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on Macroeconomics |
| By: | Aoki, Kosuke; Auerbach, Alan; Horioka, Charles Yuji; Kashyap, Anil; Watanabe, Tsutomu; Weinstein, David |
| Abstract: | Takatoshi Ito, who passed away in September 2025, was a leading scholar of macroeconomics and international finance. This column, written by a group of friends and colleagues, outlines his many contributions in a lifetime of research, teaching and policy-making in Japan, the United States and around the world. His work is particularly notable for challenging the widespread perception that standard economic analysis is somehow ill- suited for understanding the Japanese economy. Indeed, using the discipline's rigorous tools, he illuminated challenges that Japan faced earlier and more acutely than other countries - including population decline and ageing, ballooning government debt, the zero lower bound and unconventional monetary policies, real estate bubbles and their collapse, and the banking sector's problem of non-performing loans. |
| Keywords: | Asian economies, exchange rate fluctuations, foreign exchange intervention, inflation targeting, international finance, , invoicing currency, Japanese economy, macroeconomics, monetary policy, Takatoshi Ito, zero interest rate policy |
| JEL: | E52 E58 F14 F31 G15 O53 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:agi:wpaper:02000256 |
| By: | Mugrabi, Farah (Central Bank of Ireland & Université catholique de Louvain); Rünstler, Gerhard (European Central Bank) |
| Abstract: | We apply the multivariate unobserved components model of Rünstler and Vlekke (2018) to jointly estimate the cyclical and trend components of output, credit, and residential property prices in Ireland. We find that credit and house price cycles are subject to an average duration of about 15 years, considerably longer than the business cycle, estimated at 8.5 years. Compared to several alternative estimation methods, the estimates of house price and credit cycles combine strong early warning performance with superior real-time reliability. Our findings contribute to the monitoring of systemic risks in the Irish economy and the conduct of macroprudential policies. |
| Keywords: | Unobserved components models, Vector Error Correction models, Hodrick–Prescott filter, Christiano–Fitzgerald filter, Business cycles, House prices cycles, Credit cycle, Macroprudential policies. |
| JEL: | C32 E32 E44 G21 G28 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:cbi:wpaper:16/rt/25 |
| By: | Eftekhari, Aryan; Juillard, Michel; Rion, Normann; Scheidegger, Simon |
| Abstract: | For over three decades, Dynare has been a cornerstone of dynamic stochastic modeling in economics, relying primarily on perturbation-based local solution methods. However, these techniques often falter in high-dimensional, non-linear models that demand more comprehensive approaches. This paper demonstrates that global solutions of economic models with substantial heterogeneity and frictions can be computed accurately and swiftly by augmenting Dynare with adaptive sparse grids (SGs) and high-dimensional model representation (HDMR). SGs mitigate the curse of dimensionality, as the number of grid points grows significantly slower than in traditional tensor-product Cartesian grids. Additionally, adaptivity focuses grid refinement on regions with steep gradients or non-differentiabilities, enhancing computational efficiency. Complementing SGs, HDMR tackles large state spaces by approximating policy functions with a hierarchical expansion of low-dimensional terms. Using a time iteration algorithm, we benchmark our approach on an international real business cycle model. Our results show that both SGs and HDMR alleviate the curse of dimensionality, enabling accurate solutions for at least 100-dimensional models on standard hardware in relatively short times. This advancement extends Dynare’s capabilities beyond perturbation approaches, establishing a versatile platform for sophisticated nonlinear models and paving the way for integrating the most recent global solution methods, such as those from machine learning. |
| Keywords: | Adaptive Sparse Grids; High-dimensional Model Representation; Global Solution Methods; International Real Business Cycles; Time Iteration |
| JEL: | C63 E30 F44 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpm:dynare:086 |
| By: | Gourinchas, Pierre-Olivier; Ray, Walker; Vayanos, Dimitri |
| Abstract: | We develop a two-country model in which currency and bond markets are populated by different investor clienteles, and segmentation is partly overcome by arbitrageurs with limited capital. Risk premia in our model are time-varying, connected across markets, and consistent with the empirical violations of uncovered interest parity and expectations hypothesis. Through risk premia, large-scale bond purchases lower domestic and foreign bond yields and depreciate the currency, and short-rate cuts lower foreign yields, with smaller effects than bond purchases. Currency returns are disconnected from long-maturity bond returns, and yet the currency market is instrumental in transmitting bond demand shocks across countries. |
| JEL: | E43 E44 E52 F31 G12 G15 |
| Date: | 2025–11–06 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127783 |
| By: | Jiang, Hao; Vayanos, Dimitri; Zheng, Lu |
| Abstract: | We study how passive investing affects asset prices. Flows into passive funds disproportionately raise the stock prices of the economy’s largest firms, and especially those large firms in high demand by noise traders. Because of this effect, the aggregate market can rise even when flows are entirely due to investors switching from active to passive funds. Intuitively, passive flows increase the idiosyncratic risk of large firms in high demand, which discourages investors from correcting the flows’ effects on prices. Consistent with our theory, prices and idiosyncratic volatilities of the largest S&P500 firms rise the most following flows into that index. |
| Keywords: | passive investing; fund flows; asset pricing; size distribution of firms |
| JEL: | G12 G23 E44 |
| Date: | 2025–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:128591 |
| By: | Yasmine Elkhateeb (J-PAL MENA, Faculty of Economics & Political Science, Cairo University, Egypt); Riccardo Turati (Departament of Applied Economics, Universitat Autònoma de Barcelona, Spain & IZA, Germany & RFBerlin, Germany); Jérôme Valette (CEPII, IC Migrations, France & IZA, Germany & RFBerlin, Germany) |
