nep-mac New Economics Papers
on Macroeconomics
Issue of 2023‒05‒08
43 papers chosen by
Daniela Cialfi
Universita' di Teramo

  1. Inflation and Real Activity over the Business Cycle By Francesco Bianchi; Giovanni Nicolò; Dongho Song
  2. Inflation and Public Debt Reversals in the West African Monetary Zone (WAMZ) Economies By Cham, Yaya
  3. Apalancamiento, ciclo financiero y económico By Valdivia Coria, Joab Dan
  4. Money velocity, digital currency, and inflation dynamics By Hermawan, Danny; Lie, Denny; Sasongko, Aryo; Yusan, Richard
  5. Sailing Through Rough Waters By Vasily Astrov; Alexandra Bykova; Rumen Dobrinsky; Selena Duraković; Meryem Gökten; Richard Grieveson; Doris Hanzl-Weiss; Gabor Hunya; Branimir Jovanović; Niko Korpar; Sebastian Leitner; Ravik Mima; Beate Muck; Olga Pindyuk; Sandor Richter; Bernd Christoph Ströhm; Maryna Tverdostup; Nina Vujanović; Zuzana Zavarská; Adam Żurawski
  6. Narrative-Driven Fluctuations in Sentiment: Evidence Linking Traditional and Social Media By Alistair Macaulay; Wenting Song
  7. Monetary Policy and the Yield Curve By Vladislav Abramov
  8. Long Shadow of the U.S. Mortgage Expansion: Evidence from Local Labour Markets By Mitra, Aruni; Wei, Mengying
  9. Combining monetary, fiscal and structural approaches to model Albanian inflation By Papavangjeli, Meri
  10. How to Limit the Spillover from an Inflation Surge to Inflation Expectations? By Lena Dräger; Michael J. Lamla; Damjan Pfajfar
  11. Endogenous Growth, Countercyclical Dividends, and Asset Prices By Palma Filep-Mosberger; Lorant Kaszab; Zhou Ren
  12. A trend-cycle decomposition with hysteresis By Javier G. Gómez-Pineda; Julián Roa-Rozo
  13. Entry Decision, the Option to Delay Entry, and Business Cycles By Ia Vardishvili
  14. Revisiting the Monetary Transmission Mechanism through an Industry-Level Differential Approach By Sangyup Choi; Tim Willems; Seung Yong Yoo
  15. What Can Time-Series Regressions Tell Us About Policy Counterfactuals? By Alisdair McKay; Christian K. Wolf
  16. Endogenous frequencies and large shocks: price setting in Greece during the crisis By Huw Dixon; Theodora Kosma; Pavlos Petroulas
  17. St. Kitts and Nevis: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for St. Kitts and Nevis By International Monetary Fund
  18. A Theory of Fear of Floating By Javier Bianchi; Louphou Coulibaly
  19. Public Employment Agency Reform, Matching Efficiency, and German Unemployment By Christian Merkl; Timo Sauerbier
  20. Sources of Inequality and Business Cycles: Evidence from the US and Japan By Masaru INABA; Kengo NUTAHARA; Daichi SHIRAI
  21. Effects of global liquidity and commodity market shocks in a commodity-exporting developing economy By Doojav, Gan-Ochir; Luvsannyam, Davaajargal; Enkh-Amgalan, Elbegjargal
  22. Limita datoriei si riscul oboselii fiscale in tarile Europei Centrale si de Est ale UE By Iancu, Aurel; Olteanu, Dan Constantin
  23. SELFIEforTEACHERS. Designing and developing a self-reflection tool for teachers’ digital competence By ECONOMOU Anastasia
  24. Cost and uptake of income-based tax incentives for R&D and innovation By Silvia Appelt; Ana Cinta González Cabral; Tibor Hanappi; Fernando Galindo-Rueda; Pierce O’Reilly
  25. The international tax agreement of 2021: Why it's needed, what it does, and what comes next? By Kimberly A. Clausing
  26. Symmetric positive semi-definite Fourier estimator of instantaneous variance-covariance matrix By Jir\^o Akahori; Nien-Lin Liu; Maria Elvira Mancino; Tommaso Mariotti; Yukie Yasuda
  27. Quantitative analysis on selected deposits insurance issues for purposes of impact assessment By BELLIA Mario; CALÈS Ludovic; DI GIROLAMO Francesca; JOOSSENS Elisabeth; PETRACCO GIUDICI Marco
  28. The health effects of universal early childhood interventions: evidence from Sure Start By Sarah Cattan; Gabriella Conti; Christine Farquharson; Rita Ginja; Maud Pecher
  29. Relative Performance Feedback and Long-Term Tasks – Experimental Evidence from Higher Education By Raphael Brade; Oliver Himmler; Robert Jaeckle
  30. Centrally Coordinated Schedules and Routes of Airport Shuttles with LAX Terminals as Application Area By Ioannou, Petros; Chen, Pengfei
  31. Deciding for Others: Local Public Good Contributions with Intermediaries By Andrej Angelovski; Praveen Kujal; Christos Mavridis
  32. Classroom Competition, Student Effort, and Peer Effects By Mark R. Rosenzweig; Bing Xu
  33. Critical Thinking Via Storytelling: Theory and Social Media Experiment By Brian Jabarian; Elia Sartori
  34. Early Child Care and Labor Supply of Lower-SES Mothers: A Randomized Controlled Trial By Henning Hermes; Marina Krauss; Philipp Lergetporer; Frauke Peter; Simon Wiederhold
  35. Social Entrepreneurship as a Tool to Promoting Sustainable Development in Low-Income Communities: An Empirical Analysis By Sauermann, Miklas Pascal
  36. Design features of income-based tax incentives for R&D and innovation By Ana Cinta González Cabral; Pierce O’Reilly; Silvia Appelt; Fernando Galindo-Rueda; Tibor Hanappi
  37. The short- and long-term determinants of fertility in Uruguay By Zuleika Ferre; Patricia Triunfo; Jos\'e-Ignacio Ant\'on
  38. The Effects of Incentives on Choices and Beliefs in Games: An Experiment By Teresa Esteban-Casanelles; Duarte Gon\c{c}alves
  39. Digital agriculture in Europe and in France: which organisations can boost adoption levels? By Véronique Bellon-Maurel; Isabelle Piot-Lepetit; Nina Lachia; Bruno Tisseyre
  40. Economic impacts of low-carbon transport strategies for Jordan By Philip Adams; Louise Roos
  41. Rotational Grazing Adoption by Cow-Calf Operations By Whitt, Christine; Wallander, Steven
  42. The Health and Climate Benefits of Economic Dispatch in China's Power System. By Luo, Qian; Garcia-Menendez, Fernando; Yang, Haozhe; Deshmukh, Ranjit; He, Gang; Lin, Jiang; Johnson, Jeremiah X
  43. Regulatory Markets: The Future of AI Governance By Gillian K. Hadfield; Jack Clark

  1. By: Francesco Bianchi; Giovanni Nicolò; Dongho Song
    Abstract: We study the relation between inflation and real activity over the business cycle. We employ a Trend-Cycle VAR model to control for low-frequency movements in inflation, unemployment, and growth that are pervasive in the post-WWII period. We show that cyclical fluctuations of inflation are related to cyclical movements in real activity and unemployment, in line with what is implied by the New Keynesian framework. We then discuss the reasons for which our results relying on a Trend-Cycle VAR differ from the findings of previous studies based on VAR analysis. We explain empirically and theoretically how to reconcile these differences.
