international asset trade is limited to a riskless bond. In t...Read more...

CEP discussion paper

Financial Crises and Macro-Prudential Policies

Stochastic general equilibrium models of small open economies with occasionally binding financial frictions are capable of mimicking both the business cycles and the crisis events associated with the sudden stop in acces...Read more...

CEP discussion paper

Revisiting Overborrowing and Its Policy Implications

This paper analyzes quantitatively the extent to which there is overborrowing (i.e., inefficient borrowing) in a business cycle model for emerging market economies with production and an occasionally binding credit const...Read more...

Book

The Future of Finance
The LSE Report

This book presents a novel approach to the reform of the world’s financial system, starting with the basic question, what is a financial system for? It shows that the existing system has become far more complic...Read more...

CEP discussion paper

The long-term effect of digital innovation on bank performance: an empirical study of SWIFT adoption in financial services

We examine the impact on bank performance of the adoption of SWIFT, a network-based technological infrastructure for worldwide interbank telecommunication. We construct a new longitudinal dataset of 6,848 banks in 29 cou...Read more...

CEP discussion paper

Towards a New Architecture for Financial Stability: Seven Principles

In this paper we use insights from organizational economics and financial regulation to study the optimal architecture of supervision. We suggest that the new architecture should revolve around the following principles: ...Read more...

CEP discussion paper

Crisis? What Crisis? Currency vs. Banking in the Financial Crisis of 1931

This paper examines the role of currency and banking in the German financial crisis of 1931 for both Germany and the U.S. We specify a structural dynamic factor model to identify financial and monetary factors separately...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Housing Markets and the Financial Crisis of 2007-2009: Lessons for the Future

An unsustainable weakening of credit standards induced a US mortgage and housing bubble whose consumption impact was amplified by innovations altering the collateral role of housing. In countries with more stable credit ...Read more...

CEP report

Bankers' Pay and Extreme Wage Inequality in the UK

It is well known that the distribution of income in the United Kingdom has widened considerably in the last three decades. This rise has been a result of a widening at both the top and bottom of the wage distribution. Mo...Read more...

CEP discussion paper

Trading Places: Employers, Unions and the Manufacture of Voice

Using nationally representative workplace data for Britain we show that over the last quarter century union voice ? especially union-only voice ? has been associated with poorer climate, more industrial action, poorer fi...Read more...

CEP discussion paper

Union Decline in Britain

This paper investigates the demise of unionisation in British private sector workplaces over the last quarter century. We show that dramatic union decline has occurred across all types of workplace. Although the union wa...Read more...

Journal article

Journal of Education and Work:

Competition for private and state school teachers

We analyse the role of private schools in the teachers? labour market. Private schools employ an increasingly‐disproportionate share of teachers in Britain, relative to the number of their pupils. Their teachers ar...Read more...

Manpower Human Resource Lab paper

Temporary Agency Workers and Workplace Performance in the Private Sector

Using nationally representative workplace data we identify the correlates of temporary agency working (TAW) in the private sector in Britain and its association with workplace labour productivity and financial performanc...Read more...

CEP discussion paper

Economics and Politics of Alternative Institutional Reforms

We compare the economic consequences and political feasibility of reforms aimed at reducing barriers to entry (deregulation) and improving contractual enforcement (legal reform). Deregulation fosters entry, thereby incre...Read more...

CEP discussion paper

Consumption and Real Exchange Rates with Incomplete Markets and Non-Traded Goods

This paper addresses the consumption-real exchange rate anomaly. International real business cycle models based on complete financial markets predict a unitary correlation between the real exchange rate and the ratio of ...Read more...

CEP discussion paper

International Financial Integration and Entrepreneurship

We explore the relation between international financial integration and the level of entrepreneurial activity in a country. Using a unique data set of approximately 24 million firms in nearly 100 countries in 1999 and 20...Read more...

CEP discussion paper

Dynastic Management

The most striking difference in corporate-governance arrangements between rich and poor countries is that the latter rely much more heavily on the dynastic family firm, where ownership and control are passed on from one ...Read more...

CEP discussion paper

Financial Globalization and Exchange Rates

The founders of the Bretton Woods System sixty years ago were primarily concerned with orderly exchange rate adjustment in a world economy that was characterized by widespread restrictions on international capital mobili...Read more...

CEP discussion paper

Corporate R&D and Productivity in Germany and the United Kingdom

This paper analyzes differences in R&D spending and in the impact of R&D on productivity between German and UK firms. We confirm that German firms spend significantly larger amounts on R&D than their UK counterparts, eve...Read more...

CEP discussion paper

Investment, R&D and Financial Constraints in Britain and Germany

This paper tests for the importance of cash flow on investment in fixed capital and R&D using firm-level panel data in two countries between 1985 and 1994. For German firms, cash flow is not informative in simple econome...Read more...

CEP discussion paper

Financial Integration and Asset Returns

The paper investigates the impact of financial integration on asset return, risk diversification and breadth of financial markets. We analyse a three-country macroeconomic model in which (i) the number of financial asset...Read more...

Book

The State of Working Britain

What are the prospects for the British labour market at the start of the new century? Since the 1960s Britain has experienced a series of profound changes affecting the way of life and work. This overview and analys...Read more...