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on Macroeconomics |
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Issue of 2024‒07‒22
23 papers chosen by |
| By: | Bilbiie, F. O. |
| Abstract: | THANK is a tractable heterogeneous-agent New-Keynesian model that captures analytically core micro heterogeneity channels of quantitative-HANK: cyclical inequality and risk; self-insurance, pre-cautionary saving, and realistic intertemporal marginal propensities to consume. I use it to elucidate key transmission mechanisms and dynamic properties of HANK models. Countercyclical inequality yields aggregate-demand amplification and makes determinacy with Taylor rules more stringent; but solving the forward guidance puzzle requires procyclical inequality: a Catch-22. Solutions include combining inequality with a distinct risk channel, with compensating cyclicalities; I provide evidence that disposable income inequality was procyclical in the last two, Great and COVID recessions, while risk is countercyclical. Alternative policy rules also solve the Catch-22, e.g. price-level-targeting or, in the model version with liquidity, setting nominal public debt. Optimal policy with heterogeneity features a novel inequality-stabilization motive generating higher inflation volatility—but is unaffected by risk, insofar as the target efficient equilibrium entails no inequality. |
| Keywords: | Determinacy, Forward Guidance Puzzle, Heterogeneity, Inequality, Interest Rate Rules, Liquidity, Multipliers, Optimal Monetary Policy, Risk |
| JEL: | E21 E31 E40 E44 E50 E52 E58 E60 E62 |
| Date: | 2024–06–13 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2432&r= |
| By: | International Monetary Fund |
| Abstract: | The Fijian economy has recovered strongly from the pandemic. Real GDP rebounded by around 30 percent cumulatively in 2022–23, surpassing pre-pandemic levels. Inflation has recently ticked up modestly largely due to a temporary effect of the hike in Value-Added Tax rates. Supported by the economic recovery, the fiscal deficit and debt-to-GDP ratios continued to decline but remain at elevated levels. The FY2024 (August–July) budget included significant revenue enhancing measures, partially offset by spending increases, which, on balance, are expected to reduce the fiscal deficit and debt ratios. The monetary policy stance has remained accommodative, although the Reserve Bank of Fiji has begun tightening liquidity. The banking sector is sound overall, and asset quality is improving (although still lower than pre-pandemic levels). The coalition government is developing a program of growth-enhancing reforms, particularly in the National Development Plan due in June. |
| Date: | 2024–06–10 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfscr:2024/159&r= |
| By: | Vaishali Garga; Giovanni P. Olivei; J. Christina Wang |
| Abstract: | Wage inflation remains higher than it was before the onset of the COVID-19 pandemic, raising concerns that it could hinder progress toward a return of price inflation to the Federal Reserve’s 2 percent target. The impact of wage inflation on price inflation, however, cannot be considered independently of the behavior of productivity and firms’ markups. In that context, there are scenarios in which wage inflation could stay above trend for a few more quarters without contributing to higher price inflation. |
| Keywords: | wage inflation; productivity |
| JEL: | E24 E31 E39 |
| Date: | 2024–06–27 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedbcq:98463&r= |
| By: | Angelino, Pierluigi; Czarnitzki, Dirk; Volckaert, Astrid |
| Abstract: | The Flemish government launched its Spearhead Cluster (SHC) policy in 2017. The aim is to boost strategic sectors by setting up cluster initiatives which coordinate collaborative R&D initiatives. In this paper, we analyze whether becoming a member of such a cluster initiative has an impact on the Total Factor Productivity (TFP) of the firm. We exploit firm-level data between 2013 and 2020 to estimate TFP and apply a difference-in-differences approach to assess the programs' treatment effects. We find that becoming a member of a cluster has an average positive impact on firmlevel TFP of between 1 to 4.4 percent, depending on the econometric specification. These results are the first to provide an insight into the impact of the Flemish SHC policy on productivity. |
| Keywords: | cluster associations, cluster policy, innovation policy, total factor productivity, conditional difference-in-difference |
