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on Investment |
| By: | Derenoncourt, Ellora (Princeton University); Gerard, Francois (Queen Mary, University of London); Lagos, Lorenzo (Brown University); Montialoux, Claire (UC Berkeley) |
| Abstract: | How do minimum wages affect informality? We study the near-doubling of the real minimum wage from 2000 to 2009 in Brazil, where 46% of the workforce is informal. Using labor force surveys covering the informal sector, we show the minimum wage exhibits near full passthrough to informal employees working in formal firms, about half of all informal employees. The formal-to-informal reallocation elasticity with respect to the formal wage is small: -0.28. Our findings illustrate how minimum wages can positively affect living standards for workers thought beyond the reach of labor law, a sizable share of the workforce in developing economies. |
| Keywords: | informality, minimum wages, inequality |
| JEL: | J23 J46 J88 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18234 |
| By: | Gunther Capelle-Blancard (Université Paris 1 Panthéon-Sorbonne, Centre d'Econonomie de la Sorbonne) |
| Abstract: | The aim of this note is to assess whether and how the Financial Transaction Tax (FTT) could be "greened"that is, adapted or utilized to support environmental objectives and the financing of the transition to a more sustainable economy. While traditionally conceived as a regulatory tool, the FTT also holds unexploited potential as an instrument for climate finance and broader environmental alignment. This paper outlines five complementary arguments in favor of a green FTT: (1) its capacity to mobilize stable, international funding for global public goods; (2) its symbolic relevance in light of the financial sector's contribution to social and environmental disruption; (3) its ability to modestly lengthen investment horizons and counteract excessive short-termism; (4) its potential to enhance public trust in finance by matching rhetoric about sustainable finance with contributions; and (5) its prospective use as a differentiated tool to reward environmentally responsible issuers. The paper also includes a first quantitative assessment of potential revenues from a tiered green FTT, illustrating how such a mechanism could operationalize the principle of common but differentiated responsibilities and respective capabilities in climate finance. While recognizing practical limitations (in terms of governance, data reliability, and risk of complexity) the paper concludes that a well-calibrated green FTT could be a simple yet effective lever in aligning financial markets with the ecological transition |
| Keywords: | Financial transaction tax; Securities Transaction Tax; Tobin tax; Innovative Financing; Climate Finance |
| JEL: | G1 H2 Q5 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:mse:cesdoc:25012r |
| By: | Luisa Alama (Universitat Jaume I and IIDL); Joan Crespo (Universitat de València); Miguel A. Márquez (Universidad de Extremadura); Emili Tortosa-Ausina (Universitat Jaume I, IIDL and Ivie) |
| Abstract: | We empirically evaluate how the efficiency of Spanish public universities impacts regional economic performance in Spain during the period 2010–2019. Efficiency is measured using activity analysis methods that attempt to capture reflect how universities perform in their respective missions— namely, teaching, research, and knowledge transfer. We analyse the geography of higher education by examining efficiency at the provincial (NUTS3) and regional (NUTS2) levels, as well as for groups of regions (NUTS1). Our results offer several key insights. First, we find that geography plays a differential role primarily when knowledge transfer activities are considered, while geographical patterns are similar for teaching and research activities. Second, the impact of universities’ efficiency on regional economic activity varies across different outcome measures. While provinces with more efficient public university systems show higher labor productivity and capital intensity levels, there is no significant relationship with per capita income. The spatial analysis indicates that efficiency gains generate indirect and positive spillovers, particularly for capital intensity, suggesting that improvements in university performance can benefit broader regional areas. Additionally, institutional quality, measured through regional government performance indicators, reinforces these effects. Our findings suggest that policies aimed at enhancing university efficiency should prioritise the research mission. Among the three university missions, research has the greatest impact on improving productive processes and is the most effective in fostering regional economic development. |
| Keywords: | bias-corrected efficiency; capital intensity; higher education institutions; regional growth; productivity |
| JEL: | C61 J24 R11 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:eec:wpaper:2510 |
| By: | Matias D. Cattaneo (Rae); Rocio Titiunik (Rae); Ruiqi (Rae); Yu |
