Policy Research

This book explores the complex and rapidly evolving urbanization of Amazonia, a vast, diverse, and ecologically critical region undergoing a profound transformation. Amazonia is now home to nearly 41 million urban residents across 895 settlements — and yet its urbanization remains poorly understood, underestimated in scale, fragmented in form, and frequently overlooked in policy.

Through multidisciplinary perspectives and contributions from more than 50 experts, this book examines how urban growth intersects with environmental degradation, social inequality, and gaps in governance. Despite these challenges, cities in Amazonia are also places of promising innovations, from tailored healthcare services and environmental monitoring to community-led planning and cross-border cooperation.

Rooted in both local insight and regional coordination frameworks, including the Amazonia Forever program, this work offers a holistic and evidence-based understanding of urbanization in Amazonia. It argues for urgent, coordinated action to guide sustainable, inclusive development — before current urbanization trajectories lead to irreversible ecological and social consequences. The book invites researchers, policymakers and practitioners to recognize Amazonia’s cities not only as sites of vulnerability but as key agents in shaping the region’s — and the planet’s — future.

Chapter four highlights successful practices and innovative approaches that address this region’s urban challenges. Some focus on people, improving healthcare, and mapping needs for riverine communities. Others emphasize environmental care, with cities leading sustainability efforts, nature-based solutions, partnerships and ecosystem restoration to boost resilience. It also stresses the importance of increasing prosperity by finding opportunities even under difficult, cross-border conditions

Keywords: urbanization, cities, urban areas, sustainability, climate, productivity, well-being, infrastructure, Amazonia, urban development

JEL Codes: R11; R12; O18; R58; J24; R42; Q54; Z13

Diversified economies are critical for cities to sustain their growth and development, but they are also costly because diversification often requires expanding a city’s capability base. We analyze how cities manage this trade-off by measuring the coherence of the economic activities they support, defined as the technological distance between randomly sampled productive units in a city. We use this framework to study how the US urban system developed over almost two centuries, from 1850 to today. To do so, we rely on historical census data, covering over 600M individual records to describe the economic activities of cities between 1850 and 1940, as well as 8 million patent records and detailed occupational and industrial profiles of cities for more recent decades. Despite massive shifts in the economic geography of the United States over this 170-year period, average coherence in its urban system remains unchanged. Moreover, across different time periods, datasets, and relatedness measures, coherence falls with city size at the exact same rate, pointing to constraints to diversification that are governed by a city’s size in universal ways.

Saudi Arabia has witnessed a paradox where high demand for labor did not translate into high labor force participation for Saudi women. Despite possessing higher educational attainment than men, Saudi women historically faced lower participation rates, higher unemployment, and concentration in lower-paying sectors. This paper examines the paradoxical surge in Saudi women’s employment during a period of economic weakness following the 2014 oil price shock and 2020 pandemic. The study documents unprecedented employment gains driven primarily by new labor market entrants, particularly women with high school education or less, who diversified beyond traditional education and health sectors into retail, construction, manufacturing, and food services. Through empirical analysis of policy reforms implemented between 2016-2022, the paper identifies three key drivers of Saudi women’s employment gains: the removal of legal and social barriers (including workspace requirements and driving restrictions), wage subsidies during COVID-19, and increases in the Nitaqat de facto minimum wage for Saudi workers. While these gains represent historic progress, the analysis reveals concerning trends, including a widening gender wage gap and questions regarding the sustainability of subsidy-dependent employment growth. The paper highlights the need to balance short-term policy interventions to increase women’s entry into the workforce with long-term diversification efforts that align women’s skills and wage expectations with market demands to ensure sustainable and equitable employment outcomes.

We develop a novel framework to study the interaction between monetary policy and trade. Our New Keynesian open economy model incorporates international production networks, sectoral heterogeneity in price rigidities, and trade distortions. We decompose the general equilibrium response to trade shocks into distinct channels that account for demand shifts, policy effects, exchange rate adjustments, expectations, price stickiness, and input–output linkages. Tariffs act simultaneously as demand and supply shocks, leading to endogenous fragmentation through changes in trade and production network linkages. We show that the net impact of tariffs on domestic inflation, output, employment, and the dollar depends on the endogenous monetary policy response in both the tariff-imposing and tariff-exposed countries, within a global general equilibrium framework. Our quantitative exercise replicates the observed effects of the 2018 tariffs on the U.S. economy and predicts a 1.6 pp decline in U.S. output, a 0.8 pp rise in inflation, and a 4.8% appreciation of the dollar in response to a retaliatory trade war linked to tariffs announced on “Liberation Day.” Tariff threats, even in the absence of actual implementation, are self-defeating— leading to a 4.1% appreciation of the dollar, 0.6% deflation, and a 0.7 pp decline in output, as agents re-optimize in anticipation of future distortions. Dollar appreciates less or even can depreciate under retaliation, tariff threats, and increased global uncertainty.

Publisher’s Version

Global imbalances have been building up in the world economy for decades and have reached critical levels, giving rise to tariff confrontations, trade wars, and geopolitical tensions. This paper presents our systemic analysis of three global imbalances: international trade, debt dynamics, and finance. Based on our new systemic concept of global imbalances and analysis of a large body of historical and latest financial and economic data in various countries and the world economy, we have concluded that these three global imbalances are closely interconnected and mutually influence each other through different channels and nonlinear feedback mechanisms that we describe. These three global imbalances are interrelated symptoms of deep structural problems in the global economy that require corrective measures both at the level of individual countries, especially the US and China, and at the global coordinated efforts by key countries within the G7 and G20. We highlight the key structural problems in the global economy, suggest a modern interpretation of the Triffin dilemma through the prism of equilibrium levels of exchange rates, and suggest possible measures to mitigate the global imbalances. 