| Abstract: | Does immigration challenge the identities, values, and cultural diversity of receiving societies? This paper addresses this question by analyzing the impact of immigration on cultural diversity in Europe between 2004 and 2018. It combines regional cultural diversity indices derived from the European Social Survey with immigration shares from the European Labor Force Survey. The results indicate that immigration increases the salience of birthplace identity along cultural lines, fostering a shift toward nativist identities among the native population. These identity shifts, in turn, trigger a process of cultural homogenization among natives. This effect is stronger in regions receiving culturally distant immigrants. It reflects a process of convergence toward the values of highly skilled liberal natives and divergence from those of low-skilled conservative immigrants. |
| Keywords: | Immigration, Social Identity, Cultural Diversity. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:uab:wprdea:wpdea2517 |
| By: | Hyeongwoo Kim; Shuwei Zhang |
| Abstract: | This paper investigates the design of optimal monetary policy responses to technology shocks in a two-country model framework featuring sticky prices and local currency pricing, where technology shocks propagate internationally. We demonstrate that technology shocks originating in the tradable sector, regardless of their country of origin, elicit monetary policy responses that are symmetric and closely aligned across countries, thereby providing a rationale for a fixed exchange rate regime. In contrast, technology shocks in the nontradable sector generate asymmetric policy reactions and weaken the source country's currency, supporting the case for exchange rate flexibility. In addition, the international transmission of technology shocks amplifies real-sector dynamics through news effects, prompting central banks to adopt contractionary policies, starkly contrasting with the findings of previous literature. |
| Keywords: | Sticky Price; Local Currency Pricing; Exchange Rate Regimes; Technology Diffusion; Interest Rate Rules |
| JEL: | F31 F41 O0 E52 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:abn:wpaper:auwp2025-11 |
| By: | Stuart Lane |
| Abstract: | The standard fuzzy regression discontinuity (FRD) estimator is a ratio of differences of local polynomial estimators. I show that this estimator does not have finite moments of any order in finite samples, regardless of the choice of kernel function, bandwidth, or order of polynomial. This leads to an imprecise estimator with a heavy-tailed sampling distribution, and inaccurate inference with small sample sizes or when the discontinuity in the probability of treatment assignment at the cutoff is small. I present a generalised class of computationally simple FRD estimators, which contains a continuum of estimators with finite moments of all orders in finite samples, and nests both the standard FRD and sharp (SRD) estimators. The class is indexed by a single tuning parameter, and I provide simple values that lead to substantial improvements in median bias, median absolute deviation and root mean squared error. These new estimators remain very stable in small samples, or when the discontinuity in the probability of treatment assignment at the cutoff is small. Simple confidence intervals that have strong coverage and length properties in small samples are also developed. The improvements are seen across a wide range of models and using common bandwidth selection algorithms in extensive Monte Carlo simulations. The improved stability and performance of the estimators and confidence intervals is also demonstrated using data on class size effects on educational attainment. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.03424 |
| By: | Liezel Alsemgeest (University of the Free State) |
| Abstract: | The rise of social media as a platform for personal finance discussions has transformed how individuals access, share, and engage with financial knowledge. This shift is particularly evident on X (Twitter), where users increasingly turn to microblogs for advice and discussions on saving, cryptocurrency, investing, and managing debt. Despite the growing influence of these platforms, there remains a significant gap in understanding the thematic structure and emotional tone of personal finance conversations online. This study addresses this gap by analysing 37, 466 personal finance-related posts from X, offering insights into the key topics and sentiment patterns of finance-related micro-blogs.Building on methodological frameworks from recent machine learning research, Latent Dirichlet Allocation (LDA) topic modelling, augmented by VADER sentiment analysis were implemented to address the core research question: What dominant themes emerge in crowdsourced financial conversations?The analysis identified five dominant themes: cryptocurrency speculation (35.66% prevalence), debt management (15.84%), budgeting (20.63%), making money online (17.38%), and better money spending (10.49%).This research underscores the need for interdisciplinary studies that bridge personal finance, behavioural economics, and digital communication to better understand how social media influences financial decision-making. The findings have practical implications for policymakers, educators, and financial institutions aiming to enhance financial literacy, while also addressing risks associated with unverified advice and promotional content lacking proper disclosure. By mapping the thematic and emotional landscape of personal finance discourse on X, this study provides a foundation for future research into the evolving role of social media in shaping consumer financial behaviour.The growing reliance on social media for financial guidance necessitates further exploration into its impact on individual decision-making processes and broader market behaviours. This study contributes to this emerging field by offering a replicable framework for analysing large-scale social media datasets, highlighting opportunities for improving financial literacy and risks that demand regulatory attention. |
| Keywords: | Topic modelling, X, personal finance, social media, micro-blogs |
| JEL: | D14 A20 G02 |
| URL: | https://d.repec.org/n?u=RePEc:sek:iacpro:15616667 |
| By: | Dmitrii Vlasiuk |
