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- 2 weeks ago27 min
S9 Ep60: The challenges to the international financial system
The 29th Geneva Report on the World Economy examines three pressures on the international financial system at once: global imbalances, the status of the dollar, and the stability of bond markets. Two of its authors, Valentina Bruno (American University, CEPR) and Cédric Tille (Geneva Graduate Institute, CEPR), tell Tim Phillips why stocks, the dollar and US Treasuries all fell on Liberation Day in April 2025, why that could happen again, and what we should do about it. So is this a rupture, or a transition in the world's financial system?The research behind this episode:Bruno, Valentina, Steven B. Kamin, Angel Ubide, and Cedric Tille. 2026. "Changing Structure and Challenges of the International Financial System: Imbalances, Currencies, and Financial Stability." Geneva Reports on the World Economy 29. Geneva: International Center for Monetary and Banking Studies; Paris and London: CEPR Press. Free to download.To cite this episode:Phillips, Tim, Valentina Bruno, and Ceric Tille. 2026. "The challenges to the international financial system”. VoxTalks Economics (podcast).About the guestsValentina Bruno is Professor of Finance at the Kogod School of Business, American University, where she holds the Arlene R. and Robert P. Kogod Eminent Scholar Chair in Finance. She is a Research Fellow of the Centre for Economic Policy Research in the Banking and Corporate Finance programme. Her research spans macroeconomics and finance, with recent work on how the US dollar transmits global financial conditions. She has worked at the World Bank and been a visiting scholar at the Federal Reserve Board.Cédric Tille is Professor of International Economics at the Geneva Graduate Institute, where he heads the Bilateral Assistance and Capacity Building for Central Banks programme. He is a Research Fellow of CEPR in the International Macroeconomics and Finance programme. His research spans financial globalisation, the dynamics of countries' external assets and liabilities, and the currencies used to invoice international trade. He sat on the Bank Council of the Swiss National Bank from 2011 to 2023 and previously worked for nine years at the Federal Reserve Bank of New York.Research cited in this episodeThe triple decline of April 2025. After the US announced sweeping tariffs on 2 April 2025, which President Trump called "Liberation Day", US stocks, Treasuries and the dollar fell together. Bruno argues that foreign investors did not sell their US assets; they bought protection against a falling dollar, and that hedging pushed the currency down. Much of their US equity exposure remains unhedged, so a new shock that starts in the US could trigger the same response.Global imbalances. Large and persistent current account surpluses in some countries, mirrored by deficits in others. Imbalances were a major policy topic before 2008, faded after the global financial crisis, and are now back. Tille argues that the headline measures have risen only modestly; the concern is China, whose trade surplus is the largest ever recorded as a share of world GDP.The China shock. Autor, David H., David Dorn, and Gordon H. Hanson. 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States." American Economic Review 103 (6): 2121-2168. Cheap imports from China benefited US consumers as a whole, but the job losses were concentrated in particular industries and places, furniture making among them. Tille uses it to explain why Germany's car workers see the current wave of Chinese competition differently from German consumers.The coordinated policy package. International Monetary Fund. 2026. "2026 External Sector Report: Amid Rising Imbalances, the Case for Rebalancing." The standard prescription is US fiscal consolidation, more consumption in China and more investment in Europe. The report cites IMF estimates that a coordinated package would narrow global imbalances by 0.5% of world GDP over the medium term, compared with a widening of 0.4% under current trends. Nearly all the narrowing comes from China.The renminbi debate. Brad Setser of the Council on Foreign Relations argues that China holds its exchange rate down and that a stronger renminbi is part of the solution. Tille notes that other economists treat the exchange rate as
- 3 weeks ago20 min
S9 Ep59: Life after divorce
Who gets the kids? Courts aim to decide custody in the child's best interests, but nobody has had the data to test how well those decisions work.Gordon Dahl (UC San Diego, CEPR), Costas Meghir (Yale, CEPR) and seven co-authors built the data themselves. They collected more than 56,000 Swedish custody rulings, scanning paper files by hand where no digital copy existed, and linked them to records of parents' earnings, prescriptions and children's school tests. It seems Swedish judges do not agree on how often to award joint custody. Some award it in about 60% of cases; others in about 20%. But that decision makes a huge difference to the lives, and happiness, of both parents and children. They tell Tim Phillips whether joint or sole custody has, on average, better outcomes.The research behind this episode:Canessa, Stella, Gordon Dahl, Anna Hasselqvist, Costas Meghir, Susan Niknami, Marten Palme, Helmut Rainer, Olof Rosenqvist, and Pengpeng Xiao. 2026. "Life After Divorce: Effects of Joint Custody on Parents and Children." CEPR Discussion Paper 21780. To cite this episode:Phillips, Tim, Gordon Dahl, and Costas Meghir. 