European Economic ReviewPub Date : 2026-01-01Epub Date: 2025-11-01DOI: 10.1016/j.euroecorev.2025.105192
Knut Are Aastveit , Hilde C. Bjørnland , Jamie L. Cross , Helene O. Kalstad
{"title":"Unveiling inflation: Oil shocks, supply chain pressures, and expectations","authors":"Knut Are Aastveit , Hilde C. Bjørnland , Jamie L. Cross , Helene O. Kalstad","doi":"10.1016/j.euroecorev.2025.105192","DOIUrl":"10.1016/j.euroecorev.2025.105192","url":null,"abstract":"<div><div>After decades of low and stable inflation, advanced economies experienced a sharp and persistent surge in inflation following the COVID-19 pandemic. While many studies have examined the sources of this inflation, less attention has been paid to how domestic inflation expectations amplify global shocks. This paper makes a novel contribution by quantifying that amplification mechanism across six advanced, inflation-targeting economies: the United States, Canada, New Zealand, the Euro Area, the United Kingdom, and Norway. Using a structural Bayesian vector autoregression model, we jointly identify global demand and supply shocks, including various oil market shocks and global supply chain disruptions, as well as domestic shocks to inflation and inflation expectations. We show that these global shocks were key drivers of the post-pandemic inflation surge in all countries studied. Importantly, our counterfactual analysis reveals that inflation expectations have significantly amplified the transmission of global shocks, particularly in Canada, New Zealand, and the US. These findings demonstrate that the interaction between global forces and country-specific expectations is central to understanding inflation dynamics, and underscore the importance of managing inflation expectations as a tool to mitigate persistent inflation.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"181 ","pages":"Article 105192"},"PeriodicalIF":2.4,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145475372","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
European Economic ReviewPub Date : 2026-01-01Epub Date: 2025-10-15DOI: 10.1016/j.euroecorev.2025.105177
Laura Pagani , Giovanni Pica
{"title":"A peer like me? Early exposure to high achievers in math and later educational outcomes","authors":"Laura Pagani , Giovanni Pica","doi":"10.1016/j.euroecorev.2025.105177","DOIUrl":"10.1016/j.euroecorev.2025.105177","url":null,"abstract":"<div><div>Thanks to data allowing us to observe children’s peers multiple times, we investigate whether exposure during primary school to same- and opposite-gender high achievers affects children’s outcomes after termination of the exposure. Exploiting the as-good-as random allocation of children across classes within Italian primary schools, we find that exposure to a higher share of same-gender math high achievers is related to better academic performance, for both boys and girls, three years after termination of the exposure. Negative effects are observed in case of exposure to a higher share of opposite-gender high achievers. Results are consistent with a role model channel.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"181 ","pages":"Article 105177"},"PeriodicalIF":2.4,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145475375","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
European Economic ReviewPub Date : 2026-01-01Epub Date: 2025-10-18DOI: 10.1016/j.euroecorev.2025.105186
Teppo Felin , Madison Singell
{"title":"Technology: Theory-driven experimentation and combinatorial salience","authors":"Teppo Felin , Madison Singell","doi":"10.1016/j.euroecorev.2025.105186","DOIUrl":"10.1016/j.euroecorev.2025.105186","url":null,"abstract":"<div><div>Recombination has long been seen as a central mechanism for explaining technological evolution and economic growth. Yet this view suggests several puzzles. First, the set of potential combinations is astronomically large, raising the question of how humans somehow arrive at useful combinations (amongst indefinite possibilities). And second, just as possible combinations are “unprestatable” in advance, the same goes for the elements or components that might serve as building blocks of combination. The central question, then, is how actors generate salience for useful combinations as well as plausible combinatorial components. We argue that <em>theory-driven experimentation</em> generates combinatorial salience by providing a shortcut for brute force search—making the combinatorial explosion analytically tractable. We link our argument to existing approaches to combination and technology, in particular, Koppl et al.’s <em>Explaining Technology.</em> We augment long-run, evolutionary explanations of combinatorial technology with a more decision-oriented approach. In all, we argue that human theorizing—the forward-looking use of science and causal reasoning—functions as a generative metatechnology that guides experimentation and enables the discovery of useful combinations.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"181 ","pages":"Article 105186"},"PeriodicalIF":2.4,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145419636","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
European Economic ReviewPub Date : 2026-01-01Epub Date: 2025-10-14DOI: 10.1016/j.euroecorev.2025.105131
Núria Rodríguez-Planas , Alan Secor , Rafael De Balanzó Joue
