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Action Policy Digest March 2019

Author:

Date: 11 March 2019

Type: Other

Topic: Action Institute

Organized as a monthly newsletter, it presents an overview of the current international policy debate. You find below a selection of the best ideas from the most influential think tanks, structured in four areas: (i) Finance, (ii) Innovation and Development, (iii) European Affairs and (iv) Social Policy.
FINANCE

 “Trade and innovation: The Schumpeterian role of banks“. Only strong banks can fulfil their Schumpeterian role by efficiently reallocating credit. The column argues that high capital standardsefficient bankruptcy laws, and a lower cost of bank equity improve credit reallocation and thereby support the productive specialisation of the economy.

 

 “The common ownership hypothesis: Theory and explanation“. The common ownership hypothesis asks: when large investors own shares in many firms within the same industry, do those firms have an incentive to soften competition by producing fewer units, raising prices, reducing investment, innovating less, or limiting entry into new markets?

 

 “Central bank tone moves asset prices“. According to Ben Bernanke, “monetary policy is 98% talk and 2% action”.Using data on policy rate announcements and press conferences by the ECB between 1999 and 2017, this column shows that central bank tone affects asset prices, even after controlling for policy actions and economic fundamentals.

INNOVATION AND DEVELOPMENT

 “Artificial Intelligence: Ethics, governance and policy challenges“. This report summarises the work of the CEPS Task Force on Artificial Intelligence, which met throughout 2018. Arguing that the EU and its member states are uniquely positioned to lead the global community towards responsible, sustainable AI development, its members call upon European leaders to focus on leveraging AI’s potential to foster sustainable development in line with the 2030 Agenda.

 

 “A governor’s policy playbook to address disruptions from automation and artificial intelligence“. New research by Brookings authors suggested that while artificial intelligence isn’t likely to eliminate millions of jobs overnight, as many as 25 percent of American workers (36 million people) face “high” exposure to task disruption in the coming decades.

EUROPEAN AFFAIRS

 “The European Union must change its supervisory architecture to fight money laundering“. Money laundering scandals at EU banks have become pervasive. The authors here detail the weaknesses the current AML architecture’s fundamentalweaknesses and propose a new framework.

 

 “The heterogeneous tax sensitivity of firm-level investments: European evidence“. The effect of taxes on firm-level investments is very heterogeneous. This column shows that the impact of corporate taxation is up to 70% higher for entrepreneurial firms than for managerial ones, while dividend taxation negatively affects the investment of financially constrained firms but entails no significant impact on cash-rich firms.

 

SOCIAL POLICY

 “Universal basic income and the Finnish experiment“. The preliminary results on the Universal Basic Income (UBI) experiment in Finland, and what they mean for the long-standing questions over the potential impact of UBI in developed countries.

 

 “European countries need to improve research and monitoring of mortality rates“. Improvements in life expectancy are slowing down across Europe. An OECD-commissioned report attempts to unpick the reasons and calls for countries to step-up research and monitoring of mortality.

 

Credit

Let me remind you that credit is the lifeblood of business, the lifeblood of prices and jobs.

Herbert Hoover

Health

Good health is essential to social and economical development and it empowers all of the public sectors.

World Health Organization

Innovation

Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth.

Peter Drucker

Human Capital

Talent is a source from which water flows constantly renewed. But this source loses its value unless it is properly used.

Ludwig Wittgenstein