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on China |
| By: | Liping Gao; Ghislain N. Gueye; Hyeongwoo Kim; Jisoo Son |
| Abstract: | Using data from 29 regional housing markets in China, this study examines the long-run relationships between housing prices and key macroeconomic variables. Conventional cointegration methods can be misleading, as estimated coefficients often contradict standard demand-supply theory even when statistical tests indicate cointegration. Among the variables, only real income consistently explains regional housing price dynamics, whereas real interest rates and building costs fail to do so consistently across markets. Region-specific models reveal substantial heterogeneity and are both statistically robust and economically meaningful. Panel cointegration tests that account for cross-sectional dependence fail to detect cointegration when such heterogeneity is ignored. These findings highlight the limitations of uniform national approaches and underscore the need for tailored, region-specific housing policies. |
| Keywords: | Housing Market; Cointegration; Dynamic Oridinary Least Squares; Panel Cointegration Test with CSD; Disaggregated Regional Data |
| JEL: | R30 E00 C51 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:abn:wpaper:auwp2026-03 |
| By: | Zhiguo He; Yuehan Wang; Xiaoquan Zhu |
| Abstract: | Using cross-border holding data from all custodians in China’s Stock Connect, we provide evidence that Chinese mainland insiders evade see-through surveillance by round-tripping via the program. Following the 2018 Northbound Investor Identification reform, the return predictability of northbound flows decays, as does their correlation with insider trading. This reduction is especially pronounced among less prestigious foreign custodians and cross-operating mainland custodians, where insiders are more likely to hide. Furthermore, the reform erodes price informativeness, particularly in stocks with high exposure to homemade foreign investors. Our analysis highlights the role of regulatory cooperation in capital market integration. |
| JEL: | F3 G14 G15 G28 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35095 |
| By: | Yilin Cai; Meng Feng; Yueming (Lucy) Qiu; Yi David Wang |
| Abstract: | This paper uses a multi-time period difference-in-differences model to evaluate the effect of green bond issuance on the profitability of heavy-polluting enterprises listed on China's A-share market. Results reveal that the average treatment effect of green bond issuance on heavy-polluting firms’ ROE is significantly negative. Therefore, it suggests that green bond issuance requires issuing firms to give up a large amount of their profitability to develop green project and achieve green transformation. Heterogeneity analyses demonstrate that such issuance has a negative effect on firms’ profitability, which varies across different ownership, regions, and industries. Overall, these results are consistent with the concept that green bond issuance binds heavy-polluting companies to be more mindful of their polluting activities. |
| Keywords: | Green Bond Issuance; Profitability; Heavy-polluting Firms; Heterogeneity |
| Date: | 2026–04–10 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/082 |
| By: | Bonnet Paolo (European Commission - JRC); Ciani Andrea (European Commission - JRC); Zaurino Elena (European Commission - JRC) |
| Abstract: | Export controls play a prominent role in the ongoing technological race between the United States and China. This study investigates the short-term direct effects of US export controls on US exports as well as the indirect effects of these measures on the exports of third countries. We collect data on unilateral US measures targeting all exports to China of specific products in the semiconductor production chain, and merge it with monthly trade data on exports of the same products from countries participating to the production chain. First, we find a negative direct effect on US exports of chips. Second, results show positive, significant, effects on the exports of equipment for the manufacturing of semiconductors from the EU, Japan, and Singapore. This evidence is not only suggestive of a limited indirect enforcement of US policies on foreign jurisdictions, but also of the unintended effects such a unilateral policy can trigger. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:jrs:wpaper:202602 |
| By: | Joshua S. Graff Zivin; Siyuan Li; Huanhuan Wang; Zhiqiang Zhang |
| Abstract: | Incomplete performance metrics distort incentives. Exploiting the staggered roll-out of China’s national air monitoring network, we document a pollutant substitution effect: PM₂.₅ fell significantly, yet O₃ surged. We trace this to strategic behavior: facing binding PM₂.₅ targets, local governments prioritized abatement of particulate precursors while neglecting ozone precursors. Critically, this was not a benign trade-off. Although the policy reduced PM₂.₅-attributed deaths, the policy-induced O₃ surge increased O₃-attributed mortality and reduced biodiversity (measured by bird abundance). Conservative estimates suggest these costs reduced the policy’s net benefits by approximately 23.8%. Our findings highlight the hidden social costs of narrow performance targeting. |
| JEL: | D73 H77 Q53 Q57 Q58 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35087 |
| By: | Kundan Mukhia; Imran Ansari; Md. Nurujjaman |
