We empirically study the effects of broadband internet diffusion on local election outcomes and on local government policies using rich data from the U.K. Our analysis suggests that the internet has displaced other media with greater news content (i.e., radio and newspapers), thereby decreasing...

This paper develops a forward-looking indicator for macroeconomic uncertainty that employers are confronted with when they take decisions about the size of their workforce. The model that provides the basis for this uncertainty indicator interprets hires and lay-off s of workers as an investment...

The U.K.'s decision to leave the EU and the voting in of the protectionist Donald Trump to the US presidency has drawn both the UK and the USA into the Nash Trap.U.S. mathematician John Nash (the movie ‘A Beautiful Mind') postulated that Adam Smith's declaration that ‘In competition,...

The UK's decision to leave the EU in the 2016 referendum created substantial uncertainty for UK businesses. The nature of this uncertainty is different from that of a typical uncertainty shock because of its length, breadth and political complexity. Consequently, a new firm-level survey, the...

In this paper I apply firm-level analysis to examine how the Brexit process has affected business investment in the UK. An interaction term of potential trade costs after exiting the EU and a measure of firms' participation in global trade is used as a proxy for firm-level exposure to...

Standard models fail to explain variation in UK capital investment. This paper develops and tests a new theory based on the insights of Edmond Malinvaud, in which investment under uncertainty is adjusted to balance the cost of excess and deficient capacity. Using quarterly UK manufacturing data...

A behavioral divide cuts across the Atlantic. Despite the recent surge of behavioral analysis in European academia, a scrutiny of decisions by courts and regulatory agencies in the US and the EU reveals striking differences: While in the US rulings by courts and regulatory agencies progressively...

The infrequent nature of crises means that pure time-series methods struggle to distinguish the effects of capital flight on asset prices from a wide range of alternative drivers. We present a new cross-sectional approach, which is motivated by the insight that investors may have different...

Findings in behavioral science, including psychology, have been influencing policies and reforms in many nations. “Choice architecture” can affect outcomes even if material incentives are not involved. In some contexts, default rules, simplification, and uses of social norms have been found...