| Abstract: | We study the statistical properties of nonparametric distance-based (isotropic) local polynomial regression estimators of the boundary average treatment effect curve, a key causal functional parameter capturing heterogeneous treatment effects in boundary discontinuity designs. We present necessary and/or sufficient conditions for identification, estimation, and inference in large samples, both pointwise and uniformly along the boundary. Our theoretical results highlight the crucial role played by the ``regularity'' of the boundary (a one-dimensional manifold) over which identification, estimation, and inference are conducted. Our methods are illustrated with simulated data. Companion general-purpose software is provided. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.26051 |
| By: | Mangiavacchi, Lucia (University of Perugia); Piccoli, Luca (University of Trento); Stillman, Steven (Free University of Bozen/Bolzano) |
| Abstract: | This paper estimates the short-run impact of parental risky behaviors on multiple dimensions of child development using 30 years of data from a representative Russian longitudinal survey. We use factor analysis to construct a composite index of parental risky behaviors and health habits. The panel nature of the data allows us to implement individual and household fixed-effects models, which control for all time-invariant unobserved heterogeneity that might correlate with both parenting and child outcomes. We find that exposure to parental risky behaviors adversely affects children’s educational attainment (grade-for-age) and increases their propensity for risky behaviors, specifically smoking and drinking. Conversely, we find no significant impact on soft skills and only weak evidence of negative health outcomes. These impacts are more pronounced for older children and those in higher-income households. |
| Keywords: | intergenerational transmission, child development, risky behaviors, parental role model |
| JEL: | D1 I1 I2 I3 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18242 |
| By: | Elkerbout, Milan (Resources for the Future); Nehrkorn, Katarina (Resources for the Future); Holmes, Brandon (Resources for the Future) |
| Abstract: | This is the second Resources for the Future (RFF) working paper on interoperability of carbon intensity quantification methods. To read our first RFF paper on interoperability, see https://www.rff.org/publications/working-papers/trade-friendly-climate-policies-the-promise-of-interoperability/. This paper connects the ongoing debate on carbon accounting methods with existing practices in lifecycle accounting and environmental product declarations. A case study compares carbon intensity quantification methods across the EU carbon border adjustment mechanisms, the US Environmental Protection Agency’s labeling program, and an International Trade Commission study on steel and aluminum carbon intensities. This paper finds that there may be legitimate areas where product-level carbon intensity accounting choices may differ. Nevertheless, improved interoperability could still be possible by discussing and recognizing trade-offs between physical properties and policy incentives. |
| Date: | 2025–11–05 |
| URL: | https://d.repec.org/n?u=RePEc:rff:dpaper:dp-25-27 |
| By: | Kyoji FUKAO; Sonoe ARAI; Ken ITAKURA; Sagiri KITAO; Daigo NAKATA; Saeko MAEDA; Takemasa MATSUO; Akihiro YOSHINO |
| Abstract: | To make projections on the industrial structure in 2040, we divided the Japanese economy into 100 industries and constructed a macroeconomic model that endogenizes factor and goods prices as well as the industrial structure. Using this model, we examined how the price system and industrial structure in 2040 would be determined under certain assumptions regarding the production structure and the endowments of labor and fixed capital stock, ensuring equilibrium in both factor and goods markets. The model parameters were estimated using the JIP Database 2023 and the GTAP model, and the analysis also took into account the impact of population aging on the savings rate and consumption structure. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:eti:rdpsjp:25027 |
| By: | Yeva Nersisyan; L. Randall Wray |
| Abstract: | In a New York Times editorial, David Leonhardt recounts Aesop's apocryphal story about the boy and the wolf, warning that while deficit hawks have so far been wrong, the growing government debt will eventually bite. He reports the economic plans of both presidential candidates would add to the debt that will soon exceed GDP and grow to 130 percent of annual output under a President Harris, or 140 percent with a Trump presidency. |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:lev:levypn:24-1 |
| By: | Takashi Furuya; Anastasis Kratsios; Dylan Possama\"i; Bogdan Raoni\'c |
| Abstract: | We introduce a mild generative variant of the classical neural operator model, which leverages Kolmogorov--Arnold networks to solve infinite families of second-order backward stochastic differential equations ($2$BSDEs) on regular bounded Euclidean domains with random terminal time. Our first main result shows that the solution operator associated with a broad range of $2$BSDE families is approximable by appropriate neural operator models. We then identify a structured subclass of (infinite) families of $2$BSDEs whose neural operator approximation requires only a polynomial number of parameters in the reciprocal approximation rate, as opposed to the exponential requirement in general worst-case neural operator guarantees. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.01125 |