Bilateral trade data informs foreign and domestic policy decisions, serves as a growth indicator, determines tariffs, and is the basis for financial and investment decisions for corporations. Accurate trade data translates into better decision-making. However, the raw bilateral trade data reported by UN Comtrade suffer from two structural problems: reporting differences between country partners and countries reporting in different product classification systems, which require product-level harmonization to compare data across countries. In this paper, we address these challenges by combining a mirroring technique and a data-driven concordance method. Mirroring reconciles importer and exporter differences by imputing country reliability scores and applying a weighted country-pair average to calculate the estimated trade value. We harmonize product classifications across vintages by calculating conversion weights that reflect a product’s market share. The resulting publicly available datasets mitigate issues in raw trade statistics, reducing reporting inconsistencies while maintaining product-level granularity across six decades. 

The first of the Sustainable Development Goals adopted by the United Nations in 2015 is “End poverty in all its forms everywhere,” which implies moving beyond “extreme poverty” to an array of poverty lines. This raises the obvious question: to complement the dollar-a-day (now P$2.15) global lower-bound poverty line, what is the global upper-bound poverty line (GUBPL)? We propose, empirically estimate, and defend a GUBPL based on two criteria. First, the global poverty line is an absolute level of material wellbeing and treats the world’s people and households equally, not relative to birthplace, residence or citizenship. Second, the distinctive property that separates the standard poverty measures (Foster, Greer, Thorbecke 1984) is that gains in household income/consumption above the poverty line count for exactly zero in reducing poverty. Our second criteria is that a GUBPL should be set at a high enough level of income/consumption that zero gains, while not literally true, is a “close enough” approximation. Our two empirical approaches, based on completely different material wellbeing indicators, both suggest a GUBPL in the range of P$19 to P$40 per person per day. This range for a GUBPL is consistent with a variety of considerations, like national poverty lines and achievement of basics and is consistent with the new World Bank “prosperity gap” standard. A GUBPL of P$21.5 has a nice “focal point” appeal as it is exactly ten times the current global lower bound of P$2.15. A poverty line of P$21.5 makes “development as poverty reduction” an inclusive and ambitious global vision, compatible with existing and future development goals.

Amid rapid technological change and heightened competition, Europe must re-ignite economic growth. Evidence from Andalusia – Spain’s poorest region – highlights the need to make full use of a region’s productive capabilities to forge new competitive advantages and raise living standards.

Despite an abundance of valuable raw materials and breathtaking natural beauty, the western US state of Wyoming lags its neighbours in terms of economic performance. This is largely due to a lack of substantial urban centres, driven in part by excessively restrictive regulations on housing.

Green objectives have reshaped public policy worldwide since the signing in 2015 of the Paris Agreement to limit global warming. Climate policy has moved from being one policy among many to an objective embedded in public policies at every level, including energy, industrial, fiscal, trade, development and foreign policies. However, a clear outcome from this policy shift is yet to be seen, with emissions still rising and climate impacts intensifying. There is also backlash against greening in a charged geopolitical environment.

Nevertheless, the chapters in this volume, written by a range of experts worldwide, show that in many countries and policy areas, green objectives are still driving fundamental changes and many lessons have been learned. The goals of reducing emissions and enhancing economic and societal resilience to climate change will persist as climate impacts become more evident, and as the green transition produces successes at city, regional and national levels. In this context, this Bruegel Blueprint offers a fresh intellectual framework for understanding how the green transition is shaping cross-sectoral impacts across the globe.

This case study examines the implementation of Namibia’s first Productivity Task Force focused on the high-value fruit sector from 2021 to 2024. Productivity task forces, modeled after Peru’s Mesas Ejecutivas, facilitate public-private dialogues to resolve sector-specific productivity issues. The Namibian Investment Promotion and Development Board, the Ministry of Agriculture, Water and Land Reform, and the Ministry of Finance led the Namibian task force. The study highlights critical stages, including the task force’s management and organization, political authorization, and the identification and resolution of productivity problems. While some challenges remain unsolved, the PTF has laid the groundwork for long-term improvements in government capacity, better public-public coordination, public-private collaboration, and a more business-friendly environment. The study offers valuable insights for implementing similar public-private initiatives in other developing countries. This title is also available as Open Access on Cambridge Core.

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Various factors influence why some countries are more open to immigration than others. Policy is only one of them. We design country-specifc measures of openness to immigration that aim to capture de facto levels of openness to immigration, complementing existing de jure measures of immigration, based on enacted immigration laws and policy measures. We estimate these for 148 countries and three years (2000, 2010, and 2020). For a subset of countries, we also distinguish between openness towards tertiary-educated migrants and less than tertiary-educated migrants. Using the measures, we show that most places in the World today are closed to immigration, and a few regions are very open. The World became more open in the first decade of the millennium, an opening mainly driven by the Western World and the Gulf countries. Moreover, we show that other factors equal, countries that increased their openness to immigration, reduced their old-age dependency ratios, and experienced slower real wage growth, arguably a sign of relaxing labor and skill shortages.

Explore the country rankings in our interactive visualization website and learn more about the project, Leveraging the Global Talent Pool to Jumpstart Prosperity in Emerging Economies.