Non-Resident Senior Research Fellow & former Chief Economist UNU-WIDER Helsinki 🇺🇳🇫🇮Also universities of Copenhagen 🇩🇰 Manchester & Warwick 🇬🇧

Helsinki
Joined August 2014
Tony Addison retweeted
New Working Paper! J. Fink and I compare innovation projects that obtained public funding with those that were rejected. Approved projects were TWICE likely to result in significant innovations. portal.research.lu.se/en/pub…
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“Economic history will have a very exciting boom”. Very likely to be true. Digitization will be easier. But since bottlenecks remain in economic history like gaining historical context and dealing with messy real world data issues.
With math essentially being delegated to OpenAI, here's what I predict for economics and the social sciences more generally: ✅The top tier of research will just become better and it will be normal human-led research where AI is used for scale (e.g. conducting qualitative interviews with relevant populations, running behavioral interventions in the field, analyzing massive text data, etc.) ✅ Field experiments will rise in value and generally making "connections" with firms and being able to run stuff (potentially testing AI pipelines) will be in high demand ✅ Research with administrative data will become even more valuable, but the benefits might be concentrated among some prolific authors who are allowed by the government agencies to use local models to analyze the data at scale. PhD students can probably forget about it ✅Economic history will have a very exciting boom and there will be an enormous race and big rewards for digitizing archives as a source to both identify new research strategies and document new descriptive facts. ✅Review and verification systems will become massively improved with AI assistance and it will become standard practice to do a 360 review of the paper + code + data at the *submission* stage. ⚠️Research that in principle can already be almost completely outsourced to the AI (download and analyze public data, run simple survey experiments, write theory models) is in for a big shock. This would be very bad from the perspective of researchers who depend on this "bread and butter" research, but I think this type of work will just be outsourced to public agencies who can answer their own questions without the need for "peer-reviewed" research.
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This is an automatic listen! Alex is one of the most knowledgeable people out there on the US economy 1930-1945. Looking forward to my next run. so I can listen to this.
Did WWII actually make the U.S. economy more productive? New EPH Podcast episode with Alexander J. Field: manufacturing productivity fell roughly 18% between 1941 and 1945, and the "production miracle" story deserves a second look. ▶️ youtu.be/DGDXhBlq8PA
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Tony Addison retweeted
JD Vance recently said of the current affordability crisis: “You don’t turn the Titanic around overnight. It takes time to fix what was broken”. This is funny, but it is also very dangerous. (1/4)
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Tony Addison retweeted
The paper studies how small states, those not frontline in geopolitical conflict, respond to Great Powers when the latter trigger shocks, such as tariffs, that can do the small state harm. DannyQuah.com/Storage/179252… – at Singapore
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Tony Addison retweeted
Have we been mismeasuring China Shock 2.0 ? 👉Most comparisons focus on Chinese imports into G7 markets. 👉But in a world of relatively open trade, G7 manufacturers compete with Chinese factories at home, in China, and in third markets. 👉So the global scale of the shock depends on China's production, not just its exports. 🌟That why it matters that China's manufacturing growth is slower today, yet the increments are much larger relative to the G7's manufacturing base. lnkd.in/p/eiEsA4th cc: @kaushikcbasu @k_sonin @Lagarde @LHSummers @lindayueh @lugaricano @MarkJCarney @MaxCRoser @michaelxpettis @NateSilver538 @NIESRorg @NOELreports @NOIweala @Nouriel @ojblanchard1 @paulkrugman @PIIE @politico @profsfardoust @RayDalio @RBReich @RobinBrooksIIF @scottlincicome @SimonEvenett @simonjhix @sjwrenlewis @standardandedny @StephanieKelton
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Tony Addison retweeted
Politico is reporting, unsurprisingly, that the Europeans need to mobilize more funds for Ukraine -- I think there is a pretty easy way to do it that respects Belgium's redlines, but it take a bit of financial creativity 1/ many
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Retirees own 60% of the wealth in Feance. Given high life expectancy, when they pass it on, wealth is not inherited by the young, but by the about to be old (those in their 50s). Read the entire thing, an excellent analysis of the pickle our societies find themselves in.