2026. "Life after divorce." VoxTalks Economics (podcast). About the guestsGordon Dahl is Professor of Economics at the University of California, San Diego, and a Fellow in the Labour Economics programme of the Centre for Economic Policy Research. His research spans the family, public policy and the labour market, including how family income shapes children's achievement, peer effects among co-workers and family members, the effects of incarceration on employment, and how welfare use passes between generations.Costas Meghir is the Douglas A. Warner III Professor of Economics at Yale University and a CEPR Fellow in the Labour Economics, Development Economics and Public Economics programmes. His research spans labour supply and welfare programmes, marriage markets and how resources are shared within households, informal labour markets, and early childhood development.Research cited in this episodeThe best interests of the child standard. Since the 1970s, most custody law has told judges to decide in the child's best interests rather than weigh the parents' claims. Most countries now read this as keeping both parents involved, which is why joint custody is the default in many jurisdictions. The standard leaves wide discretion to judges, and Meghir says judges get little systematic evidence on what works. Elizabeth Scott and Robert Emery examine why the standard has persisted despite this criticism in "Gender Politics and Child Custody: The Puzzling Persistence of the Best-Interests Standard" (Law and Contemporary Problems, 2014).The tender years doctrine. Before the mid-19th century, English law treated children as their father's property. The Custody of Infants Act 1839, passed after a campaign by Caroline Norton, let mothers petition for custody of children under seven, and the presumption that young children belong with their mother spread across Europe. Dahl raises it to show how far the legal default has moved in less than two centuries, from father, to mother, to both.Random assignment of judges. Families who end up with joint custody differ from those who do not, so a simple comparison cannot separate the effect of the arrangement from the effect of the family. In Sweden, custody disputes go to judges at random, and judges differ in how often they award joint custody. Comparing families who drew a lenient judge with families who drew a strict one isolates the effect of the ruling itself. Economists have used the same design to study prison sentences, for example Jeffrey Kling in "Incarceration Length, Employment, and Earnings" (American Economic Review, 2006). The method only measures effects for cases where judges could disagree; it says nothing about cases where every judge would reach the same decision.Swedish court archives. Custody rulings are public records in Sweden, but no national database holds them. The authors requested files from all 48 district courts and received documents from 45. Digital archives covered cases from about 2010; for earlier years, the team visited court archives and scanned 19,491 paper rulings by hand. Dahl estimates that 80% of the project's time went on collecting data.Swedish administrative registers. Statistics Sweden registers cover the whole population and record earnings, employment, family links and place of residence.
- 4 weeks ago18 min
S9 Ep58: Not wearing Prada
Since March 2022, it has been harder to buy an iPhone in Russia, because Apple chose to stop selling there. So did Prada, Renault, Starbucks, Nike and more than 1,000 other firms. These private sanctions added to the official sanctions imposed by 45 countries.Beata Javorcik (EBRD, Oxford, CEPR) and her co-authors wanted to know if private sanctions did anything more than generate good headlines. To do this, they matched millions of Russian customs records to the trademarks on the goods, so they could tell an iPhone from a Samsung phone and a Gucci scarf from a Gucci bag. Would imports of goods under voluntary sanctions stop? Would the brands cheat? Would importers find an other way to get goods into the country through the back door? She tells Tim Phillips what private sanctions on Russia have achieved.The research behind this episode:Chupilkin, Maxim, Beata Javorcik, Alexander Plekhanov, and Aleksandra Peeva. 2026. "Not Wearing Prada: Do Private Sanctions Reinforce Official Sanctions?" CEPR Discussion Paper 21774. To cite this episode:Phillips, Tim, and Beata Javorcik. 2026. "Not wearing Prada." VoxTalks Economics (podcast).About the guestBeata Javorcik is Chief Economist of the European Bank for Reconstruction and Development, on leave from the University of Oxford, where she is Professor of Economics and a Fellow of All Souls College. She is a Fellow of the Centre for Economic Policy Research in the International Trade and Regional Economics programme. Her research spans foreign direct investment, shocks to production networks, trade under sanctions and the evasion of import duties.Research cited in this episodeOfficial sanctions on Russia. After the full-scale invasion of Ukraine in February 2022, 45 economies, including the US, the EU and the UK, imposed sanctions on Russia. They cut selected Russian banks off from the SWIFT payment messaging system, immobilised the reserves of Russia's central