    JEL: C32 E31 E32
    Date: 2023–03
  2. By: Cham, Yaya
    Abstract: The research focused on the causes of inflation and public debt reversal in the West African Monetary Zone (WAMZ) economies. Several factors influencing public debt reversal and inflation, including weak institutions, high government spending, influence from external shock and lack of proper revenue mobilization, were discussed. The impact of these factors on the WAMZ economies has also been examined. These countries suffer from high inflationary pressures, increasing borrowing costs and slow economic growth. Policies and other methods implemented by the WAMZ economies to address these challenges have also been evaluated. The last section of the research looks at the challenges these economies face in implementing the policy responses stipulated to address public debt reversals and inflation.
    Keywords: Inflation, Public Debt Reversals, West African Monetary Zone and Economies
    JEL: E5 E52 E58 E6 E62 E63 H2 H3 H30 H5 O5 O55 O57
    Date: 2023–04–11
  3. By: Valdivia Coria, Joab Dan
    Abstract: This paper provides pioneering estimates of the impact of loan-to-value (LTV) ratios, also known as leverage, on economic growth in Bolivia. The analysis reveals the pro-cyclicality between the economic and financial cycles, confirming the stylized facts. We emphasize the significance of recognizing the interplay between these cycles to attain greater stability and foster economic growth. The findings suggest that shocks in the loan-to-value (LTV) ratios trigger a rise in housing prices and greater consumption by entrepreneurs, leading to an increase in economic growth and employment levels. However, we also confirm the notion that leverage can be a double-edged tool, as its excessive utilization can disrupt markets and destabilize the overall economy.
    Keywords: Real bussines cycles (RBC), financial frictions, loan to value (LTV), bayesian estimation.
    JEL: E21 E32 E44
    Date: 2022–08
  4. By: Hermawan, Danny; Lie, Denny; Sasongko, Aryo; Yusan, Richard
    Abstract: This paper empirically investigates the impact of transaction cost-induced variations in the velocity of money on inflation dynamics, based on a structural New Keynesian Phillips curve (NKPC) with an explicit money velocity term. The money velocity effect arises from the role of money, both in physical and digital forms, in reducing the aggregate transaction costs and facilitating purchases of goods and services. We find a non-trivial aggregate impact in the context of the Indonesian economy: our benchmark estimates suggest that a 10% decrease in money velocity, which might be facilitated by a new digital currency (e.g. CBDC) issuance, would reduce the inflation rate by 0.6-1.7%, all else equal. Using the estimates and within a small-scale New Keynesian DSGE model, we analyze the potential implications of a CBDC issuance on aggregate fluctuations. A CBDC issuance that conservatively lowers the velocity of money by 5% is predicted to permanently raise the GDP level by 0.8% and lower the inflation rate by 0.8%. Both nominal and real interest rates are also permanently lower. Our findings imply that central banks could potentially use CBDCs as an additional stabilization policy tool by influencing the velocity.
    Keywords: inflation dynamics; transaction cost; velocity of money; digital money; digital currency; central bank digital currency (CBDC); aggregate fluctuations;
    JEL: E31 E32 E41 E42 E50 E51 E58
    Date: 2023–03–29
  5. By: Vasily Astrov (The Vienna Institute for International Economic Studies, wiiw); Alexandra Bykova (The Vienna Institute for International Economic Studies, wiiw); Rumen Dobrinsky (The Vienna Institute for International Economic Studies, wiiw); Selena Duraković (The Vienna Institute for International Economic Studies, wiiw); Meryem Gökten (The Vienna Institute for International Economic Studies, wiiw); Richard Grieveson (The Vienna Institute for International Economic Studies, wiiw); Doris Hanzl-Weiss (The Vienna Institute for International Economic Studies, wiiw); Gabor Hunya (The Vienna Institute for International Economic Studies, wiiw); Branimir Jovanović (The Vienna Institute for International Economic Studies, wiiw); Niko Korpar (The Vienna Institute for International Economic Studies, wiiw); Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Ravik Mima; Beate Muck (The Vienna Institute for International Economic Studies, wiiw); Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw); Sandor Richter (The Vienna Institute for International Economic Studies, wiiw); Bernd Christoph Ströhm; Maryna Tverdostup (The Vienna Institute for International Economic Studies, wiiw); Nina Vujanović (The Vienna Institute for International Economic Studies, wiiw); Zuzana Zavarská (The Vienna Institute for International Economic Studies, wiiw); Adam Żurawski
    Abstract: Although economic activity has weakened considerably compared to last year, most of the economies of CESEE seem to have largely digested the economic shock caused by the Russian invasion of Ukraine and its fallout. All CESEE economies except Hungary and Russia will post positive full-year growth in 2023. From 2024 the recovery should continue to strengthen across the region, although monetary tightening and the uncertain duration and outcome of the war are downside risks to the outlook.
    Keywords: CESEE, Central and Eastern Europe, economic forecast, Western Balkans, Visegrad group, CIS, Ukraine, Russia, Turkey, euro area, EU, convergence, Russia-Ukraine war, Russia sanctions, commodity prices, inflation, energy crisis, gas, coal, renewable energy, electricity, monetary policy, fiscal policy, EU funds, purchasing power, remittances, external debt, interest rates, banking sector, financial liabilities, credit, impact on Austria, macroeconomic forecasting
    JEL: E20 E21 E22 E24 E31 E44 E5 E62 F21 F24 F30 F50 F51 H56 H60 J30 O47 O52 O57 P24 P27 P33 P52 Q40 R30
    Date: 2023–04
  6. By: Alistair Macaulay; Wenting Song
    Abstract: This paper studies the role of narratives for macroeconomic fluctuations. We micro-found narratives as directed acyclic graphs and show how exposure to different narratives can affect expectations in an otherwise standard macroeconomic model. We capture such competing narratives in news media’s reports on a US yield curve inversion by using techniques in natural language processing. Linking these media narratives to social media data, we show that exposure to a recessionary narrative is associated with a more pessimistic sentiment, while exposure to a nonrecessionary narrative implies no such change in sentiment. In a model with financial frictions, narrative-driven beliefs create a trade-off for quantitative easing: extended periods of quantitative easing make narrative-driven waves of pessimism more frequent, but smaller in magnitude.
