|
on Macroeconomics |
| By: | Paweł Kopiec |
| Abstract: | I study the dependence of the forward guidance effectiveness on the level of economic slack. I use the model with price rigidities and uninsured unemployment risk and apply both analytical and numerical methods to study the forward guidance transmission in both''normal time'' and the crisis during which the unemployment rate rises by 150 percent. High unemployment accompanied by low job-finding rates raises the unemployment risk and increases precautionary motives. This, in turn, constrains the ability of the monetary authority to boost current demand by announcing cuts in future policy rates. The severity of that limitation increases with the time horizon of the announced change in interest rate. Quantitatively, the drop in the interest rate elasticity of aggregate consumption between the horizon of the interest rate cut equal to zero (i.e. the standard monetary policy shock) and the horizon equal to 15 quarters is 35.3% larger in the crisis than in ''normal time''. These more pronounced horizon effects imply that the forward guidance effectiveness is in general lower in the crisis than in''normal times''. |
| Keywords: | forward guidance, monetary policy, heterogeneous agents, frictional narkets, unemployment |
| JEL: | D30 D31 D52 E21 E24 E43 E52 E58 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:sgh:kaewps:2022081&r=mac |
| By: | Paul Levine (University of Surrey); Maryam Mirfatah (King’s College London); Joseph Pearlman (City University); Stylianos Tsiaras (Ecole Polytechnique Federale de Lausanne) |
| Abstract: | We study central bank liquidity provisions to the banking sector in a DSGE model estimated for the Euro Area with financial frictions on the supply and demand side of credit. We show that liquidity provisions, as in the ECB’s recent Long Term Refinancing Operations, can be welfare-enhancing or welfare-reducing when both these financial frictions exist. They relax the banks’ leverage constraint and induce banks to provide more credit. This reduces the credit spread facing firms and increases investment, but this comes at the cost of implementing the liquidity policy. We compute a welfare optimized liquidity rule for the central bank responding to output, inflation and the interest rate spread that can increase welfare in comparison with the case of no liquidity provision. Crucially, this result is conditional on a high level of central bank monitoring of the its loanable funds to banks. |
| JEL: | C11 E44 E52 E58 E61 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:sur:surrec:1323&r=mac |
| By: | Bilbiie, F. O.; Melitz, M. J. |
| Abstract: | Due to its impact on nominal firm profits, price rigidity amplifies the response of entry and exit to supply shocks. When those supply shocks are negative, such as those following supply chain disruptions, this “entry-exit multiplier†substantially magnifies the associated welfare losses—especially when wages are also rigid. This is in stark contrast to the benchmark New Keynesian model (NK), which predicts a positive output gap in response to that same shock under the same monetary policy. Endogenous entry-exit thus radically changes the consequences of nominal rigidities. In addition to the aggregate-demand amplification of supply disruptions, our model also reconciles the response of hours worked across the NK and RBC models. And unlike the standard NK model, our model can also be used to evaluate how monetary expansions can alleviate or even eliminate the negative output gap induced by supply disruptions. |
| Keywords: | Aggregate Demand and Supply, Entry-Exit, Monetary Policy, Recessions, Sticky Prices, Sticky Wages, Variety |
| JEL: | E30 E40 E50 E60 |
| Date: | 2023–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2368&r=mac |
| By: | Hein, Eckhard |
| Abstract: | This paper reviews the post-Keynesian theory of inflation against the background of the simultaneous rise in inflation and profit shares in the course of the Covid-19 recovery and the Russian war in Ukraine. It distinguishes between the Keynes, Kaldor, Robinson, and Marglin tradition, and the Kalecki, Rowthorn, and Dutt tradition. Two prototype models in the latter tradition-the Dutt, Blecker/Setterfield and Lavoie variant, and the Rowthorn and Hein/Stockhammer variant-are discussed. The paper applies the latter to elucidate recent inflation trends propelled by increasing imported energy prices and then rising mark-ups. The effects of inflation-targeting central bank interest policies versus a post-Keynesian alternative macroeconomic policy approach are evaluated. It is argued that from a post-Keynesian perspective inflation is always and everywhere a conflict phenomenon, with different potential triggers. Adequate policies should thus focus on moderating distribution conflict by incomes policies, complemented by central banks targeting low long-term real interest rates, functional finance fiscal policies and international coordination of inflation targets. |
