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on Macroeconomics |
| By: | Jing Lian Suah |
| Abstract: | The unemployment rates (u-rates) of 19 economies (10 advanced and 9 emerging) demonstrate properties consistent with the plucking model. That the amplitude of expansions and subsequent contractions are unrelated, but that the deeper the contraction, the greater the subsequent expansion. The plucking model, which suggests that the u-rate hovers at or above a theoretical floor, has implications for the unemployment-inflation trade-off as well as shock propagation mechanisms, including the effects of policy shocks. This paper does three things. First, building on existing empirics, it demonstrates a straightforward way to estimate the u-rate floor based on identified peaks in the business cycle and interpolation methods. Second, it analyses the empirical relationship between the u-rate and core inflation, and the effect of a binding u-rate floor on this. Third, it analyses the threshold effects of the u-rate gap on the propagation of macroeconomic shocks, with special attention given to interest rates, using a threshold panel local projections model. The paper finds that: (i) the u-rate hovers at or above the floor and converges towards the floor after each downturn; (ii) the relationship between core inflation and the u-rate weakens when the u-rate is further from the floor; and (iii) the propagation of interest rate, price and output shocks display threshold effects, while exchange rate and debt shocks do not. |
| Keywords: | plucking model, unemployment rate, nonlinear Phillips curve, threshold effects |
| JEL: | E24 E31 E32 E52 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:1159&r=mac |
| By: | Dr. Indrani Manna (Director, Foreign Exchange Department of the Reserve Bank of India.); Dr. Martin Suster (Council Member, Council for Budget Responsibility, Bratislava, Slovakia.); Dr.Biswajit Banerjee (Expert Policy Advisor to the Governor, National Bank of Slovakia; and Professor of Economics, Ashoka University) |
| Abstract: | By incorporating a data generating process for house price expectations in a standard new keynesian DSGE model, this paper differentiates between the macroeconomic impact of endogenous and exogenous sources of expectation shocks and the role of fiscal and macroprudential policy (in the absence of monetary policy) in managing these shocks in the housing market. The paper concludes that endogenous shocks pre-dominate exogenous shocks to expectations in home prices in accelerating credit growth and household indebtedness. But endogenous shocks can still be accredited with ’good housing booms’ tag as they raise the ability to pay-off rising debt significantly. In terms of policy, the paper finds that loan-to-value ratios score over payment to income ratios as a potent macroprudential instrument to manage housing market dynamics as constraint switching is limited in case of LTV because of an expectations sensitive factor market. Macroprudential instruments set as a function of household debt to GDP ratio reinforce the transmission channels and turn out to be counterproductive in case of endogenous shocks but effective in managing exogenous shocks. The paper also finds that property tax can be potential instrument to arrest rising home prices but it works effectively in coordination with other policies. We also show that endogenous refinancing decisions of households can be effectively used as a channel for transmission of monetary and macroprudential policy through timely coordination of two policies. |
| Keywords: | Monetary policy; Expectations; Macroprudential Measures; Loan-tovalue; Payment-to-income; Housing tax; DSGE |
| Date: | 2022–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:ash:wpaper:88&r=mac |
| By: | Sarah Arndt; Zeno Enders |
| Abstract: | We show that the impact of supply and monetary policy shocks on consumer prices is state-dependent. First, we let the data determine two inflation regimes and find that they are characterized by high and low inflation volatility. We then identify upstream supply shocks using instrumental variables based on data outliers in the producer price series. Such shocks exhibit a more substantial and more persistent effect on downstream prices during periods of elevated inflation volatility (State 2) compared to phases of more stable consumer price growth (State 1). Similarly, monetary policy shocks are more effective in State 2. Exogenously differentiating regimes by the level of inflation or the shock size does not reveal state dependency. The evidence supports a model in which producers invest in price flexibility. This model predicts that stricter inflation targeting reduces price flexibility and, consequently, the pass-through of all shocks to inflation, beyond the standard channel that affects demand. |