    Keywords: Financial markets; Inflation and prices; Monetary policy
    JEL: D84 E32 E43 E44 E5 G1
    Date: 2023–04
  7. By: Vladislav Abramov (Bank of Russia, Russian Federation Author-Name: Konstantin Styrin Author-Email: Author-Workplace-Name: Bank of Russia, Russian Federation Author-Name: Alexander Tishin Author-Email: Author-Workplace-Name: Bank of Russia, Russian Federation)
    Abstract: This paper discusses the impact of monetary policy on financial and macroeconomic variables in Russia. We distinguish two types of monetary policy: (1) that causes by changes in the current rates and (2) that causes by any other reason (such as forward guidance, communication, and central bank information). We find that these two types have distinct effects on financial variables. The first type better explains the variation of interest rates for the entire yield curve. In contrast, the second type explains the variation in the exchange rate and market indices. Moreover, we also show that monetary policy transmission from interest rates to inflation takes about one year but this effect is only temporary.
    Keywords: monetary policy surprises, high-frequency identification, principal component analysis
    JEL: E52 E58 E43 E44
    Date: 2022–05
  8. By: Mitra, Aruni; Wei, Mengying
    Abstract: We construct U.S. county-level credit supply shocks by interacting the mortgage growth of multi-market lenders with a county’s initial exposure to those lenders. The credit shocks did not impact the local labour markets during the credit boom but had a negative effect during the Great Recession. While local unemployment rates recovered post-Recession, wage growth remained depressed. Further, a long-run increase in older firms’ employment share suggests a credit-induced reduction in business dynamism and labour demand. A mechanism through occasionally binding financial constraints tied to house prices can qualitatively explain these asymmetric effects of credit shocks in booms and busts.
    Keywords: mortgage lending, credit supply shocks, local labour markets
    JEL: E24 E32 E44 G01 G20
    Date: 2023–04–05
  9. By: Papavangjeli, Meri
    Abstract: Amidst the prevailing global economic uncertainty and rising commodity prices, this article investigates empirically the driving forces of inflation in Albania through combining several approaches, focusing especially on the developments in the food sector in general and cereals in particular, during the period from 2000 to 2022. Considering four measures of inflation such as: cereals, food, non-food, and headline inflation, it analysis the effects of domestic and foreign factors on inflation, using a vector error correction model (VECM), which allows to capture both the short-term and long-term effects. The study also considers the fiscal sector in examining inflation dynamics, which has been neglected so far in the current studies on this topic. The empirical analysis finds that domestic inflation is underpinned by disequilibria in the monetary, cereals and non-food sectors; in the short-run, inflation is driven by structural factors (particularly agricultural output gap and imported inflation), as well as demand-side factors (especially money growth and public sector borrowing).
    Keywords: inflation; monetary, fiscal, structural factors
    JEL: E30 E50 E62 Q11
    Date: 2022–07–10
  10. By: Lena Dräger; Michael J. Lamla; Damjan Pfajfar
    Abstract: We study the effects of forward-looking communication in an environment of rising inflation rates on German consumers’ inflation expectations using a randomized control trial. We show that information about rising inflation increases short- and long-term inflation expectations. This initial increase in expectations can be mitigated using forward-looking information about inflation. Among these information treatments, professional forecasters’ projections seem to reduce inflation expectations by more than policymaker’s characterization of inflation as a temporary phenomenon.
    Keywords: short-run and long-run inflation expectations, inflation surge, randomized control trial, survey experiment, persistent or transitory inflation shock
    JEL: E31 E52 E58 D84
    Date: 2023
  11. By: Palma Filep-Mosberger (Central Bank of Hungary); Lorant Kaszab (Central Bank of Hungary); Zhou Ren (Wienna University of Economics and Business)
    Abstract: We study the nexus between endogenous growth and asset prices. We show that endogenous growth models with either horizontal and vertical innovation match financial data well due to countercyclical dividends which are either procyclical or acyclical in US data. Countercyclical dividends redistribute income from consumption towards investment in innovation improving growth prospects which are reflected in asset prices. In the horizontal innovation model of Kung and Schmid (2015) countercyclical dividends are the result of high monopoly markups. When markup is lowered from their benchmark 65 percent to 60 or 55 percent dividends become procyclical, the price-dividend ratio countercyclical, and the mean of the equity risk premia reduces from 290 to 82 or 46 basis points, respectively. When we introduce leisure preferences the wealth effect of technology shocks makes the aggregate dividends countercyclical as long as labour supply is not too elastic even with low values of the monopolist markup.
    Keywords: endogenous growth, innovation, markup, asset pricing, dividends, equity premium.
    JEL: E13 E31 E43 E44 E62
    Date: 2023
  12. By: Javier G. Gómez-Pineda; Julián Roa-Rozo
    Abstract: The business cycle is the cycle in the output gap and also in a stationary measure of trend output. Both the output gap and trend output are driven by joint trend-cycle shocks. The model is a univariate trend-cycle decomposition with hysteresis in trend output that enables the estimation of the output gap and trend output in 81 economies in quarterly frequency, since 1995Q1; and 184 economies in yearly frequency, in several cases since 1950, and in a few cases since 1820. Volatility and dispersion, as well as the frequency of large joint trend-cycle shocks, were low during the Gilded Age period; high during the interwar period, even more so in advanced (AD) economies compared to emerging market and developing economies (EMDE); and low in AD economies and high in EMDE economies in the post WWII period. In contrast with other existing estimates of trend output, those from the trend-cycle decomposition with hysteresis do not evolve smoothly, do not result in an artificial boom before recessions and are less sensitive to new data. **** RESUMEN: El ciclo económico es el ciclo en la brecha del producto y también en una medida estacionaria del producto tendencial. Tanto la brecha del producto como el producto tendencial son impulsados por choques conjuntos al ciclo y la tendencia. El modelo es una descomposición ciclo tendencia univariada con histéresis en el producto tendencia que permite la estimación de la brecha del producto y el producto tendencial en 81 economías en frecuencia trimestral desde 1995Q1 y en 184 economías en frecuencia anual desde 1975. La volatilidad, dispersión y frecuencia de choques conjuntos grandes fueron bajos durante el período de la Época Dorada; altos durante el período entre guerras, aún más en economías avanzadas (AD) en comparación con las emergentes y en desarrollo (EMDE); y bajo en las economías AD y alto en las economías EMDE en la segunda postguerra. En contraste con otros estimativos existentes del producto tendencial, los de la descomposición tendencia-ciclo con histéresis no evolucionan de forma suave, no resultan en un boom artificial antes de las recesiones y son menos sensibles a los datos nuevos.
