Recommended articles: Economics and Finance

WEF:

• These are the countries best prepared for the global energy transition.
• This is the story of India's GDP growth.

McKinsey:

• The economics of artificial intelligence. Rotman School of Management professor Ajay Agrawal explains how AI changes the cost of prediction and what this means for business.
• Achieving business impact with data. The best analytics are worth nothing with bad data. The importance of understanding and working on all components of the insights value chain is mission critical.

VOX:

1. Quantifying the gains from trade. Globalisation discontents blame trade for destroying jobs and slashing wages, while its supporters rebut that trade openness generates aggregate gains that can potentially benefit all. However, assessing the gains from trade represents a long-standing challenge for economists. This column argues that that accounting for firms' innovation responses doubles the gains from trade obtained in static quantitative models.
2. Financial inclusion: Drivers and real effects. Research has shown that financial inclusion is closely linked to economic development and growth. However, more work is needed to establish the magnitude and channels of this effect and to pinpoint the types of financial services that have a stronger payoff without threatening financial stability. This column tackles these questions by presenting new evidence from a recent IMF-DFID conference on financial inclusion. It also suggests avenues for future research on the topic.
3. Corporate investment in Europe: The role of finance. Despite an extensive literature examining the optimal financing mix, little work exists on firms’ preferences over specific debt financing characteristics. This column uses experimental data from Europe to analyse the link between different external financing characteristics and investment decisions. The findings suggest that modest improvements in financing terms can more than double the probability of investment. Investment decisions are particularly sensitive to interest rates and collateral requirements.
4. Higher growth needed: The case of Latin America and the Caribbean. The rate of economic growth in Latin America and the Caribbean in coming years is predicted to be below that of the rest of the world and substantially below that of the fast-growing countries of emerging Asia. This column looks at the drivers behind these growth gaps. To converge more rapidly to higher-income status, the region needs not only to boost investment but critically to raise investment efficiency.

Finally, BIS international banking statistics at end-December 2017.