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Action Policy Digest September 2019


Date: 9 September 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.

 “Heterogeneity everywhere: Survey beliefs and portfolio allocations“.  Though economists have made progress determining how investors form expectations, less is known about how those expectations inform portfolio choices. Until recently, few large-scale surveys contained the data to connect individual investors’ beliefs to their actual behaviour. This column uses data collected from a novel ongoing survey eliciting investors’ expectations about GDP growth, future stock and bond returns.

 “Attitude matters: Investor ambiguity, leverage cycles, and asset prices“.  Macroeconomic models with credit frictions do a good job of explaining debt falls during financial crises, but fail to account for pre-crisis debt increases and level pro-cyclicality. This column introduces a model in which investors’ beliefs about future collateral values are non-linear.



 Digitalisation and European welfare states“. EU policymakers must find answers to pressing questions: if technology has a negative impact on labour income, how will the welfare state be funded? How can workers’ welfare rights be adequately secured?

 “How should governments respond to Facebook’s Libra initiative?“.  How governments should respond to Libra depends on how the company integrates the cryptocurrency into their larger business. The authors envision Libra being integrated into the company’s broader business model as a basis for offering financial services, or possibly an even broader set of services.

 “Project Report Sustainability in the Age of Platforms“.  Over the past few decades, new digital platforms such as China’s Alibaba, Japan’s Rakuten and the U.S.’s eBay have grown from startups into multinational giants. With a few clicks of the keyboard, these online marketplaces bring together a seller and a buyer from anywhere in the globe.

 “Challenges in the digital age“.  The fourth industrial revolution is bringing about numerous challenges and opportunities. This column summarises selected takeaways from a recent ECB conference which brought together leading minds from academia, institutions and the private sector on the expected effects of digitalisation on the economy, including labour markets, productivity, investment and inflation, and possible implications for monetary policy.



 “Brexit endgame: Boris Johnson suspends Parliament“. Two months before the Brexit deadline, the new British Prime Minister has dramatically escalated the political tension by suspending Parliament. Although the Prime Minister defends this move as routine, critics accuse him of limiting time for legislators to prevent the United Kingdom from crashing out of the European Union on October 31 with no deal. Amid claims of a constitutional crisis, odds have increased for fall elections and a no-deal Brexit.

 “EU policy recommendations: A stronger legal framework is not enough to foster national compliance“. In 2011, the EU introduced stricter rules to monitor the implementation of country-specific policy recommendations. Using a new dataset, this column investigates whether these new laws have increased national compliance.

 “La Banca centrale europea“. The European Central Bank is an independent and supranational institution with the primary task of defining and managing monetary policy for the euro-area, ensuring price stability. The publication tells its history and illustrates its functions, structure and responsibilities and the exceptional answers to respond to the “perfect storm” of the crisis.

 “Comparative study on the governance structure and energy policies in EU macro-regional strategies“.Macro-regional strategies (MRS) are EU initiatives to create multi-country coordination structures to strengthen joint collaboration on common challenges by participating countries and regional authorities. While their establishment was top down, these initiatives and their work plans are expected to be driven increasingly by a more bottom-up approach.


 “When dad can stay home: Fathers’ workplace flexibility and maternal health“. Workplace flexibility is believed to be a key factor for improving labour market outcomes among mothers and further reducing the gender pay gap, but less is known about other aspects of flexibility, such as whether fathers value it or whether other household members benefit from it.


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

Herbert Hoover


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

World Health Organization


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