    Keywords: Hysteresis, Business cycles, Business Fluctuations, Univariate model, Trend-cycle decomposition, Trend output, Output gap, Potential output, Histéresis, Ciclo de los negocios, Fluctuaciones económicas, Modelo univariado, Descomposición tendencia ciclo, Producto tendencial, Brecha del producto, Producto potencial
    JEL: E32 E50 O47 E58 E37
    Date: 2023–04
  13. By: Ia Vardishvili
    Abstract: I show that firms' ability to postpone entry has important implications for our understanding of the observed business cycle behavior of start-ups. I use a model that closely replicates the main features of the US firm dynamics to explore and quantify the mechanism. I find that the option to wait endogenously generates a countercyclical opportunity cost of entry: during recessions, a higher risk of failure increases the value of waiting, hence the cost of entry. The mechanism increases the elasticity of entrants to aggregate shocks five times. It is responsible for three-fourths of the observed persistent differences in the recessionary and expansionary cohorts' productivity, survival, and employment. Without the channel, existing models require either large shocks that generate excessive aggregate fluctuations or exogenous mechanisms to reconcile the observed dynamics of entrants. Overlooking this channel may also result in misleading predictions about entrants' responses to different shocks or policies.
    Keywords: Entry Decision; Delay; Option Value; Firm Dynamics; Business Cycles
    JEL: D25 E22 E23 E32 E37 L25
    Date: 2023–04
  14. By: Sangyup Choi (Yonsei University); Tim Willems (Bank of England); Seung Yong Yoo (Yale University)
    Abstract: We combine industry-level data on output and prices with monetary policy shock estimates for 105 countries to analyze how the effects of monetary policy vary with industry characteristics. Next to being interesting in their own right, our findings are informative on the importance of various transmission mechanisms, as they are thought to vary systematically with the included characteristics. Results suggest that monetary policy has greater output effects in industries featuring assets that are more difficult to collateralize, consistent with the credit channel, followed by industries producing durables, as predicted by the interest rate channel. The credit channel is stronger during bad times as well as in countries with lower levels of financial development, in line with financial accelerator logic. We do not find support for the cost channel of monetary policy, nor for a channel running via exports. Our database (containing estimated monetary policy shocks for 177 countries) may be of independent interest to researchers.
    Keywords: Monetary policy transmission; Industry growth; Financial frictions; Heterogeneity in transmission; Monetary policy shocks.
    JEL: E32 E52 F43 G20
    Date: 2023–04
  15. By: Alisdair McKay; Christian K. Wolf
    Abstract: We show that, in a general family of linearized structural macroeconomic models, knowledge of the empirically estimable causal effects of contemporaneous and news shocks to the prevailing policy rule is sufficient to construct counterfactuals under alternative policy rules. If the researcher is willing to postulate a loss function, our results furthermore allow her to recover an optimal policy rule for that loss. Under our assumptions, the derived counterfactuals and optimal policies are robust to the Lucas critique. We then discuss strategies for applying these insights when only a limited amount of empirical causal evidence on policy shock transmission is available.
    Keywords: Monetary policy; Macroeconomic modeling; Policy shocks; Business cycles; Lucas critique; Policy counterfactuals
    JEL: E32 E61
    Date: 2023–02–06
  16. By: Huw Dixon (Cardiff Business School); Theodora Kosma (Bank of Greece); Pavlos Petroulas (Bank of Greece)
    Abstract: We utilize a unique micro price data set for Greece that underpins the Greek CPI. It spans almost two decades, during which Greece suffered a large economic shock. We find that during this time there were significant changes in the pricing behavior of Greek firms. We also find macro-economic developments such as annual inflation and output growth are important factors in determining the frequency and size of price changes. This leads to an intertemporal inflation dynamic linking current inflation to future price behavior and inflation. Utilizing the empirical estimates from the data, we combine a Taylor rule and Euler equation with the inflation dynamic resulting from the asymmetric impact of inflation on the frequency of price increases and the frequency of price decreases. The results of the simulations capture the Greek inflation developments well. Moreover, they also capture developments in the frequency of price increases and decreases seen in other economies and over different time-periods.
    Keywords: inflation dynamics; frequencies; prices; microdata
    JEL: E31 E37 C26 C41
    Date: 2023–02
  17. By: International Monetary Fund
    Abstract: Economic growth rebounded strongly in 2022 despite global headwinds. GDP is estimated to have grown by 9 percent in 2022 after contracting 14.5 percent in 2020 and 0.9 percent in 2021. The lifting of all COVID-related travel restrictions in August sparked a strong rebound in the tourism sector and across the economy. Yet economic activity is not back to pre-pandemic levels. Inflation picked up, increasing from 1.9 percent in 2021 to 3.8 percent in 2022, reaching the highest level in a decade. The authorities’ proactive policy response, facilitated by the fiscal buffers accumulated from a decade of prudent fiscal policy, helped shelter domestic prices from high global energy and food prices. These measures nonetheless took a heavy toll on fiscal accounts in 2022. The primary balance ex-CBI revenue and land buybacks, an indicator of the underlying fiscal stance, deteriorated to a deficit of 17 percent of GDP (vs. 15 percent in 2021). Large CBI inflows in 2022 helped finance this expansion, keeping public debt below the ECCU regional target of 60 percent of GDP. The current account deficit is estimated to have narrowed in 2022, supported by tourism recovery.
    Date: 2023–03–31
  18. By: Javier Bianchi; Louphou Coulibaly
    Abstract: Many central banks whose exchange rate regimes are classified as flexible are reluctant to let the exchange rate fluctuate. This phenomenon is known as “fear of floating”. We present a simple theory in which fear of floating emerges as an optimal policy outcome. The key feature of the model is an occasionally binding borrowing constraint linked to the exchange rate that introduces a feedback loop between aggregate demand and credit conditions. Contrary to the Mundellian paradigm, we show that a depreciation can be contractionary, and letting the exchange rate float can expose the economy to self-fulfilling crises.
    Keywords: Self-fulfilling financial crises; Exchange rates
    JEL: E52 F45 F41 G01 F36 F33 E44 F34
    Date: 2023–02–03
  19. By: Christian Merkl; Timo Sauerbier
    Abstract: Our paper analyzes the role of public employment agencies in job matching, in particular the effects of the restructuring of the Federal Employment Agency in Germany (Hartz III labor market reform) for aggregate matching and unemployment. Based on two microeconomic datasets, we show that the market share of the Federal Employment Agency as job intermediary declined after the Hartz reforms. We propose a macroeconomic model of the labor market with a private and a public search channel and fit the model to various dimensions of the data. We show that direct intermediation activities of the Federal Employment Agency did not contribute to the decline in unemployment in Germany. By contrast, improved activation of unemployed workers reduced unemployed by 0.8 percentage points. Through the lens of an aggregate matching function, more activation is associated with a larger matching efficiency.
