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on Macroeconomics |
| By: | Vito Polito (School of Economics, University of Sheffield, Sheffield S10 2TU, UK); Paulo Santos Monteiro (Department of Economics and Related Studies, University of York, UK); Mike Wickens (Cardiff University, University of York, CEPR, CESifo, UK) |
| Abstract: | This paper analyses the government expenditure multiplier at the zero lower bound (ZLB) in the presence of quantitative easing (QE), using a tractable New Keynesian model with financial frictions. We show that sufficiently large exogenous QE can lift the economy off the ZLB, thus yielding multipliers below one even for a small fiscal stimulus. Pre-commitment to a gradual QE unwinding further reduces the fiscal stimulus needed to keep multipliers below unity. When QE instead follows an instrument rule that responds to conventional monetary shortfalls, the multiplier can remain below one even at the ZLB. This result also holds under an optimally designed, welfare-based QE policy. Our analysis provides theoretical support for the growing empirical evidence that government spending multipliers can remain below unity at the ZLB. |
| Keywords: | Government expenditure multiplier, Zero lower bound, Quantitative easing |
| JEL: | E52 E58 E62 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:shf:wpaper:2025011 |
| By: | Kosuke Aoki; Alan Auerbach; Charles Yuji Horioka; Anil Kashyap; Tsutomu Watanabe; David Weinstein |
| Abstract: | Takatoshi Ito, who passed away in September 2025, was a leading scholar of macroeconomics and international finance. This column, written by a group of friends and colleagues, outlines his many contributions in a lifetime of research, teaching and policy-making in Japan, the United States and around the world. His work is particularly notable for challenging the widespread perception that standard economic analysis is somehow ill-suited for understanding the Japanese economy. Indeed, using the discipline’s rigorous tools, he illuminated challenges that Japan faced earlier and more acutely than other countries – including population decline and ageing, ballooning government debt, the zero lower bound and unconventional monetary policies, real estate bubbles and their collapse, and the banking sector’s problem of non-performing loans. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:dpr:wpaper:1298 |
| By: | Anastasiia Antonova (Bank of Canada); Mykhailo Matvieiev (Bank of Canada); Céline Poilly (Aix-Marseille Univ., CNRS, AMSE, Marseille, France) |
| Abstract: | Recessions are often accompanied by heightened uncertainty. We look at the effect of endogenous uncertainty on aggregate demand and its implications for monetary policy. We enrich a non-linear New-Keynesian model with imperfect noisy information, where the precision of signals is pro-cyclical. The endogenous uncertainty channel amplifies aggregate demand effects through precautionary saving. Ultimately, it can even reverse sign of the output-gap response to a supply shock. Monetary policy can eliminate both pricing and information-induced inefficiencies by closing the output gap. Based on U.S. household income forecast errors data, we estimate a sizable and significant degree of pro-cyclicality in the precision of signals. |
| Keywords: | Endogenous uncertainty, precautionary saving, aggregate demand, imperfect information |
| JEL: | D81 D83 E21 E32 E40 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:aim:wpaimx:2538 |
| By: | International Monetary Fund |
| Abstract: | Haiti continues to face exceptional challenges amid a deteriorating security environment and institutional fragility. Gang violence has intensified, undermining state authority and disrupting economic activity. Uncertainty persists over the political transition and the feasibility of holding general elections in 2026. The United Nations Security Council’s authorization to deploy a new Gang Suppression Force and the establishment of a United Nations Support Office for Haiti mark a potential turning point for the country, though security gains will take time to materialize and will require international support. |
| Date: | 2025–12–16 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfscr:2025/337 |
| By: | Kaplan, Jonathan; Yelshetty, Neha; Singh, Ajay S.; Salvador, Diego |
| Abstract: | Huanglongbing (HLB) is a disease that infects trees with the bacterium Candidatus Liberibacter asiaticus (CLas), which leads to fruit drop, yield reduction, and eventual death. HLB presents a significant threat to citrus production worldwide, jeopardizing its economic viability. There is currently no known cure for HLB. Past and current attempts at controlling the spread of HLB have primarily focused on spraying insecticides for Asian citrus psyllid (ACP) control, which vector CLas. Rogueing of infected trees has also been considered but has been largely abandoned given very limited effectiveness at curbing the spread of HLB. Recent research has examined the use of antibiotics, such as oxytetracycline (OTC), as potential solutions to mitigate HLB. OTC is a heat-tolerant member of the tetracycline class of antibiotics, which was first administrated through trunk injection as a pesticide for use in peaches in 1974. Our study evaluates the