| Abstract: | We develop a finite-horizon model in which liquid-asset returns exhibit Levy-stable scaling on a data-driven window [tau_UV, tau_IR] and aggregate into a finite-variance regime outside. The window and the tail index alpha are identified from the log-log slope of the central body and a two-segment fit of scale versus horizon. With an anchor horizon tau_0, we derive horizon-correct formulas for Value-at-Risk, Expected Shortfall, Sharpe and Information ratios, Kelly under a Value-at-Risk constraint, and one-step drawdown, where each admits a closed-form Gaussian-bias term driven by the exponent gap (1/alpha - 1/2). The implementation is nonparametric up to alpha and fixed tail quantiles. The formulas are reproducible across horizons on the Levy window. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.07834 |
| By: | Edda Donati |
| Abstract: | Over the last twenty years, European policies to reduce emissions in the building sector have encouraged the introduction of sustainable business models, including Energy Performance Contracting (EPC) and its Italian evolution, Servizio Energia Plus (Energy Plus Service). The latter differs from the traditional EPC model in the ESCo's ability not only to carry out efficiency measures but also to supply energy for a period of ten years after the measure, ensuring integrated management and reducing risk for the customer. This study focuses on the Energy Plus Service and analyzes its specific characteristics and economic benefits to highlight its role in promoting sustainability in the Italian building landscape. The research is based on the application of two business models - a traditional and the Energy Plus Service - to a renovation project of an Italian case study. This approach makes it possible to compare a traditional business model with Energy Plus Service, highlighting the differences in terms of energy efficiency, economic sustainability, and risk management. The expected results should show that the Energy Plus Service model offers more effective solutions to climate and energy efficiency challenges than the traditional model and is better adapted to the economic and social specificities of the Italian context. This comparison is intended to show the concrete benefits resulting from the introduction of sustainable business models in the construction sector |
| Keywords: | Energy Plus Service; EPC; Renovation; Sustainable business models |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_28 |
| By: | Johannes Kochems (University of Cologne) |
| Abstract: | This paper analyzes how (local) tax havens function. Using the German municipal business tax setting as a laboratory, I investigate the characteristics and emergence of local tax havens. I demonstrate that local tax havens are situated in close proximity to large agglomeration areas, while firms' profit-to-wage ratios in these jurisdictions are exceptionally high. I document that the amount of local profit shifting is substantial. The empirical results indicate that local profit shifting is of a similar magnitude to recent findings regarding international profit shifting by German multinationals. I deploy synthetic difference-in-differences methods, combined with administrative data sources and standard profit shifting equations, to estimate the amount of profit shifting to local tax havens. Between 2013 and 2019, around 52 billion Euros of corporate profits were shifted to local tax havens. The results are driven by a small number of large firms that offer business and financial services. The direct fiscal cost to non-tax haven municipalities amounts to roughly 7.9 billion Euros, while tax haven municipalities gain around 4.3 billion Euros in tax revenues. I conduct a case study on the emergence of Germany's largest local tax havens. I estimate that between 2012 and 2019, around 20.5 billion was transferred to its jurisdiction. The increase in local tax revenues is used to reduce public debt burdens and finance a high level of public expenditures. |
| Keywords: | Public Finance, Fiscal Federalism, Corporate Taxation, Tax Havens, Profit Shifting |
| JEL: | H25 H26 H32 H71 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:379 |
| By: | Behrendt, Karl; Huang, Iona; Casperd, Julia; Millington, Anthony; Natálio, Ana Morais; Symmons, Jackie; Mayne, Kate; Sarfo, Yaw; Erskine, Louise; Kirby, Scott |
| Abstract: | Peatland provides significant value to English food production and economy, with their drainage and use leading to extensive degradation and GHG emissions. Although some agri-environmental policies support paludiculture, there remains significant uncertainty as to the private and public benefit of adopting paludiculture by landholders, especially in landscapes where lowland peats are patchy. Using a case study approach, we define the private and social benefits of six landholders in the West Midlands of England adopting paludiculture or peatland restoration for biodiversity markets to minimise or reverse further lowland peat degradation. A stochastic bioeconomic modelling approach is applied which integrates land use alternatives, payments from agri-environmental policies, and monetisation of biodiversity net gains when lowland peats are restored for habitat gain. In addition to the substantial capital costs of rewetting a catchment, land use opportunity costs, and regulatory and compliance costs affects the minimum feasible scale of rewetting lowland peat. These present significant barriers to the adoption of paludiculture, and current agri-environmental policies and payments are unlikely to be conducive to the adoption of paludiculture in small scale non-contiguous lowland peat. This puts at risk extensive areas of fragmented lowland peat and may result in continued lowland peat degradation, agriculture’s contribution to GHG emissions and catchments not benefiting from the flood mitigation and biodiversity gain opportunities rewetting lowland peat provides. Monetisation of biodiversity net gains when restoring lowland peat habitats potentially offers the most economically beneficial pathway to protecting England’s patchy lowland peats. |
| Keywords: | Agricultural and Food Policy, Crop Production/Industries |
| URL: | https://d.repec.org/n?u=RePEc:ags:aes025:356777 |
| By: | Tetsuya Takaishi |
| Abstract: | The finite sample effect on the Hurst exponent (HE) of realized volatility time series is examined using Bitcoin data. This study finds that the HE decreases as the sampling period $\Delta$ increases and a simple finite sample ansatz closely fits the HE data. We obtain values of the HE as $\Delta \rightarrow 0$, which are smaller than 1/2, indicating rough volatility. The relative error is found to be $1\%$ for the widely used five-minute realized volatility. Performing a multifractal analysis, we find the multifractality in the realized volatility time series, smaller than that of the price-return time series. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.03314 |