| Keywords: | inflation regimes, supply shocks, monetary policy, cost pass-through, producer prices |
| JEL: | E31 E52 E32 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10839&r=mac |
| By: | Czudaj, Robert L. |
| Abstract: | This paper studies expectation formation of professional forecasters in the context of the Phillips curve. We assess whether professionals form their expectations regarding inflation and unemployment consistent with the Phillips curve based on individual forecast data taken from the ECB Survey of Professional Forecasters. We consider expectations over different horizons and do not restrict the analysis to point forecasts but we also take the information inherent in density forecasts into account. We explicitly consider the role of anchoring of inflation expectations as potential source of nonlinearity and we also assess whether the Phillips curve relation translates to a link between uncertainty regarding inflation and unemployment. Our findings show that professionals tend to build their expectations in line with the Phillips curve but this is only observed for expectations made for shorter horizons (one- or two-years-ahead). For longer horizons (five-years-ahead) the Phillips curve connection is much weaker. This relationship also depends on the degree of anchoring and results in a connection between uncertainty regarding future inflation and unemployment. |
| Keywords: | Anchoring; Inflation expectations; Phillips curve; Uncertainty; Unemployment |
| JEL: | E24 E31 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119478&r=mac |
| By: | Antón Sarabia Arturo; Bazdresch Santiago; Lelo-de-Larrea Alejandra |
| Abstract: | This paper evaluates the influence of central bank's projections and narrative signals provided in the summaries of its Inflation Report on the expectations of professional forecasters for inflation and GDP growth in the case of Mexico. We use the Latent Dirichlet Allocation model, a text-mining technique, to identify narrative signals. We show that both quantitative and qualitative information have an influence on inflation and GDP growth expectations. We also find that narrative signals related to monetary policy, observed inflation, aggregate demand, and inflation and employment projections stand out as the most relevant in accounting for changes in analysts' expectations. If the period of the COVID-19 pandemic is excluded, we still find that forecasters consider both types of information for their inflation expectations. |
| Keywords: | Central bank projections;Economic forecasting;Machine learning;Text mining |
| JEL: | E52 E58 C55 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2023-21&r=mac |
| By: | Oleg Itskhoki; Dmitry Mukhin |
| Abstract: | We develop a general policy analysis framework for an open economy that features nominal rigidities and financial frictions giving rise to endogenous PPP and UIP deviations. The efficient allocation can be implemented with monetary policy closing the output gap and FX interventions eliminating UIP deviations. When the “natural” real exchange rate is stable, both goals can be achieved solely by monetary policy that fixes the exchange rate — an open-economy divine coincidence. More generally, optimal policy features a managed float/crawling peg complemented with FX forward guidance and macroprudential accumulation of FX reserves, in line with the “fear of floating” observed in the data. Capital controls are not necessary to achieve the frictionless allocation, but they facilitate the extraction of rents in the currency market. Constrained unilateral policies are not optimal from the global perspective, and international cooperation features a complementary use of FX interventions across countries. |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10837&r=mac |
| By: | Jean-Paul L'Huillier; Gregory Phelan |