| JEL: | D24 L25 L52 L53 O25 O38 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:300010&r= |
| By: | R. ABBAS (INSEE); N. CARNOT (INSEE); M. LEQUIEN (INSEE); A. QUARTIER-LA-TENTE (INSEE); S.ROUX (INSEE) |
| Abstract: | Avec un modèle de choix optimal d'investissement – ou d'échouage – en capital brun, émetteur de gaz à effet de serre, ou vert, sans émissions, nous décrivons les transitions optimales vers la neutralité carbone qui respectent des contraintes climatiques de type plafonds ponctuels d'émissions (Fit for 55) ou budget carbone. Nous montrons que : i) un échouage anticipé ne peut pas se produire avec des cibles ponctuelles ; ii) pour limiter le réchauffement à un niveau donné, introduire explicitement cette contrainte sous la forme d'un budget carbone restant minimise le coût économique associé, induisant un échouage initial élevé avec des budgets limités. Des plafonds d'émissions réguliers dès la première année, et choisis à partir des émissions de cette trajectoire optimale, entraînent une trajectoire proche ; iii) à cumul d'émissions donné, retarder la transition augmente les coûts et l'échouage ; iv) l'investissement total durant et après la transition est inférieur à celui de l'état initial. Tous les codes utilisés sont disponibles sous https://github.com/InseeFrLab/DT-way-to- net-zero. |
| Keywords: | transition écologique, budget carbone, neutralité carbone, capital échoué, investissements |
| JEL: | Q54 Q58 E20 C61 P18 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:nse:doctra:2024/11&r= |
| By: | Viorel Silaghi; Zobaida Alssadi; Ben Mathew; Majed Alotaibi; Ali Alqarni; Marius Silaghi |
| Abstract: | Public availability of Artificial Intelligence generated information can change the markets forever, and its factoring into economical dynamics may take economists by surprise, out-dating models and schools of thought. Real estate hyper-inflation is not a new phenomenon but its consistent and almost monotonous persistence over 12 years, coinciding with prominence of public estimation information from Zillow, a successful Mass Real Estate Estimator (MREE), could not escape unobserved. What we model is a repetitive theoretical game between the MREE and the home owners, where each player has secret information and expertise. If the intention is to keep housing affordable and maintain old American lifestyle with broad home-ownership, new challenges are defined. Simulations show that a simple restriction of MREE-style price estimation availability to opt-in properties may help partially reduce feedback loop by acting on its likely causes, as suggested by experimental simulation models. The conjecture that the MREE pressure on real estate inflation rate is correlated with the absolute MREE estimation errors, which is logically explainable, is then validated in simulations. |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2405.18434&r= |
| By: | Laila Benraiss Noailles (IRGO - Institut de Recherche en Gestion des Organisations - UB - Université de Bordeaux - Institut d'Administration des Entreprises (IAE) - Bordeaux); Olivier Herrbach (IRGO - Institut de Recherche en Gestion des Organisations - UB - Université de Bordeaux - Institut d'Administration des Entreprises (IAE) - Bordeaux); Catherine Viot (IRGO - Institut de Recherche en Gestion des Organisations - UB - Université de Bordeaux - Institut d'Administration des Entreprises (IAE) - Bordeaux) |
| Abstract: | Il a toujours été plus difficile pour les PME que pour les structures de grande taille d'être attractives auprès des candidats. Cet article se propose d'étudier les effets de la marque employeur sur l'attractivité des PME et des grandes entreprises (GE) françaises dans le secteur du numérique. L'originalité de cette recherche provient de l'intérêt qu'elle porte à la génération Z, dont certains membres ne sont pas encore entrés sur le marché du travail. Les résultats d'une étude conduite auprès des futurs salariés des entreprises du numérique issus de cette génération montrent que les leviers d'attractivité des PME diffèrent de ceux des GE. Les PME du numérique sont perçues comme des employeurs qui favorisent la créativité et l'innovation. A l'inverse, l'attractivité des GE résulte des bonnes conditions économiques |
| Keywords: | Marque employeur, Attractivité, PME, Grandes entreprises, Génération Z, Entreprises de services du numérique |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04590559&r= |
| By: | Marios Michaelides (Actus Policy Research; University of Cyprus); Peter Mueser (University of Missouri) |