| By: | Perrotta Berlin, Maria (Stockholm Institute of Transition Economics); Lvovkskyi, Lev (BEROC) |
| Abstract: | In the wake of international sanctions, Russia has intensified its engagement in Africa, with potential ramifications for democracy, international relations, and conflict dynamics. This paper examines whether the expanding presence of Russian actors has influenced the allocation and composition of development aid from Western partners, particularly after the invasion of Ukraine. Given established evidence on the local socioeconomic and political effects of foreign aid, such shifts could shape public perceptions of Western development efforts and carry wider geopolitical and developmental implications. |
| Keywords: | foreign aid; Russia; World Bank |
| JEL: | F35 O12 O19 O55 P45 |
| Date: | 2025–11–05 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:hasite:0064 |
| By: | Marta Garcia-Rodriguez (Bank of Spain); Roman Horvath (Institute of Economic Studies, Charles University); Clemente Pinilla-Torremocha (Bank of England and European Research University-ERC-London) |
| Abstract: | We examine how the macroeconomic effects of temperature shocks have evolved in the United States since 1947. Using a time-varying parameter vector autoregression with stochastic volatility estimated on monthly data, we document a structural shift in the propagation of temperature shocks. Before the 1980s, higher temperatures induced demand-like dynamics—output and prices rose together. Since the 1980s, responses have become supply-like: real activity declines persistently while prices rise on impact and turn negative thereafter. A sectoral decomposition confirms shifts in agriculture, manufacturing, and services, with the services sector the primary driver of recent GDP dynamics. Our results reveal that food, services, and energy prices drive most of the aggregate price adjustments, while core prices remain muted. Temperature shocks now explain a rising share of medium-run output and price variation, and greater ex-ante temperature uncertainty depresses equity valuations on impact. Overall, temperature shocks have become increasingly contractionary and inflationary in nature. |
| Keywords: | Temperature shocks, Time-varying VAR, US economy |
| JEL: | C22 E30 E32 Q54 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:fau:wpaper:wp2025_21 |
| By: | Xiaohong Chen (Yale University); Pedro H. C. SantÕAnna (Emory University); Haitian Xie (Peking University) |
| Abstract: | This paper investigates efficient Difference-in-Differences (DiD) and Event Study (ES) estimation using short panel data sets within the heterogeneous treatment effect framework, free from parametric functional form assumptions and allowing for variation in treatment timing. We provide an equivalent characterization of the DiD potential outcome model using sequential conditional moment restrictions on observables, which shows that the DiD identification assumptions typically imply nonparametric overidentification restrictions. We derive the semiparametric efficient influence function (EIF) in closed form for DiD and ES causal parameters under commonly imposed parallel trends assumptions. The EIF is automatically Neyman orthogonal and yields the smallest variance among all asymptotically normal, regular estimators of the DiD and ES parameters. Leveraging the EIF, we propose simple-to-compute efficient estimators. Our results highlight how to optimally explore different pre-treatment periods and comparison groups to obtain the tightest (asymptotic) confidence intervals, offering practical tools for improving inference in modern DiD and ES applications even in small samples. Calibrated simulations and an empirical application demonstrate substantial precision gains of our efficient estimators in finite samples. |
| Date: | 2025–06–21 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2470 |
| By: | Valentin Burban; Sophie Guilloux-Nefussi |
| Abstract: | Inflation in the euro area reached its peak at 10.6% in October 2022 and receded quickly afterwards. Solidly anchored inflation expectations proved instrumental to this disinflation. But how can we gauge anchoring in practice? This blog post reviews various metrics to monitor the anchoring of inflation expectations in the euro area. <p> L’inflation dans la zone euro a atteint son pic à 10, 6 % en octobre 2022 et a reflué rapidement par la suite. Les anticipations d’inflation solidement ancrées se sont révélées déterminantes dans le processus de désinflation. Mais comment évaluer l’ancrage dans la pratique ? Ce billet de blog examine diverses mesures afin de suivre l’ancrage des anticipations d’inflation dans la zone euro. |
| Date: | 2025–09–18 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:econot:412 |
| By: | Jonathan Gruber; Núria Mas; Judit Vall Castelló; Jaume Vives-i-Bastida |