economic implications of OTC trunk injections as an HLB treatment in the event that a Navel orange grove in California was infected with HLB. We develop an empirical model to evaluate the effectiveness of OTC in reducing economic losses associated with HLB. The results show that the benefits of OTC treatment in terms of greater yields outweigh its cost but only when the high price of $23.29 USD per 37.5 lb box is observed. Furthermore, our model incorporates the use of insecticides in conjunction with OTC to evaluate the combined effects of these management and prevention strategies for HLB infections. Assuming the application of insecticides at an 80% efficiency in reducing the ACP population, profitability is first achieved in year 16 for average prices and yields, reaching $762.83 USD per acre. A scenario in which both prices and yields are high was also evaluated, in which the treatment becomes profitable in year 8 at every OTC efficiency. In the 20th year, cumulative discounted profits per acre are $107, 278, $117, 244, and $124, 936 USD for low, average, and high OTC efficacy, respectively. |
| Keywords: | Agricultural and Food Policy |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:360610 |
| By: | Arora, Utkarsh; Ali, Saif; Barsinge, Anjuman; Arora, Gaurav |
| Abstract: | Enacted in 2006, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) instituted a large public works program that provides 100 days of assured employment to volunteering members of rural households in India. It is implemented at the village level by the local government, called the Gram Panchayat, which undertakes development projects considered important to the village community using funds allocated through MGNREGA. This paper studies the impact of MGNREGA-based water conservation through farm ponds on agricultural land use patterns within Gram Panchayats. It looks at how farm pond construction influences land use transitions from single cropping in one year to multiple cropping in the next and vice versa. Farm ponds can increase soil moisture, provide irrigation water storage facilities, and serve as a means of livelihood through pisciculture or animal husbandry. Economic adaptation to such changes by households can cause shifts in local agricultural land use patterns. We find that the construction of new farm ponds in a Gram Panchayat drives a 4% (2.2%-6.1%) year-on-year increase in single to double/triple-cropping transitions while reducing the transitions in the reverse direction. Preexisting farm ponds and previous cropping patterns in the Gram Panchayat also play a significant role in determining the extent and direction of transitions. The study provides valuable insights for policymakers aiming to enhance agricultural productivity and rural livelihoods through water conservation initiatives. This research combines national scale with a fine Gram Panchayatlevel granularity bringing together a unique spatial data repository comprising a variety of variables related to natural and built environments as well as administrative data which can potentially generate wide-ranging research opportunities in empirical economics and applied econometrics. |
| Keywords: | Community/Rural/Urban Development |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:361116 |
| By: | Daniel H. Karney; Don Fullerton; Kathy Baylis |
| Abstract: | Computational general equilibrium (CGE) models can evaluate detailed tax reforms, trade restrictions, or environmental policy. These models can capture many complexities, but these complexities can make results difficult to interpret. Analytical general equilibrium (AGE) models provide better intuition and interpretation but cannot capture relevant complexities. We propose a method that employs AGE models to understand CGE models – a “model of the model”. We apply this idea to climate policy and carbon leakage – the increase in emissions elsewhere. Our AGE models identify seven key economic determinants of leakage within any one outcome. We then unpack results from three existing CGE models. |
| JEL: | C63 H23 Q58 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34533 |
| By: | Simon Donker van Heel; Neil Shephard |
| Abstract: | We propose using a discounted version of a convex combination of the log-likelihood with the corresponding expected log-likelihood such that when they are maximized they yield a filter, predictor and smoother for time series. This paper then focuses on working out the implications of this in the case of the canonical exponential family. The results are simple exact filters, predictors and smoothers with linear recursions. A theory for these models is developed and the models are illustrated on simulated and real data. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.16745 |
| By: | Otgun, Hanifi; Fulginiti, Lilyan; Perrin, Richard |
