Category: Business & trade
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When the economy is strong in a boom, people spend more time searching for what to buy. But when it is weak in a downturn, these same shoppers stop looking. New research shows how this dynamic helps to explain changes in productivity for the whole economy.
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Multinational companies are at the heart of both the fragmentation of production and the internationalisation of innovation. Evidence from Germany shows that larger MNCs file more patents of higher quality, and both at home and abroad. They also enable the spread of new technologies across borders.
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Evidence from Italian businesses whose revenues collapsed during lockdown illustrates how the mafia operates as a predatory lender of last resort, stepping in when a firm’s financial foundations begin to fail. The state must provide fast, accessible liquidity to beat the criminals at their own game.
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Economic shocks create different effects across firms and sectors. A financial crisis, for example, affects firms differently from an inflation spike, a supply chain disruption or a trade dispute. Understanding differences in firms’ responses is key for designing effective policy responses.
