A gender perspective on artificial intelligence and jobs: The vicious cycle of digital inequality. Bruegel WORKING PAPER | ISSUE 15/2022 | 30 AUGUST 2022.

The worldwide artificial intelligence market is expected to increase enormously in the next few years. Because of AI’s immense potential, virtually all industries will be affected by the implementation of AI systems, resulting in the digitalisation and automation of work processes. This will cause disruptive shifts in labour markets, in terms of the number and profiles of jobs in industries as well as worker skill requirements. We take a gender perspective and analyse how gender stereotypes and gendered work segregation on the one hand, and digitalisation and automation (as a consequence of AI implementation) on the other hand, are entangled and result in a vicious cycle of digital gender inequality. We provide insights into the gender-specific impact of AI technologies, which is relevant for the mitigation of the potential risk of the creation of social inequality and exclusion. We show that existing empirical evidence already indicates that AI will not increase gender equality but will somewhat further exacerbate the gender inequality in labour markets, ranging from further horizontal and vertical occupational gender segregation to an increase in the gender pay gap. We summarise policy guidance and measures to decrease gender inequality in the future

Decarbonisation of the energy system. Bruegel Policy Contribution Issue n ̊01/22 | January 2022.

Three quarters of the European Union’s greenhouse gas emissions stem from burning coal, oil and natural gas to produce energy services, including heating for buildings, transportation and operation of machinery. The transition to climate neutrality means these services must be provided without associated emissions. It is not possible today to determine tomorrow’s optimal clean energy system, largely because the cost, limitations and capability developments of competing technologies cannot be predicted. Energy systems with widely diverging shares of ‘green fuels’, in the form of electricity, hydrogen and synthetic hydrocarbons, remain conceivable. We find the overall cost of these systems to be of the same order of magnitude, but they involve larger investments at different stages of value chains. A large share of synthetic hydrocarbons would require more investment outside the EU, but less in domestic infrastructure and demand-side appliances, while electrification requires large investment in domestic infrastructure and appliances. Current projections show an overall cost advantage for direct electrification, but projections will evolve and critical players may push hard for alternative fuels. Policy will thus play a major role in shaping this balance. Political decisions should, first, push out carbon-emitting technology, primarily through carbon pricing. The more credible and predictable this strategy is over the coming decades, the smoother will be both divestment from brown technologies and investment in green technologies. Second, policy needs to help ensure that enough climate-neutral alternatives are available in time. Clear public support should be given to three system decisions about which we are sufficiently confident: the massive roll-out of renewable electricity generation; the electrification of significant shares of final energy consumption; and rapid phase-out of coal from electricity generation. For energy services where no dominant system has yet emerged, policy should forcefully explore different solutions by supporting technological and regulatory experimentation. Given the size and urgency of the transition, the current knowledge infrastructure in Europe is insufficient. Data on the current and projected state of the energy system remains inconsistent, either published in different places or not at all. This impedes the societal discussion. The transition to climate neutrality in Europe and elsewhere will be unnecessarily expensive without a knowledge infrastructure that allows society to learn which technologies, systems, and polices work best under which circumstances

Mapping banking centres globally since 1970. Bruegel WORKING PAPER | ISSUE 12/2022 | 12 JULY 2022.

Brexit and the rise of China as a leading international economic power have revived discussions about the geography of banking centres. This paper analyses the geographical evolution of banking centres since the 1970s, based on a database constructed from a ranking of the top banks in the world created by The Banker magazine, a UK-based monthly publication specialised in international financial affairs. We describe both how the database was created and the ways in which it can be used to inform policy on money and capital markets. We address why the data can be used to proxy the size of International Financial Centres (IFCs) and the methodological limitations it may present. We find that banking consolidations and the evolution of the legal framework are more central to the changing geography of banking centres than economic and financial crises. We also highlight that, despite major shifts in global economic power, leading banking centres are hard to replace

The effect of COVID certificates on vaccine uptake, public health, and the economy. Bruegel Working Paper Issue 01/2022 18 January 2022.