| Abstract: | This paper provides regional level estimates of total factor productivity (TFP) growth and its components in Turkish agriculture. Using a translog stochastic frontier model with monotonicity constraints, we decompose TFP growth into technical change and efficiency change across 26 NUTS-2 regions over 2013–2020. We also examine the relationship between technical efficiency and trade openness by integrating regional agricultural trade openness into the model as an (in)efficiency driver. These contributions address gaps in the existing literature by revealing regional TFP disparities in Türkiye and investigating the previously understudied link between technical efficiency and trade openness. Additionally, we explicitly control for climatic effects, including average temperature and precipitation in the frontier, to isolate weather-driven fluctuations from inefficiency. Our results highlight pronounced regional disparities, with export-oriented regions exhibiting higher efficiency. Moreover, trade openness is significantly and positively associated with technical efficiency, suggesting that greater integration with external markets may foster TFP growth in the Turkish agricultural sector. Climate variables show nuanced impacts, with moderate temperature and rainfall positively affecting agricultural output, while extreme conditions negatively impact yields. TFP growth is predominantly driven by technical change, while efficiency change slightly detracts from overall productivity gains. |
| Keywords: | International Relations/Trade |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:361177 |
| By: | Alexander M. G. Cox; Daniel Hernandez-Hernandez |
| Abstract: | We consider an agent who has access to a financial market, including derivative contracts, who looks to maximise her utility. Whilst the agent looks to maximise utility over one probability measure, or class of probability measures, she must also ensure that the mark-to-market value of her portfolio remains above a given threshold. When the mark-to-market value is based on a more pessimistic valuation method, such as model-independent bounds, we recover a novel optimisation problem for the agent where the agents investment problem must satisfy a pathwise constraint. For complete markets, the expression of the optimal terminal wealth is given, using the max-plus decomposition for supermartingales. Moreover, for the Black-Scholes-Merton model the explicit form of the process involved in such decomposition is obtained, and we are able to investigate numerically optimal portfolios in the presence of options which are mispriced according to the agent's beliefs. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2512.24371 |
| By: | Bauer, Kevin; Gill, Andrej; Langenbucher, Katja; Franke, Lucia |
| Abstract: | The paper starts from a situation of information asymmetry on credit markets and zooms in on AIenhanced credit scoring as an institutional response. It assumes the potential for expanding access to credit as well as the risk of discriminatory treatment of historically disadvantaged communities. Against this background, the paper explores legal requirements of "explainability", using two recent European Court of Justice decisions as illustrations. The paper gives an overview of XAI methods along with their socio-technical and legal limits. It contributes to the discussion by suggesting to treat explanations as a public good and designing an intermediary institution which would act as a go-between connecting consumer data subjects and scoring companies. |
| Keywords: | AI-enhanced Credit Scoring, Explainability (XAI) and Law |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewh:334497 |
| By: | Osadchiy, Maksim |
| Abstract: | This paper extends the classical Vasicek credit risk model by introducing a comprehensive multi-factor framework that simultaneously incorporates key sources of portfolio heterogeneity – namely, variations in asset weights, recovery rates, default probabilities, and asset correlations. By modeling the complex interactions among these factors, our approach provides a more realistic and nuanced assessment of loss distributions and risk measures. Monte Carlo simulations demonstrate that the extended Vasicek-style model yields accurate approximations of portfolio Value at Risk (VaR) across portfolios with diverse recovery profiles and moderate concentration levels. This advancement improves the precision of credit risk measurement, addresses current regulatory gaps, and offers a solid foundation for more sophisticated risk management of heterogeneous credit portfolios. |
| Keywords: | Heterogeneous Credit Portfolios; Granularity Adjustment; Vasicek Model; Value at Risk; Monte Carlo Simulation |
| JEL: | C63 G17 G21 G28 G32 G33 |
| Date: | 2025–11–27 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127032 |
| By: | Juan Pereyra; Tom Demeulemeester |
| Abstract: | We study the assignment of indivisible goods to individuals without monetary transfers. Previous literature has mainly focused on efficiency and individually fair assignments; consequently, egalitarian concerns have been overlooked. Drawing inspiration from the allocation of apartments in housing cooperatives—where families prioritize egalitarianism in assignments—we introduce the concept of Rawlsian assignment. We demonstrate the uniqueness, efficiency and anonymity of the Rawlsian rule. Our findings are validated using cooperative housing preference data, showing significant improvements in egalitarian outcomes over both the probabilistic serial rule and the currently employed rule. |
| Keywords: | random assignment, sd-efficiency, fairness, Rawls. |