| Abstract: | We examine the effects of a job-counseling program targeting Unemployment Insurance (UI) recipients in Nevada during both the Great Recession and a period characterized by a strong economy. The program reduced UI duration and improved participant employment and earnings in both periods. Effects can be partially attributed to participant exits before receiving any services (moral hazard effects) and partly to exits after receiving services (service effects). Notably, moral hazard effects appear more important during a strong economy, while the value of services is more evident during a recession. We find no evidence that the positive effects of job counseling for participants can be attributed to negative spillover effects for nonparticipants. |
| Keywords: | Job counseling, reemployment assistance, active labor market policies, unemployment, Unemployment Insurance, policy evaluation. |
| JEL: | J6 H4 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:umc:wpaper:2406&r= |
| By: | René Böheim; Thomas Horvath; Thomas Leoni; Martin Spielauer |
| Abstract: | We develop a dynamic microsimulation model to project the labor force and economic dependency ratios in the United States from 2022 to 2060, taking population projections and the large inequalities between population groups of different race/ethnicity and gender into account. We contrast policy scenarios and show the potential impact that closing the gaps in education, health, and participation rates between population subgroups can have on increasing the U.S. labor force. Our baseline projections indicate an increase of the labor force of about 27 million people by 2060, which is mainly caused by population growth. The downstream effects of removing disparities in population health and educational attainment on labor force participation can add about 10% (+2.6 million people) to our baseline projections. The potential effects of closing gaps between genders and between minority groups and the non-Hispanic White population, however, are much larger if we assume the equalization of participation rates for individuals with similar characteristics. Closing gender gaps within ethno-racial groups, for instance, can add 9.9 to 14.3 million people to the labor force. Overall, reducing disparities in labor force participation rates has the potential to more than compensate the effects of demographic aging on the economic dependency ratio. |
| JEL: | C5 J11 J21 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32590&r= |
| By: | Zhouzhou Gu; Mathieu Lauri\`ere; Sebastian Merkel; Jonathan Payne |
| Abstract: | We propose and compare new global solution algorithms for continuous time heterogeneous agent economies with aggregate shocks. First, we approximate the agent distribution so that equilibrium in the economy can be characterized by a high, but finite, dimensional non-linear partial differential equation. We consider different approximations: discretizing the number of agents, discretizing the agent state variables, and projecting the distribution onto a finite set of basis functions. Second, we represent the value function using a neural network and train it to solve the differential equation using deep learning tools. We refer to the solution as an Economic Model Informed Neural Network (EMINN). The main advantage of this technique is that it allows us to find global solutions to high dimensional, non-linear problems. We demonstrate our algorithm by solving important models in the macroeconomics and spatial literatures (e.g. Krusell and Smith (1998), Khan and Thomas (2007), Bilal (2023)). |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.13726&r= |
| By: | Justin Quinton; Glenn P. Jenkins (Department of Economics Queen’s University Canada, and Cambridge Resources International Inc.); Godwin Olasehinde-Williams (Department of Economics, Istanbul Ticaret University, Turkey) |
| Abstract: | Faced with a significant devaluation of its currency and a surge in food prices, the Nigerian government prohibited the use of foreign currency for food imports. This essentially blocked the importation of numerous food items under the guise of stimulating domestic output of these staples. Consequently, food prices in Nigeria increased despite a global decline in food prices, and the incidence and severity of food insecurity escalated. This study examines the changes in the types and severity of coping mechanisms for food insecurity resulting from the food price shock caused by the oil price crash, currency devaluation and restrictions on foreign exchange. Nigeria’s General