| Abstract: | Not in standard models. With conventional pricing frictions, imposing a flat Phillips curve also imposes a price level that is rigid with respect to supply shocks. In the New Keynesian model, price markup shocks need to be several orders of magnitude bigger than other shocks in order to fit the data, leading to unreasonable assessments of the magnitude of the increase in costs during inflationary episodes. To account for the facts, we propose a strategic microfoundation of shock-dependent price stickiness: prices are sticky with respect to demand shocks but flexible with respect to supply shocks. This friction is demand-intrinsic, in line with narrative accounts for the imperfect adjustment of prices. Firms can credibly justify a price increase due to a rise in costs, whereas it is harder to do so when demand increases. Inflation from supply shocks is efficient and does not justify a monetary policy response. |
| Keywords: | cost-push shocks; shock dependence; price stickiness; output-inflation trade-off |
| JEL: | E31 E52 E58 |
| Date: | 2023–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwq:97528&r=mac |
| By: | Davide Rizzo (UniLaSalle, INTERACT - Innovation, Territoire, Agriculture et Agro-industrie, Connaissance et Technologie - UniLaSalle); Fatma Fourati-Jamoussi (UniLaSalle, INTERACT - Innovation, Territoire, Agriculture et Agro-industrie, Connaissance et Technologie - UniLaSalle); Lucian Ceapraz (UniLaSalle, INTERACT - Innovation, Territoire, Agriculture et Agro-industrie, Connaissance et Technologie - UniLaSalle); Mariia Ostapchuk (UniLaSalle, INTERACT - Innovation, Territoire, Agriculture et Agro-industrie, Connaissance et Technologie - UniLaSalle); Hanitra Randrianasolo (UniLaSalle, INTERACT - Innovation, Territoire, Agriculture et Agro-industrie, Connaissance et Technologie - UniLaSalle); Anne Combaud (UniLaSalle, INTERACT - Innovation, Territoire, Agriculture et Agro-industrie, Connaissance et Technologie - UniLaSalle); Michel J.-F. Dubois (UniLaSalle, INTERACT - Innovation, Territoire, Agriculture et Agro-industrie, Connaissance et Technologie - UniLaSalle) |
| Abstract: | The paper explores novel connections between human and technology-driven innovation in a French agritech cluster. It focuses on the whole system innovation and addresses specifically the impact of digitalisation related to precision agriculture deployment. The cluster under investigation has been settled by the Beauvaisis municipalities' agglomeration. It comprises interactions between local authorities, firms and knowledge institutions. The analysis covers various perspectives of the stakeholders' interactions and the role of intermediary actors and introduces the concept of the floating prescriber. The early results and the following analyses will contribute to highlighting the way an ecosystem (a cluster) is developed around the issue of digital technologies and sustainable agriculture. |
| Keywords: | Agriculture, Technologie, Innovations soutenables |
| Date: | 2023–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04295987&r=mac |
| By: | Yansong Li; Zhenliang Liu; Yuqian Wang; Edmund Derrington; Frederic Moisan (EM - emlyon business school); Jean-Claude Dreher |
| Abstract: | "There is growing evidence that risky cooperation is regulated by the experience of previous interactions with others. However, it is unclear how the evaluation of outcomes from competitive interactions can affect individuals' subsequent cooperative behavior. To address this issue, we examined how participants cooperated with a partner having just competed with them. While competing, participants (N = 164) were randomly assigned to receive one of four types of outcome feedback regarding their performance (victory vs. defeat vs. uncertain vs. no competition (control)). We found that both the experience of defeats and of uncertainty as competitive outcomes exerted a negative impact on the extent to which participants then engaged in cooperative behavior with their recent opponents. This only occurred when such subsequent cooperative behavior involved a high potential for incurring personal costs but not when there was no risk of incurring personal costs and a positive return. Finally, mediation analysis revealed that the effect of defeat was mediated by participants' level of interpersonal trust and the extent to which participants were willing to cooperate, while the effect of the uncertain competitive outcome was mediated only by the extent to which participants were willing to cooperate. These findings offer novel insights into how risky cooperation is modulated by previous competition." |
| Date: | 2023–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04325682&r=mac |