| Keywords: | conflict inflation, post-Keynesian models, imported energy inflation shock |
| JEL: | E12 E25 E31 E61 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:280430&r=mac |
| By: | Paul De Grauwe; Yuemei Ji |
| Abstract: | The major central banks now operate in a regime of abundance of bank reserves. As a result, they can only raise the money market rate by increasing the rate of remuneration of bank reserves. This, in turn, leads to large transfers of the central banks’ profits (and more) to commercial banks that will become unsustainable and makes the transmission of monetary policies less effective. We propose a two-tier system of reserve requirements that would only remunerate the reserves in excess of the minimum required. This would drastically reduce the giveaways to banks, allow the central banks to maintain their current operating procedures and make monetary policies more effective in fighting inflation. |
| Keywords: | monetary policy, bank reserves, minimum reserve requirements |
| JEL: | E52 E58 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10741&r=mac |
| By: | Muellbauer, John; De Bonis, Riccardo; Liberati, Danilo; Rondinelli, Concetta |
| Abstract: | Most econometric policy models at central banks and elsewhere use an aggregate consumption function based on textbook theory. This assumes that the 'representative household' owns only an aggregate form of wealth, proxied by net worth, and never faces borrowing or liquidity constraints or transactions costs. This is inconsistent with the modern view of heterogeneous agent behaviour under uncertainty in incomplete markets. Based on data from 1980 to 2019, the conventional formulation for an aggregate consumption function for Italy is strongly rejected. The results show that the marginal propensities to consume out of household deposits and semi-liquid financial assets such as T-bills and mutual funds are greater than for less liquid assets. A significant positive effect from housing wealth is substantially offset by the negative effect of affordability measured by the house price-to-income ratio. |
| Keywords: | financial wealth, liquid and illiquid assets, permanent income, housing wealth |
| JEL: | E21 E32 E44 E51 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:amz:wpaper:2023-27&r=mac |
| By: | Vivek Sharma |
| Abstract: | Using a Two-Agent RBC model with time-varying shock to loan-to-value (LTV) ratios, I show that including housing (real estate or land) in the entrepreneurial production function has profound implications for results. In a model in which housing does not play a role as a production input, an LTV tightening has starkly different effects compared to a model in which it is a factor in the production process. In a setup devoid of a role for housing as a production input, differently from the results in the current literature, an LTV tightening leads to a spike in housing price at impact and a lesser fall afterwards. Other macroeconomic variables such as investment and output fall more at lower initial LTV ratios than at higher steady state LTV ratios. The findings of this paper indicate that housing plays an important role in shaping macroeconomic effects of LTV shocks. |
| Keywords: | Loan-to-Value (LTV) Shocks, Housing in the Production Function, Macroeconomic Fluctuations |
| JEL: | E32 E44 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2023-62&r=mac |
| By: | Andres Sanchez-Jabba; Erick Villabon-Hinestroz; Bernardo Romero-Torres |
| Abstract: | The main objective of this study is to determine whether the effect of inflation expectations on inflation dynamics in Colombia depends on the measurement of this variable. For this purpose, we estimate New-Keynesian Phillips Curves measuring expectations with data from financial markets, economic surveys, and macroeconomic models. Our findings show that a one percentage point increase in financial market expectations (BEI) leads to a median increment in inflation of 0.96 percentage points, while economic survey (QSEE) and macroeconomic model (4GM) expectations yield median effects of 0.78 and 0.50 percentage points, respectively. Possible explanations for the differences in the effect of expectations on inflation relate to asymmetric losses in forecast errors, variations in forecasting costs, rigidities in information transmission, and economic modelling limitations. **** RESUMEN: El objetivo principal de este estudio es determinar si el efecto de las expectativas de inflación en la dinámica de la inflación en Colombia depende de la medición de esta variable. Para este propósito, estimamos Curvas de Phillips Neokeynesianas midiendo las expectativas con datos de mercados financieros, encuestas económicas y modelos macroeconómicos. Nuestros resultados muestran que un aumento de un punto porcentual en las expectativas del mercado financiero (BEI) conduce a un incremento medio en la inflación de 0.96 puntos porcentuales, mientras que las expectativas de encuestas económicas (QSEE) y de modelos macroeconómicos (4GM) producen efectos medios de 0.78 y 0.50 puntos porcentuales, respectivamente. Las posibles explicaciones de estas diferencias en el efecto de las expectativas en la inflación están relacionadas con pérdidas asimétricas en los errores de pronóstico, variaciones en los costos de pronóstico, rigideces en la transmisión de información y limitaciones en la modelización económica. |
