CAGE Working Papers July 2026

818 The Equilibrium Impact of Credit Frictions: Evidence from Default Risk Using Firm-Level DataLink opens in a new window

Authors: Timothy Besley, Peter John Lambert, Isabelle Michalski-Roland, John Van Reenan

Theme: Designing and Building Institutions

Summary: This paper examines how firm-level credit frictions arising from default risk affect aggregate economic performance. Combining a micro-to-macro model with UK administrative data matched to credit risk measures, it shows that easing credit frictions would substantially increase output and wages, primarily through greater capital accumulation. The analysis also finds that persistent credit frictions distort firm size, worsen resource misallocation, and slow productivity growth. The results highlight the long-term macroeconomic costs of constrained access to finance.

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817 Social Media Toxicity and Mental HealthLink opens in a new window

Authors: George Beknazar-Yuzbashev, Francesco Capozza, Kylan Rutherford, Mateusz Stalinski

Theme: Designing and Building Institutions

Summary: This paper examines how reducing exposure to toxic social media content affects users’ mental health. In a randomized six-week experiment, participants used a browser extension that filtered posts exceeding a predefined toxicity threshold while maintaining normal platform access. Contrary to expectations, filtering increased symptoms of anxiety and depression and raised the share of users with moderate mental health symptoms. The findings suggest that content moderation may carry unintended psychological costs, potentially through increased loneliness and reduced moral self-perception.

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816 Brexit and the Blitz: Conflict, Collective Memory and PopulismLink opens in a new window

Authors: Eric Melander

Theme: Global Economic History

Summary: This paper investigates how collective memories of the Second World War influenced support for Brexit in the 2016 UK referendum. Combining georeferenced data on wartime bombing with district-level voting results, it finds that areas experiencing more bombing were more likely to vote Leave. The relationship is strongest where Second World War memorials and war graves are most prevalent, highlighting the role of collective memory. Survey evidence suggests that wartime-themed Leave campaign rhetoric was particularly persuasive in these areas.

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815 Top Researchers on Scientific Committees: Decision Quality, Peer Effects, and Opportunity CostsLink opens in a new window

Authors: Milan Makany, Natalia Zinovyeva

Theme: Gender, Health and Wellbeing

Summary: This paper examines the trade-off between using leading researchers as academic evaluators and preserving their own research productivity. Exploiting random assignment to Italy’s national academic qualification committees, it finds that stronger evaluators select candidates with better subsequent research and career outcomes while placing greater emphasis on publication quality. However, committee service reduces evaluators’ later publication output and PhD supervision, particularly among top researchers, highlighting the opportunity costs of relying heavily on leading academics for peer evaluation.

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814 The Global Electrification Frontier and Climate ChangeLink opens in a new window

Authors: Robin Burgess, Michael Greenstone, Nicholas Ryan, Anant Sudarshan

Theme: Designing and Building Institutions

Summary: This paper examines household demand for off-grid solar and grid electricity using a multi-year pricing experiment in rural India. It finds that while off-grid solar provides a valuable interim source of electricity, households value grid connections around five times more. However, grid electrification reduces overall welfare because supply costs exceed household payments and carbon emissions increase. Applying the model to African data reveals similar preferences, highlighting the broader relevance of the findings for electrification policy in developing countries.

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813 Paying for powerLink opens in a new window

Authors: Fiona Burlig, Anant Sudarshan

Theme: Designing and Building Institutions

Summary: This paper examines how citizens assess the credibility of government enforcement threats using two field experiments involving 30,000 households with electricity bill arrears in India. It finds that legal threats delivered by local utility workers are ineffective, whereas identical notices sent by registered mail significantly reduce arrears. Follow-up experiments show that households infer state credibility from the chosen messenger. The results demonstrate that bypassing low-credibility frontline agents can substantially improve revenue collection in low-capacity governments.

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812 Banking on a Corporate RebrandLink opens in a new window

Authors: Matthew Jaremski, Kris James Mitchener, Kilian Rieder

Theme: Global Economic History

Summary: This paper examines whether firms can use rebranding to overcome negative reputational shocks, exploiting the anti-German backlash following U.S. entry into World War I as a natural experiment. Focusing on German-named banks, it finds that those retaining their names suffered significant declines in assets, deposits, and market share. In contrast, banks that adopted new names largely avoided these losses, with patriotic rebranding fully offsetting the shock. The findings demonstrate that strategic rebranding can effectively mitigate externally imposed reputational damage.

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