Results

Journal article

Journal of Human Resources:

Fiscal and education spillovers from charter school expansion

Do charter schools drain resources and high-achieving peers from noncharter schools? We provide new evidence on the fiscal and educational consequences of charter expansion for noncharter students in Massachusetts, which...Read more...

CEP discussion paper

Firm-level technology adoption in times of crisis

We investigate the diffusion of frontier technologies across German firms before and during the Covid-19 crisis. Our analysis tracks the nature, timing, and pandemic-related motivations behind technology investments, usi...Read more...

Blog

Bruegel:

Pitfalls to avoid as the EU ramps up defence investment

The European Union's push to rearm in the face of growing external threats and the increasing disengagement of the United States has, so far, been primarily a push to spend more on defence and to find ways to facilitate ...Read more...

Blog

Vox EU:

Design-based fiscal stimulus transfers: Evidence and macro implications

In recent years, and during Covid-19 in particular, many countries have experimented with innovative approaches to fiscal stimulus. This column reports on an experiment in France in which individuals were given a debit c...Read more...

Blog

The Conversation:

Why building new towns isn't the answer to the UK's housing crisis

The UK's new government is intent on building 1.5 million homes over the next five years. It's all part of the plan to address the housing supply and affordability crisis. Many of these homes are to be built in the form...Read more...

Journal article

Journal of Business Venturing:

A framework for investigating new firm entry: the (limited) overlap between informal-formal and necessity-opportunity entrepreneurship

We analyse entrepreneurial entry along the dimensions of informal-formal and necessity-opportunity entrepreneurship, distinguishing between them yet considering them jointly. While the dominant view in the literature con...Read more...

Journal article

Labour Economics:

The effect of preserving job matches during a crisis

It is generally difficult to measure the importance of preserving worker-firm relationships, particularly for low-wage jobs that involve general skills. The COVID-19 pandemic led to the sudden and seemingly temporary dis...Read more...

CEP Covid-19 analysis

The self-employment trap?

The seventh LSE-CEP survey of the self-employed was undertaken in June 2023. The results revealed that the self-employed are still in the doldrums and their incomes and activity have not resumed to pre-pandemic levels. T...Read more...

CEP discussion paper

Dissecting the sinews of power: international trade and the rise of Britain's fiscal-military state, 1689-1823

We evaluate the role of taxes on trade in the development of imperial Britain's fiscal-military state. Influential work, e.g., Brewer's (1989) Sinews of Power, attributed increased fiscal capacity to the taxation of dome...Read more...

Blog

LSE IQ:

How can we make homes more affordable? (Podcast)

In this LSE IQ episode on how we can make homes more affordable, Christian Hilber shares the reasons behind the UK's current housing affordability crisis, explaining the obstacles to building more houses as a way of over...Read more...

CEP Covid-19 analysis

From Covid-19 to collapse? The self-employed and the cost of living crisis

The sixth LSE-CEP survey of the self-employed was undertaken in November 2022 and found that the downward trend in income levels of the self-employed reported in May 2022 has continued. The cost of living crisis is hitti...Read more...

Blog

Economics Observatory:

Is inflation avoidable?

Inflation in the UK is at a 40 year high, with prices rising across the economy. Shoppers can look for cheaper products, but many are already buying the lowest-cost options and the prices of those bargains are going up f...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

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...

CEP discussion paper

Unequal learning and labour market losses in the crisis: consequences for social mobility

The unequal learning and labour market losses arising in the UK due to the Covid-19 pandemic are used to assess the consequences for social mobility. Labour market and learning losses have been more pronounced for people...Read more...

Blog

LSE British Politics and Policy:

Budget 2020: a bold response to coronavirus, but more must be done if it becomes widespread in the UK

While the 2020 Budget offers an overall adequate response to the challenges currently posed by coronavirus, there are three issues that need to be addressed further, especially as the outbreak becomes more widespread, wr...Read more...

Journal article

Fiscal Studies:

Financing local police spending in England and Wales: fiscal federalism in practice

Since 1995, police forces in England and Wales have been able to raise revenues locally to supplement grants from central government. We analyse the variation across police force areas in locally raised police revenues o...Read more...

CEP election analysis

Housing

Housing affordability is a key concern of an ever-larger fraction of UK voters who are crammed into artificially limited space. It also underlies the sense of being shut out of prosperity and unable to escape declining l...Read more...

Journal article

China and World Economy:

Fiscal subsidy policy on home appliances: its effects on domestic consumption and exports in China

This paper evaluates the effects of the Home Appliances Going to the Countryside (HAGC) policy, a fiscal subsidy program implemented in China to boost private consumption of home appliances in rural areas from 2007 to 20...Read more...