{"title":"Building resilience in college: evidence from a randomized trial","authors":"Núria Rodríguez-Planas , Alan Secor , Rafael De Balanzó Joue","doi":"10.1016/j.euroecorev.2025.105131","DOIUrl":"10.1016/j.euroecorev.2025.105131","url":null,"abstract":"<div><div>We conducted a randomized evaluation of a primary prevention intervention whose main goal was to increase the resilience of students from a large broad-access Hispanic Serving Institution and commuter urban college. In a 90-minute workshop, students (1) were introduced to the resilient-thinking approach, which offers conceptual tools to cope with unexpected negative shocks; (2) worked individually and in groups to identify challenges in their community; and (3) brainstormed strategies to address them. We find that the intervention increased by 5 percent of a standard deviation the short-run resilience of the average student. The intervention was most effective for students with weaker <em>individual</em> protective factors at baseline (the most vulnerable students, those with lower resilience, and with higher mental health problems), and for those with stronger <em>community</em> protective factors, suggesting that individual and community factors mediate differently within this intervention. The intervention effects on students’ resilience persisted over time. These effects were mostly driven by an improvement in students’ collaboration (i.e., maintenance and formation of support networks and personal relationships), and vision (i.e., sense of purpose and belief in an ability to define, clarify, and achieve goals). As anticipated due to the low-dose nature of the intervention, we did not find effects on academic performance the semester of the intervention or the following one, nor on depression and anxiety the following semester.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"181 ","pages":"Article 105131"},"PeriodicalIF":2.4,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145365256","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
European Economic ReviewPub Date : 2026-01-01Epub Date: 2025-11-05DOI: 10.1016/j.euroecorev.2025.105182
Simona E. Cociuba , James C. MacGee
{"title":"Sectoral reallocations with an aging population","authors":"Simona E. Cociuba , James C. MacGee","doi":"10.1016/j.euroecorev.2025.105182","DOIUrl":"10.1016/j.euroecorev.2025.105182","url":null,"abstract":"<div><div>Demographic projections show the majority of OECD economies will see declines in their working-age populations in the coming decades. This is potentially problematic, since young workers account for a large share of net labor reallocation between growing and shrinking industries. To examine if sectoral reallocation costs are exacerbated by an aging population, we develop a three-sector perpetual youth search model with sector-specific human capital. Our model features two interconnected frictions: <em>sectoral preference</em>, which implies that only some workers are mobile across sectors, and a <em>wage bargaining distortion</em>, whereby mobile workers’ outside option of searching in the growing sector dampens the fall in shrinking sector wages, leading to rest unemployment. In our parametrized model, as population growth declines from 3 to <span><math><mrow><mo>−</mo><mn>1</mn></mrow></math></span> percent, output losses from a one-time reallocation shock of 3 percentage points increase seven-fold to nearly 10 percent of annual GDP, and there are extended periods of high unemployment and low vacancies.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"181 ","pages":"Article 105182"},"PeriodicalIF":2.4,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145475374","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Understanding witness reporting of intimate partner violence","authors":"Rebeca Echavarri , Ariadna García-Prado , Fernanda Gutierrez-Navratil , Sara Martinez-de-Morentin","doi":"10.1016/j.euroecorev.2025.105208","DOIUrl":"10.1016/j.euroecorev.2025.105208","url":null,"abstract":"<div><div>We conducted an incentivized experiment to evaluate the impact of anonymity (witness and aggressor) and institution type (whether or not it has legal enforcement) on witness propensity to report Intimate Partner Violence (IPV). We used a hypothetical vignette that placed subjects in the role of witnesses to a case of IPV, who must decide whether or not to report IPV in four different treatments involving variations in anonymity conditions and type of institution. We find that preserving aggressor anonymity and being able to report to a legal enforcement institution (police as opposed to social services) promote witness reporting. Additionally, we examined the underlying assumption that fear drives these outcomes by designing a laboratory experiment in which fear is elicited by exposing subjects to a horror short. The results show that fear reduces reporting, and aggressor anonymity offsets the effect of fear.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"181 ","pages":"Article 105208"},"PeriodicalIF":2.4,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145529359","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
European Economic ReviewPub Date : 2026-01-01Epub Date: 2025-11-03DOI: 10.1016/j.euroecorev.2025.105194
Ashani Amarasinghe , Paul A. Raschky , Yves Zenou , Junjie Zhou
