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Policymakers are asking whether generative AI is reshaping labour demand, and the literature has found mixed results so far. This column links Denmark’s official IT-use survey to monthly employer–employee records and compares firms that started using AI in 2023 with those that did not. Early adopters fall behind their own pre-adoption employment trend. The decline is most visible in AI-exposed jobs and among new hires, and only significant among small firms. The results indicate that AI is affecting the labour market, even though the effect is not visible in the aggregate statistics.

Labor markets around the world are being reshaped by powerful trends, including rapid advances in artificial intelligence (AI), and population aging in some regions and youth bulges in others. AI's impact on labor markets is multifaceted and complex: It has the potential to create new job opportunities and make many jobs more productive, but it will also automate some tasks leading to the destruction of some of today's jobs. AI can also affect labor markets by changing international patterns of specialization. At the same time, demographic trends pose additional challenges. In all developed…

In the shadow of a rumored AI proof of one of the biggest problems in their field, three computer scientists rushed to publish their own milestone result. The post As AI Closed In on ‘Unique Games’ Proof, Researchers Raced to Beat the Machines first appeared on Quanta Magazine

The summit between Presidents Donald Trump and Xi Jinping did not deliver much, except for some lowering of tariffs, and there was no agreement on long-term challenges of overcapacity and trade. Companies are still complaining about a second China shock. The European Union and China established a working group in May of this year on "macroeconomic imbalances," but it has failed to produce results so far, and European Commission president Ursula von der Leyen has said that patience is running out. Meanwhile, European manufacturers continue to face stiff competition from their Chinese…

Who will benefit from the continent's investment boom?

Interest in the role of cultural norms, institutions, and development has resurfaced in recent years especially post the 2024 Nobel Prize in Economics. This column revisits Bhutan, which has pursued ‘gross national happiness’ rather than GDP since the 1970s. Four decades of data show that rapid income growth remains only weakly associated with measured happiness, even as multidimensional wellbeing has continued to rise alongside growth. The broader lesson is that a wellbeing measure becomes effective only if it is embedded in local cultural norms and given institutional teeth, showcasing the importance of cultural norms to economic development.

It is well known that monetary policy affects firms’ investment decisions. But which firms are the most responsive to changes in interest rates? And does this responsiveness vary over time? The literature has given diverse answers to this question, focusing on characteristics such as firm size, age, and financial position, and mostly studying these traits in isolation. In this post based on a recent Staff Report, we explore how investment responsiveness to monetary policy changes across firms and over time. We find that investment by most firms in most time periods responds little to monetary policy. For some firms in some periods, however, investment is very responsive to changes in interest rates. While these instances of strong sensitivity correlate with several firm traits, there is substantial variation that cannot easily be linked to specific characteristics of firms. Our findings therefore underscore the importance of considering the entire distribution of investment responses rather than focusing on the average effect.

Julianne Smith, who represented the United States at NATO during the Biden administration, argues that Russian hybrid warfare in Europe is escalating quickly, and NATO is not doing enough to deter it. Putin is attempting to discourage support for Ukraine and undermine faith in Article 5, and NATO is responding with an outdated playbook.

Optogenetics, recognized by the 2026 medicine Nobel, makes cells respond to light, including eye cells that normally relay signals to the brain.