VoxEU @ CEPR

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VoxEU – CEPR’s policy portal - promotes "research-based policy analysis and commentary by leading economists". VoxEU columns cover all fields of economics broadly defined and are widely read.

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In New Zealand, the Māori Advisory Committee advises on whether registration of a trademark incorporating Māori signs is likely to be offensive. This raises the cost of entry in New Zealand but increases the value of existing trademarks there.
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The figure plots event-study coefficients from a linear probability model where the outcome equals one if the trademark is successfully registered and zero if abandoned, cancelled, rejected, or withdrawn. Across food, tourism, cosmetics, and luxury goods, indigenous language and heritage increasingly anchor premium market positions, but when it comes to trademarks, few jurisdictions have developed national rules to explicitly protect and preserve traditional knowledge. This column looks at the case of New Zealand, where the Māori Advisory Committee advises the Commissioner of Trademarks on whether registration of a trademark incorporating Māori signs is likely to be offensive to Māori. This embedded collective governance mechanism raises the cost of new entry in New Zealand but increases the value of existing trademarks held there.
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Hakim El Karoui & Marc Reverdin make the case for a Mediterranean Community of Human Capital, built around joint investment in training, skills, and mobility, thereby expanding the skills base and reducing brain drain.
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Europe's shrinking workforce is weighing on its productivity and welfare systems. Meanwhile, its southern Mediterranean neighbours currently produce growing numbers of graduates whom domestic labour markets cannot absorb. This column makes the case for a Mediterranean Community of Human Capital, built around joint investment in training, skills, and mobility, which could expand the skills base, reduce brain drain, and rebuild trust with Europe’s closest neighbours.
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Olivier Accominotti, Jason Cen, David Chambers, and Victor Degorce argue that covered interest parity deviations are not a recent phenomenon and have, in fact, been the norm over the past 60 years, with the notable exception of the years immediately preceding the GFC.
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This figure plots the 30-day moving average of the three-month US dollar basis for the British pound between 1968 and 2025, measured in basis points. The USD basis is defined as the difference between the three-month US dollar offshore Eurocurrency deposit rate and the synthetic USD interest rate obtained when swapping British pounds into US dollars. For visual clarity, the vertical axis is truncated at ±60 basis points.
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The case of Bhutan shows that cultural norms matter for macroeconomic development. Four decades of data show that rapid income growth remains weakly associated with measured happiness, and that only by embedding the wellbeing measure in local cultural norms does it become effective.

Interest in the role of cultural norms, institutions, and development has resurfaced in recent years especially post the 2024 Nobel Prize in Economics. This column revisits Bhutan, which has pursued ‘gross national happiness’ rather than GDP since the 1970s. Four decades of data show that rapid income growth remains only weakly associated with measured happiness, even as multidimensional wellbeing has continued to rise alongside growth. The broader lesson is that a wellbeing measure becomes effective only if it is embedded in local cultural norms and given institutional teeth, showcasing the importance of cultural norms to economic development.
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S Maria Bonin, S Darougheh, & A Kuchler find evidence that the adoption of AI is impacting the Danish labour market, even though the effect is not visible in aggregate statistics. They show that early adopters of AI fall behind their own pre-adoption employment trend.
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Log employment (full-time equivalents) of firms first using AI in 2023 (left panel) or 2024 (right panel), relative to firms reporting no AI use, each measured against a firm-specific linear trend; within three-digit industry × month. Left panel: trend estimated on 2020–2021, so 2022 is out of sample; indexed to January 2023. Right panel: first-time 2024 adopters compared with firms reporting no AI use through 2024; trend estimated on 2021–2022; indexed to January 2024. Shaded areas are 95% confidence bands. The vertical axis is in log points (−0.1 ≈ −10%). Survey-weighted. Policymakers are asking whether generative AI is reshaping labour demand, and the literature has found mixed results so far. This column links Denmark’s official IT-use survey to monthly employer–employee records and compares firms that started using AI in 2023 with those that did not. Early adopters fall behind their own pre-adoption employment trend. The decline is most visible in AI-exposed jobs and among new hires, and only significant among small firms. The results indicate that AI is affecting the labour market, even though the effect is not visible in the aggregate statistics.
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Worker-managed firms are a remedy for rising income inequality & protect social cohesion by increasing employees' bargaining power & providing an enhanced sense of self-worth. Data suggest well-designed co-ops compete with conventional firms in free markets with no evidence of a productivity gap.

Rising income inequality in Western high-income countries threatens democratic governance and social cohesion, and AI risks making it worse. Drawing on a forthcoming book, this column argues for worker-managed firms as a durable remedy. With no external owners taking profits, worker cooperatives protect against the rising bargaining power of employers and provide an enhanced sense of self-worth and self-determination for employees. Furthermore, the data suggest that well-designed worker cooperatives compete with conventional firms in free markets with no evidence of a productivity gap. Because they are underprovided by the market, it calls for government action to support worker cooperatives.
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S Reyes Ortega, K Freeman, P Hernando-Kaminsky, J Huber, & @paolomauroecon.bsky.social use data from 150 economies to study how venture capital financing differs across countries. Most of the cross-country gap is associated with how many startups enter the pipeline rather than their funding.