bank, limited Russia's earnings from hydrocarbon exports and banned exports of arms, dual-use goods, advanced technology, industrial equipment and luxury goods. By the end of 2022, around 40% of product lines were at least partly covered. The luxury ban explains some odd entries. Ski suits and sports clothing priced above €300 are sanctioned, and champagne is banned while prosecco is not. Enforcement sits with several bodies: in the US, the Office of Foreign Assets Control and the Commerce Department; in the EU, individual member states; in the UK, the Office of Financial Sanctions Implementation and the Office of Trade Sanctions Implementation.Private sanctions and public opinion. Oliver Hart, David Thesmar and Luigi Zingales surveyed 2,915 Americans, a representative sample, in May and June 2022. Of these, 61% agreed that doing business in Russia is like being an accomplice to the war, and that firms should sever ties whatever the consequences. Javorcik raises the study to explain why firms with no legal obligation to leave Russia chose to go anyway: reputation, the threat of boycotts, pressure from investors, employees and business partners, and sometimes the values of managers. Hart, Oliver, David Thesmar, and Luigi Zingales. 2024. "Private Sanctions." Economic Policy 39 (117): 203-268."The business of business is business." The phrase is a popular summary of the view Milton Friedman set out in a 1970 essay in the New York Times Magazine, "The Social Responsibility of Business Is to Increase Its Profits." Hart and his co-authors found that only a minority of their respondents treated the decision to leave Russia as a purely commercial one.The Yale list. A team at the Yale Chief Executive Leadership Institute, led by Jeffrey Sonnenfeld, has tracked what more than 1,500 major companies said about their Russian operations since the invasion. To qualify, a firm must have revenue above $100 million, be majority owned from outside Russia and Belarus, and have meaningful operations in its home country, in Russia and in at least one other country. The team grades firms from full withdrawal to "digging in," and keeps a separate record of firms that reneged on their promises to leave. Javorcik and her co-authors use the list to classify the owners of 1,657 Western trademarks. Only 11 firms moved from strict private sanctions to doing little or nothing.Customs data with trademarks. The paper draws on transaction-level records of Russian imports from 2016 to 2023, about 12 mill
- Oct 2, 202621 min
S9 Ep57: Merit, masters and China's imperial exam
For more than 1,300 years, China chose its top officials by written exam. Its top officials were chosen meritocratic ally -- or were they?When the results came out, each successful candidate went to pay his respects to the men who had marked his exam. He called the examiner master, and the bond lasted for life.Ruixue Jia (UC San Diego, CEPR) and her co-author Ying Bai followed 24,269 graduates of the Qing dynasty's imperial examination, from 1644 to 1905, to see who reached the top of the imperial state. A high mark in the examination was important, but so did an examiner who later rose to power. Jia tells Tim Phillips how merit and patronage worked together.The research behind this episodeBai, Ying, and Ruixue Jia. 2026. "Meritocracy and the Networks It Forged: China's Imperial Examination." CEPR Discussion Paper 21814. Prepared for The ANNALS of the American Academy of Political and Social Science.To cite this episodePhillips, Tim, and Ruixue Jia. 2026. "Merit, masters and China's imperial exam." VoxTalks Economics (podcast). About the guestRuixue Jia is Professor of Economics at the School of Global Policy and Strategy, University of California San Diego, where she co-directs the China Data Lab. She is also a Visiting Professor at the University of Hong Kong, a Fellow of the Centre for Economic Policy Research in its Political Economy and Economic History programmes, and co-editor of the Review of Economics and Statistics. Her research spans elite formation, the politics of education and science, and the historical roots of China's development. She is co-author, with Hongbin Li and Claire Cousineau, of The Highest Exam: How the Gaokao Shapes China (Belknap Press, 2025).Research cited in this episodeThe imperial examination. China's system for recruiting officials through competitive written exams on the Confucian classics and literary composition. It began around 605 CE, expanded under the Song dynasty around 1000 CE, and was abolished in 1905. In the Qing dynasty it had three levels. The entry (prefectural) exam was held twice every three years; the provincial and national exams once every three years. About 240 candidates passed each national exam, earning the title of jinshi. Bai and Jia study all 112 national exams held between 1644 and 1905.How many took part. Every man could sit the exam in principle, but preparation cost years of study and lost income. Jia says that in the 18th century about two million men registered for the entry-level exam, roughly 2% to 3% of men aged 15 to 50, and that families often pooled resources to put one son forward. By her calculation, even a man who tried five times had less than a 1% chance of passing the entry level. These are her figures from the conversation.Fan Zhongyan. The Northern Song statesman and poet (989 to 1052) whose story Jia uses to show how the exam