| Abstract: | We identify a robust structural signature of stock markets during exogenous shock events by analyzing collective return dynamics across G5 countries. Using Random Matrix Theory, we introduce the complexity gap, defined as the difference between the normalized largest eigenvalue and the average pairwise correlation, to quantify changes in market structure. This measure reveals a consistent three-phase pattern across multiple shocks, including the 2025 U.S. tariff event, the COVID-19 crisis, and country-specific shocks in Japan and China during 2024. Before a shock, markets show a positive complexity gap, reflecting a rich structure with multiple interacting factors. During shocks, the gap collapses to near zero, signaling strong synchronization under a single dominant mode. Post-shock recovery follows a nonmonotonic path: an initial widening (a false recovery), a temporary recollapse, and final sustained restoration. This pattern holds at both market and sector levels and across global and local shocks. Ordinal entropy analysis confirms the same sequence of collapse and false recovery in directional diversity. We further demonstrate that lower complexity gap values predict higher future portfolio volatility, especially after shocks, establishing its value as a state-dependent risk indicator. For investors, initial gap widening may mislead, while sustained widening signals genuine structural stabilization. These findings reveal a robust structural signature governing financial market dynamics during crisis and recovery periods. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2604.19107 |
| By: | Auboin, Marc; Smith, Donal; Mbise, Théo; D'Andrea-Adrian, Barbara; Della Coletta, Fabio |
| Abstract: | In this descriptive paper, we focus on the sectoral composition of trade balances and their evolution since the 1970s, through the aggregation of millions of data points for goods and services. We use a "tree" approach, from global to regional, and from regional to sectoral and finally country balances. Balances are examined through the lens of country-world pairs, not bilateral balances, and from various angles: as a share of global and regional GDP, and in value-added terms. We find both elements of stability and change. At the aggregate and regional levels, the story is one of stability. From the mid-1980s onwards, despite some year-to-year variation, we observe an overall stability in the geography and size of aggregate surplus and deficit regions, particularly when scaled by global GDP. This means, for example, that the size of Asia's surpluses as a share of global GDP in 2024 was close to that of 1986. This is equally true of North America's deficits. That said, imbalances have grown during certain periods, mostly between 1976 and 1986, and in the run up to the global financial crisis, and have fallen at other times (1990s, 2010s). As of the mid-2020s they are on the rise, but levels are smaller than at the peak in 2005, pre financial crisis. Changes are mostly at the sector and country level. Machinery/capital goods, and the electronics sector, have become the largest sources of manufacturing trade imbalances. Country-sector pairs show a reallocation of manufacturing surpluses and deficits across countries: while Japan, Germany and Italy accounted for the eight of the ten largest sector surpluses in the mid-1980s. In 2024, China had become the source of three out of the four largest surpluses, substituting Japan in sectors such as machinery and manufactured goods. North America's consistent trade deficits have increasingly reflected manufactured goods, most recently in machinery and electronics. In Europe, pharmaceuticals have replaced machinery as the largest surplus sector. In agri-food, several regions shifted from surplus to deficit positions and vice versa. South America records persistent agri-food surpluses, but with a vastly changed product composition over time. Changes in these sectors should not obscure the fact that mineral fuels (oil and gas) have been, and remain, the single largest source of sectoral imbalances, with China the largest importer. The evolution of services trade balances highlights growing surpluses of Europe and North America. Aside from the recent, and limited, exception of the Middle East, other regions have recorded deficits, in some cases rising ones. Information, communication, and technology services are the fastestgrowing source of surpluses, while intellectual property-related services are the fastest-growing source of deficits. Transport and travel still account for large share of the level of imbalances. Adopting a value-added perspective alters the assessment of global trade balances across regions for both goods and services. This approach makes Europe's goods trade deficit larger and its services surplus smaller. It results in North America's goods trade deficit decreasing and its service trade surplus increasing, a trend which has intensified over time. It also makes Asia's goods trade surplus larger (a visible trend since 1995), while little change is observed for the services trade deficit. |
| Keywords: | Trade, Trade Imbalances, Empirical studies on trade |
| JEL: | F10 F14 F O57 R10 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:wtowps:340114 |
| By: | Mircea Mureșan (Member of the Academy of Scientists, Romania) |
| Abstract: | The ongoing military conflict in the Middle East represents one of the most significant turning points for the contemporary architecture of international security. The escalation of the confrontations between Hamas and Israel, which began in October 2023, has generated a complex geopolitical dynamic that goes beyond the regional framework and produces structural effects on global security. In a context characterized by strategic rivalries, proxy conflicts and competition for influence in the international system, the war in the Middle East is becoming a catalytic factor of current geopolitical transformations. The paper analyzes how the conflict influences regional stability and contributes to the reconfiguration of the global balance of power. The study examines the interaction between state and non-state actors involved in the conflict, including the role played by Iran and regional armed organizations such as Hezbollah, as well as the impact of the positioning of great powers, especially the United States, Russia and China. The research also explores three main dimensions of the transformation of global security: the risk of regional conflict expansion, the implications for international energy and trade security, and the impact on the emerging geopolitical architecture characterized by multipolar tendencies. The research results suggest that the war in the Middle East is not just a regional confrontation, but an accelerating factor in the transformation of the international security system, amplifying rivalries between great powers, energy vulnerabilities, and risks of instability in different regions of the world. In this context, the conflict becomes a defining element of the new global geopolitical configuration. |