    Keywords: Hartz reforms, search and matching, reform of employment agency
    JEL: E24 E00 E60
    Date: 2023
  20. By: Masaru INABA; Kengo NUTAHARA; Daichi SHIRAI
    Abstract: The main objectives of this paper are twofold. The first is identifying the sources of inequality and business cycle fluctuations in the US and Japan. The second is investigating the effects of reducing inequality on business cycles. We develop a tractable heterogeneous-agent business cycle model with unconstrained (U) and hand-to-mouth (HtM) households. We also introduce wedges, which imply various types of distortions in economic activities, into the model following the business cycle accounting approach and estimate them by the Bayesian method. We focus on consumption inequality as inequality. We find that, in the US, the labor market distortions specific to the U households have significant impacts on both business cycles and consumption inequality, while the primary source of business cycles is the distortion in aggregate productivity, and that of consumption inequality is the labor market distortion specific to the HtM. In contrast, we find that no common factors significantly impact both business cycles and consumption inequality in Japan. In Japan, the key for business cycles is the distortion in aggregate productivity, and that for consumption inequality is the labor market distortions specific to U and HtM households. We also investigate the effects of reductions in consumption inequality on business cycle volatility through two types of experiments: (1) removing labor market distortions specific to two types of households, which are primary sources of consumption inequality, and (2) redistribution policy. Removing the labor market distortions increases output growth volatility in the US while it reduces in Japan. Removing cyclical consumption inequality by redistribution policy reduces output growth volatility in the US and increases in Japan. In contrast, reducing the level of consumption inequality from the estimated steady-state levels increases output volatility in both countries. However, the relation between the level of consumption inequality and output growth volatility is not monotonic. If consumption inequality is quite severe, a reduction in consumption inequality reduces output growth volatility.
    Keywords: Inequality; consumption inequality; business cycle accounting; wedges; distortions; hand-to-mouth JEL codes: E25; E32; E37
    Date: 2023–04
  21. By: Doojav, Gan-Ochir; Luvsannyam, Davaajargal; Enkh-Amgalan, Elbegjargal
    Abstract: This paper assesses the effects and transmission mechanisms of global liquidity and commodity market shocks in Mongolia, a commodity-exporting developing economy, using a structural vector autoregression (SVAR) model. Results show that boom and bust cycles in commodity and international financial markets lead to business and financial cycles in the economy as these shocks account for 30, 45, and 60 percent of domestic output, real exchange rate, and lending rate fluctuations, respectively. Commodity demand shocks have more persistent and robust effects on domestic cycles than commodity supply shocks. Trade and financial (resource export revenues, lending rate, and exchange rate) channels play an essential role in transmitting the shocks. Buoyant commodity demand and global liquidity shocks lead to a significant fall in the domestic lending rate, while positive commodity supply and global liquidity shocks appreciate the real exchange rate.
    Keywords: Commodity demand shocks, Commodity supply shocks, Global liquidity shocks, Business cycle, Structural VAR, Mongolia.
    JEL: C51 E32 F41 F62
    Date: 2022
  22. By: Iancu, Aurel (Institutul National de Cercetari Economice al Academiei Romane); Olteanu, Dan Constantin (Institutul National de Cercetari Economice al Academiei Romane)
    Abstract: This study analyzes the correlation between the primary budget balance and the public debt during the last two decades, for a panel of 12 countries from Central and Eastern Europe, in order to assess their debt sustainability, the level of debt at which fiscal fatigue may occur, as well as the degree of risk for fiscal fatigue, depending on the past and future evolution of the public debt. First, using estimates of the cubic fiscal reaction function and two variants (quadratic / linear) of the financing cost function, we determined the equilibrium level of public debt as % of GDP, the ”fiscal fatigue” point and the debt limit, for the whole panel and each country. Second, using the common (from panel regressions) and country-specific coefficients, and public debt projection for 10 and 5 years, we evaluated the risk level of fiscal fatigue, in relation to the future evolution of the public debt and other financial indicators.
    Keywords: primary balance, public debt, fiscal space, fiscal policy
    JEL: H61 H62 H63 H68 E62
    Date: 2022–12
  23. By: ECONOMOU Anastasia (European Commission - JRC)
    Abstract: Digital competence is a core element of teachers’ professional profile. Based on DigCompEdu, the European conceptual framework for the Digital Competence of Educators, SELFIEforTEACHERS is a self-reflection tool to support building of digital competence for primary and secondary teachers. Through a self-reflection process, teachers can self-assess their digital competence, identifying strengths and weaknesses. Based on the tool feedback, they can plan their professional learning and further development of their digital competence. SELFIEforTEACHERS aims to empower teachers to actively engage in their professional learning process and to support them in their use of digital technologies in their professional context. It is a learning journey rather than an assessment tool. At the same time, it provides a tool for education systems to support teachers in their professional development. Aggregated results generated by self-reflections within a group, support planning of professional development programmes. SELFIEforTEACHERS is available online for teachers across Europe and beyond. It is currently available in 29 languages, including all official languages of the European Union. It is an action of the European Commission Digital Education Action Plan 2021-2027.
    Keywords: SELFIEforTEACHERS, professional development, professional learning, self-reflection, self-assessment, educators' digital competence, DigCompEdu
    Date: 2023–04
  24. By: Silvia Appelt; Ana Cinta González Cabral; Tibor Hanappi; Fernando Galindo-Rueda; Pierce O’Reilly
    Abstract: Despite the increasing adoption of income-based tax incentives for R&D and innovation in the OECD area and beyond, evidence on the availability, design, generosity and actual cost of these incentives remains scarce. This report helps fill this gap by documenting government efforts to provide preferential tax treatment of economic outputs of innovation activities. Drawing on the responses of national contact points to the OECD KNOWINTAX surveys carried out in 2020 and 2021, it presents new evidence on the cost (foregone tax revenues) and uptake of income-based-tax incentives by businesses in 2019, and tracks their distribution by firm size and industry and their evolution over the 2000-2019 period.
    Keywords: innovation, research and development, tax incentives
    JEL: O34 O38 H25
    Date: 2023–04–20
  25. By: Kimberly A. Clausing (Peterson Institute for International Economics)
    Abstract: In 2021, more than 135 jurisdictions agreed on transformative new international tax rules that would establish a minimum tax rate of 15 percent on multinational corporate income regardless of where it was reported. In December 2022, the European Union unanimously moved forward to implement this minimum tax, and other countries, including South Korea, Japan, Australia, Canada, and the United Kingdom, are also either implementing the tax or taking substantial steps toward implementation. In tandem, the United States should also reform its international tax system and adopt a stronger minimum tax. While the future of the international agreement is uncertain, it has important implications for the ability of governments worldwide to create tax systems that are administrable, fair, and efficient. The agreement also demonstrates important guiding principles for the future of multilateral cooperation on global collective action problems, including efforts to protect public health from future pandemics, address nuclear proliferation, and resolve territorial conflicts. US progress on international tax reform would enhance much needed international cooperation on these issues.