In the COVID-19 pandemic, governments have, among other measures, mandated the use of COVID certificates to prove vaccination, recovery or a recent negative test, and have required individuals to show certificates to access shops, restaurants, and education or workplaces. While arguments for and against COVID certificates have focused on reducing transmission and ethical concerns, the incentive effects of COVID certificates on vaccine uptake, health outcomes and the economy has not yet been investigated. To estimate these effects, we construct counterfactuals based on innovation diffusion theory for France, Germany and Italy. We estimate that the announcement of COVID certificates during summer 2021 led to increased vaccine uptake in France of 13.0 (95% CI 9.7–14.9) percentage points (p.p.) of the total population up to the end of the year, in Germany 6.2 (2.6–6.9) p.p., and in Italy 9.7 (5.4–12.3) p.p. Further, this averted an additional 3,979 (3,453–4,298) deaths in France, 1,133 (-312–1,358) in Germany, and 1,331 (502–1,794) in Italy; and prevented gross domestic product (GDP) losses of €6.0 (5.9–6.1) billion in France, €1.4 (1.3–1.5) billion in Germany, and €2.1 (2.0–2.2) billion in Italy. Notably, the application of COVID certificates substantially reduced the pressure on intensive care units (ICUs) and, in France, prevented occupancy levels being exceeded where prior lockdowns were instated. Varying government communication efforts and restrictions associated with COVID certificates may explain country differences, such as the smaller effect in Germany. Overall, our findings are more sizeable than predicted. This analysis may help inform decisions about when and how to employ COVID certificates to increase vaccine uptake and thus avoid stringent interventions, such as closures, curfews, and lockdowns, with major social and economic consequences

Analysis of Developments in EU Capital Flows in the Global Context (2021): Rise and fall after the COVID-19 outbreak. CEPS External Contribution February 2022.

After 2020’s unprecedented fall in GDP, most countries have managed to recover quite rapidly in 2021, thanks to similarly unprecedented policy responses. After the abrupt falls of early 2020, pre-existing global capital flows trends have resumed and even strengthened. FDI accelerated their fall, especially in the EU, while portfolio investment increased quite strongly. Other forms of investment, and in particular banking holdings, seem to have weathered the pandemic well. This is in stark contrast with the global financial crisis of 2007-09. Uncertainty, however, remains elevated. The economy remains fragile, public debt has increased enormously and new risks, from inflation to geopolitical instability, are intensifying. This study provides evidence of these trends and undertook an in-depth investigation into several selected issues relevant to EU capital flows

COVID-19 and the shift to remote work. Bruegel Policy Contribution Issue n˚09/22 | June 2022.

COVID-19 has accelerated the shift to remote work. Enabling knowledge workers to do their jobs from home or elsewhere brings benefits by increasing labour participation, avoiding unproductive commuting time (thus reducing the carbon footprint), and reducing the gender gap by enabling single parents or partners with domestic-care responsibilities to work. Not all jobs are suitable for remote work, but far more remote work is feasible than was typical prior to the pandemic. The post-pandemic new normal is sure to differ both from the pre-pandemic normal and from current arrangements. Hybrid arrangements in which part of the week is spent at the office, and part at home, are likely to become the norm. Employers, workers, educators, trade unions and governments will need to adapt to the new normal. For employers and managers, the change emphasises the need to manage based on results rather than hours worked, and likely implies many changes in how they manage their employees. Workers will need to be flexible in order to capitalise on the new opportunities in the evolving world of work, and to ensure they have suitable skills for remote work. Educators will need to further emphasise digital skills, and to accelerate the shift from traditional education to lifelong learning. Trade unions will need to re-think how they recruit workers who do not see each other every day, and how they can respond to evolving social protection needs. Policymakers will need to deal with distributional effects driven by the shift to remote work, to protect the work-life balance that remote work potentially erodes, and to seek to ensure that the shift to remote work does not erode social protection

Why the Ukraine crisis should push the UK and EU into a tighter embrace on security policy. CEPS Policy Contribution February 2022.