| Abstract: | Most nations in the world have side-by-side private and public health care systems. Policymakers worry that “dual practice” across sectors might reduce care to the public sector. This concern led regions in Spain to offer “exclusivity bonuses” to physicians who practice exclusively in the public sector. We show theoretically that the impact of these bonuses on the public sector is ambiguous. We demonstrate empirically that the bonuses backfired: they did increase exclusive participation in the public sector, but significantly reduced hours of work. When regions added offsetting bonuses for dual practice, they were largely ineffective. |
| JEL: | I18 J30 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34433 |
| By: | Belloc, Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza); Velilla, Jorge (University of Zaragoza) |
| Abstract: | Understanding how household decisions react to economic shocks is important for effective policy design. Using detailed individual consumption data, we investigate how household consumption responds to unexpected inheritance realizations within an inter-temporal collective framework. Inheritances constitute personal assets that are not equally divided upon divorce among spouses according to matrimonial property laws, and they play the role of stochastic distribution factors affecting intra-household bargaining dynamics. Estimating a dynamic collective model, the analysis provides evidence consistent with dynamic bargaining effects. In particular, heirs immediately increase their consumption growth, while their partners experience a decline in their consumption. These findings are not driven by liquidity- or credit-constrained households, which could otherwise lead households to overreact to inheritance receipts. |
| Keywords: | commitment, consumption, inheritances, dynamic collective model |
| JEL: | D12 D13 D15 D31 E21 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18243 |
| By: | Klara Kantova (Institute of Economic Studies, Charles University, Prague, Czech Republic); Michaela Hasikova (Institute of Economic Studies, Charles University, Prague, Czech Republic) |
| Abstract: | Pay transparency laws are a key policy response to persistent gender wage disparities, yet evidence on their effectiveness is mixed. This meta-analysis synthesizes 268 estimates from 12 studies. Across a broad suite of publication bias diagnostics, we find at most weak evidence of selective reporting, while most approaches indicate a small but significant positive effect beyond bias. The pooled mean effect is 0.012 log points, corresponding to an average 1.2% increase in women´s wages relative to men, consistent with a modest narrowing of the gap. Heterogeneity analysis using Bayesian and frequentist model averaging shows that policy design is pivotal. Public disclosure regimes produce larger reductions than internal access or job-ad disclosure, while evidence for pay-secrecy bans is imprecise. Specification choices also matter, with regional and employee controls attenuating effects and sector controls amplifying them. Overall, effective transparency depends on both robust policy design and careful empirical specification. |
| Keywords: | pay transparency, gender gap, wages, policy-design, model averaging, meta-analysis |
| JEL: | J16 J31 J38 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:fau:wpaper:wp2025_22 |
| By: | Goeb, Joseph; Htar, May Thet; Zu, A Myint |
| Abstract: | This Research Note presents results from an August 2025 phone survey of 227 agricultural input retailers – who provide agricultural inputs and informal credit to farmers – in Myanmar’s major agro-ecological zones. Key Findings • Input sales declined sharply in the 2025 monsoon relative to 2024. Fewer retailers sold inorganic fertilizers and pesticides, and aggregate sales for those who did sell declined by 31 percent for inorganic fertilizer and 10 percent for pesticides. • The decline is not solely due to supply shortages: smaller areas planted, weaker farm profits, and conflict have dampened demand, while climate change and the 2025 earthquake add to input market stress. Two-thirds of retailers cite lower input demand from climate change in the past three years, and earthquake impacts – while more localized – disrupted market access and areas planted. • Transport remains the dominant business disruption. Even with a slight drop in overall reported disruptions compared to 2024, transport problems – higher costs, checkpoints and roadblocks – still dominate. Long input supply chains dependent on imports and flowing through Yangon mean that checkpoints and higher costs compound as inputs reach rural farmers. • Farmer finances are stressed, especially in rice-dominant areas. Farmers are asking for and taking more credit from input retailers. This likely reflects tighter liquidity following the recent global rice price decline, which has reduced incentives and profitability for monsoon paddy. • Credit provision is expanding but adding risk. More retailers are providing credit to farmers and sourcing their inputs on credit from suppliers. Yet, two-thirds of retailers that provided credit in 2024 still have unpaid debts from farmers, raising the risks of cascading financial stress. • Measures to ease transport constraints, stabilize access to imported fertilizers and pesticides, and expand formal credit options for both farmers and retailers would help sustain this essential link in the agrifood system. |