    Date: 2023–04
  26. By: Jir\^o Akahori; Nien-Lin Liu; Maria Elvira Mancino; Tommaso Mariotti; Yukie Yasuda
    Abstract: In this paper we propose an estimator of spot covariance matrix which ensure symmetric positive semi-definite estimations. The proposed estimator relies on a suitable modification of the Fourier covariance estimator in Malliavin and Mancino (2009) and it is consistent for suitable choices of the weighting kernel. The accuracy and the ability of the estimator to produce positive semi-definite covariance matrices is evaluated with an extensive numerical study, in comparison with the competitors present in the literature. The results of the simulation study are confirmed under many scenarios, that consider the dimensionality of the problem, the asynchronicity of data and the presence of several specification of market microstructure noise.
    Date: 2023–04
  27. By: BELLIA Mario (European Commission - JRC); CALÈS Ludovic; DI GIROLAMO Francesca (European Commission - JRC); JOOSSENS Elisabeth (European Commission - JRC); PETRACCO GIUDICI Marco (European Commission - JRC)
    Abstract: The EU bank crisis management and deposit insurance (CMDI) framework lays out the rules for handling bank failures, while preserving financial stability, protecting depositors, and aiming to avoid the risk of excessive use of public financial resources. Notwithstanding the progress achieved in promoting a stable and integrated financial system, the objective of shielding public money from the effect of bank failures is only partially achieved. The evaluation of the current rules to handle a banking failure has in fact identified potential issues with the framework’s design, implementation, and application. The review of the CMDI framework should provide solutions to address these issues and enable the framework to fully achieve its objectives and be fit for its purpose. Notably, the revision calls for a further harmonization of insolvency law to increase its efficiency and overall coherence to manage bank crises in the EU, as well as to enhance the level of depositor protection, including the creation of a common depositor protection mechanism (European Deposit Insurance Scheme, EDIS). The following report covers in particular three aspects closely related to the Deposit Insurance design and efficiency which are mentioned in the review: the potential coverage of temporary high deposit balances (THDBs), the effectiveness and pooling effect of the EDIS, and the assessment of alternative methodologies to compute risk-based contribution to a common European Deposit Insurance Fund.
    Keywords: Financial Stability, European Deposit Insurance Scheme, EDIS
    Date: 2023–04
  28. By: Sarah Cattan (Institute for Fiscal Studies); Gabriella Conti (Institute for Fiscal Studies); Christine Farquharson (Institute for Fiscal Studies); Rita Ginja (Institute for Fiscal Studies); Maud Pecher (Institute for Fiscal Studies)
    Date: 2022–10–13
  29. By: Raphael Brade; Oliver Himmler; Robert Jaeckle
    Abstract: We present first experimental evidence that relative performance feedback improves both the speed and quality with which challenging long-term tasks are completed. Providing university students with ongoing relative feedback on accumulated course credits accelerates graduation by 0.12 SD, and also improves grades by 0.063 SD. Treatment effects are concentrated among students with medium pre-treatment graduation probabilities: when these students are informed about an above-average performance, their outcomes improve – otherwise their outcomes deteriorate. Combined with survey evidence, this pattern of results suggests that learning about own ability is a plausible mechanism.
    Keywords: relative performance feedback, rank, natural field experiment, higher education, perceived ability, belief updating
    JEL: C93 D83 D91 I21 I23 I24
    Date: 2023
  30. By: Ioannou, Petros; Chen, Pengfei
    Abstract: Today’s airport terminals face a critical problem of traffic congestion in the terminal area partly caused by uncoordinated shuttle operations. The congestion near pick-up and drop-off points negatively affects passenger traffic leading to unnecessary idling, delays and congestion with negative impact on air quality and mobility. The need for an intelligent shuttle management system becomes more urgent with the development of information technologies, battery electric shuttles and autonomous vehicles. In this project, we developed a centrally coordinated shuttle scheduling and routing management system for mixed fleets of diesel and electric shuttles using a digital twin of LAX to LA downtown traffic road network by optimizing the total combined cost of energy consumption and travel time. A Co-Simulation Optimization method is used to solve the problem. The objective is to reduce congestion at the designated pick up and drop off points due to different shuttles showing up at these points during overlapping time windows which exceed the curb capacity. Another objective is to integrate into the system mixed fleet of shuttles that include diesel and battery operated. The proposed centrally coordinated shuttle scheduling and routing management system takes into account the characteristics of mixed shuttle fleets and is shown to reduce the operational cost such as energy consumption and delays. The results also suggest the deployment of electric shuttles in order to reduce emissions and improve air quality further. View the NCST Project Webpage
    Keywords: Engineering, Shuttle Scheduling and Routing, Load Balancing System, Co-Simulation, Mixed Shuttle Fleet, Electric Shuttle, Autonomous Shuttle
    Date: 2023–04–01
  31. By: Andrej Angelovski (Middlesex University); Praveen Kujal (Middlesex University and Chapman University); Christos Mavridis (Gabriele d’Annunzio University of Chieti-Pescar)
    Abstract: Given the prevalence of local public goods, whose broader use is often limited by distance and borders, we propose a potential solution to the free-riding problem by having each participant/beneficiary delegate the public good contribution decision to a non-local intermediary who neither puts in own endowment into the public good nor benefits from it. Intermediaries make decisions under two compensation mechanisms where the incentives for the intermediary are either non-aligned (fixed) or aligned (variable) with those of the beneficiary. We find that the use of intermediaries, regardless of whether their compensation is aligned or not with that of the beneficiary, significantly increases contributions to the provision of the public good. We conclude that individuals behave differently when they (formally) make decisions for someone else even if their incentive structures are identical.
    Keywords: Public goods, intermediaries, delegation
    JEL: H4 C91 D90
    Date: 2023
  32. By: Mark R. Rosenzweig; Bing Xu
    Abstract: This paper studies how rewards based on class rank affect student effort and performance using a game-theoretic classroom competition model and data from the resettlement of Southeast Asian refugees in the US. The paper finds that variation in the presence of strong or weak students changes the incentives and test scores of incumbent students depending on their ability group in accord with the competition model, with increases in the number of strong students lowering effort among strong and weak incumbents but raising the test scores of weak incumbents. The results suggest that competition induced by rank-based rewards within homogeneous ability groups lowers overall effort levels, while the presence of strong students directly augments the performance, but not the effort levels, of weak students despite the competition. The paper also rules out a number of alternative explanations for these school composition effects, including disruptions, teacher-initiated changes in curriculum in response to changing class composition, selective incumbent-student school exit, and endogenous responses of refugee location choices to school performance.