Household Survey Panel data from 2012 and 2015, during periods of high oil prices, is compared with data from 2018 when oil prices had remained low, the currency had been devalued, and the treasury had been depleted. Alongside detailed descriptive statistics, logistic and hurdle regressions are employed for statistical analysis. Findings indicate a rise in the percentage of Nigerian households grappling with food insecurity from 2015 to 2018. During this period, 68.7% of households resorted to at least one coping mechanism, 31.8% adopted six or more coping strategies, and 43.2% resorted to severe coping strategies. The issue stems not primarily from natural disasters or conflicts but from a failure in macroeconomic and agricultural economic policies. Our findings confirm that these policies come at great cost, particularly to female-headed households, single-parent households, households headed by elderly people, and other vulnerable populations, pushing them deeper into food insecurity. |
| Keywords: | Food insecurity, Nigeria, Oil price, Economic shock, Food policy |
| JEL: | Q17 D10 E2 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:qed:wpaper:1520&r= |
| By: | Annika Nivala (VATT Institute for Economic Research) |
| Abstract: | Finland had a large regional wage subsidy for hiring the first employee in 2007–2011. In this paper, I show that the take-up of the subsidy was very low: only 2% firms that became employers used the subsidy. The subsidy was restricted to hiring a full-time employee, which reduced the take-up. However, even among full-time employers the take-up rate was only 6%. Hence, a large majority of firms left thousands of euros on the table by not using the subsidy. Based on the descriptive evidence, the low take-up seems to be explained by low awareness in addition to costs of using the subsidy. Using a regional difference-in-differences identification strategy, I estimate the effect of the subsidy on the probability of becoming an employer and other firm outcomes. As a consequence of the low take-up, the estimated effect is zero. |
| Keywords: | Business subsidies, Wage subsidies, Firm behavior, Labor demand, Entrepreneurship, Small Business |
| JEL: | H25 H32 J23 J38 M51 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:fit:wpaper:23&r= |
| By: | Behn, Markus; Cornacchia, Wanda; Forletta, Marco; Jarmulska, Barbara; Perales, Cristian; Ryan, Ellen; Serra, Diogo; Tereanu, Eugen; Tumino, Marcello; Abreu, Daniel; Ciampi, Francesco; Ciocchetta, Federica; Drenkovska, Marija; Fritz, Benedikt; Geiger, Sebastian; Melnychuk, Mariya; Meusel, Steffen; Reginster, Alexandre; Rychtárik, Štefan; Vilka, Ilze; Virel, Fleurilys |
| Abstract: | The 2019 revision to the Capital Requirements Directive allowed the systemic risk buffer to be applied on a sectoral basis in the European Union. Since then an increasing number of countries have implemented the new tool, primarily to address vulnerabilities in the residential real estate sector. To inform and foster a consistent understanding and application of the buffer, this paper proposes two specific methodologies. First, an indicator-based approach which provides an aggregate measure of cyclical vulnerabilities in the residential real estate sector and can signal a potential need to activate a sectoral buffer to address them. Second, a model-based approach following a stress test rationale simulating mortgage loan losses under adverse conditions, which can be used as a starting point for calibrating a sectoral buffer. Besides these methodological contributions, the paper conceptually discusses the interaction between the sectoral buffer and other prudential requirements and instruments, ex ante and ex post policy impact assessment, and factors guiding the possible release of the buffer. Finally, the paper considers possible future applications of sectoral buffer requirements for other types of sectoral vulnerabilities, for example in relation to commercial real estate, exposures to non-financial corporations or climate-related risks. JEL Classification: G21, G28 |
| Keywords: | banks, capital buffers, financial stability, macroprudential policy |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbops:2024352&r= |
| By: | \'Alvaro Romaniega |