| Keywords: | farm inputs; markets; transport; supply chains; prices; rice; Myanmar; Asia; South-eastern Asia |
| Date: | 2025–10–22 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:othbrf:177266 |
| By: | Itskhoki, Oleg; Mukhin, Dmitry |
| Abstract: | Trade wars and financial sanctions are again becoming an increasingly common part of the international economic landscape, and the dynamics of the exchange rate are often used in real time to evaluate the effectiveness of sanctions and policy responses. We show that sanctions limiting a country’s exports or freezing its assets depreciate the exchange rate, while sanctions limiting imports appreciate it, even when both types of policies have exactly the same effect on real allocations, including household welfare and government fiscal revenues. Beyond the direct effect from sanctions, increased precautionary savings in foreign currency also depreciate the exchange rate when they are not offset by the sale of official reserves or financial repression of foreign-currency savings. We show that the dynamics of the ruble exchange rate following Russia’s invasion of Ukraine in February 2022 are quantitatively consistent with the combined effects of these forces calibrated to the observed sanctions and government policies. We evaluate the associated welfare, fiscal and inflationary consequences for both Russia and the coalition of Western countries. |
| Keywords: | trade sanctions; financial sanctions; financial repression; FX market |
| JEL: | E50 F31 F32 F41 F51 |
| Date: | 2025–10–25 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129422 |
| By: | Cai, Ruohong; Bergstrom, John C.; Mullen, Jeffrey D.; Wetzstein, Michael E. |
| Abstract: | This paper presents a dynamic crop rotation model that shows how crop yield and price volatility could impact crop mix and acreage response under crop rotation considerations. Specifically, a discrete Markov decision model is utilized to optimize producers’ crop rotation decision within a finite horizon. By maximizing net present value of expected current and future profits, a modified Bellman equation helps develop optimum planting decisions. This model is capable of simulating crop rotations with different lengths and structures. Specifically, the corn-soybeans rotations were simulated using the crop rotation model. |
| Keywords: | Crop Production/Industries, Research Methods/Statistical Methods |
| URL: | https://d.repec.org/n?u=RePEc:ags:ugeocr:103949 |
| By: | Nicolas M. Burotto |
| Abstract: | The author develops a dynamic macroeconomic model of a small open economy to identify two key vulnerabilities that prevent emerging markets from fully integrating into global markets: high financial integration costs and their low position in the international monetary hierarchy. These vulnerabilities make them susceptible to financial traps, jeopardize debt sustainability, and increase volatility. He shows that the weak response of capital flows to interest rates further limits the ability of monetary policy to stabilize the system. As a result, these economies have restricted policy options and often resort to mimicking external monetary policy strategies in times of financial distress. |
| Keywords: | external debt sustainability; currency hierarchy; financial trap; balance of payments constraint; subordinated integration |
| JEL: | E12 E32 E44 F34 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1087 |
| By: | Resta, Onofrio; Resta, Emanuela; Costantiello, Alberto; Liuzzi, Piergiuseppe; Leogrande, Angelo |
| Abstract: | This paper examines the environmental and infrastructure determinants of respiratory disease mortality (TRD) across European nation-states through an original combination of econometric, machine learning, clustering, and network-based approaches. The primary scientific inquiry is how structural environmental variables, such as land use, energy mix, sanitation, and climatic stress, co-interact to affect respiratory mortality across regions. Although prior literature has addressed individual environmental predictors in singleton settings, this paper fills an integral gap by using a multi-method, systems-level analysis that accounts for interdependencies as well as contextual variability. The statistical analysis draws on panel data covering several years and nation-states using fixed effects regressions with robust standard errors for evaluating the effects of variables such as agricultural land use (AGRL), access to electricity (ELEC), renewable energy (RENE), freshwater withdrawals (WTRW), cooling degree days (CDD), and sanitation (SANS). We employ cluster analysis and density-based methodology to identify spatial and environmental groupings, while machine learning regressions—specifically, K-Nearest Neighbors (KNN)—are utilized for predictive modeling and evaluating feature importance. Lastly, network analysis identifies the structural connections between variables, including influence metrics and directional weights. We obtain the following results: Consistently, across all regressions, AGRL, WTRW, and SANS feature importantly when determining the effect for TRD. Consistently across all networks, influencer metrics identify AGRL, WTRW, and SANS as key influencers. Consistently across all models, the best-performing predictive regression identifies the nonlinear (polynomial or non-monotone), context-sensitive nature of the effects. Consistent with the network results, the influencer metrics suggest strong connections between variables, with a particular emphasis on the importance of holistic environmental health approaches. Combining the disparate yet complementary methodological tools, the paper provides robust, understandable, yet policy-relevant insights into the environmental complexity driving respiratory health outcomes across Europe. |