| By: | Shalabh Kumar Singh; Shubhashis Sengupta |
| Abstract: | Artificial intelligence (AI) is emerging as a foundational general-purpose technology, raising new dilemmas of sovereignty in an interconnected world. While governments seek greater control over it, the very foundations of AI--global data pipelines, semiconductor supply chains, open-source ecosystems, and international standards--resist enclosure. This paper develops a conceptual and formal framework for understanding sovereign AI as a continuum rather than a binary condition, balancing autonomy with interdependence. Drawing on classical theories, historical analogies, and contemporary debates on networked autonomy, we present a planner's model that identifies two policy heuristics: equalizing marginal returns across the four sovereignty pillars and setting openness where global benefits equal exposure risks. We apply the model to India, highlighting sovereign footholds in data, compute, and norms but weaker model autonomy. The near-term challenge is integration via coupled Data x Compute investment, lifecycle governance (ModelOps), and safeguarded procurement. We then apply the model to the Middle East (Saudi Arabia and the UAE), where large public investment in Arabic-first models and sovereign cloud implies high sovereignty weights, lower effective fiscal constraints, and strong Data x Compute complementarities. An interior openness setting with guardrails emerges as optimal. Across contexts, the lesson is that sovereignty in AI needs managed interdependence, not isolation. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.15734 |
| By: | Valérie Laforest (FAYOL-ENSMSE - Institut Henri Fayol - Mines Saint-Étienne MSE - École des Mines de Saint-Étienne - IMT - Institut Mines-Télécom [Paris]); Michelle Mongo (ENSM ST-ETIENNE - Ecole Nationale Supérieure des Mines de St Etienne); Audrey Tanguy (Mines Saint-Étienne MSE - École des Mines de Saint-Étienne - IMT - Institut Mines-Télécom [Paris]); Hervé Vaillant (EVS - Environnement, Ville, Société - ENS de Lyon - École normale supérieure de Lyon - Université de Lyon - Mines Saint-Étienne MSE - École des Mines de Saint-Étienne - IMT - Institut Mines-Télécom [Paris] - UL2 - Université Lumière - Lyon 2 - UJML - Université Jean Moulin - Lyon 3 - Université de Lyon - INSA Lyon - Institut National des Sciences Appliquées de Lyon - Université de Lyon - INSA - Institut National des Sciences Appliquées - UJM - Université Jean Monnet - Saint-Étienne - ENTPE - École Nationale des Travaux Publics de l'État - ENSAL - École nationale supérieure d'architecture de Lyon - CNRS - Centre National de la Recherche Scientifique - ALLHiS - Approches Littéraires, Linguistiques et Historiques des Sources - UJM - Université Jean Monnet - Saint-Étienne); Jonathan Villot |
| Keywords: | Apprentissage, économie circulaire, jeu sérieux, déchets, négociation |
| Date: | 2025–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05356141 |
| By: | Albagli, Pinjas; García-Echalar, Andrés |
| Abstract: | This paper examines the effects of a major 2012 student loan reform in Chile that reduced interest rates from 6% to 2% and introduced more flexible repayment terms. Unlike studies of initial loan implementation, this reform offers a rare opportunity to examine how changes in the cost of borrowing affect enrollment decisions among already-eligible students. Using rich administrative data and a difference-in-differences design, we estimate the effects of the reform on immediate enrollment, second-year enrollment, and second-year dropout. To strengthen causal inference, we complement our strategy with a difference-in-discontinuities approach that leverages eligibility thresholds. We find a compositional shift in immediate enrollment: university enrollment increases by 2.5 percentage points, offset by an equal decline in vocational institutions, with no effect on overall enrollment. This shift persists into second-year outcomes, where university students exhibit slightly higher dropout and vocational students show improved persistence. These effects are concentrated among students from voucher schools and are absent among students from public schools, likely due to persistent academic and financial constraints. We also find that overall enrollment declines for female students, which may reflect greater risk aversion in response to uncertainty. These findings shed light on how price-based reforms to student loan programs can generate unequal responses across student groups and institutional sectors, offering valuable lessons for the design of equitable higher education financing. |
| Keywords: | tertiary education; financial aid; interest rates; repayment conditions; enrollment; retention; dropout; institutional sector switching |
| JEL: | I22 I28 |
| Date: | 2025–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130051 |
| By: | Giuliana, Raffaele; Panfilo, Matteo; Peltonen, Tuomas |
| Abstract: | This study sheds light on the impact of digitalisation and social media on deposit flows and rates of euro area banks during the recent period of monetary tightening. Drawing on difference-in-differences analysis of confidential monthly data (12/2019 –10/2023) of deposit flows and rates as well as measures of bank digitalisation and social media exposure through Twitter sentiment, the study offers two novel sets of findings. First, banks with a higher degree of digitalisation exhibit larger fluctuations in deposits, with higher inflows from mid-2020 to early 2022 but greater outflows in response to the tightening. Digitalisation is also correlated with higher sensitivity of banks’ NFC deposit rates to policy rates. Second, a negative Twitter sentiment reduces deposit inflows, even after accounting for traditional news’ sentiment and a comprehensive set of bank-specific factors, including asset prices and performance indicators. JEL Classification: G21 |
| Keywords: | deposit franchise, deposits, digitalisation, monetary tightening, social media |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:srk:srkwps:2025153 |
| By: | Shehani Gamage; Abdul-Rasheed Amidu; Deborah Levy |