This figure compares the average sectoral distribution of VC volume within countries across high-income and low- and middle-income countries over 2012–2023. For each income group, the figure reports the average share of total VC volume accounted for by each selected sector, weighted by country GDP. The first three sectors—IT, Services–R&D, and Manufacturing–Chemicals and Pharmaceuticals—are sectors in which the average VC share is higher in high-income countries, whereas the remaining three sectors—Wholesale and Retail, Financial Services, and Transportation and Logistics—are sectors in which the average VC share is higher in low- and middle-income countries. Existing views on what venture capital finances and how its markets are structured are primarily shaped by the experience of the US and a few other high-income economies. This column presents evidence covering nearly 270,000 venture capital-backed startups in over 150 economies to provide a more complete picture. Venture capital markets differ across countries in size and also in kind. At lower levels of economic development, the composition tilts away from knowledge intangibles towards organisational intangibles. Yet differences in what venture capital finances tell only part of the story. Most of the cross-country gap in venture capital activity is associated with how many startups enter the funding pipeline rather than how much each raises.
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During banking crises, nonbank financial institutions contract syndicated lending relative to banks but expand corporate bond underwriting. For firms with access to bond markets, relationships with nonbank underwriters can help preserve market-based financing.
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Left panel: corporate bond issuance as a share of corporate bonds and syndicated loans one year before and in the first year of country-specific banking crises, the GFC, and the COVID-19 shock. Right panel: volume-weighted NBFI share of corporate bond underwriting in borrower-country-years without and with a systemic banking crisis. Nonbank financial institutions are often seen as procyclical lenders, cutting credit more sharply than banks during stress, while bond markets can substitute for bank lending when credit supply contracts. This column brings these perspectives together and argues that this cyclicality depends on the function intermediaries perform. During banking crises, nonbank financial institutions contract syndicated lending relative to banks but expand corporate bond underwriting. For firms with potential access to bond markets, we find that relationships with nonbank underwriters can therefore help preserve market-based financing when bank credit is impaired.
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Ruiqi Sun & Daniel Trefler show that AI makes digital services dramatically more attractive, increasing their user base at home and abroad. But when governments restrict the movement of data across borders, the gains from AI are halved.
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The curves show the cumulative distribution of app-level foreign user shares in 2020 through the 60th percentile. Small apps are those at or below the median number of total users. AI is transforming digital services, and mobile apps, which routinely reach users far beyond their home markets, show just how global that transformation has become. This column shows that AI makes these products dramatically more attractive, increasing their user base at home and abroad by more than threefold. But when governments restrict the movement of data across borders, the gains from AI are halved. This creates a genuine policy tension. Rules designed to protect privacy, national security, and democratic institutions can also make it harder to build better products and spread the gains from new technologies.
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When work tasks are classified by what they require of a human, Benjamin Verschuere & Angus Cameron show that AI both substitutes and complements work. Highly substitutable work has grown 3.3 pp/year more slowly since 2021 and complemented work 3.3pp faster.
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The figure shows every US occupation mapped by its substitution and complement shares. Applied to the full US occupational database, employment-weighted work comes out 32% substitution, 15% complement, and 53% inert. Estimates of AI's employment effect disagree in size and even in sign. This column argues the disagreement is built into the measurement: AI substitutes for humans on some tasks and complements humans on others, and any single exposure index nets these opposing forces into one number. Classifying US work tasks by what they require of a human and letting the two forces enter separately, both effects appear at once: since 2021, highly substitutable work has grown 3.3 percentage points a year more slowly, and complemented work 3.3 points faster. The adjustment runs primarily through hiring rather than firing, and it lands on the young.
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US-Israeli military intervention in Iran sharply reoriented mobilisation away from anti-government protest and toward pro-government activity. Overt foreign intervention can make sovereignty politically valuable to incumbent governments.
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The figure plots the average number of weekly protests per county in Iran. Military intervention may be undertaken to weaken a hostile regime and strengthen the position of its opponents. This column argues that evidence from the 2026 US-Israeli strikes on Iran points to a different outcome: the strikes left total protest levels broadly unchanged but sharply reoriented mobilisation away from anti-government protest and toward pro-government activity. The findings suggest that overt foreign intervention can make sovereignty politically valuable to incumbent governments by making domestic opposition easier to portray as aligned with an external adversary.
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For 1,300+ years, China chose top officials through written exams. But did merit alone determine success?

In the latest #VoxTalks Economics, Ruixue Jia joins Tim Phillips to discuss research with Ying Bai on how exam performance and networks shaped careers.

🎧Listen now: ow.ly/mN5V50ZTShB

#EconSky

For 1,300+ years, China chose top officials through written exams. But did merit alone determine success? In the latest #VoxTalks Economics, Ruixue Jia joins Tim Phillips to discuss research with Ying Bai on how exam performance and networks shaped careers. 🎧Listen now: https://ow.ly/mN5V50ZTShB #EconSky
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