|
on Macroeconomics |
| By: | Joachim Jungherr; Matthias Meier; Timo Reinelt; Immo Schott |
| Abstract: | We provide novel empirical evidence that firms’ investment is more responsive to monetary policy when a higher fraction of their debt matures. In a heterogeneous firm New Keynesian model with financial frictions and endogenous debt maturity, two channels explain this finding: (1.) Firms with more maturing debt have larger roll-over needs and are therefore more exposed to fluctuations in the real interest rate (roll-over risk). (2.) These firms also have higher default risk and therefore react more strongly to changes in the real burden of outstanding nominal debt (debt overhang). Unconventional monetary policy, which operates through long-term interest rates, has larger effects on debt maturity but smaller effects on output and inflation than conventional monetary policy. |
| Keywords: | Monetary policy; Investment; Corporate debt; Debt maturity |
| JEL: | E32 E44 E52 |
| Date: | 2024–12–06 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgif:1402 |
| By: | Knut Are Aastveit (Norges Bank); Jamie Cross (Melbourne Business School); Francesco Furlanetto (Norges Bank); Herman K van Dijk (Erasmus University Rotterdam, Tinbergen Institute, Norges Bank) |
| Abstract: | The Fed's policy rule shifts during different phases of the business cycle, particularly in relation to monetary easing and tightening phases. This finding is established through a dynamic mixture model, which estimates regime-dependent Taylor-type rules using US quarterly data from 1960 to 2021. This approach supports partitioning the data into two regimes corresponding to business cycle phases, closely linked to monetary easing and tightening. The estimated policy rule coefficients differ in two key ways between the regimes: the degree of gradualism is significantly higher during normal times than during recessions, when rates are typically cut; and the output gap coefficient is higher in the recessionary regime than in the normal regime. Notably, the estimate of the inflation coefficient satisfies the Taylor principle in both regimes. These results are further strengthened when using real-time data. |
| Keywords: | Monetary policy, Taylor rules, mixed distributions, regime-switching |
| Date: | 2024–12–12 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20240074 |
| By: | Radhika Pandey (National Institute of Public Finance and Policy); Ila Patnaik (Aditya Birla Group of Companies); Rajeswari Sengupta (Indira Gandhi Institute of Development Research) |
| Abstract: | It has been eight years since India adopted the inflation targeting (IT) framework for its monetary policy. In this paper we present a comprehensive analysis of the IT regime, addressing several critical aspects. We evaluate the performance of inflation over this period, and review the conduct of monetary policy during and after the Covid-19 pandemic. We also identify key challenges that persist particularly in context of the Impossible Trilemma and highlight issues that may require further examination in order to improve the effectiveness of the IT framework in the future. |
| Keywords: | Inflation Targeting, Reserve Bank of India, Monetary Policy Committee, CPI Inflation, Impossible Trilemma |
| JEL: | E4 E5 F3 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ind:igiwpp:2024-022 |
| By: | International Monetary Fund |
| Abstract: | Benin’s macroeconomic performance appears robust 2½ years into the EFF and ECF arrangements. There are promising signs of economic transformation, with higher value-added exports and momentum in information and communications technology and tourism. The 2025 budget—the last year of fiscal adjustment under the current economic cycle—targets compliance with the WAEMU fiscal deficit norm of 3 percent of GDP. Benin’s reform program has gained traction with development partners, with budget support consistently exceeding expectations—complementing robust tax collection—and investor confidence re-affirmed by several sovereign credit upgrades. A key challenge ahead for Benin is to maintain the reform momentum and further strengthen inclusive policies for an economic transformation that generates jobs and benefits all Beninese. The authorities are pressing ahead with their reform agenda—with caution, appropriately. |
| Date: | 2024–12–19 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfscr:2024/356 |
| By: | Colantone, Italo; Ottaviano, Gianmarco; Takeda, Kohei |
| Abstract: | This paper studies the impact of globalization on intergenerational income mobility. Exploiting U.S. data, we find that stronger trade exposure at the commuting zone level lowers the intergenerational income mobility of residents. In particular, higher exposure to Chinese import competition lowers the income mobility of the cohort of U.S. workers born in 1980-1982. We present a general equilibrium theory in which path dependence in sector choice of individuals over generations and mobility frictions determine the dynamics of industrial compositions across locations in a country. The theory predicts that rising import competition reduces intergenerational income mobility, consistent with the empirical findings. |
| Keywords: | Industrial Organization, Political Economy |
| Date: | 2024–12–10 |
| URL: | https://d.repec.org/n?u=RePEc:ags:feemwp:348542 |
| By: | Chiara Colesanti Senni (University of Zurich - Department of Finance); Saeid Vaghefi (University of Zurich); Tobias Schimanski (University of Zurich); Tushar Manekar (Zurich University); Markus Leippold (University of Zurich; Swiss Finance Institute) |
