The Center for Economic and Policy Research (CEPR) is a progressive American think tank that specializes in economic policy. Based in Washington, D.C. CEPR was co-founded by economists Dean Baker and Mark Weisbrot in 1999.Considered a left-leaning organization, notable CEPR contributors include Nobel Memorial Prize in Economic Sciences recipients Joseph Stiglitz and Robert Solow.
Legal analysts who study sovereign debt often refer to the doctrine of “Odious Debts.” As a rule, a state remains liable for its debts notwithstanding a change in government. The doctrine of Odious Debts purports to identify an exception in cases where lenders know that a despot’s borrowing does not benefit the public. In such cases, the doctrine posits that a new government may repudiate the debt after it assumes power. The doctrine is aspirational, in the sense that no court or tribunal has unequivocally acknowledged its existence. Yet this has not diminished its appeal. Our Essay sets out the basics of this phenomenon.
The relation between income and democracy remains debated, empirically and theoretically. We propose a broader perspective that goes beyond a uni-directional and monocausal interpretation of the income-democracy nexus by focusing on the neglected role of the transition from economic stagnation to sustained growth. We illustrate our argument with an integrated model of long-run growth and democratisation that delivers two general insights. First, rather than higher income levels per se, it is the onset of sustained growth that increases the likelihood of democratisation. Intuitively, the faster accumulation of productive factors, such as human capital, reduces conflicts of interest and hence the elite’s resistance to democracy. Second, the economic consequences of democracy are amplified when democratisation occurs after the transition to growth. We explore the validity of these novel predictions by revisiting influential empirical studies and exploiting variation in the timing of the transition to sustained growth. Our evidence is consistent with the theoretical predictions, shedding new light on the interpretation of earlier mixed findings.
This paper explores global perceptions and understanding of climate change and policies, examining factors that influence support for climate action and the impact of different types of information. We conduct large-scale surveys with 40,000 respondents from 20 countries, providing new international data on attitudes toward climate change and respondents’ socioeconomic backgrounds and lifestyles. We identify three key perceptions affecting policy support: perceived effectiveness of policies in reducing emissions, their impact on low-income households, and their effect on respondents’ households (self-interest). Educational videos clarifying policy mechanisms increase support for climate policies; those merely highlighting climate change’s impacts do not. (JEL C83, D83, D91, Q54, Q58)
We develop a new model of cycles and crises in emerging markets, featuring an occasionally binding borrowing constraint and stochastic volatility, and estimate it with quarterly data for Mexico since 1981. We propose an endogenous regime-switching formulation of the occasionally binding borrowing constraint, develop a general perturbation method to solve the model, and estimate it using Bayesian methods. We find that the model fits the Mexican data well without systematically relying on large shocks, matching the typical stylized facts of emerging market business cycles and Mexico's history of sudden stops in capital flows. We also find that interest rate shocks play a smaller role in driving both cycles and crises than previously found in the literature.
We analyze attention to personal finances using a high-frequency panel of bank data, including information on logins. We document a number of robust patterns. Relative to their personal histories, individuals pay more attention when holding more cash and liquidity and when receiving income. In contrast, attention decreases discretely as bank account balances go from positive to negative and then decreases further as overdraft debt increases. We conclude that Ostrich effects in a personal finance context, i.e., the avoidance of obtaining information on everyday personal finances, is a widespread phenomenon and explore a number of explanations for our findings.
