Working Papers

When oil is scarce and debt is binding: policy sequencing under a severe energy supply shock

With inflation still binding and fiscal space thin, the 2026 Iran shock revives the case for pre-committed, conditional yield anchors with clear exit

Gene Frieda

Between values and interests: drivers of EU aid

EU aid is still more poverty-focused than peers, but external policy drivers are growing and reshaping development cooperation after Global Gateway

Anna Bahí, Roel Dom, Niclas Poitiers and Camille Reverdy

How do trade restrictiveness and trade policy uncertainty affect FDI? An empirical investigation

Rising trade barriers and uncertainty are choking FDI inflows, hitting low and middle-income investors hardest in a fragmented global economy

Hites Ahir, Luca Bettarelli, Davide Furceri, Francesco Frangiamore, Jonathan D. Ostry and Francesco Scianna

Size versus allocation in capital market development: evidence from pension funds and insurance companies

EU capital markets stay small as savings sit in deposits, making insurers and pension funds pivotal if portfolios shift into productive assets

Marie-Sophie Lappe and David Pinkus

Defence innovation and procurement reform: an empirical evaluation of the US Defense Innovation Unit

Ethan Kapstein, Javier Ospital and Guntram B. Wolff

Challenges to the integration of the Western Balkans into European Union supply chains

Western Balkan EU integration has deepened, yet rising non-tariff barriers and new EU rules keep trade costs high despite zero tariffs

Madalena Barata da Rocha, Niclas Poitiers and Nina Vujanović

Who controls the defence industry?

The defence industry is gaining importance in Europe, but the methods by which states exercise control over it are varied and poorly understood

Marco Becht, Juan Mejino-López and Guntram B. Wolff

The European Union’s external imbalances: past, future and policy

Europe’s rising external surplus now rivals China’s, reflecting weak investment and growing surpluses, pointing to a need for pro-investment reforms

Zsolt Darvas, Costanza Greppi Maturana, Alexandre Mendonça, Camille Reverdy, Bo Sangers and Jeromin Zettelmeyer

Debt sustainability in Japan and the case for a fiscal council

Rising rates are testing Japan’s fiscal framework, with debt dynamics hinging on growth and pointing to the need for adjustment and a fiscal council

Tomomi Miyazaki, Marie-Sophie Lappe and Roel Dom

Carbon pricing beyond borders: assessing climate policy spillovers from the EU carbon border adjustment mechanism

EU CBAM is nudging trade-exposed partners towards carbon pricing, but spillovers are concentrated in high and upper middle-income countries

Anna Bahí, Maximilian Fuchs and Camille Reverdy

Investing for tomorrow: long-term investment, economic scale and the green transition

Climate mitigation investment increases with long horizons, economic scale and investor diversity, underscoring long-term capital and climate clubs

Philip Ushchev and Guntram B. Wolff

Tackling India's jobs plight: underutilised levers and lessons from China

This paper contrasts the development trajectories of these two economies and identifies several underutilised jobs-growth levers in India

Alicia García-Herrero and Rajeswari Sengupta

Europeans should be allowed to trade personal data

Well-designed data markets could curb gatekeeper power, protect privacy and pay users for sharing data, while preserving ad-supported digital services

Paul Heidhues, Nick Jacobson, Giorgio Monti and Fiona M. Scott Morton

Growth without profits: how will ‘involution’ in China end?

China’s involution drives price wars and misallocation as even laggards slash prices, propping up zombie firms and stoking trade tensions

Alicia García-Herrero and Jianwei Xu

The Western Balkan energy sector: between Russia, the European Union and the green transition

This paper analyses energy transitions in the Western Balkans, away from dependence on Russia and towards the EU electricity market

Nina Vujanović, Rouven Stubbe and Maria Catarina Louro

How resilient is Russia’s economy after four years of war?

Resilience in Russia’s 2022–25 economy is fading as war spending slows growth, entrenches inflation and amplifies structural fragilities

Marek Dabrowski