| Keywords: | Respiratory Disease Mortality, Environmental Determinants, Machine Learning Regression, Network Analysis, Panel Data Models |
| JEL: | C23 C38 C45 I0 I00 I1 I10 |
| Date: | 2025–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126073 |
| By: | Adam Wiechman; John M. Anderies; Margaret Garcia |
| Abstract: | Our infrastructure systems enable our well-being by allowing us to move, store, and transform materials and information given considerable social and environmental variation. Critically, this ability is shaped by the degree to which society invests in infrastructure, a fundamentally political question in large public systems. There, infrastructure providers are distinguished from users through political processes, such as elections, and there is considerable heterogeneity among users. Previous political economic models have not taken into account (i) dynamic infrastructures, (ii) dynamic user preferences, and (iii) alternatives to rational actor theory. Meanwhile, engineering often neglects politics. We address these gaps with a general dynamic model of shared infrastructure systems that incorporates theories from political economy, social-ecological systems, and political psychology. We use the model to develop propositions on how multiple characteristics of the political process impact the robustness of shared infrastructure systems to capacity shocks and unequal opportunity for private infrastructure investment. Under user fees, inequality decreases robustness, but taxing private infrastructure use can increase robustness if non-elites have equal political influence. Election cycle periods have a nonlinear effect where increasing them increases robustness up to a point but decreases robustness beyond that point. Further, there is a negative relationship between the ideological sensitivity of candidates and robustness. Overall, the biases of voters and candidates (whether they favor tax increases or decreases) mediate these political-economic effects on robustness because biases may or may not match the reality of system needs (whether system recovery requires tax increases). |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.22411 |
| By: | RANAIVOSON, Tojonirina Miada Zafindraibe; LAZAMANANA, Pierre Andre |
| Abstract: | The massive release emission of greenhouse gases into the atmosphere, which has emerged as a pressing global concern, entails detrimental consequences for both the environment and the economic system. As a consequence, the severity of the consequences of climate change has disrupted economic issues and strategies. Major reorientations of economic policies, particularly climate policies, mainly based on CO2 emission levels have been adopted during various Conferences of the Parties (COP).This issue has therefore led us to investigate the effects of such climate policies on the economy as a whole. To achieve our objective, a climate DSGE model reflecting the characteristics of Madagascar has been implemented. The results of impulse response function reveal that dynamic carbon taxation proves more effective in reducing CO2 emissions compared to a quota policy, which is a source of volatility. Climate finance, on the other hand, is insufficient to stimulate the economy if not combined with carbon pricing. |
| Keywords: | Climate policies, Greenhouse gases, Carbon pricing, DSGE, Conferences of the Parties, Climate change |
| JEL: | H23 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126384 |
| By: | Cecilia Carvalho; Daniel Monte; Emanuel Ornelas |
| Abstract: | Members of the World Trade Organization are increasingly disregarding its rules, raising concerns about the future of the multilateral trading system. To analyze the sustainability of the rules-based trade regime, we develop a dynamic framework of stochastic asynchronous games where the leading country determines the trade regime and leadership changes over time. We show that transitioning from a power-based to a rules-based regime requires the presence of a hegemonic power â€" i.e., a country significantly larger than all others. Nonhegemonic leading countries benefit from a power-based regime, but may nevertheless uphold rules anticipating that they can lose their dominance in the future. We find that the longterm viability of a rules-based equilibrium hinges on the cost of establishing it, which must be neither too small nor too large, on countries’ discount factors and on the degree of turnover in world leadership, both of which must be sufficiently large. In a bipolar state, free-riding and market-power forces further undermine the feasibility of rules-based equilibria. We also highlight the trade-offs that a redesign of the WTO rules must face to remain viable. If the leading country becomes shortsighted, the system needs to become more efficient, offer more latitude to the leading country, or even exclude it from the system. |