The ugly truth about France and some of the other European countries currently in turmoil - and which none of the politicians want to admit because it'd be political suicide - is that you can't solve the problem by going after immigrants (as the right asserts) or the rich (as the left asserts), but you could solve it by going after the old. One extraordinary statistic for you: people over 60 in France, a quarter of the population, own 60% of France's wealth, non-financial and financial (ofce.fr/pdf/revue/2025/3-192…). And here is another crazy statistic: that same quarter of the population, those above 60, receive nearly two-thirds of all social spending by the French government (previssima.fr/actualite/prot…) - which is famously among the highest in the world (France's government spending is an insane 57.3% of GDP). Last statistic: they make up about 40% of voters because they're a third of registered voters (insee.fr/fr/statistiques/266…), and they turn out far more than anyone else (franceinfo.fr/elections/sond…). Put our 3 statistics together and there's almost a bit of an apartheid situation here: the old own most of the country's wealth, collect most of the social spending and have the political power to keep it that way. Which makes them a de-facto rentier class, living off assets and transfers paid for by younger generations. And, of course, at the risk of stating a truism, the future is built by the young. Yet France keeps effectively taking money away from them to give it to those whose working lives are already behind them - and need the money far less since they already own the country's wealth. What about inheritance, I hear you ask? That's the funniest/saddest aspect: given that life expectancy has kept rising, the French now inherit a home at 54 on average. The most common case is someone in their 80s leaving it to heirs in their 50s, in effect the very old transferring wealth to the about-to-be old (insee.fr/fr/statistiques/fic…). You can add this to our earlier apartheid statement: on top of all the rest, even when the old finally let go of their wealth, it stays within their own "camp". That's my personal situation, incidentally: I'm 42, my father is 71 and he is starting to look at ways to pass things on to me and my siblings, when our professional lives are already well settled, so it'll arrive when it changes things the least, which is pretty much the French system in a nutshell. Now, I get that there'd be some unfairness in going after them: they paid into the system their entire working lives, playing by the rules of a social contract that told them if they paid up they'd collect at the end. Changing the rules now means breaking that promise, which is admittedly unfair. But there's no magic wealth tree in any society: you can only take it where it is. That's the way most major societal transformations end up happening. They're often triggered by a catastrophic event (the so-called "four horsemen": mass-mobilisation war, revolution, state collapse, plague) BUT what really drives change is a transfer: wealth gets pried from the privileged class who've been sitting on it and handed to those who'll build what comes next. So, in theory and in an ideal world, you can do without the catastrophic event and directly proceed with the transfer... The fact that in France, and elsewhere in Europe, it's the youth protesting is probably no coincidence - even though they don't frame it as a generational fight. And even though, cruel irony, the left politicians many of them march behind promise to bring the retirement age back to 60 (lcp.fr/actualites/legislativ…), which would make the situation even worse. Let's say they understand intuitively that the system is stacked against them, even if they haven't yet figured out how. And politicians are obviously doing what politicians do, meaning pandering to the people who actually vote, while pointing the young towards easier - and politically convenient - scapegoats. To be clear I'm not saying it's the only problem in France, VERY far from it. I'm also not saying that all old people in France live a lavish lifestyle at the expense of younger generations: there are also plenty of very poor retirees who, if anything, would deserve more. What I am saying is that it's probably the biggest elephant in the room: everyone can see it, nobody dares mention it - no politician, from any side, wants to run on cutting grandma's pension - and it makes every other problem harder to fix.
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Tony Addison retweeted
Safe government bonds enjoy a discount: the convenience yield; when a government issues more debt, it erodes this discount for itself & other countries - but safe asset issuers also have market power & incentives to reduce issuance to boost the yield cepr.org/voxeu/columns/safe-…
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"The notion of a 'Minsky moment' has helped restore financial instability to macroeconomics, but it has also encouraged a narrowing of Minsky." New paper from Riccardo Bellofiore. levyinstitute.org/wp-content…
Thirty years ago today, the great economist Hyman Minsky passed away. It was Minsky who first set me on the path toward Post-Keynesian economics. Within mainstream economics, he is best known for his Financial Instability Hypothesis. Yet his theoretical legacy extends far beyond it. Building on Keynes and Kalecki, Minsky developed a comprehensive understanding of how a capitalist economy functions, in which price and profit formation, investment, financing, and the dynamics of debt are understood as interconnected processes.
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True in Spain too. Every landlord in Madrid and Barcelona screens the renters now. This is an obvious consequence of rent control. The most vulnerable, ostensible protected by the legislation, are in fact excluded from the rental market: if you cannot be evicted for non payment, then you are too risky a renter.
A friend of mine had to do a 15 minute interview about his job, income, previous rental history, etc, in order to *view* a flat. Luckily for him, he has a well-paid job, has lived in England all his life, and an impeccable rental history. I feel bad for people who don't.
