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Looking back from 2030 over the previous 10 years shows that many challenges have only partially been addressed. Much of the decade countries all over the world were struggling to get back on their feet following a global pandemic that wiped out many gains in jobs, earnings, and living standards painfully created previously. Public institutions have remained more important than ever but have been weakened by slow growth, faltering demographics, climate change, and other challenges. At the same time, opportunities from new technologies have only slowly benefited a larger part of the (working) population. New initiatives stemming from civil society and the private sector are only slowly emerging but have shown first signs of making a bigger impact by 2030. Building on a new policy consensus that puts sustainability and resilient societies rather than short-term profits at the center of collective action, signs of optimism are finally re-emerging gradually.

AI is transforming labor markets around the world. Existing research has focused on advanced economies but has neglected developing economies. Different impacts of AI on labor markets in different countries arise not only from heterogeneous occupational structures, but also from the fact that occupations vary across countries in their composition of tasks. We propose a new methodology to translate existing measures of AI impacts that were developed for the US to countries at various levels of economic development. Our method assesses semantic similarities between textual descriptions of work activities in the US and workers' skills elicited in surveys for other countries. We implement the approach using the measure of suitability of work activities for machine learning provided by Brynjolfsson et al. (2018) for the US and the World Bank's STEP survey for Lao PDR and Viet Nam. Our approach allows characterizing the extent to which workers and occupations in a given country are subject to destructive digitalization, which puts workers at risk of being displaced, in contrast to transformative digitalization, which tends to benefit workers. We find that workers in Lao PDR are less likely than in Viet Nam to be in the "machine terrain", where workers will have to adapt to occupational transformations due to AI and are at risk of being partially displaced. Our method based on semantic textual similarities using SBERT is advantageous compared to approaches transferring AI impact scores across countries using crosswalks of occupational codes.

Dialogue des terrains et des disciplines au sein des sciences sociales, cet ouvrage s’inscrit dans une volonté d’élaboration collective d’une réflexion institutionnaliste sur les pays en développement. Il est le fruit d’un séminaire de recherche Institutions et développement (Matisse-CNRS, Paris, 2001-2006). Il souhaite permettre au lecteur de s’orienter dans les travaux d’économie du développement contemporaine (théories de la croissance, anti-développement) et parmi les discours des institutions financières internationales. Ceci passe par un travail de clarification des positions théoriques et idéologiques, face à la vague montante du néo-institutionnalisme en sciences sociales. Au-delà de contributions purement théoriques, l’ancrage en économie politique est clairement affirmé dans des textes analysant les changements institutionnels à l’œuvre dans des pays ou régions particuliers (Afrique de l’Ouest, La Réunion, le Mali, la Russie, l’Iran et l’Équateur). La question de la souveraineté des États s’y trouve nécessairement soulevée. Vues d’ailleurs, de nouvelles questions apparaissent, qui demandent un travail conceptuel nourri par des références situées en-dehors de la discipline économique auxquelles ce livre souhaite ouvrir. En effet, les pays dits du Sud sont des lieux d’élaboration politique, économique et sociale singuliers que les économistes européens gagnent à connaître et à réfléchir afin de penser la mondialisation et ses effets en connaissance de cause.

« An economic transaction is a solved political problem. Economics has gained the title of queen of the social sciences by choosing solved political problems as its domain. »(Lerner, 1972 : 259) Les économies développées sont caractérisées par une grande diversité quant à leur environnement institutionnel : le marché financier transforme l’épargne en investissement selon des structures variées, tandis que la détermination du salaire et l’ajustement quantita...

The impact of robots on employment and trade is a highly discussed topic in the academic And public debates. Particularly, there are concerns that automation may threat jobs in emerging countries given the erosion of the labour cost advantage. We provide evidence on the effects of robots on worldwide employment, including emerging economies. To instrument the use of robots, we introduce an index of technical progress, defined as the ability of robots to carry out different tasks. Robots turn out to have a significantly negative impact on worldwide employment. While it is small in developed countries, for emerging economies it amounts to -11 per cent between 2005 and 2014. However, here, there appear positive spillovers especially from robotisation in manufacturing on employment outside manufacturing. Furthermore, we assess cross-country effects, finding that robots in developed countries decrease offshoring just as employment in emerging economies. Die Auswirkungen von Robotern auf Beschäftigung und Handel sind in der akademischen und öffentlichen Debatte ein viel diskutiertes Thema. Insbesondere gibt es Bedenken, dass die Automatisierung Arbeitsplätze in Schwellenländern gefährden könnte, da der Arbeitskostenvorteil nachlässt. Wir liefern Belege für die Auswirkungen von Robotern auf die weltweite Beschäftigung, einschließlich der Schwellenländer. Um den Einsatz von Robotern zu instrumentieren, führen wir einen Index des technischen Fortschritts ein, definiert als die Fähigkeit von Robotern, verschiedene Aufgaben auszuführen. Roboter wirken sich signifikant negativ auf die weltweite Beschäftigung aus. Während der Effekt in Industrieländern klein ist, beträgt er in Schwellenländern zwischen 2005 und 2014 - 11 Prozent. Hier zeigen sich jedoch positive Spillover-Effekte insbesondere durch die Robotisierung im Verarbeitenden Gewerbe auf die Beschäftigung außerhalb des Verarbeitenden Gewerbes. Darüber hinaus untersuchen wir länderübergreifenden Auswirkungen. Dabei stellen wir fest, dass Roboter in Industrieländern zu weniger Offshoring führen und sich so negativ auf die Beschäftigung in Schwellenländern auswirken.