{"title":"How natural disasters spread conflict","authors":"Ashani Amarasinghe , Paul A. Raschky , Yves Zenou , Junjie Zhou","doi":"10.1016/j.euroecorev.2025.105194","DOIUrl":"10.1016/j.euroecorev.2025.105194","url":null,"abstract":"<div><div>This paper studies how natural disasters spread conflicts within a network. We first construct a new panel data set that combines geo-referenced information about conflict events and natural disasters, for 5,944 districts in 53 African countries, over the period 1989–2020. Considering natural disasters as exogenous shocks that affect the combatants’ activity in a locality, we find that natural disasters decrease conflict incidence in the affected locality, increase conflict incidence in neighbouring localities, and lead to an overall net increase in conflict incidence. The spatial dispersion of conflict varies by the level of local rent-seeking opportunities and the level of international, post-disaster aid. We then provide a simple theoretical framework that may explain this conflict dispersion pattern. Findings provide important implications for implementing local and aggregate level conflict mitigation policies.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"181 ","pages":"Article 105194"},"PeriodicalIF":2.4,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145475371","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
European Economic ReviewPub Date : 2026-01-01Epub Date: 2025-10-24DOI: 10.1016/j.euroecorev.2025.105188
Joël J. van der Weele , Cristina Figueroa-Sisniega
{"title":"Inconvenient truths: A note on information avoidance and the price of fairness","authors":"Joël J. van der Weele , Cristina Figueroa-Sisniega","doi":"10.1016/j.euroecorev.2025.105188","DOIUrl":"10.1016/j.euroecorev.2025.105188","url":null,"abstract":"<div><div>Previous literature has shown that people are often reluctant to learn whether individually profitable actions have negative consequences for others. In an experimental allocation decision, we vary the ‘inconvenience’ of becoming informed about the payoffs of another player by changing the costs and benefits of choosing the fair outcome. Making the fair allocation cheaper to implement turns out to have a multiplier effect, raising both altruistic choices of informed subjects and the fraction of subjects that chooses to become informed. Thus, in situations of uncertainty, subsidizing altruistic choices to decision makers could be an effective tool for raising social welfare. By contrast, variations in the size of recipients’ potential payoffs have a smaller effect on ignorance and fair choices.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"181 ","pages":"Article 105188"},"PeriodicalIF":2.4,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145419635","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
European Economic ReviewPub Date : 2026-01-01Epub Date: 2025-10-24DOI: 10.1016/j.euroecorev.2025.105159
Frauke von Bieberstein , Eberhard Feess , Natalie Packham
{"title":"Multi-step delegation and the frequency of immoral decisions: Theory and experiment","authors":"Frauke von Bieberstein , Eberhard Feess , Natalie Packham","doi":"10.1016/j.euroecorev.2025.105159","DOIUrl":"10.1016/j.euroecorev.2025.105159","url":null,"abstract":"<div><div>People who can increase their payoff by violating a moral norm may delegate decisions to dilute their perception of responsibility, which can lead to a higher overall frequency of moral transgressions. To structure the different effects at work, we first develop a model with multiple delegation stages where decision makers have private information on their lying costs and dilution of responsibility. Our model shows that the impact of delegation is generally ambiguous, but also identifies intuitive sufficient conditions for more moral transgressions with delegation. We then perform a large-scale online experiment where subjects in groups of three can increase their payoff by lying about the outcome of a lottery. We find no evidence that delegation increases the overall lying frequency. Estimating the subjects’ preferences from the data, we find a normal distribution for lying costs and a strongly negatively skewed distribution for a rather low dilution effect.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"181 ","pages":"Article 105159"},"PeriodicalIF":2.4,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145419637","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
European Economic ReviewPub Date : 2026-01-01Epub Date: 2025-10-31DOI: 10.1016/j.euroecorev.2025.105191
Pei Kuang , Kaushik Mitra , Li Tang , Shihan Xie
{"title":"Macroprudential policy and housing market expectations","authors":"Pei Kuang , Kaushik Mitra , Li Tang , Shihan Xie","doi":"10.1016/j.euroecorev.2025.105191","DOIUrl":"10.1016/j.euroecorev.2025.105191","url":null,"abstract":"<div><div>This paper studies how macroprudential policy changes affect consumers’ housing market expectations and housing affordability perceptions in the United Kingdom. We conduct a large-scale online survey experiment presenting hypothetical changes of three borrower-based macroprudential tools: residential loan-to-value (LTV), buy-to-let LTV, and loan-to-income ratios. We find that policy tightening lowers house price expectations, reduces homebuying intentions, and worsens affordability assessments, while loosening has the opposite effects. The residential LTV ratio is the most effective tool. To interpret these findings, we embed our survey estimates into a dynamic model linking expectations, credit, and housing demand. The model shows that immediate belief shifts significantly amplify house price and consumption responses, highlighting the importance of expectations in the transmission of macroprudential policy.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":"181 ","pages":"Article 105191"},"PeriodicalIF":2.4,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145475373","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}