| Abstract: | Nature-related disclosures by companies are insufficient. As long as they remain voluntary, this situation is unlikely to improve, even under well-intentioned initiatives like the Task Force on Nature-related Financial Disclosures (TNFD). These conclusions are based on our investigation into the decision-usefulness of such disclosures through the development of ASKNATURE 1 , an AI-powered tool that analyzes company reports to assess their environmental impact. Our conversational AI prototype can answer challenging questions in two settings: (1) recommendations and guidelines from organizations such as the Task Force on Nature-related Financial Disclosures (TNFD) and (2) user-specific inquiries for Corporate Sustainability Reports (CSR). As an illustration, we apply ASKNATURE to the CSRs of the Nature Action 100 (NA100) companies. Based on the answers provided by our tool and in line with the double materiality paradigm, we classify companies' activities based on their impact direction: company-to-nature (C2N), nature-tocompany (N2C), or neutral. Despite the unprecedented loss of biodiversity and significant depletion of natural capital, our sentiment analysis reveals that corporate disclosures predominantly report positive C2N impact. Moreover, there is minimal overlap between the countries mentioned in the reports and regions of environmental significance, which raises concerns about transparency. Consequently, we find that current CSR disclosures, although aligned with the TNFD, are not sufficiently decision-useful for stakeholders and lack legal enforceability. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2490 |
| By: | Effrosyni Adamopoulou (University of Mannheim); Jeremy Greenwood (University of Pennsylvania); Nezih Guner (CEMFI); Karen Kopecky |
| Abstract: | The role of friends in the US opioid epidemic is examined. Using data from the National Longitudinal Survey of Adolescent Health (Add Health), adults aged 25-34 and their high school best friends are focused on. An instrumental variable technique is employed to estimate peer effects in opioid misuse. Severe injuries in the previous year are used as an instrument for opioid misuse in order to estimate the causal impact of a person’s best friends’ opioid misuse on their own misuse. The estimated peer effects are significant: Having a best friend with a reported serious injury in the previous year increases the probability of own opioid misuse by around 7 percentage points in a population where 17 percent ever misuses opioids. The effect is concentrated among non-college graduates and peers with strong ties who are central in their friendship networks. Peer opioid misuse leads to deteriorating health, opioid addiction, and eventually death. |
| Keywords: | peer-group effects, instrumental variables, Add Health, severe injuries |
| JEL: | C26 D10 I12 J11 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:hka:wpaper:2024-020 |
| By: | Ganzer, Andreas (Institute for Employment Research (IAB), Nuremberg, Germany); Schmucker, Alexandra (Institute for Employment Research (IAB), Nuremberg, Germany); Wolter, Stefanie (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "The Establishment History Panel (BHP) is composed of cross sectional datasets since 1975 for West Germany and 1992 for East Germany. Every cross section contains all the establishments in Germany which are covered by the IAB Employment History (BeH) on June 30th. These are all establishments with at least one employee liable to social security on the reference date. Establishments with no employee liable to social security but with at least one marginal part-time employee are included since 1999. The cross sections can be combined to form a panel. This data report describes the Establishment-History-Panel (BHP) 1975–2023." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Bundesrepublik Deutschland ; IAB-Open-Access-Publikation ; Datenaufbereitung ; Datenqualität ; Datenzugang ; IAB-Betriebs-Historik-Panel ; Datenanonymisierung ; Datensatzbeschreibung ; Imputationsverfahren ; Stichprobe ; 10.5164/IAB.BHP7523.de.en.v1 ; 1975-2023 |
| Date: | 2024–11–14 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabfda:202409(de) |
| By: | Youngsoon Kwon (Bank of Korea); Myungkyu Shim (Yonsei University); Hee-Seung Yang (Yonsei University) |
| Abstract: | Does the COVID-19 crisis accelerate automation? We investigate this question by analyzing employment trends based on occupational COVID-19 exposure and automation potential, key factors influencing post-pandemic automation. Using micro-level data from South Korea (2016–2022), we find a persistent decline in employment for occupations with high exposure and high automatability since the pandemic outbreak. In contrast, other occupations have largely recovered to pre-pandemic employment levels after an initial decline. These findings suggest that the pandemic has incentivized firms to adopt labor-replacing technologies to mitigate the business risks associated with viral transmission. |
| Keywords: | Automation, COVID-19, Employment, Technology adoption, South Korea |
| JEL: | E24 I15 J21 O33 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:yon:wpaper:2024rwp-236 |
| By: | Benander, Ajax |
| Abstract: | In the current scientific landscape, research on Earth’s biological natural history is primarily done through the use of fossil evidence and genetic evidence, with the former leaning closer to the reactive side of the spectrum, and the latter being perhaps more proactive when used in these contexts. They each have their limitations, however, such as the luck involved with finding fossils and the limited pictures which they can provide us with at all, as well as the lack of immediate tangibility available in genetic analyses, especially with regard to features like the ecological context of a past organism. All of this being said, we would now like to introduce a possible third form of extracting information about the history and evolution of Earth’s biosphere, and perhaps with something more of a narrative component at that. This novel framework is what we refer to as “Nexic reasoning”, which serves as a brief extension of the premises of Aethic reasoning to a mediocrity principle-based context. At its fullest, Nexic reasoning has the capacity to paint a surprisingly detailed picture about Earth’s history using little more than glorified Bayesian reasoning, may serve as part of an Aethic generalization to the interaction-free measurements of Elitzur and Vaidman, and indeed even directly implies the Rare Earth hypothesis, thereby forming an implicative link between concepts like the Aethic extrusion principle and the solution to the Fermi paradox. Most intriguingly of all, Nexic reasoning makes a series of falsifiable predictions about Earth’s biosphere as a function of our present knowledge about it, for which we know, of course, that the mere existence of such predictions opens the possibility of elevating Nexic reasoning, and all its claims, to the standard of a scientific theory. |