| Abstract: | With a growing emphasis on sustainability and corporate social responsibility (CSR) in the property sector, managers are increasingly challenged by the integration of financial performance with social impact. This study employs interviews with managers from listed property trusts in New Zealand to investigate their strategies for embedding social value into commercial property initiatives. The findings reveal that managers acknowledge the advantages of socially responsible practices such as heightened tenant satisfaction, improved community relations, and financial benefits, including enhanced marketability and reduced vacancy rates. The thematic analysis identifies essential strategies, including community engagement, sustainable building practices, and transparency in CSR reporting. Interviews also revealed the complexities involved in balancing the interests of various stakeholders, such as tenants, investors, and the broader community. Managers stress the importance of aligning properties with societal needs to cultivate long-term loyalty and trust, thereby enhancing reputational capital. This study contributes to the understanding of how social value is operationalised within New Zealand's listed property trust sector, offering recommendations for enhancing social value initiatives. These insights aim to inform stakeholders about the critical role of social value in fostering sustainable property management. |
| Keywords: | CSR; Property Trusts; social value; Tenant Satisfaction |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_296 |
| By: | Rakeshkumar H Sodha |
| Abstract: | Problem. "Thinking" LLMs (TLLMs) expose explicit or hidden reasoning traces and are widely believed to generalize better on complex tasks than direct LLMs. Whether this promise carries to noisy, heavy-tailed and regime-switching financial data remains unclear. Approach. Using Indian equities (NIFTY constituents), we run a rolling 48m/1m walk-forward evaluation at horizon k = 1 day and dial cross-sectional complexity via the universe size U in {5, 11, 21, 36} while keeping the reasoning budget fixed (B = 512 tokens) for the TLLM. We compare a direct LLM (gpt-4o-mini), a TLLM (gpt-5), and classical learners (ridge, random forest) on cross-sectional ranking loss 1 - IC, MSE, and long/short backtests with realistic costs. Statistical confidence is measured with Diebold-Mariano, Pesaran-Timmermann, and SPA tests. Main findings. (i) As U grows under a fixed budget B, the TLLM's ranking quality deteriorates, whereas the direct LLM remains flat and classical baselines are stable. (ii) TLLM variance is higher, requiring ex-post calibration (winsorization and blending) for stability. (iii) Portfolio results under transaction costs do not support a net advantage for the TLLM. Hypotheses. Our results are consistent with the following testable hypotheses: H1 (Capacity-Complexity Mismatch): for fixed B, TLLM accuracy degrades superlinearly in cross-sectional complexity. H2 (Reasoning Variance): TLLM outputs exhibit higher dispersion date-by-date than direct LLMs, increasing error bars and turnover. H3 (Domain Misfit): next-token prediction objectives and token-budgeted inference are poorly aligned with heavy-tailed, weakly predictable stock returns. Implication. In our setting, "thinking" LLMs are not yet ready to replace classical or direct methods for short-horizon stock ranking; scaling the reasoning budget and/or re-aligning objectives appears necessary. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.08608 |
| By: | Jian Liang; Chyi Lin Lee; Yunhe Cheng; Franz Fuerst; Matthew Ng |
| Abstract: | This study examines the heterogeneous impact of flooding, if any, on housing prices, rental markets, and household financial conditions, with a particular focus on lower-income households in New South Wales, Australia. Using a Spatial Difference-in-Differences (SDID) approach to housing and household-level financial data, we assess changes in housing prices, rental markets, and household expenditures in flood-affected areas, focusing on the March 2021 flood event. Specifically, it examines its disproportionate effects, if any, on low-income households, particularly renters, for the first time. Our results reveal that while the direct impact on property sale prices is statistically insignificant, rental prices increased by 2.7% to 3%, with the most significant effect observed in the lower-end rental market. This can be attributed to supply shortages and landlords passing repair costs onto tenants. Specifically, owner-occupiers faced a significant rise in home repair and insurance expenses, while renters experienced increased housing costs without direct repair liabilities. Additionally, vacancy rates in flooded areas declined by 10.7% to 15.7%, with rental market pressures particularly affecting lower-income households. Results here suggest that lower-income households, particularly renters, were disproportionately affected by the flooding events. The study highlights critical policy implications, including improved flood risk awareness, better tenant regulatory protection, and integrating climate resilience into housing affordability strategies. |
| Keywords: | Flooding; Housing Markets; spatial DID; Sydney |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_193 |
| By: | Stefano BIANCHINI (European Commission); Valentina DI GIROLAMO (European Commission); Julien RAVET (European Commission); David ARRANZ (European Commission) |
| Abstract: | The use of AI for scientific discovery has advanced at pace in the last decades. While this technology holds great potential to transform research, concerns have been voiced about its adverse, often unintended consequences. Can AI actually boost scientific creativity and lead to more innovative and impactful discoveries? Thus far, answers to this question remain largely anecdotal and confined to a handful of disciplines. In this paper, we study the diffusion of AI across 80 scientific fields from 2000 to 2022 and its impact on creativity – measured through novelty and impact. We find that AI adoption has accelerated in nearly all disciplines since the early 2010s, with research activity becoming increasingly concentrated in three major regions: the EU, the US, and China. Our analysis confirms an overall positive effect of AI on scientific creativity, though with considerable variation across fields: while most have benefited, some have seen little to no gains, and a few have even experienced negative returns. We propose that the structural organisation of knowledge within a field – and, by extension, the patterns of knowledge production – may moderate the influence of AI on scientific discovery. Specifically, we show that AI has greater transformative potential in “rough” knowledge spaces, where ideas are more fragmented and disconnected, and human cognition struggle to cope with complexity. These findings contribute to the ongoing debate on the role of AI in science and are contextualised within recent policy initiatives designed to promote AI-powered science. |
