Key Highlights
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Countries hit by new US tariffs have three main policy options: retaliate with their own tariffs, subsidize their own industries, or sign new trade deals with other countries. The study finds that choosing to deepen trade integration with other partners is the best option, as it increases real income for those countries and the world, even while US tariffs are in place.
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Retaliatory tariffs can improve a country’s trade terms but hurt US exports and create economic distortions, while subsidies are costly and can lead to even more trade diversion and potentially trigger new tariffs against the subsidizing country. This highlights the complex trade-offs policymakers face when responding to protectionist measures from a major trade partner.
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A study of 1920s-30s Germany, using the expulsion of Jewish doctors as a natural experiment, found that having more physicians significantly reduced infant mortality and deaths from common childhood diseases. This provides strong historical evidence that increasing the supply of healthcare workers saves lives, especially among the most vulnerable.
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The research also found that the health benefits from adding more physicians follow a pattern of diminishing returns, meaning the first doctors in an area have a huge impact, but each additional doctor saves fewer lives. This helps explain the historical trend of rapidly falling infant mortality in the 20th century as healthcare systems were first built up.
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In Africa, a person’s poverty status is directly linked to receiving lower quality healthcare at government hospitals, affecting areas like drug availability, staff presence, wait times, and respect from medical staff. This shows that poverty creates a double burden, limiting both economic opportunity and access to decent medical care within the public system.
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The negative effect of poverty on healthcare quality depends on actually using public health facilities, not just living near them, suggesting the problem is rooted in the experience of care delivery. This points to the need for policies that both boost individual incomes and directly improve how public health services are managed and delivered.
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A study of Italian towns found that paying municipal executives higher wages successfully reduced corruption in public procurement, but also made those officials more likely to be targeted by criminal attacks. This reveals a tragic trade-off where good governance reforms can unintentionally increase physical risks for public servants.
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In portfolio management, a simple, decades-old method for estimating stock market volatility (the EWMA model) performs just as well as much more complex modern techniques for daily and weekly forecasts, even after accounting for trading costs. This is a powerful reminder that in finance, straightforward and well-understood tools often remain highly effective in real-world investing.
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