One of the costs of Brexit is the weakened ability of both the UK and the EU to shape a strong joint response to Russia’s threats to pan-European security. In the standoff over Ukraine, the need for close cross-Channel cooperation is particularly acute for any effective sanctions package negotiated with the US. Yet, post-Brexit relations between the UK and the EU are currently governed by a narrow Trade and Cooperation Agreement (TCA) which does not include a designated chapter on political dialogue and that, barring a handful of exceptions, does not contain any provisions on cooperation on foreign and security matters. Fortunately, the preparatory work undertaken to reach the bilateral accord contains the answer to the question on how trust between the parties can be regained through procedural means. This policy brief highlights the embers of the Brexit bonfire that might be raked up to rekindle the flame of dialogue and cooperation between the UK and the EU in foreign affairs and security policy

Shortening the settlement cycle: Why Europe should not wait too long to introduce T+1. ECMI Commentary no 77 | January 2022.

The amount of time required for the settlement of securities is a long-running issue for European capital markets. Twenty years ago, the Giovannini Group looked at the large number of securities settlement systems that existed in Europe (and still do). In 2014, based on the Group’s proposals for improving the settlement cycle, the EU moved from T+3 (trade date plus three business days) to T+2 (trade date plus two business days), with the US following a few years later in 2017. The US is now ready to shorten its settlement cycle further to T+1 by 2024, and the question of whether the EU should follow cannot be ignored for too much longer. However, the significant problems caused by the diversity and fragmentation of the EU’s capital markets and market infrastructures would have to be solved first

COVID-19 in the European Union: health impacts and effects on economic activity. Bruegel WORKING PAPER | ISSUE 13/2022 | 19 JULY 2022.

This paper quantitatively describes different aspects of the COVID-19 pandemics: new cases, hospitalisations, intensive-care admissions and deaths, while illustrating their changing relationships over time. It then assesses how the different variables have affected relevant sectoral and macroeconomic indicators. Finally, it concludes that, from an economic perspective, what matters when it comes to managing the pandemic is to prevent intensive-care admissions and deaths arising from COVID-19. The success of vaccination should be measured in terms of its ability to prevent the most serious consequences, rather than its ability to prevent infections and hospitalisations

Legal options for a green golden rule in the European Union’s fiscal framework. Bruegel Policy Contribution Issue n˚13/22 | July 2022.

Achieving the European Union’s climate goals and decoupling from Russian energy will require a massive increase in green public spending, which will be difficult when EU fiscal rules requiring fiscal consolidation are reinstated. The two major proposals to address the conflicting goals of fiscal consolidation and increased green public investment needs are a possible new European climate investment fund and a green golden rule. The latter would exclude any increase in net green public investment from the fiscal indicators used to measure compliance with fiscal rules, for countries with sound public finances. An EU climate fund and a well-designed green golden rule would be equivalent in terms of project selection, implementation and control procedures. If the climate fund does not involve redistribution across member states, then the treatment of related spending and consequent borrowing in national fiscal indicators and in the EU’s fiscal framework would be the same. New regulations would be needed to set up both the climate fund and the green golden rule. Special legislation would be needed to exempt the subsequent climate expenditures from EU fiscal rules in both cases. A climate fund financed by EU borrowing with redistributive effects across countries would likely result in the exclusion of the fund’s activities from national fiscal indicators and EU fiscal rules without any legislative changes. There are question marks about the desirability and political feasibility of redistribution across the EU for climate purposes. An EU climate fund, irrespective of whether or not it involves redistribution, would mainly benefit southern and eastern EU countries. An instrument is needed to foster green public investment in western and northern EU countries as well. The green golden rule would be such an instrument. While there are some pragmatic options to mimic a green golden rule in the current EU fiscal framework, such as amending the so-called ‘investment clause’ and adjusting the medium-term objective for the structural balance, ultimately, elements of the 2011 Six-Pack legislation and the 2012 Treaty on Stability, Coordination and Governance should be revised to include a green golden rules