Regional economic conditions are well-established determinants of the geography of political resentment. However, regions are not homogeneous, and the mechanisms through which local economies affect individual political attitudes are unclear. We argue that feelings of relative deprivation are shaped by how personal prospects are tied to regional conditions, and that the interaction between subjective individual and regional deprivation affects perceptions of shared struggle and systemic unfairness. Through a large-scale survey experiment in Britain addressing geographical self-selection, we provide causal evidence that poor individuals in poor regions express political resentment, whereas in affluent regions the political attitudes of poor and wealthy individuals are indistinguishable. Our findings stress 1) the importance of egocentric mechanisms whereby local economies shape individual prospects; 2) the significance of subjective beliefs over objective information on deprivation; 3) the mobilization potential of highlighting regional deprivation by political entrepreneurs; 4) the relevance of place-based policies to mitigate political discontent.

How does immigration affect support for redistribution? While most research focuses on overall tax and spending levels, we investigate how immigration influences preferences conditional on tax structures. Using two original survey experiments in the UK, we find that low- and middle-income respondents are more likely to support redistribution to immigrants under progressive systems shielding them from fiscal costs, but oppose redistribution when immigrants are identified as beneficiaries and the tax structure increases their fiscal burden. In contrast, high-income respondents' preferences are largely unaffected by either tax structure or immigrant inclusion. These findings suggest that progressive taxation (1) is a viable revenue-generating strategy without provoking major political backlash; (2) reduces native resistance to immigrant welfare inclusion; (3) helps explain puzzling variation in immigration's effects on welfare attitudes; and (4) clarifies why low- and middle-income groups sometimes reject generous welfare programs despite standing to benefit. Our results highlight the importance of institutional design in shaping how economic self-interest and immigration concerns interact.

Das britische Wirtschaftsmagazin The Economist hat die Wirtschaftspolitik der Regierung Trump als „Fortress Economics“ bezeichnet. Bei der Festung USA werden alle Zugbrücken hochgezogen. Importe werden mit dem expliziten Ziel durch Zölle verteuert, um (fast) alle Produkte wieder in den USA zu produzieren. Und die Grenzen der USA, nicht nur nach Mexiko, sind fast vollständig geschlossen.

We study the procurement patterns of non-listed firms and examine how these often-overlooked, yet pivotal players in global supply chains adjust their sourcing when they anticipate accountability for externalities beyond their organizational boundaries. Using granular customs data and a surprise information release about the German Supply Chain Due Diligence Act, product-level regressions reveal that importing firms are 3.5 percentage points less likely to source a product from countries where the relevant production sector exhibits elevated ESG-related risks, suggesting that firms tend to cut ties with higher-risk suppliers. The effects are concentrated among firms with well-diversified supplier networks for a product and higher profitability, suggesting they have the necessary flexibility to respond quickly to anticipated regulatory pressure. Our findings suggest that mandates requiring firms to incorporate broad sustainability considerations into their operational decisions may have limits, particularly for non-listed firms.

Drawing on detailed career and biographical data of Chinese politicians, this study builds a dynamic social network for all political elites in China and examines the selection process of provincial-level politicians. Using regression and tree-based machine learning techniques and leveraging individuals’ global centrality within political networks, we unveil the relative importance of economic performance, political networks, and career trajectory in determining the selection of provincial leaders. Our findings highlight the critical role of network embeddedness.

More individualistic countries experience higher economic growth. We provide evidence for a human-capital-based explanation of the growth effects of individualism. Using data from the largest international adult skill assessment, we establish that individualism shapes human capital formation. We identify the effects of individualism by exploiting variation between migrants at the origin-country, origin-language, and person level. Migrants from more individualistic cultures have higher cognitive skills and larger skill gains over time. They also invest more in their skills over the life cycle, as they acquire more years of schooling and are more likely to participate in adult education activities. Individualism is more important in explaining adult skill formation than any other cultural trait that previous literature has emphasized. In the labor market, more individualistic migrants earn higher wages and are less often unemployed. We show that our results cannot be explained by selective migration or omitted origin-country variables.

We study how idiosyncratic income risk shapes the aggregate and distributional effects of labor and capital income taxation in dynamic general equilibrium models. To this end, we compare a heterogeneous-agent (HA) model with uninsurable idiosyncratic labor productivity risk and a ten-representative-agent (TE) model in which households correspond to fixed wealth deciles without such risk. At the aggregate level, both models generate qualitatively similar responses; however, the HA model exhibits a smaller recessionary impact driven by precautionary savings behavior, which stabilizes investment. At the distributional level, the models differ sharply. In the HA framework, tax shocks trigger endogenous mobility across wealth deciles. These inter-decile transition dynamics tend to benefit lower deciles. In contrast, the TA model features fixed household positions. Our findings highlight that while simpler multi-representative-agent models can approximate aggregate dynamics well, they may miss important distributional adjustment channels. The relevance of these mechanisms ultimately depends on the empirical importance of mobility across the wealth distribution, pointing to a key trade-off between model simplicity and accuracy.

Many countries and regions remain below the level of economic activity of the world’s most advanced economies. Some countries form growth clubs, some are stuck in the middle-income trap, and some stay on a very low level of economic activity. Although this situation is well documented on the country level, there is less evidence at the sub-national level within countries. We estimate county-level capital stocks and price indices and provide a comprehensive county-level data set for Germany. We find no evidence of convergence across all counties even if we condition on important drivers of long-term growth such as physical and human capital accumulation. Instead, we identify five convergence clubs, using endogenous clustering. We analyze differences in growth paths and describe the identified clusters based on variations in contributions of capital, labor, and total factor productivity to economic growth. Additionally, we examine the role of migration for regional development and find that net migration has in particular contributed to growth in richer regions.