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Discussion Paper
Revisiting China's Current Account: Evidence from Recent Revisions
Global imbalances have returned to the forefront of policy debates, with China at the center of those discussions. China's trade surplus has reached exceptionally large levels, raising concerns about its implications for the rest of the world (de Soyres et al. 2026).
Discussion Paper
Second-Round Effects of Oil Prices on Inflation in the Advanced Foreign Economies
The surge in oil prices in the wake of the post-COVID-19 economic rebound and Russia's invasion of Ukraine exerted significant upward pressure on consumer price inflation around the world. As seen in the left panel of Figure 1, Brent crude oil prices soared to nearly $130 a barrel in March 2022 and remained elevated through June, before only slowly retracing the gains.
Working Paper
Transformative and Subsistence Entrepreneurs: Origins and Impacts on Economic Growth
This paper explores the symbiotic relationship between transformative entrepreneurs and inventors, which is crucial for economic growth. We utilize microdata from Denmark to demonstrate that while the relationship between IQ and general entrepreneurship tends to be negative, it is strongly positive among transformative entrepreneurs. Transformative entrepreneurs, often with higher IQ and education levels, significantly drive R&D and business growth, thereby providing substantial opportunities for inventors. In contrast, average entrepreneurs are more influenced by their family's ...
Working Paper
Committing to Grow: Privatizations and Firm Dynamics in East Germany
This paper investigates a unique policy designed to maintain employment during the privatization of East German firms after the fall of the Iron Curtain. The policy required new owners of the firms to commit to employment targets, with penalties for non-compliance. Using a dynamic model, we highlight three channels through which employment targets impact firms: distorted employment decisions, increased productivity, and higher exit rates. Our empirical analysis, using a novel dataset and instrumental variable approach, confirms these findings. We estimate a 22% points higher annual employment ...
Discussion Paper
Which Entrepreneurs Boost Productivity?
Why do some entrepreneurs drive economic growth while others do not? This piece discusses new work that studies entrepreneurs using a comprehensive dataset from Denmark. We study who becomes an entrepreneur, along with their hiring and business decisions, and find that a distinct minority are “transformative.” These individuals, who generate disproportionate productivity gains, tend to have high IQ scores, be well-educated, and hire technical (R&D) workers. The data support the idea of productivity growth being driven by the symbiotic relationship between transformative entrepreneurs and ...
Report
Transformative and Subsistence Entrepreneurs: Origins and Impacts on Economic Growth
This paper studies how individuals sort into entrepreneurship and invention-related occupations and how their interactions shape innovation and economic growth. We develop an endogenous growth model in which occupational sorting jointly determines the supply of R&D talent and entrepreneurs’ demand for it. Empirically, using Danish microdata, we show that transformative entrepreneurs—those who hire R&D workers—tend to have higher IQ and education and build faster-growing firms than other entrepreneurs. Quantitatively, the estimated model indicates that financial barriers to education ...