Ugo Panizza

Too Much Finance Redux This paper revisits the "too much finance" hypothesis by reassessing the relationship between financial depth and economic growth using an expanded dataset (1960–2019) and a systematic est

7/7 The question of whether finance can become "too much of a good thing" for economic growth remains as relevant as ever — particularly at a moment when calls for further financial deregulation are once again growing louder. ideas.repec.org/p/gii/giihei...

6/7 One important challenge to our findings: "The Economic Effects of 'Excessive' Financial Deepening" (2025) by Markus Eberhardt and coauthors, using a factor-augmented heterogeneous diff-in-diff estimator. We're very much looking forward to continuing the dialogue! 📊

5/7 A big thank you to David Cobham and @alexcobham.bsky.social for organizing the conference and for inviting us to write this paper.

4/7 Stephen Cecchetti & Enisse Kharroubi also presented at the conference — using different data and different methods — and their findings similarly corroborate the too-much-finance hypothesis.

3/7 In January 2026, we presented "Too Much Finance Redux" at a conference at LSE. It shows that our original findings are robust across all possible estimation periods between 1960 and 2019, using transparent and simple estimation techniques. The results hold.

Too Much Finance Redux This paper revisits the "too much finance" hypothesis by reassessing the relationship between financial depth and economic growth using an expanded dataset (1960–2019) and a systematic est

2/7 In 2012, Jean-Louis, Enrico Berkes & I published an IMF WP titled "Too Much Finance" (published in the Journal of Economic Growth in 2015). Together with a paper by Stephen Cecchetti & Enisse Kharroubi, it sparked a large literature. ideas.repec.org/p/gii/giihei...

1/7🧵 New paper "Too Much Finance Redux" with Jean-Louis Arcand and Enrico Berkes — a follow-up to over a decade of work on whether financial deepening can go too far. Here's the story: @gvagrad.bsky.social

The DHS Death Spiral So many knives in backs and so much tea to spill and so many more knives in backs!

“Outside of the Pentagon, the operational capacity of the federal government has been destroyed.” Interesting reading from @dandrezner.bsky.social danieldrezner.substack.com/p/the-slow-m...

Closing lunch for Finance and Development Conference at the Terrasse de la Paix at the @gvagrad.bsky.social with beautiful view of the Alps and Lake Geneva

Mitu on Salesian bonds (apparently the first true Eurobonds dating back to 1734 papers.ssrn.com/sol3/papers....

VoxTalks Economics episode: What should Europe do about Trump? Beatrice Weder di Mauro and Ugo Panizza of the Graduate Institute Geneva talk with Tim Phillips about Europe’s options in response to recent US policy shifts — from trade to geopolitical strategy. 👉 https://cepr.org/multimedia/what-should-europe-do-about-trump

VoxTalks Economics episode: What should Europe do about Trump?

@wederdim.bsky.social and @upanizza.bsky.social @gvagrad.bsky.social talk with @talknormal.co.uk about Europe’s options in response to recent #US policy shifts — from trade to geopolitical strategy.

👉 cepr.org/multimedia/w...
#EconSky

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Opinion | I’m the Prime Minister of Spain. This Is Why the West Needs Migrants.

there are smart and compassionate leaders and there are leaders who are neither www.nytimes.com/2026/02/04/o...

Existing evidence indicates that foreign direct investment promotes growth only when host economies have the human capital and deep financial markets to absorb spillovers. This column documents how the role of these conditions has weakened since the turn of the century. The authors also demonstrate how the growth effects of foreign direct investment vary dramatically across sectors, with a positive effect in the services sector, no significant effect in manufacturing, and a negative effect in services. Finally, they show that the association between foreign investment and growth is strongest in country-sectors with low participation in global value chains, and that the type of participation matters too.

The role of human capital and deep financial markets for the effectiveness of FDI has weakened since the turn of the century. The growth effects of FDI vary dramatically across sectors, A Bénétrix, H Pallan, & @upanizza.bsky.social explain.
cepr.org/voxeu/column...
#EconSky

FDI and growth in the age of global value chains

New @voxeu.org piece with Agustin Benetrix and Hayley Pallan

@cepr.org @gvagrad.bsky.social

cepr.org/voxeu/column...

6/ In a world where the “rules” no longer rule, the question becomes: what replaces them?

5/ The 2nd edition, published in December and freely available here: cepr.org/.../economic....
anticipates many of the tensions now dominating Davos — and discusses policy responses not only for Europe, but for the rest of the world as well.

4/ These themes are also at the core of our @cepr.org
eBook The Economic Consequences of the Second Trump Administration (edited with Gary Gensler, Simon Johnson
& Beatrice Weder di Mauro).

3/ Today, geopolitics is back at the center of everything. Integration is no longer just about efficiency — it’s increasingly used as leverage: tariffs, sanctions, finance, supply chains.

2/ For decades, the system was imperfect but functional: shared rules, multilateral institutions, dispute settlement, and (some) predictability in global trade & finance.

1/ Mark Carney’s #WEF speech is a sharp reminder of what is really at stake in Davos this year: the accelerating breakdown of the traditional rules-based international order.

New VoxTalks Economics: Is US debt sustainable? Recorded at the CEPR Annual Symposium, Ugo Panizza and Antonio Fatás discuss rising US debt, recent fiscal policy, and the limits of delay. Listen here: https://cepr.org/multimedia/us-debt-sustainable

New VoxTalks Economics w/ @talknormal.co.uk: Is US debt sustainable?

Recorded at the CEPR Annual Symposium, @upanizza.bsky.social @gvagrad.bsky.social and @antoniofatas.bsky.social discuss rising US debt, recent fiscal policy, and the limits of delay.

Listen here: cepr.org/multimedia/u...
#EconSky

The Economic Consequences of the Second Trump Administration - Chambre de commerce, d'industrie et des services de Genève Monday 26 January 2026 12:00-14:00 - CCIG, Boulevard du Théâtre 4, Genève - The Economic Consequences of the Second Trump Administration

4/ Interested in how US policy shifts affect trade, growth, global public goods, Europe, and developing economies? Join us.

👉 Register here: agenda.ccig.ch/agenda/2026/...

3/ 🎙️ Chaired by @mlsalles.bsky.social Laure Salles
👋 Introduction by Mario Marchesini
📍 CCIG, Geneva | 12:00–14:00
Doors open 11:30 | 🍸 Cocktail from 13:00

2/ I’ll be there with @wederdim.bsky.social to discuss the key economic implications, drawing on the latest edition of the @cepr.org eBook The Economic Consequences of the Second Trump Administration: A Preliminary Assessment.

1/🌍 Geneva lunch briefing — 26 Jan 2026
The Economic Consequences of the Second Trump Administration (CCIG) & @gvagrad.bsky.social

Trump’s second term is reshaping the US economy — with major spillovers for Europe, emerging markets, and the global order.

7/ 💡 Takeaway:

FDI can boost production and exports without delivering the same boost to domestic value added and productivity.

So aggregate growth regressions may miss the real story.

6/ 🌍 And crucially: GVC participation changes the relationship.

FDI is most strongly linked to growth when GVC integration is low…

…but the relationship fades (or flips) as global production becomes more fragmented.

5/ We build a new dataset on sectoral FDI for 112 EMDEs (1975–2023) and uncover big heterogeneity across sectors:

FDI ↗ growth in the primary sector
~ no robust link in the secondary sector
FDI ↘ growth in the tertiary sector

4/ 🔎 What we find:

✅ The old story—“FDI works if you have enough human capital / finance”—is robust in the 1970s–80s

❌ But it largely disappears in later decades.