| Abstract: | This brief note explores the theoretical justification for some approximations of arithmetic forwards ($F_a$) with weighted averages of overnight (ON) forwards ($F_k$). The central equation presented in this analysis is: \begin{equation*} F_a(0;T_s, T_e)=\frac{1}{\tau(T_s, T_e)}\sum_{k=1}^K \tau_k \mathcal{A}_k F_k\, , \end{equation*} with $\mathcal{A}_k$ being explicit model-dependent quantities that, under certain market scenarios, are close to one. We will present computationally cheaper methods that approximate $F_a$, i.e., we will define some $\{\tilde{\mathcal{A}}_k\}_{k=1}^K$ such that \begin{equation*} F_a(0;T_s, T_e)\approx \frac{1}{\tau(T_s, T_e)}\sum_{k=1}^K \tilde{\mathcal{A}}_k \tau_k F_k\, . \end{equation*} We also demonstrate that one of these forms can be closely aligned with an approximation suggested by Katsumi Takada in his work on the valuation of arithmetic averages of Fed Funds rates. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.09488&r= |
| By: | International Monetary Fund |
| Abstract: | Growth decelerated to 1.7 percent in 2023 from 4.2 percent in 2022 but has proven resilient despite ongoing headwinds, such as spillovers from the war in Ukraine and from the economic slowdown in Europe. Inflation has moderated from 17.4 percent in October 2022 to 6 percent, on average, in 2023, but wage pressures linger due to minimum wage increases and emigration. The fiscal balance deteriorated from a surplus of 0.9 percent in 2022 to a deficit of 1.7 percent in 2023, reflecting the accumulated impact of several permanent increases in public wages and social benefits. Progress on structural reforms remains limited, although EU accession talks appear to have sparked some reform ambition. |
| Date: | 2024–06–20 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfscr:2024/175&r= |
| By: | Aidt, Toke; Asatryan, Zareh; Badalyan, Lusine |
| Abstract: | Many governments operate consumer debt relief programs, often timed to match the election cycle, but their political effects are not well understood. We ask if debt relief can influence elections in democracies. Our motivating exercise is the Biden administration's promise to relieve student debt. We utilize quasi-experimental variation generated by another very large debt relief program enacted in the Republic of Georgia that, similar to USA, affected every sixth voter. We estimate that the program helped the incumbent candidate win that election, and that its effects persisted. Overall, we show how economic power can translate into political power in democracies. |
| Keywords: | Consumer debt relief, US student debt, distributive politics, vote buying, elections |
| JEL: | G51 D72 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:300009&r= |
| By: | Jonathan G. Conzelmann (The University of North Carolina at Chapel Hill); Steven W. Hemelt (The University of North Carolina at Chapel Hill); Brad J. Hershbein (W.E. Upjohn Institute for Employment Research); Shawn M. Martin (University of Michigan); Andrew Simon (The University of Chicago and Australian National University Research School of Economics); Kevin M. Stange (University of Michigan) |
| Abstract: | How does postsecondary human capital investment respond to changes in labor market skill demand? We quantify the magnitude and nature of this response in the U.S. 4-year sector. To do so, we develop a new measure of institution-major-specific labor demand, and corresponding shift-share instrument, that combines job ads with alumni locations. We find that postsecondary human capital investments meaningfully respond. We estimate elasticities for degrees and credits centered around 1.3, generally increasing with time horizon. We provide evidence that both student demand and institutional supply-side constraints matter. Our findings illuminate the nature of educational production in higher education. |
| Keywords: | labor demand, skill demand, college major, educational investment |
| JEL: | J23 J24 I23 |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:upj:weupjo:24-400&r= |
| By: | Poschacher, Gerhard |
| Abstract: | Die Gründung der Österreichischen Gesellschaft für Agrarökonomie, für die sich Hans Karl Wytrzens als langjähriger Geschäftsführer und Präsident große Verdienste erworben hat, fällt in eine Zeit, in der die Fehlentwicklungen einer stark auf Wachsen oder Weichen ausgerichteten Agrarpolitik mit Überschüssen, einseitigen Fruchtfolgen und zunehmenden Umwelt- und Bodenschäden immer deutlicher sichtbar wurden und eine ökologische Neuorientierung notwendig machten. Der wachsende politische Einfluss von Umweltgruppen und der Einzug der Grünen in den Nationalrat (1986) sowie die Regierungsbeteiligung der Grünen in Deutschland mit Renate Künast als Bundesministerin für Ernährung, Landwirtschaft und Verbraucherschutz (2001 2005) haben das ökologische