VoxTalks Economics

In the oldest Japanese municipalities, close to half the residents are already over 65. As young people move to cities, the retailers close, then the clinics, then the bus that used to reach the next town. Rural Japan is not simply ageing: it is emptying.
Elisa Giannone (CREI, CEPR) and her co-authors have analysed Japan's 1,741 municipalities from 1980 onwards. The oldest quarter of them lost around 26% of their population by 2010; the youngest quarter grew by 22%, and the gap between them is still widening. 
Taxing city dwellers could reverse the trend. But that's a century-long policy, that would also lower national income per head by about 1.3%. There is no version of this without a bill attached, she warns.
The research behind this episode:
Giannone, Elisa, Yuhei Miyauchi, Nuno Paixão, Xinle Pang, and Yuta Suzuki. 2026. "Living in a Ghost Town: The Geography of Depopulation and Aging." CEPR Discussion Paper 21447 (gated).
To cite this episode:
Phillips, Tim, and Elisa Giannone. 2026. "What price to save Japan's ghost towns?" VoxTalks Economics (podcast).

About the guest

Elisa Giannone is a researcher at CREI, an Adjunct Professor at Universitat Pompeu Fabra, an Affiliated Professor at the Barcelona School of Economics. She works on internal migration, regional income divergence, the spatial consequences of local shocks and the question of why people move.
Research cited in this episode

Social and natural population change. Demographers separate population movements through migration, known as social change, from births and deaths, known as natural change. Giannone's team runs both counterfactuals separately. Shut down migration and the oldest municipalities still age, but the population loss between 1980 and 2010 falls from nearly 0.3 log points to under 0.1. The framework follows Stanley Smith, Jeff Tayman and David Swanson's standard treatment of state and local population projections.
Scale economies in local public services. A 1% increase in local population is associated with a 0.53% fall in municipal government spending per head. Roads, schools, clinics and administration carry a large fixed cost, so the cost of serving each remaining resident rises as a town shrinks. This is the fiscal arithmetic that makes depopulation expensive.
Consumption-equivalent flow utility. The paper's measure of quality of life, amenity-adjusted real income. It captures what the residents of a place can actually buy and enjoy rather than what they earn on paper, which matters when the shops and the doctors are leaving.
The five oldest prefectures. Kochi, Shimane, Tokushima, Tottori and Yamagata, ranked by elderly share in 2015. They are the target group in every policy simulation, and their combined elderly share reaches nearly 60% by 2215 under the baseline projection.
Municipal extinction. Hiroya Masuda's 2014 book Chiho Shometsu warned that unipolar concentration in Tokyo would drive hundreds of rural municipalities out of existence. It set the terms of Japan's regional revitalisation debate, and the paper's projections give that warning a number.
United Nations World Population Prospects. Giannone's figures for the global picture, including the count of countries that have already passed peak population and those projected to do so by the mid 2050s, come from the UN projections rather than from the paper itself.
More VoxTalks Economics episodes

Economic decline and the rise of populism. Andrés Rodríguez-Pose explains what happens politically in the places this episode watches emptying, and why long term regional decline shows up at the ballot box.
Related reading on VoxEU.org

Living in a ghost town: The geography of depopulation and ageing. The authors' own column, with the charts behind this episode.
Japan's age wave: Challenges and solutions, a column by Andrew Stawasz, Paige Kirby, JP Sevilla and David Bloom on the national scale of the problem this episode breaks down by region.
Mobile seniors and local economic development. Marco Badilla-Maroto, Benjamin Faber, Antoine Levy and Mathilde Munoz find that retirees moving into poorer French regions bring economic gains with them, a useful counterweight to the Japanese story.
Population shrinking and the future of European municipalities, in which Friedrich Heinemann, Alexander Kalb and Benny Geys set out the scale economies problem for Europe's own shrinking towns.

Travel broadens the mind. So the Voxtalks visits a conference, we find the most interesting research from economists just starting out, and hand three of them a microphone. Ad that is today's episode, recorded at the CEPR Paris School of Economics Policy Forum 2026.
Listen to hear three findings that undercut conventional wisdom. Guido Lamarmora (University of Nottingham) argues that the usual policy prescription for developing economies that want to industrialise of raising agricultural productivity can deepen their reliance on farming rather than break it. Costanza Tomaselli (Imperial College London) studies what an energy price shock in Mexico does to employment: she finds that firms without access to credit hire rather than fire. Mushegh Tovmasyan (University of Paris-Saclay) follows Armenia after Russia was sanctioned in 2022, where trade doubled but the gains went to incumbents and their workers, not to new firms.
The research behind this episode:
Lamarmora, Guido. 2026. "The Food Problem in an Open Economy." 
Tomaselli, Costanza, and Armando Rangel Colina. 2026. "Energy Shocks, Employment Response, and Heterogeneous Credit Access." 
Tovmasyan, Mushegh. 2026. "Trade and Firm-Level Adjustments to Geopolitical Shifts: Evidence from Armenia." 
To cite this episode:
Phillips, Tim, Guido Lamarmora, Costanza Tomaselli, and Mushegh Tovmasyan. 2026. "The Next Generation: PSE 2026." VoxTalks Economics (podcast).

