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on Confederation of Independent States |
| By: | Anton Pichler; Jan Hurt; Tobias Reisch; Johannes Stangl; Stefan Thurner |
| Abstract: | The Russian invasion of Ukraine on February 24, 2022 entailed the threat of a drastic and sudden reduction of natural gas supply to the European Union. This paper presents a techno-economic analysis of the consequences of a sudden gas supply shock to Austria, one of the most dependent countries on imports of Russian gas. Our analysis comprises (a) a detailed assessment of supply and demand side countermeasures to mitigate the immediate shortfall in Russian gas imports, (b) a mapping of the net reduction in gas supply to industrial sectors to quantify direct economic shocks and expected relative reductions in gross output and (c) the quantification of higher-order economic impacts through using a dynamic out-of-equilibrium input-output model. Our results show that potential economic consequences can range from relatively mild to highly severe, depending on the implementation and success of counteracting mitigation measures. We find that securing alternative gas imports, storage management, and incentivizing fuel switching represent the most important short-term policy levers to mitigate the adverse impacts of a sudden import stop. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.07981 |
| By: | Fredy Gamboa-Estrada; José Vicente Romero |
| Abstract: | This study examines the determinants of sovereign risk, focusing on the impact of geopolitical risk in emerging market economies (EMEs) sovereign risk metrics. Using local projection techniques, we evaluate the effects of geopolitical risk on credit default swaps (CDS) and EMBI indices in EMEs, including the recent war between Ukraine and Russia. Our findings highlight the significance of considering geopolitical risk when analyzing risk premiums for emerging markets. Notably, we find that the impact of geopolitical risk shocks on CDS is higher than the effect on EMBI spread dynamics. Furthermore, using recursive estimations, we show that the effect of geopolitical risk on sovereign CDS and EMBI spreads has been relatively stable. On the other hand, we find an important degree of heterogeneity across countries by analyzing evidence from individual countries. Some countries in our sample seem statistically unaffected by geopolitical risk, particularly when examining EMBI dynamics. **** RESUMEN: Este estudio examina los determinantes del riesgo soberano, centrándose en el impacto del riesgo geopolítico en las métricas para una muestra de mercados emergentes (EMEs). Utilizando técnicas de proyección local, evaluamos los efectos del riesgo geopolítico en los swaps de incumplimiento crediticio (CDS) y en los índices EMBI, incluyendo la reciente guerra entre Ucrania y Rusia. Nuestros hallazgos resaltan la importancia de considerar el riesgo geopolítico al analizar las primas de riesgo para los mercados emergentes. En particular, encontramos que el impacto de los choques de riesgo geopolítico en los CDS es mayor que el efecto en la dinámica del EMBI. Además, utilizando estimaciones recursivas, mostramos que el efecto del riesgo geopolítico en los CDS soberanos y en el EMBI ha sido relativamente estable. Por otro lado, presentamos evidencia de un importante grado de heterogeneidad entre los países al examinar las estimaciones de países individuales. Algunos países de nuestra muestra parecen no estar afectados por el riesgo geopolítico, particularmente al examinar la dinámica del EMBI. |
| Keywords: | Sovereign risk, credit default swaps, EMBI, emerging markets, geopolitical risk, local projection, riesgo soberano, swaps de incumplimiento crediticio, EMBI, mercados emergentes, riesgo geopolítico, proyecciones locales. |
| JEL: | C22 F37 G15 G17 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:bdr:borrec:1282 |
| By: | Fetzer, Thiemo (Warwick University and University of Bonn); Palmou, Christina (Office for National Statistics (ONS)); Schneebacher, Jakob (Competition and Markets Authority (CMA)) |
| Abstract: | We study how businesses adjust to significant rises in energy costs. This matters for both the current energy crisis and the longer-term shift towards Net Zero. Using firm-level real-time survey and administrative data backed by a pre-registered analysis plan, we examine how firms respond to the energy price shock triggered by Russia’s invasion of Ukraine along output, price, input, process and survival margins. We find that, on average, firms pass on some cost increases, build up cash reserves, and face higher debt, but do not yet see layoffs or bankruptcies. However, effects are highly heterogeneous by size and industry: for instance, small firms tend to increase cash reserves and prices, while large firms invest more in capital. We estimate separate elasticities for many small industry cells and subsequently use kmeans clustering techniques on the estimated effects to identify high-dimensional firm-adaptation archetypes. These estimates can help tailor firm support in the energy transition both in the short and the long term. More generally, the machinery developed in this paper enables policymakers to evaluate and adjust economic policy in near-real time. |
| Keywords: | energy price shock ; firm dynamics ; climate change ; high-dimensional analysis JEL Codes: D22 ; D24 ; H23 ; L11 ; O30 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1517 |
| By: | Popov, Vladimir; Konchakov, Roman; Didenko, Dmitry |
| Abstract: | The previous research with incomplete data revealed that zemstva expenditure on education per capita were higher in regions with low level of education, but these spending did not make much of a difference – human capital in these regions remained relatively low (Popov, Konchakov, Didenko, 2024). The results reported in this paper provide additional and more rigorous proof that zemstva activities and the increase in their spending for education in 1897-1913 contributed to the spread of primary education and to the decline in the inequality of the distribution of human capital not only between the regions |
| Keywords: | educational attainment, school enrollment, inequality, land distribution, growth |
| JEL: | D63 I24 J24 N93 R11 |
| Date: | 2024–09–21 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122162 |
| By: | Bonga-Bonga, Lumengo |
| Abstract: | This paper makes a significant contribution to the literature on the policy trilemma by evaluating potential policy combinations that are relevant for the BRICS grouping within the context of the Impossible Trinity. Additionally, the paper introduces a new modeling approach for assessing the policy trilemma, based on establishing a boundary for the linear combination of variables related to the trilemma. The findings reveal that adopting a fixed exchange rate system presents considerable challenges for BRICS countries within the framework of the Impossible Trinity. Specifically, the results suggest that if BRICS countries opt for a fixed exchange rate system, they would likely have to forgo free capital flow. This loss of flexibility could be particularly detrimental, given their significant international influence and their role as major recipients of capital flows for trade and financial transactions. |
| Keywords: | impossible trinity; exchange stability; monetary policy independence; BRICS. |
| JEL: | C2 E61 F4 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121839 |