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Tony Addison retweeted
Cabo Verde’s historic #WorldCup debut put the country in the global spotlight. The opportunity now is to turn that attention into lasting economic growth and jobs. Through investments in airport connectivity and tourism, @IFC_org is helping create new opportunities for local businesses and workers across the islands. ifc.org/en/stories/2026/from…
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Tony Addison retweeted
From yesterday’s @FT #AI #php #outage
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Tony Addison retweeted
Viewing the world economy as a system of chokepoints has its own deadly blind spot, Yeling Tan & coauthors write in @ForeignAffairs. It is leading policymakers to focus on capabilities rather than strategy—to fixate on what leverage they have, & what leverage others have over them, rather than considering what happens when many countries build up their chokepoint power all at once. foreignaffairs.com/united-st…
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Tony Addison retweeted
CHART OF THE DAY: The price of natural gas in the US 🇺🇸 and Europe 🇪🇺. Now, imagine running a gas-intensive company (say, a fertilizer plant) in either region. Europe >$30; US <$3
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Tony Addison retweeted
A typically punchy interview from Andy Haldane and full of his trademark soundbites. “Penny wise, Pound foolish”, I think, is a new one unless I haven’t been keeping up. Three substantive thoughts… - Andy is dead right that financial markets are looking for an excuse to reward, or penalise, good financial management. The prize here of getting the UK back to the middle of the G7 pack on its sovereign interest rates is ~£20bn/year. But that prize requires some tough calls on welfare and wider public spending. Waiting till “manana” when your political capital is likely diluted is a bearish signal for those who are watching. - Interesting rhetorical flourish on the UK being taxed out. Playing on the more regularly use maxed out (for borrowing). Whilst this is contested by many on the left, I wonder whether Andy is getting ahead of January 2027 tax receipts data when we may get the first official data to observe whether the anecdotes of capital/wealth flight translate to the tax take. That would make a tough spending review, fiendishly hard. Tax revenues growing at 2x NGDP this parliament is clearly unsustainable. - Andy sounds quite hawkish on inflation as you might expect from a former central banker. With CPI “going through the gears” over the next few months does indeed look inevitable. And because of “tough comps” next April the role of the Budget in fanning (or dousing) those flames is key. Reeves’ last Budget was actually quite disinflationary (-40bp in 2026) - to her credit. That makes price decisions by HMT going into Q2 27 (the indexation quarter) key. It will be one of the tests the market will set government at the Budget - whether Healey is a firestarter or a fireman when it comes to inflation (oh god, I’m at it now…!) Overall a very readable interview and lots of market wisdom and tough love if no.10/no.11 are in listening mode.
EXCLUSIVE: Andy Burnham must “take the knife” to public spending in the budget or risk a Liz Truss-style crisis that will “crater” the economy and the government’s popularity, an ally of the prime minister has warned Andy Haldane, a former chief economist at the Bank of England, said he feared the government would deliver a “mañana budget” that deferred the difficult decisions on public spending and “doesn’t speak to the urgency of now” In an interview with The Times, he said that Britain was “close to being taxed out and maxed out in terms of borrowing”. He spoke of concerns that the government was failing to grasp how “precarious” the fiscal position was He said that the government needs to cut the size of the state and reduce taxes if it were to “unleash the animal spirits and generate growth” Haldane warned Burnham that he cannot “vibe-code” his way to growth, and raised concerns about the gap between the government’s rhetoric and the reality. He said that the government was effectively deferring the “day of reckoning” He also said that the decision to increase taxes on banks could show that the government lacked the courage to cut public spending. He said the move was “penny wise, pound foolish” and sent a broader economic message that if businesses make profits “the taxman cometh” Haldane said that while Burnham had the potential to be a “great prime minister” who could serve two terms, the economy was his “blind spot”. He said that the fiscal situation facing Britain was “precarious” “The penny has not yet fully dropped, including in Downing Street,” he said. “You see that in us having the highest borrowing costs in the G7, despite not having the highest debts and deficits. “It’s the old Hemingway [Ernest Hemingway, the author] thing, isn’t it? How do you go bankrupt? First slowly, then very quickly. The biggest risk to Andy not transforming Britain, to not serving two terms, to not being seen in the history books as a great prime minister, is not political risk. “It’s not those who sit behind him. It’s probably not even those who sit opposite him in Westminster. Keir [Starmer] lost the dressing room. Andy’s biggest risk is that he loses the dealing room. And then that’s an even more painful way to go, as Liz Truss would tell you.” Andy Haldane: PM risks Truss-style crisis if he dodges tough choices thetimes.com/article/9b12c00…
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Tony Addison retweeted
How did advanced economies cut their debt roughly in half after WWII? In this Analytical Corner, Neil Shenai explains that the biggest driver wasn't growth or fiscal consolidation. It was financial repression. youtube.com/watch?v=EczVdPgJ…
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Tony Addison retweeted
I'm thrilled to be launching Econvitals today. It's been the main way in which I have been tracking and understanding the economy over the last several months. And I decided I might as well share it with all of you--for free. Has a combo of website, email lists & social media.
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Tony Addison retweeted
China’s surplus is not the greatest contributor to imbalances—the US deficit is. As a share of global GDP, the US’ current account imbalance was 2-3x that of China in 2023 to 2024, Nicholas Lardy writes in response to @MikeFroman in @ForeignAffairs. foreignaffairs.com/guest-pas…
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