| Keywords: | hegemonic stability theory, World Trade Organization, trade agreements |
| Date: | 2025–10–22 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2128 |
| By: | Hansj\"org Albrecher; Jinxia Zhu |
| Abstract: | This paper explores the optimal policy for using an allocated carbon emission budget over time with the objective to maximize profit, by explicitly taking into account present-biased preferences of decision-makers, accounting for time-inconsistent preferences. The setup can be adapted to be applicable for either a (present-biased) individual or also for a company which seeks a balance between production and emission schedules. In particular, we use and extend stochastic control techniques developed for optimal dividend strategies in insurance risk theory for the present purpose. The approach enables a quantitative analysis to assess the effects of present-bias, of sustainability awareness, and the efficiency of a potential carbon tax in a simplified model. In some numerical implementations, we illustrate in what way a higher degree of present-bias leads to excess emission patterns, while placing greater emphasis on sustainability reduces carbon emissions. Furthermore, we show that for low levels of carbon tax, its increase has a positive effect on curbing emissions, while beyond a certain threshold that marginal impact gets considerably weaker. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.27384 |
| By: | Jian Yan; Zhuoxi Li; Yang Ning; Yong Chen |
| Abstract: | We revisit the classical problem of comparing regression functions, a fundamental question in statistical inference with broad relevance to modern applications such as data integration, transfer learning, and causal inference. Existing approaches typically rely on smoothing techniques and are thus hindered by the curse of dimensionality. We propose a generalized notion of kernel-based conditional mean dependence that provides a new characterization of the null hypothesis of equal regression functions. Building on this reformulation, we develop two novel tests that leverage modern machine learning methods for flexible estimation. We establish the asymptotic properties of the test statistics, which hold under both fixed- and high-dimensional regimes. Unlike existing methods that often require restrictive distributional assumptions, our framework only imposes mild moment conditions. The efficacy of the proposed tests is demonstrated through extensive numerical studies. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.24714 |
| By: | Sara MacLennan |
| Abstract: | Some argue that school is a means to an end, and time spent in lessons may be unpleasant, but it helps these children in the future. The question is 'to what end'. Are school years something which have to be tolerated in order to have happier lives later in life, or something which have to be tolerated to add to the productivity of the UK economy? Others (such as the authors of this book) would even argue that it is desirable for children to be happy even during their school hours and school years. The wellbeing of children matters in its own right, as well as the impact on later adult outcomes and wellbeing. The current government has proposed the wellbeing of children as a priority. For this, schools will play an important role. |
| Keywords: | mental health, education, schools, wellbeing, UK Economy, happiness |
| Date: | 2025–10–13 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepops:72 |
| By: | Joerg Bibow |
| Abstract: | For the past hundred years or more, payments have been primarily associated with banking, and banking as we know it today--being the result of many centuries of evolution--features a bundling of (at least) three main lines of business: lending, deposit-taking, and payment services. In the past 15 years or so, banks have come under severe competition as providers of payment services. Will "banking on payments" become outmoded and payments untethered from banking, or will payments still have a place in the future of banking? This paper sets out to explore this question and to address the following two related issues. First, what are the likely consequences (especially for the financing of growth and the provision of liquidity in the form of bank deposits) of the apparent "unbundling" of the traditional connections in banking between lending, deposit-taking, and payment services? Second, what are the implications of the evolution (or revolution) of money, payments, and banking for public policy, monetary theory, and the theory of monetary policy? |
| Keywords: | banking; money; payments; financial intermediation; bank regulation; monetary policy |
| JEL: | B22 E12 E42 E58 G21 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1091 |