| Keywords: | Research and Innovation funding, impact assessment, econometric methods, spillover effects, mediation analysis, policy evaluation |
| JEL: | O32 O38 C18 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:eug:wpaper:ki-01-25-085-en-n |
| By: | Gerholz, Karl-Heinz (Ed.); Hochleitner, Thomas (Ed.); Maidanjuk, Ilona (Ed.); Beil, Shaleen (Ed.) |
| Abstract: | Überlegen Sie einmal: Fällt Ihnen ein Beruf ein, für den sprachliche Interaktion unwichtig ist? Nein? Das ist nicht überraschend, denn Sprache ist das Herzstück jeder beruflichen Tätigkeit. Und damit ist die Programmatik des vorliegenden Sammelbandes umrissen. Es geht um die immense Bedeutung beruflicher Sprachbildung. Hierbei zeigen theoretische und empirische Beiträge konkrete Gestaltungsmöglichkeiten zur beruflichen, schulischen und betrieblichen Sprachbildung auf. Abgerundet werden diese mit inspirierenden und reflektierten Praxisbeispielen. Wenn Sie verstehen wollen, warum Sprache der Motor für beruflichen Erfolg und unternehmerische Wertschöpfung sein kann, dann laden wir Sie ein, dieses Buch zu lesen. |
| Keywords: | Berufsbildung, Sprache, Sprachgebrauch, Sprachförderung, Sprachkompetenz, Mehrsprachigkeit, Lernort, Pflegeberuf, Berufsausbildung, Bildungspersonal, Porfessionalisierung, Deutschunterricht, Lesekompetenz, Schreibkompetenz |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bibbfb:331814 |
| By: | Pasquale Accardo (University of Bath); Adriano Amati (Università Ca' Foscari Venezia); Giovanni Mastrobuoni (Collegio Carlo Alberto; University of Turin; University of Essex) |
| Abstract: | This study uses a unique longitudinal data set on daily museum visits in Northern Italy to investigate how social networks influence leisure consumption. Based on detailed administrative records of museum cardholders, we use repeated joint visits to build a dynamic network of peers. We identify peer effects that exploit exogenous variation in membership prices generated by age-based discounts. We find robust evidence of peer spillovers in both museum attendance and membership renewal, primarily driven by a preference for shared experiences. These results underscore the role of social interactions in shaping leisure demand and support the view that social networks can amplify individual behavior. More broadly, our findings contribute to the understanding of peer dynamics in settings where consumption is inherently social. |
| Date: | 2025–09–25 |
| URL: | https://d.repec.org/n?u=RePEc:eid:wpaper:58192 |
| By: | Nastasia Smeets (ERT - IMT Mines Alès - ERT - IMT - MINES ALES - IMT - MINES ALES - IMT - Institut Mines-Télécom [Paris] - HSM - Hydrosciences Montpellier - IRD - Institut de Recherche pour le Développement - INSU - CNRS - Institut national des sciences de l'Univers - CNRS - Centre National de la Recherche Scientifique - UM - Université de Montpellier, HSM - Hydrosciences Montpellier - IRD - Institut de Recherche pour le Développement - INSU - CNRS - Institut national des sciences de l'Univers - CNRS - Centre National de la Recherche Scientifique - UM - Université de Montpellier); Guillaume Junqua (ERT - IMT Mines Alès - ERT - IMT - MINES ALES - IMT - MINES ALES - IMT - Institut Mines-Télécom [Paris] - HSM - Hydrosciences Montpellier - IRD - Institut de Recherche pour le Développement - INSU - CNRS - Institut national des sciences de l'Univers - CNRS - Centre National de la Recherche Scientifique - UM - Université de Montpellier, HSM - Hydrosciences Montpellier - IRD - Institut de Recherche pour le Développement - INSU - CNRS - Institut national des sciences de l'Univers - CNRS - Centre National de la Recherche Scientifique - UM - Université de Montpellier) |
| Keywords: | Eau domestique, Méditerranée, Bassin versant, AWARE, Stress hydrique, Tourisme, Empreinte eau, WSI |
| Date: | 2025–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05356176 |
| By: | Kohlscheen, Emanuel; Moessner, Richhild; Takats, Elod |
| Abstract: | In this study, we provide ex post empirical analysis of the effects of climate policies on carbon emissions at the aggregate national level, using a comprehensive database of 121 countries. Carbon taxes and emissions trading systems (ETS), and the overall stringency of climate policies are considered. We use dynamic panel regressions, controlling for macroeconomic factors (economic development, GDP growth, urbanisation and the energy mix). Higher carbon taxes and ETS prices reduce carbon emissions. An increase in carbon taxes by $10 per ton of CO2 reduces CO2 emissions per capita by 1.3% in the short run and by 4.6% in the long run. |
| Keywords: | carbon emission trading system; carbon dioxide emissions; energy; carbon tax; climate policies |
| JEL: | Q00 Q48 Q58 |
| Date: | 2025–11–07 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130125 |
| By: | Sébastien Levionnois (ECOSYS - Ecologie fonctionnelle et écotoxicologie des agroécosystèmes - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UMR AGAP - Amélioration génétique et adaptation des plantes méditerranéennes et tropicales - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); Noémie Gaudio (AGIR - AGroécologie, Innovations, teRritoires - EI Purpan - Ecole d'Ingénieurs de Purpan - Comue de Toulouse - Communauté d'universités et établissements de Toulouse); Rémi Mahmoud (AGIR - AGroécologie, Innovations, teRritoires - EI Purpan - Ecole d'Ingénieurs de Purpan - Comue de Toulouse - Communauté d'universités et établissements de Toulouse); Christophe Pradal (UMR AGAP - Amélioration génétique et adaptation des plantes méditerranéennes et tropicales - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier, Cirad-BIOS - Département Systèmes Biologiques - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement, LIRMM - Laboratoire d'Informatique de Robotique et de Microélectronique de Montpellier - CNRS - Centre National de la Recherche Scientifique - UM - Université de Montpellier); Corinne Robert (ECOSYS - Ecologie fonctionnelle et écotoxicologie des agroécosystèmes - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | Highlights: • Simulated intercropping decrease disease intensity and improve protectiveness while canopy indicators predict