Author: e-axes

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Macro

Fertility Falls Everywhere But Will Growth Suffer?

Two new papers examine the global fertility decline. The first shows how nearly universal this trend is, with standard economic explanations falling short. The second challenges the usual pessimism: lower birth rates coincide with faster growth in GDP per working-age adult and more labor-saving innovation.

Financial Markets

From Information to Liquidity: How Stablecoins Reshape Bank Intermediation

Two new papers show that stablecoins may transform banking in two ways: by weakening the transaction information that supports bank lending and by increasing banks’ liquidity needs, reserves and exposure to payment shocks.

AI

Rethinking Markets in the Age of AI Agents

Autonomous AI agents could transform markets, firms, and financial institutions while challenging the assumptions that underpin economic coordination. Two new papers examine how AI may reshape bargaining, decision-making, market stability, and institutional trust and why humans may struggle to understand or anticipate the actions of increasingly capable AI systems.

Books

New and Noteworthy Books in Economics (August)

We have selected four books that offer thought-provoking perspectives on global capitalism, European economic policy, cultural change, and financial inclusion. Together, they examine how institutions, ideas, and policies shape economic opportunity and social outcomes.

Monetary Policy

When Debt Erodes Central Bank Independence

New research models how rising public debt endogenously undermines the credibility of central bank mandates, pushing economies from monetary to fiscal dominance. A recent ECB speech makes the same case from the policy side, warning that record debt levels, shorter maturities, and more price-sensitive bond investors are quietly narrowing the space for independent monetary policy.

Financial Markets

Decomposing Treasury Supply Shocks: Volume, Maturity, and Monetary Equivalence

Two new 2026 working papers show Treasury issuance moves yields much like monetary policy. One isolates the maturity dimension: extending debt maturity steepens the curve, eases credit-risk premia via signaling, boosts near-term investment, and can offset roughly a third of the Fed’s QE-driven yield compression.

Monetary Policy

How Firms Adjust Their Investment Decisions to Fed Policy

(Open Access) Two new working papers analyze how monetary policy transmits to corporate decision-making. The first shows that policy shocks reshape long-horizon spending far more than near-term budgets, pointing to adjustment costs as a key source of transmission lags. The second reveals that only a small share of firms drive most of the aggregate investment response.

AI

AI Valuations and Private Credit

(Open Access)  As AI infrastructure spending races past $2.9 trillion through 2028, private credit has quietly become one of its biggest financiers with AI-related deals tripling to 34% in 2025. This issue traces how a shock to AI valuations or earnings could transmit through bank credit lines and data-center financing straight into an already-untested $2 trillion private credit market.

Climate

Is Economic Growth Compatible With Credible Climate Constraints?

(Open Access) Recent research finds severe climate damages justify aggressive carbon pricing which actually boosts growth. Yet another recent research paper finds that even an efficient carbon price leaves little room for a fair global carbon budget that also allows developing countries to grow. Climate policy may help aggregate growth, but equity remains unsolved.

AI

The AI Measurement Problem: When Markets Price What Firms Can’t Easily Disclose

(Open Access) Two new 2026 papers tackle how to measure AI’s economic footprint: one diagnoses why different AI datasets give conflicting answers, the other shows equity markets already price AI exposure directly with high-AI-beta firms earning a significant premium.

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