sold itself. He lost his father as an infant and grew up in modest circumstances, passed the national exam in 1015, and rose to become one of the empire's most senior officials. Stories like his, Jia argues, sustained belief in the system. What mattered was perceived mobility, not the realised rate.The high and low categories. Successful national candidates were ranked and divided at a cutoff. The top two groups received the jinshi degree; the third and largest group received the lesser tong jinshi ("similar to jinshi") degree. Bai and Jia compare the cutoff to the admission thresholds of elite universities today. Candidates just above it started their careers in better positions.Top office. Bai and Jia define top office as rank three or above in the nine-rank system, which covered ministers, governors general and provincial governors. Only about 12.6% of jinshi reached it, on average 16 years after passing the exam. In practice, appointments were shaped by a handful of Grand Secretaries and Grand Ministers of State; on average seven people held these posts in any year.The master and disciple relationship. Each national exam was overseen by one or two chief examiners and two or three vice examiners, all serving officials. After the results, graduates visited their examiners, called them "master teacher" and called each other "classmates". The historian Ichisada Miyazaki describes it as "a pledge between them to assist each other to weather the storms of political life" (Miyazaki, Ichisada. 1981. China's Examination Hell: The Civil Service Examinations of Imperial China. Yale University Press, p. 56). Philip Kuhn called the system "a veritabl
- Sep 25, 202629 min
S9 Ep56: Decoupling from China after Trump's Trade Wars
In March 2025, Apple chartered cargo flights to deliver 600 tonnes of iPhones from India to the United States. A year earlier, four in five smartphones that imported to the US came from China. One of the aims of US trade policy has been to decouple the US economy from China. So is the strategy working? Chad Bown (PIIE, CEPR) tells Tim Phillips how he examined the US import data product by product to see how American importers coped with Trump's second trade war. In consumer electronics, many firms quietly built a second supply chain in tariff-exempt countries before 2025, and switched sourcing away from China almost overnight in 2025. But clothing and footwear did not switch, because alternative source countries like Vietnam faced tariffs almost as high. When the US taxes imports from every country, the decoupling strategy gets lost.The research behind this episode:Bown, Chad P. 2026. "How Did Trump's 2025 Trade War Affect the Decoupling of US-China Supply Chains?" CEPR Discussion Paper DP21801 (gated). Forthcoming in Asian Economic Policy Review. To cite this episode:Phillips, Tim, and Chad P. Bown. 2026. "Decoupling from China after Trump's Trade Wars." VoxTalks Economics (podcast).About the guestChad P. Bown is the Reginald Jones Senior Fellow at the Peterson Institute for International Economics and a Fellow in the International Trade and Regional Economics programme of the Centre for Economic Policy Research. He was chief economist at the US Department of State from January 2024 to January 2025, and senior economist for international trade and investment on President Obama's Council of Economic Advisers. His research spans trade policy, industrial policy, economic security and supply chains. He co-created the Trade Talks podcast with Soumaya Keynes in 2017, and with Keynes he is co-author of How to Win a Trade War (Simon & Schuster, 2026).Research cited in this episodeThe 2018-19 Section 301 tariffs. In Trump's first term the US imposed tariffs on imports from China in stages, on product lists set under Section 301 of the Trade Act of 1974. Lists 1, 2 and 3, mostly intermediate inputs such as auto parts, ended at 25%. List 4A began at 15% and was cut to 7.5% in February 2020 under the Phase One agreement. List 4B, mostly consumer goods such as smartphones, laptops and toys, was delayed "for Christmas season" and never imposed. By the end of the first trade war, roughly two thirds of US imports from China faced new tariffs. Bown's point is that the goods spared in 2018-19 were the ones hit hardest in 2025.The 2025 IEEPA tariffs on China. In February and March 2025, before Liberation Day, the US imposed two rounds of 10% tariffs on all imports from China under the International Emergency Economic Powers Act, justified by concerns over fentanyl. For the first time this covered smartphones and other List 4B goods. One of the two was removed in November 2025 after Presidents Trump and Xi met in South Korea.Liberation Day. On 2 April 2025 the US announced tariffs on most of its trading partners, at rates that varied by country. A long list of products, including smartphones, was exempt under Annex II. On 9 April the country rates were paused and a 10% baseline applied while countries negotiated. China's rates escalated after retaliation on both sides; the Liberation Day actions on China alone reached 125% before a truce in Geneva in May. The exemptions matter to the episode. A tariff on China changes sourcing only if the alternatives face a lower one.The August 2025 tariffs on India. The US raised tariffs on India by a further 25 percentage points in August 2025, citing India's purchases of Russian oil. Smartphones were again