Many advanced economies have recently embarked on fiscal austerity. As this has come at a time of high and rising income disparities, policy-makers have fretted about the inequality effects of fiscal consolidations. We shed new light on this issue by empirically investigating the (composition) effects of tax-based consolidations on income inequality, output and labour market conditions for a sample of 16 OECD countries over the period 1978-2012. We find that tax-based consolidations reduce income inequality, but at the cost of weaker economic activity. However, tax composition does matter. Indirect taxes reduce income inequality by more than direct taxes, possibly due to the operation of a positive labour supply channel. Higher indirect taxes increase the price of the consumption basket and create incentives for agents to increase their labour supply. We find this effect to be stronger for middle aged women. Looking at specific instruments, general consumption taxes and personal taxes are the most suited to reduce inequality while at the same time minimizing the equity-efficiency trade-off.

This article presents an original spatial methodology based on a network analysis approach in order to identify and to track spatial similarities among economic activities as well as to analyse their interdependence. Traditionally, such interdependence is analysed using input-output matrices (IO) that track economic flows across sectors. However, models based on IO do not allow to analyse spatial interdependence. In our approach, instead, we make use of local employment patterns. In particular, using sectoral employment of 8091 Italian municipalities across 18 economic activities, our approach allows to identify spatial inter-linkages in terms of employment patterns. By comparing such local employment patterns, our methodology shows inter-linkages among activities, which are important for understanding the transmission of exogenous shocks. Our analysis highlights similarities among economic activities, and allows to identify central activities (hubs) and their relationship with each other. Moreover, simulating the spread of an exogenous shock through the economic structure allows us to identify important activities not only in economic terms but also in terms of centrality and connectivity.

The economic meltdown since 2008-9 has created disinflation, and even deflation in some countries in the Euro-area, in a period with large debt overhang, creating the condition for a continuing financial market stress in the Euro-area. As disinflation and deflation push up the real interest rate, while growth and income declines, the leveraging problem becomes more severe and the economy risks shifting into a regime with high insolvency risk, high financial stress, rising credit spreads, possibly accompanied by strong adverse macroeconomic feedback loops. Investigating the consequences of those magnifying feedback loops, given the debt deflation, we demonstrate the possibility of unstable dynamics and downward spirals in the presence of regime-dependent macro feedback loops, using a theoretical model with decentralized matching mechanisms on both labor and financial markets. To explore the amplifying linkages between deflation, output, labor and financial markets, we employ a new solution procedure called NMPC to solve our models variants for out-of-steady-state dynamics. We empirically explore deflationary trends in Europe and employ a Global VAR (GVAR) model for a large euro area macro data set to estimate the impact of deflation on output. Moreover, we use a four variable Multi-Regime VAR (MRVAR) model with regime dependent IRs to study deflationary as well as well as the financial risk drivers in a MRVAR setting. New measures for financial risk drivers are employed and multi-regime IRs for output, inflation rates, interest rates and financial stress are explored. We also study regime changes in central macro relationships such as regime change in the credit - output link, the Phillips curve and in Okun’s law.

The authors of this paper formulate a disequilibrium AS-AD model based on sticky wages and prices, perfect foresight of current inflation rates and adaptive expectations concerning the inflation climate in which the economy operates. The model consists of a wage and a price Phillips curves, a dynamic IS curve as well as a dynamic employment adjustment equation and a Taylor-rule-type interest rate law of motion. Through instrumental variables GMM system estimation with aggregate time series data for the U.S. and the euro area economies, the authors obtain structural parameter estimates which support the specification of their theoretical model and show the importance of the inflationary climate, as well as of the Blanchard-Katz error correction terms, and indirectly of income distribution, in the dynamics of wage and price inflation in the U.S. and the euro area economies.

We estimate a dynamic, intertemporal optimisation model that mimics features of European labour markets, such as sticky nominal wages and sluggish adjustment of employment to shocks for 15 OECD countries. The estimates include a measure for the degree of labour market sluggishness that compares well with standard indicators of product and labour market regulation. Calibration of the model on a selected country sample confirms its explanatory power in comparison with the standard competitive markets model. In a second step, the measure for labour market sluggishness is used as a policy variable and model variants are simulated in order to assess the extent to which the countries would have performed better with more flexible labour markets. These policy experiments show that an increase in labour market flexibility reduces the volatility of consumption relative to production, improves intertemporal efficiency but entails higher employment risk.

Chapter 1 provides an overview and assessment of the price competitiveness and export performance of the euro area and the larger euro area countries, as well as an evaluation of how standard equations have been able to explain actual export developments. Chapter 2 carries out a constant market share analysis for the euro area and thereby sheds light on the reasons for movements in aggregate export market shares by looking at the sectoral and geographical composition of euro area exports. Chapter 3 looks at the evolution of the technological competitiveness of the euro area and major competitors – proxied by patenting activity and R&D expenditure – and analyses some structural indicators of competitiveness using survey data. Chapter 4 then looks at the impact of FDI on competitiveness and export performance. Finally, Chapter 5 summarises the main findings of the report, but also critically evaluates their importance and implications.

This paper analyses trends in sectoral specialisation in the EU and concludes the following: 1) The European production structure appears more homogenous than that of the US. 2) While sectoral specialisation has shown a slight increase in some smaller euro area countries towards the end-1990s, it is too early to detect any potential impact of EMU. 3) Despite some changes in sectoral composition, the business cycles of euro area countries became more synchronised over the 1990s, which may be seen as reassuring from the point of view of the single monetary policy. 4) Sectoral re-allocation accounts for as much as 50% of the increase in labour productivity growth in business sector services in the euro area. 5) The slowdown of European labour productivity growth relative to the US since the mid-1990s is explained by a stronger performance in the US wholesale and retail trade, financial intermediation and high-tech manufacturing sectors.