| Keywords: | Inflation expectations, inflation dynamics, New-Keynesian Phillips Curve, Generalized Method of Moments, expectativas de inflación, dinámica inflacionaria, curva de Phillips neokeynesiana, método generalizado de momentos |
| JEL: | C26 D84 E12 E31 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:1257&r=mac |
| By: | NAKAJIMA, Jouchi |
| Abstract: | This study uses the Bank of Japan's Tankan (Short-Term Economic Survey of Enterprises in Japan) data to estimate the long-run time series of Japanese firms' inflation expectations since 1990. In the Tankan, the series for "consumer price inflation expectations" and "output price inflation expectations" go back to 2014, while that for "output price DI" features a longer time series. Using the relationship between these series for 2014–2022, we estimate the one-year ahead consumer price inflation expectations for 1990–2013 based on the output price DI. The firms' inflation expectations obtained are found to have information that improves forecast accuracy when forecasting consumer price inflation, which is not included in the lag in inflation or the output gap, and enhances forecast accuracy more than economists' inflation expectations. |
| Keywords: | Inflation expectations, Output price expectations, Tankan |
| JEL: | C22 E31 E37 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hituec:749&r=mac |
| By: | Gulnara Nolan (Reserve Bank of Australia); Jonathan Hambur (Reserve Bank of Australia); Philip Vermeulen (University of Canterbury, New Zealand) |
| Abstract: | We provide new evidence on the effect of monetary policy on investment in Australia using firm-level data. We find that contractionary monetary policy makes firms less likely to invest and lowers the amount they invest if they do so. The effects are similar for young and old firms, indicating that the decline in the number of young firms in Australia over time is unlikely to have weakened the effect of monetary policy. The effects are also broadly similar for smaller and larger firms. This suggests that evidence that some, particularly large, firms have sticky hurdle rates does not mean that they do not respond to monetary policy. It also suggests that overseas findings that expansionary monetary policy lessens competition by supporting the largest firms likely do not apply to Australia. We find evidence that financially constrained firms, and sectors that are more dependent on external finance, are more responsive to monetary policy, highlighting the important role of cash flow and financing constraints in the transmission of monetary policy. Finally, we find evidence that monetary policy affects firms' actual and expected investment contemporaneously, suggesting that expectations are reactive and will tend to lag over the cycle. |
| Keywords: | investment; monetary policy; financial constraints |
| JEL: | E22 E52 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:rba:rbardp:rdp2023-09&r=mac |
| By: | Yoshiki Ando; Dirk Krueger; Harald Uhlig |
| Abstract: | In this paper we study the neoclassical growth model with idiosyncratic income risk and aggregate risk in which risk sharing is endogenously constrained by one-sided limited commitment. Households can trade a full set of contingent claims that pay off depending on both idiosyncratic and aggregate risk, but limited commitment rules out that households sell these assets short. The model results, under suitable restrictions of the parameters of the model, in partial consumption insurance in equilibrium. With log-utility and idiosyncratic income shocks taking two values one of which is zero (e.g., employment and unemployment) we show that the equilibrium can be characterized in closed form, despite the fact that it features a non-degenerate consumption- and wealth distribution. We use the tractability of the model to study, analytically, inequality over the business cycle and asset pricing, and derive conditions under which our model has identical, as well as conditions under which it has lower/higher risk premia than the corresponding representative agent version of the model. |
| JEL: | D15 D31 E21 E23 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:31903&r=mac |
| By: | Olivo, Victor |