exempt, so Apple's Indian supply chain stayed tariff free. For some clothing, India ended up facing a larger tariff increase than China.The Supreme Court ruling on IEEPA tariffs. On 20 February 2026 the US Supreme Court ruled that the country-level tariffs imposed under IEEPA were illegal. The Section 232 sectoral tariffs and the Section 301 tariffs on China were not part of the case. The administration removed the IEEPA tariffs and began imposing new ones under other legal authorities, which is why Bown warns that some of the 2025 effects may yet reverse.Apple's alternative supply chain in India. Apple and its contract manufacturers, including Foxconn and Tata Electronics, spent several years building iPhone assembly in India. Patrick McGee tells the story in Apple in China: The Capture of the World's Greatest Company (Simon & Schuster, 2026). Over the last nine mon
- Sep 18, 202625 min
S9 Ep55: Loosening inheritance law
In most of the world you do not get to choose who inherits your money. Across continental Europe, Latin America, and countries governed by Islamic law, a minimum share of your estate will be reserved for your children, your spouse, and in some places your surviving parents. Write a will that ignores them and the law overrules you. If you want a head start in life, choose your parents carefully.Switzerland changed the rules in January 2023. The compulsory share for children fell by one third and the share reserved for surviving parents disappeared altogether. In this week's VoxTalk, Marius Brülhart (University of Lausanne, CEPR) tells Tim Phillips how he had been following the reform with no way of observing its effects, until a website that helps Swiss people write their wills online offered him its anonymous data. People who were handed more freedom gave less to their children and their parents, and more to spouses and partners. About one third of every liberated franc went to recipients outside the family altogether. Liberalising the law spreads wealth without taxing anyone: politically, though maybe not democratically, attractive. The research behind this episode:Brulhart, Marius, and Laia Soler. 2026. "Unfree Wills: Inheritance Rules, Bequest Motives, and Wealth Diffusion." CEPR Discussion Paper 21811. The CEPR version is gated.To cite this episode:Phillips, Tim, and Marius Brulhart. 2026. "Loosening inheritance law." VoxTalks Economics (podcast).About the guestMarius Brulhart is Professor of Economics at HEC Lausanne, University of Lausanne, and a Research Fellow of the Centre for Economic Policy Research. His research spans public finance, regional and urban economics, and international trade, with a long-running interest in how Swiss taxpayers and testators respond to the rules they are given. He has advised the World Bank, the OECD, the European Commission, and the Swiss government.Research cited in this episodeProtected heirs. Swiss law, like that of most civil-law countries, reserves compulsory minimum shares of an estate for close family. Before 2023 those categories were children and other direct descendants, spouses, and surviving parents. An unmarried testator with children could freely allocate only 25% of their estate; the rest belonged to the children by law.The 2023 reform. Parliament passed the change in December 2020 and it came into force on 1 January 2023. Minimum shares for direct descendants were cut by one third, those for surviving parents were abolished, and the share reserved for a surviving spouse was left alone. Averaged across family types in the data, the freely attributable portion of an estate rose by 19 percentage points, from 39% to 58%.DeinAdieu.ch. The Swiss online service that generated the data, funded by charities seeking legacies. Users answer questions about their family situation, the tool limits their choices to what the law allows, and they set the shares with a set of sliders. The sample covers 16,887 completed forms submitted between January 2020 and March 2024, which straddles the reform.Bunching. Before the reform, a large share of testators gave their protected heirs exactly the legal minimum and not a franc more; 52% of testators with children and 72% of those with living parents had been giving more than they wanted to. When the minimum fell, so did their allocations.Reference dependence. The whole distribution moved, not just the people who had been pinned to the legal floor. Testators who had voluntarily given their children more than the law required also gave less after the reform, which suggests the legal minimum works as a mental benchmark for generosity even when it is not binding.Marginal diffusion propensity. Brulhart and Soler's term for the share of each newly discretionary franc that goes to nonrelatives and charities. Their central estimate is 0.33. Applied to the whole population it implies that the reform moved more wealth outside family dynasties than Switzerland's inheritance taxes do, though Swiss inheritance tax is unusually light, with children inheriting tax free in most cantons.More VoxTalks Economics episodesWealth Taxes. Marius Brulhart's earlier conversation with Tim Phillips, on what Switzerland's cantons reveal about how people respond when wealth rather than income is taxed.Political inequality. Julia Cagé on what concentrated wealth does to democratic politics, which is the other
- Sep 11, 202618 min
S9 Ep54: Does sacking the manager work?