| Date: | 2024–12–26 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:jvkcp |
| By: | Nikhil Rathee (MA Actuarial Economics, Madras School of Economics); Rupel Nargunam (corresponding author, Assistant Professor, Madras School of Economics) |
| Abstract: | This study investigates the actuarial fairness of health insurance policies by examining discrepancies within the Indian health insurance and their impact on medical costs. By virtue of its creation, the scope of health insurance contracts is to cover medical expenses and the cost of the same is expected to reflect the expected cost of medical services. In practice it is observed that there are discrepancies such as misinformation, accessibility to health care services, hospital quality and inconsistencies in claims processing, increase costs associated with health care of individuals participating in the health insurance, which affect the fairness in pricing of these policies. This study uses Structural Equation Modelling (SEM) to develop latent variables representing these discrepancies and Hierarchical Linear Modelling (HLM) to assess their effect on the cost of medical care. The findings of this study support the presence of region-wise discrepancies in the Indian health insurance sector and the results support the significant impact on the increase in medical expenses. The study concludes with policy recommendations aimed at enhancing the efficiency, effectiveness and fairness of the health insurance policies in India. |
| Keywords: | Pricing Health Insurance, Actuarial Fairness, Discrepancies, Misinformation, Claim process inconsistencies, Access to Medical Services. |
| JEL: | I11 I13 G22 G52 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:mad:wpaper:2024-271 |
| By: | Islem Saadaoui (TVES - Territoires, Villes, Environnement & Société - ULR 4477 - ULCO - Université du Littoral Côte d'Opale - Université de Lille) |
| Abstract: | This study explores the economic value of Aleppo pine forests, a unique and threatened ecosystem in the border region of central Tunisia. These forests play a vital role in supporting small rural communities, but face increasing pressures and restrictions on their use. This research aims to assign a monetary value to forest conservation, considering the region's specific socio-economic context. Strategies for empowering local residents as key actors in developing sustainable cross-border initiatives are further investigated. Employing the Contingent Valuation Method, a survey of 350 local residents and international users was conducted to assess their Willingness to Pay for forest conservation efforts. Logistic regression analysis revealed that sociodemographic factors, such as monthly income and preferred payment method, significantly influence both and the likelihood of participation. These findings highlight the feasibility and importance of reconciling economic development with ecological sustainability in this critical region. |
| Keywords: | Economic assessment Ecosystem service Regional planning Cross-border development initiative Contingent valuation method, Economic assessment, Ecosystem service, Regional planning, Cross-border development initiative, Contingent valuation method |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04849786 |
| By: | Huang, Kaixing; You, Yaxuan |
| Abstract: | Genetically modified (GM) crops are expected to reduce agricultural carbon emissions, which account for approximately 30\% of global carbon emissions, by reducing the use of high-emission production inputs. However, upon examining the gradual roll-out of GM crops across countries, we find that GM crops have increased total agricultural carbon emissions by 7.4% and increased the carbon-emission intensity of crops by 9.4%. A key reason is that GM crops have expanded cultivation into marginal lands, which require more fertilizer and energy inputs. While exporting GM crops to non-GM countries could reduce the global carbon-emission impact of GM crops, a large portion of GM crops is used for domestic livestock production, which further increases carbon emissions. Policies that restrict GM crops to the lands most suitable for them and encourage the export of GM crops could help mitigate the impact of GM crops on global carbon emissions. |
| Keywords: | Genetically modified crops, agricultural carbon emissions, agricultural technology, crop yield |
| JEL: | O13 O50 Q16 Q54 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122650 |
| By: | Famulok, Jakob; Kormanyos, Emily; Worring, Daniel |
| Abstract: | We present novel evidence that retail investors attempt offsetting their carbon footprints by investing sustainably. Using highly granular transaction data from bank clients, we find that higher footprints are linked to greener portfolios. In an experiment with clients from the same bank, we show that an exogenous shock to the participants' salience of their emissions causally shifts sustainable asset allocations upward. Finally, we identify a substitution effect between offsetting through donations and sustainable assets. Our findings add to an understanding of the behavioral drivers of sustainable investing, which is crucial to design effective policies aligning financial markets with environmental goals. |
| Keywords: | sustainable investing, carbon footprints, green portfolios, retail investors, experimental finance |
| JEL: | G40 G41 G11 D14 C93 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewp:306359 |