About the guests

Guido Lamarmora is completing his PhD at the University of Nottingham, with research on international trade, macro development, and structural transformation. Soon you will find him at Johannes Gutenberg University Mainz as a postdoc.
Costanza Tomaselli is a PhD candidate at Imperial College Business School, with research spanning financial economics, industrial organisation, and energy economics.
Mushegh Tovmasyan is a PhD candidate at University Paris-Saclay, RITM, with research spanning international trade, sanctions, and firm and worker outcomes, built on newly accessible Armenian administrative microdata.
Research cited in this episode

The food problem. The long-standing account of why poor countries keep so many workers in agriculture; households spend most of their income on food, and low farm productivity means many workers are needed just to feed the population. Lamarmora's point is that the standard fix, raising farm productivity or opening to trade, need not hold once you model the economy as open and put land into the picture.
Land as a fixed factor. Agriculture uses land, which is fixed, as well as labour. Ignore it and a country with many workers per hectare looks unproductive when it is not. Once land is accounted for, low-income countries turn out to have relatively high agricultural productivity, which flips the conventional diagnosis.
Input-output linkages. Industry is wired into the rest of the economy through supply chains, so a rise in industrial productivity or cheaper industrial imports lowers costs everywhere, including on the farm. In Lamarmora's estimates the gains from industry run roughly twice those from raising agricultural productivity.
Storm Uri. The February 2021 winter storm that damaged the natural gas pipeline supplying Mexico's electricity, producing a sharp and spatially uneven jump in power prices. Tomaselli uses distance to gas-fired capacity as the source of variation to isolate the labour-market effect of an energy shock.
Credit access as a shock absorber. Mexico gave firms no fiscal support after the shock, which let Tomaselli see what finance alone can do. Firms with credit did not change production or employment; they borrowed to smooth the shock. The suggestive model implication is that easing credit frictions could do the work of a blanket energy subsidy at lower cost to the public purse.
Sanctions and the neutral economy. Sanctions destroy trade between the sanctioning and target countries but open opportunities for neutrals. Armenia, a landlocked transition economy with trade near 100% of GDP and Russia as its largest partner, saw trade double to triple after 2022. Tovmasyan uses Armenian customs and matched employer-employee microdata to ask whether this is new production, rerouting, or just higher prices.
Incumbent-led intermediation. The trade boom was driven by existing large firms scaling up relationships and adding sanctioned goods such as electronics and machinery, not by broad new entry. Employment barely moved; gains showed up as more hours and higher wages for existing workers, which Tovmasyan reads as intermediation rents shared with labour.
More VoxTalks Economics episodes

Previous next generations:
Paris 25: Ali Bakhtawar, Lucie Giorgi, and Alishuba Philip discuss Lawfare, single sex schooling, and slum clearance.
PSE 25: Pelin Ozgul, Deepakshi Singh, and Nathan Vieira on AI in call centres, female employment in India, and short-time work in Europe.
Paris 24: Laura Arnemann, Gustavo Julio García Bernal, and Matyas Molnar tall Tim about performance-related pay, intergenerational wealth, and international exhibitions. 
PSE 24: Alice Chiocchetti, Yuan Hu, and Christoph Semken describe their research on profit-shifting, green tech, and the effect of changing to a greener lifestyle.
Follow VoxTalks to discover more of yesterday’s stars of tomorrow.

Recorded at the PSE-CEPR Policy Forum 2026.
A country wants a stable exchange rate, it wants money to move freely across its borders, and it wants to set its own interest rates. It's a well-known trilemma. Central bankers must pick any two, because you cannot have all three. 
History, it turns out, did not read that memo.
Eric Monnet has spent years reading the balance sheets that central bankers kept on each other. Since 1891 the Bank of France paid teams of multilingual economists to copy out the weekly and monthly accounts of every other central bank in the world. Those ledgers, now digitised, show that central banks have been far more than interest-rate setters. For more than a century they have quietly expanded their balance sheets to cushion their economies against shocks arriving from abroad. In this week's VoxTalk, Monnet argues we have seriously underestimated how much room to manoeuvre they have used since the 19th century.
The research behind this episode:
Bazot, Guillaume, Eric Monnet, and Matthias Morys. 2024. "Central Banks and the Absorption of International Shocks (1891-2019)." CEPR Discussion Paper No. 19646. (Gated.)
To cite this episode:
Phillips, Tim, and Eric Monnet. 2026. "Absorbing shocks since 1891." VoxTalks Economics (podcast).