    JEL: I21 I24 J15
    Date: 2023–04
  33. By: Brian Jabarian; Elia Sartori
    Abstract: In a stylized voting model, we establish that increasing the share of critical thinkers -- individuals who are aware of the ambivalent nature of a certain issue -- in the population increases the efficiency of surveys (elections) but might increase surveys' bias. In an incentivized online social media experiment on a representative US population (N = 706), we show that different digital storytelling formats -- different designs to present the same set of facts -- affect the intensity at which individuals become critical thinkers. Intermediate-length designs (Facebook posts) are most effective at triggering individuals into critical thinking. Individuals with a high need for cognition mostly drive the differential effects of the treatments.
    Date: 2023–03
  34. By: Henning Hermes (University of Düsseldorf, Institute for Competition Economics); Marina Krauss (University of Augsburg, Department of Economics); Philipp Lergetporer (Technical University of Munich, School of Management); Frauke Peter (Deutsches Zentrum für Hochschul- und Wissenschaftsforschung); Simon Wiederhold (University of Ingolstadt, D-85049 Ingolstadt)
    Abstract: We present experimental evidence that enabling access to universal early child care for families with lower socioeconomic status (SES) increases maternal labor supply. Our intervention provides families with customized help for child care applications, resulting in a large increase in enrollment among lower-SES families. The treatment increases lower-SES mothers' full-time employment rates by 9 percentage points (+160%), household income by 10%, and mothers' earnings by 22%. The effect on full-time employment is largely driven by increased care hours provided by child care centers and fathers. Overall, the treatment substantially improves intra-household gender equality in terms of child care duties and earnings.
    Keywords: Child care, maternal employment, gender equality, randomized controlled trial
    JEL: D90 J13 J18 J22 C93
    Date: 2023–04
  35. By: Sauermann, Miklas Pascal
    Abstract: Social entrepreneurship has emerged as a critical driver for promoting sustainable development in low-income communities facing pressing social and environmental challenges. However, the factors that contribute to the success of such initiatives and the obstacles faced by social entrepreneurs remain poorly understood. This study employs a mixed-methods approach, drawing on data collected from surveys of 60 community members and interviews with 20 social entrepreneurs operating in low-income communities to examine the role of social entrepreneurship in fostering sustainable development. The results reveal that successful social entrepreneurship initiatives in low-income communities require strong leadership, community engagement, funding accessibility, and adaptability. Moreover, social entrepreneurship has the potential to advance sustainable development through the provision of innovative solutions to complex social and environmental problems, the promotion of local economic development, and the enhancement of community resilience. However, the study also highlights several challenges social entrepreneurs face in low-income communities, including navigating complex regulatory environments, securing funding, and establishing community trust. Addressing these obstacles requires collaboration between social entrepreneurs, policymakers, and other stakeholders, as well as the development of tailored support mechanisms that address the unique needs of social entrepreneurship initiatives.
    Keywords: Social Entrepreneurship, Sustainable Development, Low-Income Communities, Impact Assessment
    JEL: L31 Q01
    Date: 2023–03–27
  36. By: Ana Cinta González Cabral; Pierce O’Reilly; Silvia Appelt; Fernando Galindo-Rueda; Tibor Hanappi
    Abstract: Tax incentives that provide preferential tax treatment to the incomes arising from research and development (R&D) and innovation activities, such as intellectual property regimes, have become widespread in recent years. This paper describes the key design features of tax incentives available in 49 member countries of the Inclusive Framework on BEPS (IF), covering all OECD countries and EU countries. It outlines differences in the design of such incentives that may translate into differences in the tax benefits offered. The information collected and reported in this paper is a first step towards a more systematic comparison of tax support policies for R&D and Innovation.
    Date: 2023–04–20
  37. By: Zuleika Ferre; Patricia Triunfo; Jos\'e-Ignacio Ant\'on
    Abstract: This paper examines the determinants of fertility among women at different stages of their reproductive lives in Uruguay. To this end, we employ time series analysis methods based on data from 1968 to 2021 and panel data techniques based on department-level statistical information from 1984 to 2019. The results of our first econometric exercise indicate a cointegration relationship between fertility and economic performance, education and infant mortality, with differences observed by reproductive stage. We find a negative relationship between income and fertility for women aged 20-29 that persists for women aged 30 and over. This result suggests that having children is perceived as an opportunity cost for women in this age group. We also observe a negative relationship between education and adolescent fertility, which has implications for the design of public policies. A panel data analysis with econometric techniques allowing us to control for unobserved heterogeneity confirms that income is a relevant factor for all groups of women and reinforces the crucial role of education in reducing teenage fertility. We also identify a negative correlation between fertility and employment rates for women aged 30 and above. We outline some possible explanations for these findings in the context of work-life balance issues and argue for the importance of implementing social policies to address them.
    Date: 2023–04
  38. By: Teresa Esteban-Casanelles; Duarte Gon\c{c}alves
    Abstract: How and why do incentive levels affect strategic behavior? This paper examines an experiment designed to identify the causal effect of scaling up incentives on choices and beliefs in strategic settings by holding fixed opponents' actions. In dominance-solvable games, higher incentives increase action sophistication and best-response rates and decrease mistake propensity. Beliefs tend to become more accurate with higher own incentives in simple games. However, opponents with higher incentive levels are harder to predict: while beliefs track opponents' behavior when they have higher incentive levels, beliefs about opponents also become more biased. We provide evidence that incentives affect cognitive effort and that greater effort increases performance and predicts choice and belief sophistication. Overall, the data lends support to combining both payoff-dependent mistakes and costly reasoning.
