Bulletin December 2007

IN THIS ISSUE...

Globalisation's threat to the welfare state
Workers in many post-industrial countries have tended to view globalisation with suspicion and even fear; and politicians have responded either by trying to hold back the tide through protectionism, or promising more financial help to those who lose out through globalisation. Using data from more than 100 countries, CEPR Research Fellow Giuseppe Bertola argues that there is also an alternative solution: fostering free financial markets, so that individuals are able to protect themselves from unexpected shocks.

Making a hash of their education?
Pot-smoking teenage dropouts are a familiar social stereotype, but academic research confirms that cannabis use has a direct impact on the levels of education young people achieve. CEPR Fellow Jan C van Ours and co-author Jenny Williams take a more detailed look at this problem, and reveals that the younger a cannabis-user takes up the habit, the more seriously it will go on to damage their education.

Doha - getting to yes
Six years down the line, after a series of dramatic bust-ups and many months of confrontational to-ing and fro-ing, the Doha Development Agenda still looks a long way from what CEPR Fellows Bernard Hoekman and David Vines call, 'getting to yes'. Using bargaining theory to show just what a difficult task the WTO's 151 member-countries have set themselves, they explore some potential ways out of the current impasse.

One pillar or two?
CEPR Research Fellow Michael Woodford attacks two widely-held tenets of current thinking about monetary policy - the idea that financial integration leaves central banks powerless in the face of global developments; and the insistence of the European Central Bank that money-growth matters in setting interest rates.