| By: | Hafsa Toujgani (EREN [CRESS - U1153 / UMR_A 1125] - Nutritional Epidemiology Research Team | Equipe de Recherche en Epidémiologie Nutritionnelle - Université Sorbonne Paris Nord - CRESS (U1153 / UMR_A 1125) - Centre for Research in Epidemiology and Statistics | Centre de Recherche Épidémiologie et Statistiques - CNAM - Conservatoire National des Arts et Métiers [CNAM] - HESAM - HESAM Université - Communauté d'universités et d'établissements Hautes écoles Sorbonne Arts et métiers université - USPC - Université Sorbonne Paris Cité - INSERM - Institut National de la Santé et de la Recherche Médicale - UPCité - Université Paris Cité - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Joséphine Brunin (ADEME - Agence de l'Environnement et de la Maîtrise de l'Energie); Elie Perraud; Benjamin Allès; Mathilde Touvier; Denis Lairon; François Mariotti; Philippe Pointereau (Solagro - Solagro, 75, Voie TOEC, CS 27608, F-31076 Toulouse Cedex 3, France); Julia Baudry; Emmanuelle Kesse- Guyot (EREN [CRESS - U1153 / UMR_A 1125] - Nutritional Epidemiology Research Team | Equipe de Recherche en Epidémiologie Nutritionnelle - Université Sorbonne Paris Nord - CRESS (U1153 / UMR_A 1125) - Centre for Research in Epidemiology and Statistics | Centre de Recherche Épidémiologie et Statistiques - CNAM - Conservatoire National des Arts et Métiers [CNAM] - HESAM - HESAM Université - Communauté d'universités et d'établissements Hautes écoles Sorbonne Arts et métiers université - USPC - Université Sorbonne Paris Cité - INSERM - Institut National de la Santé et de la Recherche Médicale - UPCité - Université Paris Cité - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Date: | 2023–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04350853&r=mac |
| By: | Alexandre Mathieu (SOURCE - SOUtenabilité et RésilienCE - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines - IRD [France-Nord] - Institut de Recherche pour le Développement); Loïc Pian (SOURCE - SOUtenabilité et RésilienCE - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines - IRD [France-Nord] - Institut de Recherche pour le Développement); Madina Ba (SOURCE - SOUtenabilité et RésilienCE - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines - IRD [France-Nord] - Institut de Recherche pour le Développement); Ephigénie Mackane Madioune (SOURCE - SOUtenabilité et RésilienCE - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines - IRD [France-Nord] - Institut de Recherche pour le Développement); Lenaïg Moign (SOURCE - SOUtenabilité et RésilienCE - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines - IRD [France-Nord] - Institut de Recherche pour le Développement); Léon N'Da (SOURCE - SOUtenabilité et RésilienCE - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines - IRD [France-Nord] - Institut de Recherche pour le Développement); Mouhamadou Mansour Nguirane (SOURCE - SOUtenabilité et RésilienCE - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines - IRD [France-Nord] - Institut de Recherche pour le Développement); Miahy Ny Fanantenana Randriantseheno (SOURCE - SOUtenabilité et RésilienCE - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines - IRD [France-Nord] - Institut de Recherche pour le Développement); Yanis Rihi (SOURCE - SOUtenabilité et RésilienCE - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines - IRD [France-Nord] - Institut de Recherche pour le Développement) |
| Abstract: | Between 2022 and 2023, UMI SOURCE underwent a significant transformation in doctoral integration, aimed at enhancing cooperation and equity between its Northern and Southern branches. This document provides an assessment of these dynamics, highlighting the initial challenges, adopted strategies, and achieved successes. Initiatives such as monthly inter-branch workshops, the adoption of collaborative platforms, and the establishment of the Working Group on Doctoral Disparities and Inequalities (GTDID) have contributed to better integrating doctoral candidates and promoting collaborative and equitable research. Although there is still a path to tread, these actions have helped to overcome some initial reluctances related to cultural and geographical diversity, paving the way for new collaborations and joint research endeavors. |
| Abstract: | Entre 2022 et 2023, l'UMI SOURCE a entrepris une transformation significative dans l'intégration doctorale, visant à améliorer la coopération et l'équité entre ses antennes du Nord et des Suds. Ce document présente un bilan de ces dynamiques, mettant en lumière les défis initiaux, les stratégies adoptées, et les succès obtenus. Les initiatives telles que les ateliers mensuels inter-antennes, l'appropriation de plateformes d'échanges, et la création du Groupe de Travail sur les Disparités et les Inégalités Doctorales (GTDID) ont contribué à proposer une meilleure intégration des doctorants et à promouvoir une recherche collaborative et équitable. Même si du chemin reste à parcourir, ces actions ont permis de surmonter quelques réticences initiales liées à la diversité culturelle et géographique, ouvrant la voie à de nouvelles collaborations et recherches communes. |
