Geoeconomic fragmentation may have major implications for the global economy. This column uses using a multi-country New Keynesian model to analyse the effects of various
By increasing the cost of using fossil fuels, carbon taxes should incentivise substitution toward cleaner energy. In practice, firms may shift production and emissions across
Financial crises usually inflict the most damage when banks suddenly shift from pursuing profits to survival. This column argues that such drastic behavioral changes render