| Abstract: | The purpose of this work is to provide a detailed descriptive analysis of the hyperinflationary process that affected Venezuela between December 2017 and January 2020. The analysis is based on the approach of Cagan (1956) in the sense that it uses the criteria defined by Cagan to identify hyperinflationary episodes, and places special emphasis on the behavior of monetary factors (the supply of and demand for money) as the main direct determinants of hyperinflationary dynamics. Evidence is presented that the change in monetary dynamics through a jump in the rate of growth of the monetary base was a fundamental factor in the process of acceleration of the price level. The study also confirms that Cagan's condition of stability of the money demand was met during the hyperinflationary episode, and that the essential impulse of the hyperinflationary process was generated via expansion of the money supply and not an unstable behavior of the demand for money. |
| Keywords: | Hyperinflation, money supply, money demand, monetary base, fiscal deficit, monetary financing. |
| JEL: | E41 E51 E63 |
| Date: | 2023–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119195&r=mac |
| By: | Daria Tabashnikova (National Research University Higher School of Economics); Marina Sandomirskaia (National Research University Higher School of Economics) |
| Abstract: | We study single- and double-elimination tournaments with heterogeneous players of two types: regular players and a superstar. Players choose efforts in each match with linear costs, winning with a probability calculated with the Tullock success function. We consider several designer maximization problems: total efforts, probability of winning the strongest player, and a weighted composed function. We show that a double-elimination tournament is less profitable in most cases, except when the tournament organizer is concerned about the probability that the superstar wins the tournament. |
| Keywords: | single-elimination tournament, double-elimination tournament, tournament design, heterogeneous players, superstar |
| JEL: | C72 D47 Z20 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:263/ec/2023&r=mac |
| By: | Yanfei Li (Economic Research Institute for ASEAN and East Asia (ERIA)); Jia Zhao (Hunan University of Technology and Business); Jianjun Yan (Hunan University of Technology and Business) |
| Abstract: | Currently, major economies are competing on the technological and industrial development of fuel cell electric vehicles (FCEVs). This paper discusses the relationship between the patent value of FCEVs and the commercialisation of this technology. First, the patent data of FCEVs are analysed, focusing on data of China, Germany, Japan, the Republic of Korea, and the United States. Then, the paper constructs the FCEV patent value index framework based on the technological value and economic value of patents. Finally, this paper conducts an empirical study to analyse the influence of patent value on the development of the FCEV industry. It is found that, under the current situation, individual patent value can significantly promote the development of the FCEV industry, whilst the gross patent value of a certain country even has a negative impact. In addition, the increase of hydrogen infrastructure, research and development expenditure, and market demand will significantly promote the development of the FCEV industry. The development level of related industries such as the battery electric vehicle industry and the reduction of environmental pollution are also significant drivers of the development of FCEVs |
| Keywords: | FCEV, patent value, industry development |
| Date: | 2023–06–09 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2023-05&r=mac |
| By: | Jon D. Wisman; Michael Cauvel; Aaron Pacitti |
| Abstract: | The standard introductory course in microeconomics presents a sophisticated set of tools for understanding the dynamics of markets, which are of central importance in all contemporary societies. Unfortunately, most textbooks for this course inadequately address and frequently distort the six following issues critical to students' understanding of economic society: Work is presented negatively as providing disutility; interdependence in decision making is ignored, masking the social nature of humans; the view that economic growth be society's principal goal is uncritically embraced; and the consequences of externalities are inadequately addressed, as too are market power, and property rights. The outcome is that students are often left with the impression that unfettered markets necessarily deliver economic efficiency and just outcomes, resulting in pedagogy that serves as ideology legitimating prevailing unequal social conditions. This article is intended to help professors recognize the incomplete and unbalanced understanding offered by most microeconomics textbooks to better enable them to avoid teaching economics as ideology. |
| Keywords: | Microeconomic education, realism of assumptions, ideology, social role of microeconomics |
| JEL: | A11 A14 B40 D00 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:2023-07&r=mac |
| By: | Nilsson, Lars (DG Trade) |