such effects. • Pea intercropped with wheat decreased disease intensity compared with faba bean. • Nitrogen fertilization increased disease intensity. • This study stressed the critical lack of experimental data on disease in intercropping. Abstract: Context : Intercropping is a promising strategy for integrated disease management and agroecological transition, although experimental and modelling studies are scarce. Objectives: This study aims to understand and quantify the impact of non-host species choice and nitrogen (N) fertilization on disease epidemics in the context of intercropping. Methods: We collected existing experimental data on LAI based on a literature survey of non-diseased wheat intercropped with different non-host legume species (pea and faba bean) and N fertilization treatments. Based on a foliar epidemic model for intercropping, we simulated epidemics directly on these experimental data of LAI. The model is parameterized for two wheat fungal diseases: Septoria tritici blotch, a rain-borne disease, and wheat leaf rust, an air-borne disease. Results: Our results indicate that intercropping can decrease disease intensity and improve protectiveness for both diseases. Effect depends however on species choice as pea intercropped with wheat leads to lower disease intensity and better intercropping protectiveness compared with faba bean, whereas N fertilization increased disease intensity. We also found that crop indicators describing wheat leaf area index (LAI) can predict disease intensity, whereas indicators describing companion LAI can better predict intercropping protectiveness. Conclusions: Intercropping can significantly reduce fungal epidemics on wheat, and intercropping management practices can be optimized for effective disease management in wheat-legume intercrops. The dilution effect is more related to disease intensity, while the barrier effect is more related to intercropping protectiveness. Implications: These findings pave the way for identifying field indicators to predict epidemics. However, this study also stressed the critical lack of experimental data on disease in intercropping. |
| Keywords: | Septoria tritici blotch, Wheat leaf rust, Intercropping, Crop mixture |
| Date: | 2026–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05328274 |
| By: | Valerio Dionisi |
| Abstract: | Complementarities in intermediate inputs trigger the even transmission of asymmetric shocks in production networks. This paper linearly captures these complementarities through shared inter-sectoral trade relationships, and makes two novel contributions to the understanding of networked economies. First, it introduces a theoretical framework that distinguishes between factor input demand and factor input supply network distances, measuring economic distance between sectors based on common upstream sellers or downstream buyers. These horizontal interdependencies determine how sector-specific shocks transmit horizontally across the network, complementing and balancing the standard vertical (Leontief inverse) mechanism. Second, using sector-level U.S. employment data, the paper provides empirical evidence that positive employment shocks in closely demand- or supply-connected sectors are attenuated, whereas larger distances generate employment comovement. Together, these two contributions reveal that the horizontal geometry of a production network plays a critical role in understanding how sectoral interactions propagate micro-originated shocks in an Input-Output economy. |
| Keywords: | Input-Output economy, production networks, network distance, horizontal transmission, sectoral comovement, tools for policy design |
| JEL: | C67 D57 E32 F16 L14 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:mib:wpaper:559 |
| By: | Anselme Njocke (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour) |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05361027 |
| By: | Melissa Escobar Cisternas (EVS - Environnement, Ville, Société - ENS de Lyon - École normale supérieure de Lyon - Université de Lyon - Mines Saint-Étienne MSE - École des Mines de Saint-Étienne - IMT - Institut Mines-Télécom [Paris] - UL2 - Université Lumière - Lyon 2 - UJML - Université Jean Moulin - Lyon 3 - Université de Lyon - INSA Lyon - Institut National des Sciences Appliquées de Lyon - Université de Lyon - INSA - Institut National des Sciences Appliquées - UJM - Université Jean Monnet - Saint-Étienne - ENTPE - École Nationale des Travaux Publics de l'État - ENSAL - École nationale supérieure d'architecture de Lyon - CNRS - Centre National de la Recherche Scientifique - ALLHiS - Approches Littéraires, Linguistiques et Historiques des Sources - UJM - Université Jean Monnet - Saint-Étienne); Valérie Laforest |
| Keywords: | processus d'idéation, ingénierie, Soutenabilité forte, conception, soutenable, circularité forte |
| Date: | 2025–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05356142 |
| By: | Wang, Maria |
| Abstract: | Abstract The gravity model is one of the most widely used tools in international economics, explaining trade between countries through their mutual “attraction”, determined by economic size and geographical distance. In an era defined by geopolitical tensions, the pandemic, and disruptions to supply chains, the gravity model helps reveal how global trade is fragmenting and reorienting toward regional blocs. From Finland’s perspective, the model provides a valuable means of evaluating trade vulnerability and adaptive capacity: roughly one quarter of Finland’s intermediate goods imports depend on countries whose supply reliability is geopolitically uncertain. This perspective is crucial for understanding how Finland can strengthen its trade resilience and strategic autonomy in a rapidly changing global economy. |
| Keywords: | Geoeconomics, Industrial policy, Trade policy, National security |
| JEL: | F13 O25 F52 |
| Date: | 2025–11–12 |
| URL: | https://d.repec.org/n?u=RePEc:rif:briefs:167 |
| By: | Strebel, Michael A. (University of Bern) |
| Abstract: | Local governments in many countries struggle to find candidates for elected office. In the resulting uncontested elections, voters cannot choose between different candidates and hold local representatives accountable. Amalgamation might be a solution for this challenge to democracy since larger jurisdictions need fewer elected officials per voter. Combining data on all Swiss local government mergers in the 21st century with data on local executive elections, this article assesses whether amalgamation reforms indeed increase candidate supply and hence local electoral contestation. Staggered difference-in-differences regressions show that amalgamation increases the number of candidates/seat. The underlying mechanisms seem to go beyond a ``mechanical'' effect that results from a mere expansion of the candidate pool. This study, thus, provides first empirical evidence that local government amalgamation might contribute to mitigate a hidden supply side crisis of electoral democracy at the local level. |
