NEW PARADIGM
The New Paradigm Papers of the Month of March
Once a month the Forum New Economy is showcasing a handful of selected research papers that lead the way towards a new economic paradigm.
BY
DAVID KLÄFFLINGPUBLISHED
31. MARCH 2025READING TIME
5 MIN
Where Have All the Good Jobs Gone? Changes in the Geography of Work in the US, 1980-2021
Gordon H. Hanson, Enrico Moretti
Bringing back ‘good jobs’ was central to Biden’s industrial policy strategy (CHIPS Act and Inflation Reduction Act) and was understood as ‘good manufacturing jobs’. A new study on the US labor market now shows that most good jobs (i.e., full-time workers attain with high wages) have indeed shifted away from the industrial sector. For college graduates, good jobs today are concentrated in the business, professional, and IT service sector. Good jobs for workers without a college degree are in construction. Moreover, the authors show a strong spatial persistence of good jobs concentration, which underlines the importance of place-based policies.
The Compliance Effects of the Automatic Exchange of Information: Evidence from the Swiss Tax Amnesty
Enea Baselgia
Today, around 10% of global corporate tax revenue is lost in offshore tax havens. Before the introduction of the automatic exchange of bank information in 2017, offshore tax evasion was even more prevalent. A recent study now analyzes the effects of this policy reform on tax compliance in Switzerland – one of the world’s most infamous tax havens. With detailed administrative tax data, the author provides causal evidence for positive compliance effects. The reform resulted in taxpayers disclosing a sum of 42 billion Swiss francs, equivalent to 6% of GDP. These results corroborate the necessity of global tax policy coordination.
Beyond Tariffs: How Did China’s State–Owned Enterprises Shape the US–China Trade War?
Felipe Benguria, Felipe Saffie
The “most beautiful word in the dictionary” is tariffs, according to US President Trump. These days, it feels like the US government is imposing new trade tariffs every day, which obscures the fact that they are not the only element in trade disputes. A recent study analyzing the US-China trade war during the first Trump administration examines the role of Chinese state-owned enterprises: Their strong ties to the country’s political leadership allowed them to be strategically used to disrupt trade and harm the US economy. The authors show that the presence of SOEs in Chinese imports had a significant negative effect on US exports (4%) in addition to the impact of tariffs (8%). Importantly, the decline in Chinese imports by state-owned enterprises particularly affected industries in US regions with a high share of Republican voters, underlining the political nature of the measures.
Structural Reforms and Economic Performance: The Experience of Advanced Economies
Nauro F. Campos, Paul De Grauwe, Yuemei Ji
The term structural reforms is often used by market-liberal economists and politicians to sell deregulation. The argument is that by leveraging economic efficiency gains, in the end everyone will benefit in welfare terms. In a survey article, recently published in the Journal of Economic Literature, Paul De Grauwe and co-authors explain why this argument often is far from reality. First, the return of structural reforms is lowered by the existence of market failures, such as market concentration, asymmetric information or externalities. For example, the liberalisation of financial markets can lead to faster economic growth but can also generate excessive risk-taking and macroeconomic instability. Second, the authors point to important institutional differences between European countries and the US, which prevent one-size-fits-all policy recommendations.