| Abstract: | Preferential rules of origin (RoO) are an integral and necessary part of preferential trading arrangements, as control of the origin of the preferentially imported goods is needed to prevent trade deflection. But complying with RoO are associated with costs. These can come in the form of burden to deal with the necessary administrative requirements and in terms of increased costs of imported intermediates should the RoO lead to a distortion of sourcing of inputs. This paper matches the RoO under the EU-Canada Comprehensive Economic and Trade Agreement with the exact products they apply to, which is novel. It further provides descriptive statistics on preference eligible trade, information on the value of potential duty savings and on the associated preference utilisation rates (PUR) by RoO. The empirical part of the paper conducts a comparative analysis of the impact of the various RoO on the PUR in EU trade with Canada for the 2018-2021 period. It also examines whether the same RoO has a different impact on the PUR depending on the direction of trade (EU imports vs. EU exports) |
| Keywords: | RoO; preference utilisation rates; CETA |
| JEL: | F13 F14 |
| Date: | 2023–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:dgtcen:2023_003&r=mac |
| By: | Roll, Stephan |
| Abstract: | Over the past 10 years, the de facto alliance of the governments of Egypt, Saudi Arabia and the United Arab Emirates has exercised significant influence over developments in the Middle East. The common goal has been to prevent democratic transformation, stop the rise of political Islam and counter the influence of Iran and Turkey over the region. But joint regional political interventions have so far had little success. Moreover, divergences of interest in bilateral relations between these authoritarian Arab states have come to light in recent months. The potential for conflict has become evident with regard to both economic and regional political issues and is only likely to increase in the future. For Germany and the European Union, these divergences of interest between the three countries offer an opportunity to pursue their own goals in the region. |
| Keywords: | Egypt, Saudi Arabia, UAE, Iran, Turkey, Germany, EU, Middle East, political Islam, democratic transformation |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:swpcom:279940&r=mac |
| By: | Tanaka, Ayumu (Aoyama Gakuin University) |
| Abstract: | There has been much debate over the past 20 years about whether accession to the GATT/WTO increases trade for member countries. Previous studies have used estimation methods that do not properly consider that the timing of GATT/WTO accession varies from country to country. This study uses a recently developed staggered difference-in-differences (DiD) estimator to explore the effects of GATT/WTO accession by explicitly accounting for the timing of accession. It finds evidence that GATT/WTO accession significantly increases trade in member countries. The DiD results show that the trade promotion effect of the GATT/WTO GATT/WTO reaches 12.5--25.7% and 21.5--79.5%, 5 and 10 years after both countries' accession. |
| Date: | 2023–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:kjzyq&r=mac |
| By: | Doris Hanzl-Weiss (The Vienna Institute for International Economic Studies, wiiw); Branimir Jovanović (The Vienna Institute for International Economic Studies, wiiw); Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This issue of the wiiw Monthly Report replaces our earlier series of the wiiw FDI Report. FDI in Central, East and Southeast Europe Growing signs of bleak prospects by Olga Pindyuk and Doris Hanzl-Weiss FDI performance in CESEE significantly weakened in the first nine months of 2023, with FDI inflows decreasing year on year in most of the countries. EU-CEE experienced the sharpest contraction of FDI inflows among the subregions. Investors appear to have become more pessimistic about the region’s prospects, as indicated by the falling number of greenfield investment projects in all the subregions apart from CIS and Ukraine. In line with global trends, the renewable energy sector is gaining in importance in the FDI structure. Employment in new greenfield FDI in the Western Balkans by Branimir Jovanović Between 2010 and 2021, around 180, 000 jobs were created by new greenfield FDI projects in the Western Balkans, with manufacturing accounting for the bulk of them. About two thirds of the newly created jobs were medium skilled, with the skills intensity of the FDI-related jobs generally lower than overall for new employment in the region. This points to the importance of the careful calibration of incentives and benefits in policies to attract FDI. Forecasts of main economic indicators for Central, East and Southeast Europe for 2023-2025 |
| Keywords: | FDI inflows, greenfield investment, FDI stocks, M&As, employment |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:wii:mpaper:mr:2023-11&r=mac |
