The US net foreign asset position – measuring the difference between its foreign assets and liabilities – was negative, yet small, until 2007. This column shows that since then, it has deteriorated sharply to negative 65% of GDP, mostly as a result of changes in the market value of US-owned assets abroad and foreign-owned assets in the US. These valuation effects are explained by rising US equity values disproportionately benefitting foreign owners of US firms.

There are significant regional disparities in productivity levels across the UK. The June 2022 CfM survey asked the members of its UK panel to evaluate the reasons for these disparities and policies that might close the gaps.

Although transport costs have decreased substantially over the past two centuries, they are still far from negligible. This column argues that in addition to standard ad-valorem transport costs, there is an important role for additive costs in trade models. The authors estimate that over the period 1974 to 2019, additive costs represented between 35% (in air transport) and 45% (in vessel) of total transport costs.

Central banks in developed countries have launched cautious investigations into whether, how, and to what extent they should intervene in climate policy. This column shows that central banks would face trade-offs if they were to start tackling climate change, as the instruments overlap with those already used in their monetary and macroprudential mandates. Using a using a principal–agent setting, the authors argue that central banks’ effectiveness in addressing climate change will depend on capture risk and  calibration risk.