Your football team keeps losing. The season is slipping away. One thing can be changed by Friday, and the crowd is already singing about it: sack the manager.Jan van Ours (Erasmus School of Economics, CEPR, Feyenoord fan) has looked at seven seasons of the Dutch top flight and 31 managers who were sacrificed mid-season. To work out whether any of them deserved it, he uses bookmaker odds and expected goals to distinguish bad play from bad luck. The new-manager bounce is real: results improve after a new manager walks in. But also, not real: clubs that don't sack the manager have an upturn too. The message for the boardroom, in football and business, is that not doing anything might often be the best course of action.The research behind this episode:van Ours, Jan C. 2026. "Dust in the Wind: Causes and Consequences of Managerial Replacements." CEPR Discussion Paper DP21850, Centre for Economic Policy Research. The paper is gated.To cite this episode:Phillips, Tim, and Jan van Ours. 2026. "Does sacking the manager work?" VoxTalks Economics (podcast).About the guestJan van Ours is Emeritus Professor of Applied Economics at Erasmus School of Economics, Erasmus University Rotterdam, and a core member of the Erasmus Centre for Applied Sports Economics. He is also Adjunct Professor at the Center for Health Economics, Monash Business School, and a Research Fellow of the Centre for Economic Policy Research. His research spans unemployment dynamics, labour market policy, health and well-being, and the economics of professional sport, where match data offer a rare chance to watch a labour market in the open.Research cited in this episodeThe Eredivisie sample. Seven seasons of the top league of Dutch professional football, from 2018/19 to 2024/25, covering 4,136 match observations and 126 club-seasons. In that period 31 managers were replaced during a season; about 15% had gone by mid-season and 25% by the end of it.Points surprise. The cumulative gap, from the first match of the season, between the points a club has won and the points the bookmakers implied it should have won. Bookmaker odds are used as the benchmark because they already contain everything the market knows about squad quality, home advantage and the opposition; van Ours confirms this in the data, finding that recent results add nothing to the odds as a predictor of the next match.Performance surprise. The same cumulative gap, but measured with expected points derived from expected goals rather than actual results. Points surprise catches a club that is losing. Performance surprise catches a club that is playing badly. A club can be one without being the other, which is how luck gets separated from ability.Expected goals. The probability that a given shot becomes a goal, estimated from thousands of comparable attempts and conditioned on the distance and angle of the shooter, the body part used, and the type of pass and attack. Van Ours converts expected goals scored and conceded into a distribution of match outcomes, and from that into expected points. His data come from fbref.com; the paper notes that match-level expected goals were discontinued in January 2026 after a dispute between fbref and Opta.The counterfactual replacement. The device that carries the paper. For each actual sacking, van Ours searches the same club in a different season for a moment when the sum of points surprise and performance surprise was almost identical, and the manager survived. Of the 31 replacements, 22 have a counterfactual, 19 of them unique. Clubs that sacked the manager gained 0.21 points per match afterwards. Clubs in the same trouble that did not sack the manager gained 0.38.Scapegoating. William Gamson and Norman Scotch set out the idea in "Scapegoating in baseball" in the American Journal of Sociology in 1964, describing the sacking of a manager as an anxiety-reducing ritual that participants treat as an improvement whether or not anything improves. Van Ours returns to it to explain why a decision with no measurable effect keeps being taken.Managers in regular firms. Stuart Gilson's 1989 study in the Journal of Financial Economics found that replaced executives were not employed by another firm for at least three years. Football managers are frequently back in work within weeks, which is one reason the job pays what it does. Hilger, Mankel and Richter reviewed 91 studies of top executive dismissals published between 1960 and 2010 and concluded that the effects of managerial turnover are not statistically different from zero.<
- Sep 4, 202633 min
S9 Ep53: Lessons from Populism in Latin America