Journal article

The Quarterly Journal of Economics:

Who becomes an inventor in America? The importance of exposure to innovation

We characterize the factors that determine who becomes an inventor in the United States, focusing on the role of inventive ability (?nature?) versus environment (?nurture?). Using deidentified data on 1.2 million invento...Read more...

CEP discussion paper

Fiscal and education spillovers from charter school expansion

The fiscal and educational consequences of charter expansion for non-charter students are central issues in the debate over charter schools. Do charter schools drain resources and high-achieving peers from non-charter sc...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

American Economic Review:

The sovereign-bank diabolic loop and esbies

We propose a simple model of the sovereign-bank diabolic loop, and establish four results. First, the diabolic loop can be avoided by restricting banks' domestic sovereign exposures relative to their equity. Second, equi...Read more...

CEP discussion paper

The sovereign-bank diabolic loop and ESBies

We propose a simple model of the sovereign-bank diabolic loop, and establish four results. First, the diabolic loop can be avoided by restricting banks domestic sovereign exposures relative to their equity. Second, equit...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 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

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 US election analysis

Inequality and opportunity: the return of a neglected debate

During this election period many Americans are feeling angry towards the very rich, especially those working in the financial sector, who helped cause the Great Recession and yet were bailed out by the government. Increa...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 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

Growth and productivity: UK economic performance since 1997

A common view is that the performance of the UK economy between 1997 and 2010 under Labour was very weak and that the current economic problems are a consequence of poor policies in this period. In this report, we analys...Read more...

CEP report

The political economy of the Greek debt crisis: a tale of two bailouts

We review the events that led to the May 2010 and July 2011 bailout agreements. We interpret the bailouts as outcomes of political-economy equilibria. We argue that the second bailout was not on the Pareto frontier and s...Read more...

CEP discussion paper

The Household Effects of Government Spending

This paper provides new evidence on the effects of fiscal policy by studying, using household-level data, how households respond to shifts in government spending. Our identification strategy allows us to control for time...Read more...

CEP discussion paper

Fiscal Multipliers over the Business Cycle

This paper illustrates why fiscal policy becomes more effective as unemployment rises in recessions. The theory is based on the equilibrium unemployment model of Michaillat (forthcoming), in which jobs are rationed in re...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Tax Competition Among Local Governments: Evidence from a Property Tax Reform in Finland

This paper uses a Finnish policy intervention to study tax competition among local governments. Changes in the statutory lower limits to the property tax rates are used as a source of exogenous variation to estimate the ...Read more...

CEP discussion paper

Trade Crisis? What Trade Crisis?

We provide an analysis of the 2008-2009 trade collapse using microdata from a small open economy, Belgium. First, we find that changes in firm-country-product exports and imports occurred mostly at the intensive margin: ...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Is Fiscal Decentralization Harmful for Economic Growth? Evidence from the OECD Countries

The global drive towards decentralization has been increasingly justified on the basis that greater transfers of resources to subnational governments are expected to deliver greater efficiency in the provision of public ...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 discussion paper

Do Oil Windfalls Improve Living Standards? Evidence from Brazil

We use variation in oil output among Brazilian municipalities to investigate the effects of resource windfalls. We find muted effects of oil through market channels: offshore oil has no effect on municipal non-oil GDP or...Read more...

CEP discussion paper

Can Family-Support Policies Help Explain Differences in Working Hours Across Countries?

It has been suggested in the literature that taxes and subsidies play an important role in explaining the differences in working hours across countries. In this paper I test whether public programmes for family support p...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Does Decentralization Matter for Regional Disparities? A Cross-Country Analysis

This paper looks at the relationship between fiscal and political decentralization and the evolution of regional inequalities in a panel of 26 countries ? 19 developed and 7 developing ? for the period between 1990 and 2...Read more...

CEP discussion paper

On the International Dimension of Fiscal Policy

This paper analyses the international dimension of fiscal policy using a small open economy framework in which the government finances its spending by levying distortionary taxation and issuing non-state-contingent debt....Read more...

CEP discussion paper

Seigniorage

In this paper I analyse four different but related concepts, each of which highlights some aspect of the way in which the state acquires command over real resources through its ability to issue fiat money. They are (1) s...Read more...

CEP discussion paper

Inflation, Inequality and Social Conflict

This paper presents a political economy model of inflation as a result of social conflict. Agents are heterogeneous in terms of income. Agents? income levels determine their ability to hedge against the effects of inflat...Read more...

CEP discussion paper

The Fallacy of the Fiscal Theory of the Price Level

It is not common for an entire scholarly literature to be based on a fallacy, that is, 'on faulty reasoning; misleading or unsound argument'. The 'fiscal theory of the price level', recently re-developed by Woodford,...Read more...