| Keywords: | Middle East, War, Global Security, Geopolitics, Multipolarity, Regional Conflict, Energy And Energy Security, International Stability |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:smo:raiswp:0638 |
| By: | Kumar Rishabh; Vatsala Shreeti |
| Abstract: | In this paper, we trace the geography and economic characteristics of firms that produce artificial intelligence (AI) products and services. Many economies around the world are evaluating their strategic priorities in AI, yet relatively little is documented about the global distribution of AI production. We construct a new database that identifies 1, 246 AI-producing firms across 32 economies. We map these firms in each economy into the five layers of the AI supply chain: compute, cloud and related infrastructure, data tools, AI models and AI applications. The biggest markets for AI production are China and the US. Most economies specialise only in a few supply chain layers and many focus largely on compute. AI firms in all economies exhibit strong home bias in investment activity, with a focus on downstream applications. Finally, we find that venture capital inflows are strongly correlated with the presence and density of AI firms in a given economy. |
| Keywords: | artificial intelligence, AI supply chain, firm geography, AI measurement |
| JEL: | O33 C81 L86 F23 L16 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:bis:biswps:1343 |
| By: | Joseph Kopecky (Department of Economics, Trinity College Dublin) |
| Abstract: | I develop a quantitative multi‐country, multi‐sector trade model in which population age structure shapes comparative advantage through age‐dependent skills. Workers of different ages supply heterogeneous bundles of cognitive and physical abilities that appreciate or depreciate over the life cycle, and sectors use these skills with differing intensities. I embed this mechanism into a Ricardian trade model calibrated to 30 countries and 20 manufacturing sectors. Reduced‐form evidence from a panel of 204 countries (1995‐2024) documents a 'grey advantage': a country's share of older workers is associated with a shift in its export mix toward appreciating‐skill‐intensive sectors. Evaluated in partial equilibrium, the calibrated model recovers 84% of this empirical relationship. General equilibrium adjustment then compresses the trade composition response by a factor of ten, as endogenous wage and price changes absorb the sectoral reallocation but generate welfare‐relevant real-income effects. Forward projections decompose the total demographic effect into a workforce‐size channel (shrinking populations produce less) and a skill‐composition channel (aging shifts the mix of skills, altering sectoral comparative advantage). The composition channel generates welfare effects ranging from ‐0.9% to +0.05%, comparable to standard trade‐policy shocks, and exhibits a striking temporal pattern. Historical demographic divergence supported positive composition gains, but as countries' age structures converge toward a common older profile, these gains are reversing. Bilateral trade flows reallocate accordingly, with the model projecting that China‐US trade will fall by 10% and India‐US trade will rise by 34% in the coming decades. |
| Keywords: | Comparative advantage, Population aging, Trade, Demographics, Ricardian model |
| JEL: | F11 F14 F17 J11 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:tcd:tcduee:tep0726 |
| By: | Joshua Aizenman; Rodolphe Desbordes; Jamel Saadaoui |
| Abstract: | How damaging is a “trade war” compared to a “military war” or a “war of words”? Aggregate conflict indicators cannot say, because they treat missile strikes, sanctions, and diplomatic protests as equivalent. We build a monthly bilateral indicator from GDELT event data, calibrated against human-curated ground truth, that decomposes hostility into four layers: kinetic fighting (“military war”), military posture, sanctions-context tensions (“trade war”), and routine diplomacy. The decomposed panel reveals a secular shift: over the past decade, governments have steadily substituted economic coercion for military confrontation, nearly doubling the trade-weighted share of hostility channelled through sanctions contexts. In a gravity trade model, the aggregate indicator is negative, large, and statistically significant, but the decomposition reveals that only two layers drive the result. Kinetic conflict and trade-context hostility are both economically large and precisely estimated; routine diplomacy, despite dominating measured hostility, has no trade effect at all. The directed structure uncovers a retaliation channel that compounds trade losses over several months. Our measure remains a robust determinant of international trade in a horse race against closest alternative bilateral indicators. Relative to a pre-escalation baseline, the geopolitical deterioration of the past decade has put roughly $334 billion of bilateral trade at risk, with the US–China pair accounting for half. |
| JEL: | F15 F43 F5 F50 F51 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35077 |