| By: | Simola, Heli |
| Abstract: | This brief examines the latest developments in Russian imports on the basis of mirror statistics. We focus particularly on technology products subject to export restrictions imposed by sanctioning coalition countries. While most Russian imports of technology products subject to sanctions fell considerably between the first half of 2021 and the first half of 2023, our analysis reveals that the value of certain imported technology products also increased substantially. Exports of these products grew dramatically particularly from Central Asia and Caucasus, but the share of these countries in Russian imports is still moderate. China was by far the most important provider of technology products to Russia in absolute terms during the observation period. |
| Keywords: | Russia, imports, sanctions |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bofitb:280400&r=mac |
| By: | Jerg Gutmann; Pascal Langer; Matthias Neuenkirch |
| Abstract: | In this first empirical analysis of how sanctions affect international migration, we apply two estimation strategies, a panel difference-in-differences model and an event study approach. Our dataset covers 79, 791 dyad-year observations, reflecting migration flows from 157 origin countries to 32 destination countries between 1961 and 2018. The data supports that UN and joint EU-US sanctions increase emigration from target countries by around 20 percent. Our event study results of joint EU-US sanctions imply a gradual increase in emigration over the course of a sanction episode. The impact of UN sanctions on international migration is smaller and less persistent. Moreover, the effects are driven by target countries with fewer political rights and civil liberties, where emigration substitutes for the costly voicing of dissent. Finally, our results do not support systematic gender differences in the effect of sanctions on migration. |
| Keywords: | Gender Differences, International Sanctions, Migration |
| JEL: | F22 F51 J16 O15 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:trr:wpaper:202311&r=mac |
| By: | Subash Sasidharan (Indian Institute of Technology (IIT), Madras); Shandre Thangavelu (Jeffrey Cheah Institute of Southeast Asia, Sunway University and Institute for International Trade, University of Adelaide) |
| Abstract: | Industrial agglomeration is an important component to create efficiency and externalities for industrial growth and competitiveness for the Indian economy. In this paper, we examine the spatial location of Indian firms and industry agglomeration at district and township level for the Indian economy. Particularly, we examine the impact of urban amenities in driving the industrial agglomeration in the Indian economy using firm-level data. We carefully control for township-level urban amenities, as well as firm level characteristics in affecting the industry agglomeration. As opposed to previous stateand district-level studies, we examine the impact of urban amenities at a more disaggregated township level for 2011. The study also examines the impact of urban amenities on manufacturing, as well as the services sector. The empirical analysis findings indicate a positive correlation between town-level disparities in industry agglomeration and various amenities, including education, healthcare, energy, transportation, finance, and cultural resources. These results remain consistent when considering alternative measures of agglomeration and conducting sub-sample analyses. |
| Keywords: | Industrial Agglomeration; Urban Amenities |
| JEL: | F15 O15 |
| Date: | 2023–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2023-14&r=mac |
| By: | Klein, Margarete; Major, Claudia |
| Abstract: | Since February 2022, Ukraine has been defending itself against yet another Russian war of aggression. Now that immediate support - military, diplomatic, financial and humanitarian - for Ukraine has improved, the country's long-term security needs to be addressed. Looking ahead, security commitments should be built on political, economic and military pillars. NATO membership is essential for Ukraine's security, but it is also in the geostrategic and normative interests of the Alliance, even if it is a risky, long-term and difficult endeavour. At the 2023 summit in Vilnius, NATO recognized that Ukraine's future is in the Alliance but remained vague about the conditions to join. Yet, other agreements announced on the margins of the summit by the G7 and individual states expand the support for Ukraine. Framed as steps to increase Ukraine's security, these should accompany the transition from current security support to future guarantees. |
| Keywords: | Ukraine, Russian war against Ukraine, security commitments, security guarantees, Ukraine’, s NATO accession, NATO, Nato, 2023 Vilnius summit, 2023 NATO summit, EU, European security, Kyiv Security Compact |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:swpcom:279936&r=mac |