| Keywords: | Doctoral Integration, North-South Dialogue, Academic Equity, Doctoral Inequalities, Intégration doctorale, Dialogue Nord-Sud, Equité académique, Inégalités doctorales |
| Date: | 2023–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04336522&r=mac |
| By: | G. Pino; M. Nieto Garcia; A. Peluso; G. Viglia; R. Filieri (Audencia Business School) |
| Abstract: | Peer-to-peer (P2P) rental service platforms-i.e., platforms where owners of private possessions (e.g., houses) lend them to other people-often deliver appeals that encourage platform users to contribute to prosocial causes (e.g., through charitable donations). Although many users are skeptical about such appeals, this research argues that exposing users to "virtuous" lenders-i.e., lenders who convey ethicality and unselfishness through their profile descriptions-elicits positive reactions to the above-mentioned appeals. Three experimental studies demonstrate that this occurs because users' perception of a lender's virtuousness extends to the platform and facilitates a belief that it is genuinely committed to prosocial causes. This perception, in turn, enhances users' willingness to engage in charitable giving. However, the beneficial effect of virtuous lenders vanishes when users exhibit high moral disengagement. P2P platforms are, therefore, advised to rely on virtuous lenders and strengthen users' moral principles to increase the persuasiveness of their prosocial appeals. |
| Abstract: | Peer-to-peer (P2P) rental service platforms—i.e., platforms where owners of private possessions (e.g., houses) lend them to other people—often deliver appeals that encourage platform users to contribute to prosocial causes (e.g., through charitable donations). Although many users are skeptical about such appeals, this research argues that exposing users to "virtuous" lenders—i.e., lenders who convey ethicality and unselfishness through their profile descriptions—elicits positive reactions to the above-mentioned appeals. Three experimental studies demonstrate that this occurs because users' perception of a lender's virtuousness extends to the platform and facilitates a belief that it is genuinely committed to prosocial causes. This perception, in turn, enhances users' willingness to engage in charitable giving. However, the beneficial effect of virtuous lenders vanishes when users exhibit high moral disengagement. P2P platforms are, therefore, advised to rely on virtuous lenders and strengthen users' moral principles to increase the persuasiveness of their prosocial appeals. |
| Keywords: | Peer-to-peer platforms prosocial behavior donation efficacy charitable giving virtuous lenders, Peer-to-peer platforms, prosocial behavior, donation efficacy, charitable giving, virtuous lenders, Prosocial behavior, Donation efficacy, Charitable giving, Virtuous lenders |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04248928&r=mac |
| By: | DOMNICK Clemens (European Commission - JRC); HERVAS SORIANO Fernando (European Commission - JRC); GAVIGAN James (European Commission - JRC); MONCADA PATERNO' CASTELLO Pietro (European Commission - JRC); RENTOCCHINI Francesco (European Commission - JRC) |
| Abstract: | This Brief gives a short EU policy contextualisation of “Industrial innovation for Open Strategic Autonomy – leaving no one and no place behind’’ followed by a digest of the results of CONCORDi 2023 conference (Oct. 24-26, 2023) on the same subject. It focusses on policy relevance, drawing on new scientific evidence, insights and recommendations highlighting some of the policy challenges ahead. The content of this document – original for its comprehensive and new science-to-policy handling of the topic - reinforces the messages related to Open Strategic Autonomy of recent Communications of the Commission. Main hilights arising form this Brief are: a) Industrial Innovation as a pillar of industrial policy is central to achieving Open Strategic Autonomy (OSA); 2) In pursuing OSA, social and territorial cohesion should be integrated into industrial innovation policy; 3) Institutional capacities as well as quality and good governance are crucial to OSA; 4) More research and cooperation between practitioners and scientists is needed to underpin and monitor OSA. |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc136221&r=mac |