Bewusstsein in der Gesellschaft für Biodiversität, Bodenschutz und Tierwohl gestärkt und Reformen in der Gemeinsamen Agrarpolitik der EU (GAP) mit einer stärkeren Ausrichtung auf die ländliche Entwicklungsstrategie mehr Klasse und weniger Masse sowie die Unterstützung des Biolandbaus befeuert. Mit dem "Manifest für die Ökosoziale Agrarpolitik in Österreich" von Josef Riegler (1988) wurde in Österreich die Agrarwende auf den Ackerflächen mit verstärktem Anbau von Öl- und Eiweißpflanzen und der Erarbeitung von Förderungsmaßnahmen für den biologischen Landbau erfolgreich eingeleitet. Die Erkenntnisse der Agrarwissenschaften fanden immer mehr Berücksichtigung für die Gestaltung der GAP und haben wesentlich die einschneidenden Reformen 2003 mit der Entkoppelung der Direktzahlungen von der Produktion bis zur "Grünen Architektur" (European Green Deal) 2023 beeinflusst. |
| Keywords: | Landwirtschaft, Wissenschaft-Politik-Interaktion, Österreich 1990-2024 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:inwedp:298006&r= |
| By: | Anthony McDonnell (Center for Global Development); Ranil Dissanayake (Center for Global Development); Katherine Klemperer (Center for Global Development); Flavio Toxvaerd (University of Cambridge); Michael Sharland (St. George’s, University of London) |
| Abstract: | Antibiotic resistance (ABR) is a major challenge that already contributes to almost five million deaths per year. Without action, this number will likely rise substantially. In this paper, we provide the first comprehensive assessment of the economic drivers of ABR, arguing that ABR in large part arises from extensive unresolved market (and regulatory) failures on both the supply and demand side. Each of these failures is well-understood from other contexts in economics. Specifically, ABR is a common pool problem that arises from too-rapid depletion of the stock of working antibiotics and insufficient replenishment with new antibiotics. We identify specific unresolved failures in the market for antibiotic innovation, in pricing structures that undermine its insurance function and in the production of known antibiotics on the supply side. We also identify failures on the demand side, including an underinvestment in preventative action, mismatch problems in the market for human antibiotic use and un-internalised negative externalities in pharmaceutical production and agriculture. We conclude by briefly considering how to resolve these market failures. |
| Date: | 2024–02–22 |
| URL: | https://d.repec.org/n?u=RePEc:cgd:wpaper:682&r= |
| By: | Bayerlein, Michael; Böttcher, Miranda; Rudloff, Bettina; Villarreal, Pedro A. |
| Abstract: | In the European summer of 2027, the world faces a threat, not only to human health but also to biological diversity and food security. An alarming scenario is emerging: The rapidly thawing permafrost in the Russian tundra has released an unknown form of anthrax that is primarily transmitted by birds. European efforts to collaborate with Russia in combating the spread of this pathogen are being met with resistance. |
| Keywords: | pathogens, permafrost, climate change, anthrax, Russia, global health, health threats, global health governance architecture |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swpcom:299529&r= |
| By: | Böhl Gutierrez, Mauricio; Vega Araújo, José; Arond, Elisa |
| Abstract: | This policy brief addresses the critical issue of phasing out diesel subsidies in Colombia and underscores the urgent need for coordinated action and strategic planning. The Colombian government views the subsidy phase-out as part of its energy transition strategy, proposing investments in carbon-neutral technologies as a replacement. However, the transport sector - the main consumer of diesel - largely considers these plans inadequate and is sceptical about their feasibility. Subsidies for diesel and gasoline, stemming from the Fuel Price Stabilisation Fund (FEPC), burden the Colombian budget with a significant deficit and threaten Colombia's fiscal sustainability. In 2022, subsides represented 2.5 per cent of the national gross domestic product (GDP). A failed subsidy phase-out could undermine the country's energy transition efforts, potentially leading to national strikes by the transport sector and eroding trust in the government's transformation plan. The brief examines the hurdles for the diesel subsidy phase-out process, with a particular focus on the necessary reforms within the transport sector, scepticism about the government's energy transition plans and the potential negative effects for state-owned enterprise Ecopetrol. Drawing from these insights, the policy brief distils policy recommendations for the short and medium term. In the concluding remarks, it stresses that a failed subsidy phase-out could jeopardise broader energy transition efforts. Recommendations for the national government (see p. 5 for more details): Short term - 1. Re-initiate stakeholder meetings on the phase-out promptly, with the Ministry of Transport taking the lead and involving additional key stakeholders such as clients of the transport sector, the Ministries of Social Prosperity, Environment, and Labour, as well as the National Planning Department. 