Highlights 2026

WP 26/07

In “The Republic of Letters and the Rise of the West” Luigi Pascali and Mounu Prem, together with Andrea Melillo and Francesca Asja Trento, study whether the Republic of Letters—the network of scholars who exchanged ideas across Europe during the Enlightenment—helped lay the foundations for modern economic growth. They combine digitized correspondence between Enlightenment thinkers with aristocratic family trees, historical postal routes, and biographical data on scientists, inventors, merchants, and entrepreneurs across Europe between 1600 and 1850. They show that Enlightenment ideas spread partly through aristocratic kinship networks. Aristocrats connected to individuals already corresponding with Enlightenment scholars were more likely to join the Republic of Letters themselves. Using changes in historical postal routes as a source of plausibly exogenous variation, they then examine whether exposure to this intellectual network affected local economic development. Their results suggest that regions exposed to the Republic of Letters experienced large and persistent increases in applied scientists and inventors in the decades that followed. The effects are strongest for scientific and technical correspondence, with little impact from religious or philosophical exchange. The findings support the idea that the Enlightenment functioned as a pan-European market for useful knowledge that contributed to the rise of innovation before industrialization.

WP 26/06

In “The Visibility Premium: Article Order and Citations”, Francesco Lippi, together with Chun Chee Kok and Sascha O. Becker, exploit a natural experiment to identify the causal effect of the order in which articles appear within a journal issue on citations. Using data on 1,456 articles published in the Economic Journal between 2010 and 2024, they find that articles appearing earlier in an issue receive substantially more citations throughout the sample period. Articles ranked 7-9 receive 20% fewer two-year citations than those ranked 1-3, with effects growing to 28% over five years. Between December 2015 and February 2025, the journal switched from chronological to alphabetical ordering, allowing them to disentangle rank (visibility) effects from alphabetical (name) effects. Analysis of views and downloads confirms a visibility mechanism, with important implications for editorial practices.

WP 26/05

In “Ancestral Inequality and Preferences for Redistribution” Graziella Bertocchi, together with Arcangelo Dimico and Gian Luca Tedeschi, investigate the ancient determinants of preferences for redistribution. Their hypothesis is that cross-country variation in contemporary attitudes toward redistribution is shaped by ancestral inequality, which arose as an endogenous adaptation of pre-Neolithic hunter-gatherer societies to seasonal food shortages induced by the seasonality of the wild progenitors of domesticated crops. To test this hypothesis, they use a combination of individual-level, bioclimatic, ethnographic, and archaeological data. First, using contemporary survey data and an epidemiological approach, they show that migrants originating from countries characterized by higher ancestral inequality exhibit lower support for redistribution, and that this relationship is driven by the degree of crop seasonality in the migrants’ origin countries. Next, using data on premodern societies, they show that crop seasonality induces food storage practices, which in turn lead to inequality. The positive effect of food storage on inequality is corroborated by data from archaeological sites. Finally, drawing on data from preindustrial polities, they uncover that the mechanism linking food storage to redistributive preferences operates through the positive influence of the former on tolerance for inequality.

WP 26/04

Cognitive decline severely impairs financial decision-making, but often develops unnoticed. In “Cognitive decline and financial decision-making”, Fabrizio Mazzonna, Andrea Orsenigo and Franco Peracchi present a model of portfolio choice with endogenous information acquisition which predicts that investors unaware of their decline will take on excessive risk and delay the transfer of financial control to a trusted agent. They test these implications in an experimental survey of affluent older US investors by eliciting their intended actions under hypothetical scenarios of memory decline. About one in nine respondents overestimates their memory skills. Their randomized interventions reveal that making the financial risks of memory decline salient shifts stated choices toward more prudent behaviors, namely risk reduction and a reallocation from informal arrangements toward professional financial advice. Most importantly, they uncover significant heterogeneity: among unaware investors, only personalized, objective feedback on memory performance triggers a shift in intended behavior, while general educational information alone has limited effects. Finally, they document substantial gender asymmetries in delegation advice, with male respondents less likely to suggest delegation when the hypothetical subject is of the opposite sex. These findings can shape information campaigns and advisory practices aimed at protecting older investors from the financial consequences of cognitive decline.

WP 26/03

The paper “Misallocation with Lumpy Investment” by Francesco Lippi and Aleksei Oskolkov studies "misallocation", i.e. how efficiently capital is shared among businesses, by accounting for "lumpy" investment—the reality that firms tend to make large equipment purchases only occasionally rather than in constant, small amounts. Using 40 years of data on Italian firms, the authors provide a new analytical method to quantify this efficiency and find that while measures that ignore investment lumpiness are biased, their final estimates are surprisingly close to our more refined result. The model shows that much of what looks like an "inefficient" distribution of resources in a snapshot of the economy is actually consistent with firms acting optimally in a dynamic sense, making rational, forward-looking decisions in the face of idiosyncratic shocks.

WP 26/02

This essay, “The Financial Drivers of Populism in Europe” by Luigi Guiso, Massimo Morelli, Tommaso Sonno, and Helios Herrera, contributes to our understanding of the evolution of populist attitudes and voter preferences, as well as the emergence of populist parties and the evolution of party supply and their platforms in Europe. The essay links novel insights on populism to the comparative politics literature on party transformation. It argues that the financial crisis represented a watershed for populism in Europe, and explains why by focusing on its effects on trust in institutions and markets, particularly among occupational groups typically unaffected by traditional economic crises.

WP 26/01

In "War and Democratic Backsliding" Joao Monteiro, together with Efraim Benmelech, provide the first global, long-run evidence on how war reshapes democratic institutions. Using data on all conflicts since 1948, they show that the onset of conflict causes a large and persistent decline in democracy: institutions weaken immediately, continue to erode for nearly a decade, and do not recover. Yet this deterioration is highly selective. It appears only in first-time conflicts, intrastate wars, highly fractionalized societies, and conflicts that governments win. The decline operates through political channels -- media censorship, judicial purges, curtailed civil liberties, irregular leadership turnover, and constitutional suspensions - rather than through any functional requirement of war-making. Autocratization does not increase the probability of victory, and institutional instability reduces it. Taken together, the findings show that war does not require autocracy; it enables executives to expand their authority and implement institutional changes that would be difficult to enact in peacetime.