The new episode of VoxTalks Economics traces the effects of South Americans populism, left and right. Alejandro Werner (Georgetown Americas Institute) is one of the authors of a new paper that traces populist governments across Latin America back to 1970. He argues that they follow a strikingly similar script: they expand spending, weaken the institutions built to restrain them, and ride the wave until inflation catches up with them. But the most recent generation of leaders -- Chávez and Maduro, the Kirchners, Correa, and Morales -- lasted longer than their predecessors. Why?The research behind this episode:Magud, Nicolás E., Antonio Spilimbergo, and Alejandro Werner. 2026. "Lessons from Populism in Latin America." Paper presented at the second Economic Policy: Papers on European and Global Issues Conference, June 2026. Forthcoming in Economic Policy.To cite this episode:Phillips, Tim, and Alejandro Werner. 2026. "Lessons from Populism in Latin America." VoxTalks Economics (podcast).About the guestAlejandro Werner is the founding director of the Georgetown Americas Institute and a nonresident senior fellow at the Peterson Institute for International Economics. He spent nine years as director of the International Monetary Fund's Western Hemisphere Department, and earlier held senior posts at Mexico's finance ministry and central bank. His research spans macroeconomic policy, fiscal sustainability, and financial crises across Latin America.Research cited in this episodeThe Global Populism Database, built by political scientist Kirk Hawkins and colleagues, codes the rhetoric of presidents and prime ministers on a scale from zero (not populist) to two (highly populist), reading inauguration and campaign speeches for anti establishment language, appeals to "the people," and simple, direct phrasing. Magud, Spilimbergo, and Werner use this index, rather than a leader's policies, to decide who counts as a populist, which keeps their definition independent of the outcomes they go on to measure.Dornbusch and Edwards' "macroeconomics of populism," from their 1991 edited volume of the same name, was the first systematic account of how Latin American leaders combine expansionary spending with price controls, and how the resulting shortages and capital flight bring the cycle to an end. The new paper tests whether that pattern still holds three decades on.Funke, Schularick and Trebesch (2023), published in the American Economic Review, built an alternative populism index from historical case studies rather than speeches, and found that populist leaders leave a drag on economic activity that can persist for up to fifteen years after they leave office. Werner and his coauthors use this index as a robustness check on their own results.Local projections, a method developed by the economist Oscar Jorda in 2005, trace how a variable such as inflation or the real exchange rate evolves in the years after a shock, in this case the arrival of a populist government, without imposing the structure of a full macroeconomic model.The commodity terms of trade windfall, a measure developed by Gustavo Adler and Magud, calculates the extra income a country earns when its export prices rise relative to its import prices. The paper uses this measure to show that the populist governments with the largest windfalls, including Venezuela, Bolivia, and Ecuador, stayed in power the longest.More VoxTalks Economics episodesFiscal Populism and Monetary Policy, recorded at the same EP conference, in which Magud talks to Tim Phillips about how a government's fiscal stance interacts with the credibility of its central bank.The Dollar Anchor Is Slipping, Tarek Hassan talks to Tim Phillips about what happens when the dollar's role as the world's safe asset comes under strain.Related reading on VoxEU.orgFour decades of terms of trade booms, a VoxEU column by Magud and Adler that introduces the income windfall measure used in this paper, and shows how much larger Latin America's most recent commodity boom was than those of the 1970s.Effects of commodity price windfalls on external debt: the role of political institutions</a
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About VoxTalks Economics
Learn about groundbreaking new research, commentary and policy ideas from the world's leading economists. Presented by Tim Phillips.
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It's a free AI-powered email that summarizes new episodes of VoxTalks Economics as soon as they're published. You get the key takeaways, notable quotes, and links & mentions — all in a quick read.
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When a new episode drops, our AI transcribes and analyzes it, then generates a personalized summary tailored to your interests and profession. It's delivered to your inbox every morning.
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VoxTalks Economics covers topics including Science, News, Education, Business, Social Sciences. Our AI identifies the specific themes in each episode and highlights what matters most to you.
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