2. Collaborate with these stakeholders to develop an action plan, incorporating support measures for the transport sector such as improving energy efficiency and coordination between the transport companies. 3. Create specific social programmes aimed at mitigating socioeconomic effects, using the Participatory Guarantee System (SPG) and strengthening the System for the Identification of Potential Beneficiaries of Social Programmes (Sisbén). Medium term - 4. Review the objectives and strategies of national planning documents to accurately reflect the circumstances of self-employed truckers. These should consider reallocating funds from subsidies to supplement the existing Vehicle Fleet Replacement Fund (Fondo de Reposición del Parque Automotor). 5. Restructure the transport sector to enhance resilience and promote investment in sustainability. For instance, explore the model of cooperatives in the Colombian passenger transport sector, which enables truckers to maintain autonomy while mitigating investment risks. 6. Explore strategic partnerships between Colombian and foreign private-sector entities with experiences incorporating sustainable and responsible practices, academia and research institutions, and development agencies that have an interest in the Colombian energy transition process to expedite the transition to more sustainable technologies in the transport sector. |
| Keywords: | Fossil Fuel, Subsidy Phase-Out, Diesel, Energy Transition, Colombia, Transport Sector, Political Economy, Just Transition, Hydrogen, Socioeconomic Effects |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:idospb:299532&r= |
| By: | Gambato, Jacopo |
| Abstract: | I analyze a model of directed search in which a consumer inspects a finite number of products sharing attributes with each others. The consumer discovers her valuation for the attributes of the inspected products and adapts her search strategy based on what she has learned. The consumer anticipates the optimal paths that arise after different realizations; this generates a search rule that accounts for learning systematically. In this search environment, a multiproduct seller commits to a menu of horizontally differentiated products. The seller can exploit the fact that the emerging search paths reveal the consumer's preferences: by setting different prices for ex ante identical products, the seller can encourage specific paths to arise and exploit the information that the consumer learned through search. In some cases, the seller optimally limits the set of available products. |
| Keywords: | consumer search, directed search, learning, multiproduct monopoly, pricing, product portfolio |
| JEL: | D42 D83 L12 L15 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:300012&r= |
| By: | Cavallo, Eduardo A.; Cepeda, Ana; Panizza, Ugo |
| Abstract: | This paper studies the interplay between environmental performance and financial valuation of firms in Latin America and the Caribbean. We provide insights into how environmental considerations are integrated into financial decision-making and investor behavior by analyzing the stock market reaction to environmental news of firms with different levels of carbon emission intensity. We find that high emission intensity firms tend to underperform after the release of environmental damage news. Our baseline estimates indicate that, after the release of such news, firms at the 75th percentile of the distribution of emission intensity experience stock returns that are 17% lower than those of firms at the 25th percentile of the distribution of emission intensity. These results suggest that investors care about and price carbon risk, but only when this risk is salient. |
| Keywords: | Carbon emissions;climate change;Environmental news;Stock returns |
| JEL: | G12 G14 G18 G32 G38 Q54 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:13537&r= |