About the guest

Eric Monnet is Professor at the Paris School of Economics and EHESS, and a Research Fellow at CEPR. An economic historian, his work spans central banking, the international monetary system, and the history of European financial systems across the 19th and 20th centuries. He previously worked as an economist at the Bank of France, and his book Controlling Credit examines monetary policy in postwar France.
Research cited in this episode

The Mundell trilemma. Formulated by Robert Mundell in the 1960s, the trilemma holds that an open economy cannot simultaneously maintain a fixed exchange rate, free capital movement, and an independent monetary policy; it can have any two. Mundell received the Nobel Prize in part for the idea. 
The global financial cycle and the dilemma. Helene Rey argues that even a floating exchange rate does not buy full monetary autonomy, because a common global financial cycle, driven by the risk appetite of large financial institutions, moves interest rates and exchange rates across countries at once. A shock in one emerging market prompts investors to demand higher compensation across others they treat as similar. The trilemma, in this view, is really a dilemma.
The Bank of France archive. The research department of the Bank of France was founded to track the financial operations of foreign central banks, collecting their weekly and monthly balance sheets from 1891 onward. The dataset assembled from these records covers 23 countries, essentially every central bank in existence by the late 1930s, and combines balance-sheet data with monthly figures on industrial production, consumer prices, and stock markets.
Discount loans, open market operations, and foreign exchange interventions. The specific tools have changed completely; the behaviour has not. In the 19th century central banks intervened by discounting commercial bills and holding gold or foreign deposits; today they conduct open market operations in government bonds and hold US Treasury bills. Across all these forms, the response to an external shock, expanding domestic assets to supply liquidity, has been consistent.
Taming the Global Financial Cycle. The predecessor study by the same authors: Bazot, Monnet, and Morys, "Taming the Global Financial Cycle: Central Banks as Shock Absorbers in the First Era of Globalization," Journal of Economic History 82(3), 2022, which established the pattern for the classical gold standard period.
More VoxTalks Economics episodes

The Bank of England's Capital Mistake. Former Bank insiders David Aikman and John Vickers argue that cutting equity capital requirements for UK banks could raise the odds of a financial crisis, a companion piece on what central bank balance sheets are for.
Related reading on VoxEU.org

Central banks and the absorption of international shocks, the authors' own VoxEU column setting out the dataset and the two main findings in brief.

If you run a business that exports to the United States, how big is the tariff you have to pay? In 2025 that question was hard to answer. Between February and December, 53 separate announcements introduced, delayed, reinstated or changed US tariffs, with different countries and products pulled in or exempted each time.
Kalina Manova (UCL, CEPR) and her colleagues built a database of every one of those announcements, but they also measured  the confusion that those announcements created. She tells Tim Phillips about how tariff confusion has become a second tax on trade, as confusion puts off exporters: but it's one that raises no revenue. 
On average, uncertainty about the actual tariff doubled the damage done to trade by the tariff hikes themselves. For some countries it tripled it. Does this result mean that, if the US cleared up the confusion by not changing its tariffs regularly, it could double tariff income for the same impact on trade?
The research behind this episode:
Manova, Kalina, Dennis Novy, Thomas Sampson, and Aaron Tang. 2026. "Tariff Confusion." CEPR Discussion Paper DP21688 (gated).
To cite this episode:
Phillips, Tim, and Kalina Manova. 2026. "Tariff Confusion." VoxTalks Economics (podcast).

About the guest

Kalina Manova is Professor of Economics at University College London and a Research Fellow at the Centre for Economic Policy Research. Her work spans global production networks and multinational activity, firm productivity and management, trade policy, and the financial frictions that shape international trade and investment. She holds an AB, AM and PhD from Harvard, and has previously held posts at Stanford, Princeton and Oxford.
Research cited in this episode

US Tariff Announcement Database (USTAD). The dataset Manova and her co-authors assembled by hand from US presidential executive orders and proclamations, recording all 53 tariff announcements of 2025 and tracing, for roughly 230 origin countries and more than 18,000 ten-digit product categories, the statutory tariff in place each month.
The four confusion measures. With no direct way to measure confusion, the paper proxies it four ways: the cumulative number of relevant announcements a firm had to track; the number of possible tariff calculations those announcements could produce (labelled tariff mess, defined as two to the power of the number of announcements); the highest tariff a firm might infer if it heard only the bad news (tariff max); and how far that worst case sits above the true statutory rate (tariff miss).
The firm survey. A survey of roughly 4,500 firms in the US and Canada in March and April 2025 found that around 45% believed tariffs on Chinese goods were below 20%, when the true average was about 42%; at the same time, 87% underestimated how many announcements had postponed or rolled back tariffs. Firms were wrong in both directions at once.
Trade policy uncertainty. A prior literature on uncertainty about future tariffs, which tends to find that firms delay forming trade relationships when the future is unclear. The paper’s contribution is to separate confusion about current tariffs from uncertainty about future ones, and to show the former bites on its own.
Relationship-specific investment and trust. Trade in goods that require buyers and suppliers to customise to one another, or that sit in stickier supply relationships, proved more resilient to confusion; so did trade with countries whose populations report higher trust in foreigners. Informal trust, rather than formal contract enforcement, did the work of cushioning the shock.
The IEEPA ruling. In February 2026 the US Supreme Court ruled that the tariffs imposed in 2025 under the International Emergency Economic Powers Act were unlawful. The paper's data stops before the ruling, which generated fresh policy change and, presumably, fresh confusion.
More VoxTalks Economics episodes