| Date: | 2025–11–19 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:cyrtm_v1 |
| By: | Phoebe Koundouri; Chloe Chua; Konstantinos Dellis |
| Abstract: | The Greek agri-food system faces mounting environmental, economic, and public health challenges driven by climate change, biodiversity loss, and a departure from traditional dietary patterns. This study uses the FABLE calculator to examine the potential impacts of transitioning toward the Mediterranean Diet (MD) under different scenario pathways. The FABLE Calculator is an integrated modelling tool for assessing sustainable food and land-use pathways under various scenarios including Shared Socioeconomic Pathways (SSPs). Our analysis for Greece highlights that adopting the MD could reduce agricultural greenhouse gas emissions in Greece by up to 46-60% by 2050.This occurs primarily through lower methane and nitrous oxide emissions from reduced livestock production and associated land-use change. Other key environmental benefits include enhanced biodiversity and improved land-use efficiency. The shift also delivers substantial health gains, lowering risks of cardiovascular diseases and diabetes while improving food affordability. However, our results also highlight significant economic trade-offs, including declines in production value and employment particularly within livestock-dependent sectors. Projected increases in production for crops does not compensate for losses in livestock production. Productivity improvements further accelerate emissions reduction and further reduce production costs but do not fully offset labor losses. The findings underscore the "double dividend" of dietary transitions-simultaneous climate and health benefits-whilst revealing key economic problems and evincing the need for complementary policies to ensure equity and resilience. Integrating dietary shifts into national climate, agricultural, and health strategies, supported by education, fiscal incentives, and social protection, can advance Greece toward a sustainable, healthy, and inclusive food system. But more effort is needed to match supply side measures to dietary changes, echoing very recent publications and case studies. |
| Keywords: | Agri-food Systems, Mediterranean diet, FABLE, Agricultural Emissions, Greece |
| Date: | 2025–11–15 |
| URL: | https://d.repec.org/n?u=RePEc:aue:wpaper:2559 |
| By: | Rongjun Ao; Ling Zhong; Jing Chen; Xiaojing Li; Xiaoqi Zhou |
| Abstract: | While prior research has emphasized the path-dependent nature of occupational systems, it has paid limited attention to how local industrial structures contribute to occupational change. To address this gap, this study examines how regional occupational evolution is shaped by two distinct mechanisms: (1) path-dependent skill and knowledge transfer, whereby new occupations emerge through the recombination of existing occupational structures; and (2) industry-driven task reconfiguration, through which industrial upgrading reshapes the demand for occupations. To operationalize these dynamics, the concept of industry–occupation cross-relatedness is introduced, capturing the proximity between new occupations and a region’s existing industrial portfolio. Drawing on panel data from 241 Chinese cities between 2000 and 2015, the study estimates the effects of both occupational relatedness and cross-relatedness on new occupation specialization. The results reveal that both mechanisms significantly promote occupational evolution, yet they tend to function as substitutes rather than complements. Furthermore, their effects differ across skill levels: high-skilled occupations are more responsive to industrial transformation, low-skilled occupations to occupational pathways, while medium-skilled occupations exhibit relatively weak responsiveness to both. These findings underscore the importance of structural conditions and skill heterogeneity in shaping regional patterns of occupational change. |
| Keywords: | Occupational Evolution; Path Dependence; Chinese Cities; Industry-Occupation Cross-Relatedness; Skill Heterogeneity |
| JEL: | R11 O14 N95 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2534 |
| By: | Silvia Leoni; Marco Catola |
| Abstract: | The debate on environmental policy increasingly focuses on aligning private incentives with social objectives in imperfectly competitive markets. While traditional literature has centred on public-based mechanisms like taxes and subsidies, a growing strand emphasizes private-based mechanisms, particularly green consumerism, where consumer preferences can drive firms’ adoption of clean technologies. Recent game-theoretic analysis shows that consumers’ willingness-to-pay can lead to various market equilibria, from all-green to all-brown outcomes. This paper complements this analytical approach by developing an agent-based model (ABM) to study the dynamic evolution of a spatial market where firms, based on relative performance, decide whether to supply brown or green products to heterogeneous consumers. Our computational simulations confirm that all three market structures—all-brown, all-green, and mixed—can endogenously emerge depending on average green consumer preferences. Furthermore, we evaluate the effectiveness of three policy instruments: an environmental tax, a subsidy to green firms, and a subsidy to green consumers. We find that supply-side policies are more effective than demand-side subsidies. Specifically, an environmental tax ensures the fastest convergence to an all-green market, while a production subsidy is most effective at reducing the share of brown firms and consumers in mixed-market scenarios. By bridging game-theoretic insights with agent-based computational analysis, this paper provides a dynamic and policy-relevant perspective on the transition to sustainable markets. |
| Keywords: | agent-based modelling, pollution abatement, green technology, environmental policy |
| JEL: | C63 D43 H23 L13 L51 |
| Date: | 2025–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:pie:dsedps:2025/326 |