    Date: 2023–04
  39. By: Véronique Bellon-Maurel (UMR ITAP - Technologies et Méthodes pour les Agricultures de demain - 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, Institut Convergences Agriculture Numérique #DigitAg - IRSTEA - Institut National de Recherche en Sciences et Technologies pour l'Environnement et l'Agriculture); Isabelle Piot-Lepetit (UMR MoISA - Montpellier Interdisciplinary center on Sustainable Agri-food systems (Social and nutritional sciences) - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - IRD - Institut de Recherche pour le Développement - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - 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, Institut Convergences Agriculture Numérique #DigitAg - IRSTEA - Institut National de Recherche en Sciences et Technologies pour l'Environnement et l'Agriculture); Nina Lachia (UMR ITAP - Technologies et Méthodes pour les Agricultures de demain - 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, Institut Convergences Agriculture Numérique #DigitAg - IRSTEA - Institut National de Recherche en Sciences et Technologies pour l'Environnement et l'Agriculture); Bruno Tisseyre (UMR ITAP - Technologies et Méthodes pour les Agricultures de demain - 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, Institut Convergences Agriculture Numérique #DigitAg - IRSTEA - Institut National de Recherche en Sciences et Technologies pour l'Environnement et l'Agriculture)
    Abstract: This paper presents the way the digital transformation of the agricultural sector is implemented in Europe and in France. It describes the main European and national strategies, the structure of research and innovation initiatives, and the investment in capacity building to foster innovation, adoption and use. More specifically, the French research and innovation ecosystem on digital agriculture is described. The actors involved come from different organisations, such as research and higher educational institutes, government agencies, agricultural technology (AgTech) companies, farmer unions etc., and work together by means of associations (e.g. Robagri), networks (e.g. RMT Naexus, DigiFermes, Fermes Leader), or living labs (e.g. Occitanum) on both digital technology assessment and co-design. Additionally, support is devoted to capacity building (e.g. Le Mas numérique, Mobilab) and a better understanding of the drivers of adoption and use of digital technologies (e.g. FrOCDA). Among these various organisations, #DigitAg, the Digital Agriculture Convergence Lab, has been created to foster interdisciplinary research on digital agriculture. All these initiatives aim to use digital technologies to support the European Green Deal, Farm-to-Fork and Biodiversity strategies as well as the French orientation towards more agroecological practices for safer and more sustainable food systems. Even though this organisational ecosystem is developing fast, the objective of encouraging the coevolution of both digital and green transformations is not without challenges that still need to be overcome, either through new research, innovations, initiatives or collaborations between the actors involved.
    Keywords: #DigitAg, digital agriculture, digitalisation, Farm-to-Fork, green deal, innovation adoption, innovation ecosystems, innovation use, Digital agriculture Innovation ecosystems Green deal Farm-to-Fork Innovation adoption Innovation use Digitalization #DigitAg, Digital agriculture, Innovation ecosystems, Green deal, Innovation adoption, Innovation use, Digitalization
    Date: 2023
  40. By: Philip Adams; Louise Roos
    Abstract: Greenhouse gas emissions in Jordan come primarily from the combustion of refined oil products in transport. Hence, plans to reduce emissions focus primarily on the transport sector. These plans, often detailed from a technological point of view, seldom present reasoned economic measures of likely consequences. This paper provides an assessment of the likely economic costs and benefits for Jordan of two typical schemes to reduce the environmental effects of transport. Both relate to the delivery of passenger services. The first is to encourage the uptake of Battery Electric Vehicles (BEVs) at the expense of Internal Combustion Vehicles (ICVs) and, to a lesser extent, hybrid vehicles. The second is to invest in new public transport infrastructure -- phase 2 of the Bus Rapid Transport system -- assisting to reduce the use of private vehicles principally in urban areas. The analysis is based on scenarios to 2050 constructed using a large model of Jordan's economy, named JorGE. JorGE is calibrated to data for 2020 and has a detailed industrial classification. That classification recognizes electricity produced by several different conventional fossil fuel and renewable technologies and a number of road transport service industries. The road transport industries distinguish passenger from freight services. For passenger services there are separate industries producing public transport services and private transport services. The latter is further disaggregated into services provided by the three different passenger vehicle types -- ICVs, EVs and Hybrids.
    Keywords: CGE modelling, electric vehicles (BEV), internal combustion vehicles (ICV), greenhouse gas, public transport
    JEL: C68 R41
    Date: 2023–04
  41. By: Whitt, Christine; Wallander, Steven
    Abstract: Rotational grazing is a management practice in which livestock are cycled through multiple fenced grazing areas (paddocks) in order to manage forage production, forage quality, animal health, and environmental quality. USDA, Natural Resources Conservation Service (NRCS) and other organizations promote rotational grazing as an important grazing practice for providing improved environ-mental outcomes, relative to continuous grazing, in which livestock are not cycled between grazing areas. USDA, NRCS provides financial assistance for rotational grazing and related management practices through the Environmental Quality Incentives Program (EQIP), the Conservation Stewardship Program (CSP), and technical assistances through the Conservation Technical Assistance (CTA) program. Despite the breadth of support for rotational grazing, only limited information is available on the prevalence of rotational grazing and the variation in how producers implement the practice, including details on how frequently or “intensively” grazing operations rotate livestock between paddocks and how outcomes such as stocking density and cost relate to system characteristics. This study uses data from the 2018 Agricultural Resource Management Survey Cattle and Calves Cost and Returns Report to fill this information gap. The study finds that about 40 percent of cow-calf operations use rotational grazing, but adoption rates vary by production regions. Most rotational grazing systems are relatively simple. Only 40 percent of cow-calf operations that report using rotational grazing operations use an intensive rotational grazing schedule.
    Keywords: Agribusiness, Environmental Economics and Policy, Farm Management, Industrial Organization, Land Economics/Use, Livestock Production/Industries, Production Economics
    Date: 2022–11–01
  42. By: Luo, Qian; Garcia-Menendez, Fernando; Yang, Haozhe; Deshmukh, Ranjit; He, Gang; Lin, Jiang; Johnson, Jeremiah X
    Abstract: China's power system is highly regulated and uses an "equal-share" dispatch approach. However, market mechanisms are being introduced to reduce generation costs and improve system reliability. Here, we quantify the climate and human health impacts brought about by this transition, modeling China's power system operations under economic dispatch. We find that significant reductions in mortality related to air pollution (11%) and CO 2 emissions (3%) from the power sector can be attained by economic dispatch, relative to the equal-share approach, through more efficient coal-powered generation. Additional health and climate benefits can be achieved by incorporating emission externalities in electricity generation costs. However, the benefits of the transition to economic dispatch will be unevenly distributed across China and may lead to increased health damage in some regions. Our results show the potential of dispatch decision-making in electricity generation to mitigate the negative impacts of power plant emissions with existing facilities in China.
    Keywords: Humans, Carbon Dioxide, Reproducibility of Results, Coal, Climate, Air Pollution, Power Plants, China, air pollution, power system in China, public health, Climate-Related Exposures and Conditions, Climate Action, Environmental Sciences
    Date: 2023–02–01
  43. By: Gillian K. Hadfield; Jack Clark
    Abstract: Appropriately regulating artificial intelligence is an increasingly urgent policy challenge. Legislatures and regulators lack the specialized knowledge required to best translate public demands into legal requirements. Overreliance on industry self-regulation fails to hold producers and users of AI systems accountable to democratic demands. Regulatory markets, in which governments require the targets of regulation to purchase regulatory services from a private regulator, are proposed. This approach to AI regulation could overcome the limitations of both command-and-control regulation and self-regulation. Regulatory market could enable governments to establish policy priorities for the regulation of AI, whilst relying on market forces and industry R&D efforts to pioneer the methods of regulation that best achieve policymakers' stated objectives.
    Date: 2023–04

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