World War Trade. Richard Baldwin on how the April 2025 tariffs settled into a trade Cold War, and why the rest of the world kept trading without the US.
Europe in the Middle. Pol Antràs and Beata Javorcik on where redirected Chinese exports go when they can no longer sell in the US, and what that means for European firms and consumers.
How exchange rates responded to tariffs. Giancarlo Corsetti on why the dollar fell after Liberation Day when tariffs should, in theory, have pushed it the other way.
Related reading on VoxEU.org

Trump and Tariffs, a VoxEU debate page collecting research on how the 2025 tariffs are reshaping supply chains, trade relationships and market stability.

Recorded at the PSE-CEPR Policy Forum, Paris School of Economics.
Tariffs move trade around, but so does economic power. When one economy dominates, other countries fall into step with it. They trade with the dominant economy, and also with each other. 
Alberto Martin (Barcelona School of Economics, CEPR) is one of a team that has tracked the influence of hegemons, large dominant economies, on trade from the start of the 19th century. In  our latest VoxTalk he tells Tim Phillips about how they used treaties (not necessarily about trade) as a proxy for alignment, and built a database of 77,000 of them signed between 1800 and 2020 to test their theory.
Hegemons sign a disproportionate share of these international agreements. After treaty-signing, trade links become stronger. But treaty-signing has fallen sharply over the past 15 years, as much as it did during the two world wars. If we are heading towards a multipolar world, might what will the absence of a global hegemony do to trade?
The research behind this episode:
Broner, Fernando, Alberto Martin, Josefin Meyer, and Christoph Trebesch. 2025. "Hegemonic Globalization." CEPR Discussion Paper 20339 (gated).
To cite this episode:
Phillips, Tim, and Alberto Martin. 2025. "How superpowers shape trade." VoxTalks Economics (podcast).

About the guest

Alberto Martin is a Senior Researcher at the Center for Research in International Economics (CREI), an Adjunct Professor at Universitat Pompeu Fabra, a Research Professor at the Barcelona School of Economics, and a Research Fellow at the Centre for Economic Policy Research, where he directs the International Macroeconomics and Finance programme. His research spans macroeconomics, finance, and international economics, including asset bubbles, credit cycles, sovereign debt, and the political economy of trade.
Research cited in this episode

Global Treaty Database. The dataset at the heart of the paper, assembled by the authors from the United Nations Treaty Collection, the League of Nations archive, and country-specific historical sources. It records roughly 77,000 international agreements signed between 1800 and 2020, most of them bilateral, sorted into economic and non-economic categories such as trade, taxation, migration, borders, and military cooperation.
Hegemonic stability. The idea, introduced by Charles Kindleberger in 1973, that an open and stable world economy needs a single dominant power to underwrite it. This paper builds a formal model of the mechanism Kindleberger described, and asks what happens to openness when dominance is contested.
Alignment and UN voting. The most common existing proxy for how closely two countries are aligned is whether they vote together at the United Nations. The authors' treaty measure correlates with UN voting in some periods and less in others, partly because many UN votes turn on narrow questions; treaties cover more policy areas and reach back 200 years, which UN voting cannot.
The recent decline in treaty-signing. Since 1800 treaty-signing has trended upward, interrupted by three sharp falls: the First World War, the Second World War, and a decline over the last 15 years that is proportionally comparable to the first two. The authors checked large-country sources directly to rule out a reporting lag, and the fall appears real.
More VoxTalks Economics episodes

The safety paradox. Isabelle Méjean on how, when countries impose trade restriction to protect themselves, it also makes conflict more likely. 
Related reading on VoxEU.org

Why globalisation needs a leader: Hegemons, alignment, and trade, the authors' own VoxEU column setting out the theory of hegemonic globalisation and what a shift from a unipolar to a multipolar world might mean for trade.
From bilateralism to a system: Europe's early trade treaties and lessons for EU trade policy in a contested world, a VoxEU column by Laura Panza and Maria Ptashkina drawing on nearly 900 commercial treaties from 1815 to 1919 to argue for expanding networks of agreements even without universal multilateralism.