| JEL: | C78 D63 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:mnt:wpaper:2403 |
| By: | Du, G. |
| Abstract: | We propose a unified axiomatic theory of microeconomics, aiming to establish a new benchmark model that supersedes the traditional Walrasian perfect competition baseline. This framework bridges the theoretical divide between General Equilibrium theory and modern Industrial Organization (IO), offering a more accurate representation of complex economic realities. This theory takes the behavioral rules of firms in real markets as the endogenous mechanism through which market structures are generated, replacing the standard practice of imposing perfect competition, monopoly, and other market forms as exogenous assumptions. Under a set of minimal axioms (consumer utility maximization, firm profit maximization, firm entry/exit mechanisms, and market clearing) and by introducing realistic cost and demand structures (firm-level cost heterogeneity, fixed costs, and demand elasticity, among others), pricing behavior and market structures long treated as exogenous (such as perfect competition and monopoly) are derived endogenously as equilibrium outcomes of firms' profit-maximizing behavior. Within a single framework, the theory nests traditional cost and marginal analysis, game-theoretic approaches to imperfect competition, and the Walrasian general equilibrium model; different regions of the parameter space naturally yield equilibrium outcomes corresponding to perfect competition, monopoly, monopolistic competition, and competitive-fringe structures. Our analysis shows that perfect competition is only a highly symmetric and intrinsically unstable equilibrium point: even small cost differences suffice to push the system toward more common monopoly or oligopoly configurations, while positive feedback mechanisms render these structures stable, helping to explain why market power is not easily competed away. Under empirically observable premises, the theory coherently derives the principal market forms and, in doing so, clarifies the domains of applicability of various classic models. It can also be used to predict which market structures industries will evolve toward under given conditions, providing a unified and operational theoretical foundation for empirical research, industrial policy, and firms' business and competitive strategy decision-making. |
| Keywords: | Unified Market Structure Theory; Endogenous Structural Evolution; Imperfect Competition; Unified General Equilibrium Framework; Network Externalities and Feedback Mechanisms; Pareto Optimality under Heterogeneity |
| JEL: | D40 D41 D42 D43 D50 D85 L11 L12 L13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127096 |
| By: | Diego Restuccia |
| Abstract: | I examine the empirical properties of firm-level productivity and distortions across countries using the newly released World Bank Enterprise Surveys (WBES). Using a standard framework of production heterogeneity, I show that the gap in productivity and distortions between high and low productivity firms is larger in developing countries, generating large aggregate productivity losses from misallocation. A key empirical property of distortions in developing countries is that they systematically weaken the relationship between firm size and firm productivity. I exploit a unique feature of the WBES data to document which specific aspects of the economic environment faced by firms, such as financial constraints, regulation, corruption, and weak infrastructure, are consistent with the empirical pattern of distortions across countries. |
| JEL: | O11 O14 O4 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34573 |
| By: | Benner, Niklas (RWI - Leibniz Institute for Economic Research); Heuer, Felix (RWI - Leibniz Institute for Economic Research); Kamb, Rebecca (RWI - Leibniz Institute for Economic Research); Storm, Eduard (Institute for Advanced Studies (IHS), RWI) |
| Abstract: | How do economic crises reshape firms’ skill demand through changes in the organization of work? Using the COVID-19 pandemic as a shock to workplace practices, this paper examines whether short-term disruptions prompt lasting shifts in job requirements. We draw on 11 million German online job vacancies from 2017–2024 and implement an event-study design that exploits pre-pandemic variation in workfrom- home feasibility across occupations. This approach identifies firms’ differential exposure to remote-work constraints based on the occupational mix of their job postings. We find that crisis-induced shifts in skill demand were mainly short-lived, but one adjustment persisted: a lasting rise in interactive requirements, reflecting the emergence of hybrid collaboration. This form of organizational change contrasts with the technology-driven automation emphasized in prior crises and was shaped mainly by structural factors —digital infrastructure, firm size, and sectoral exposure —rather than by cyclical variation. Our results show that temporary shocks can trigger selective and enduring shifts in firms’ skill demand through evolving workplace organization. |
| Keywords: | Online Job Ads, Skill Demand, Work-from-Home Feasibility, COVID-19, Task Reallocation, Event Study |
| JEL: | J23 J24 J63 O33 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ihs:ihswps:number62 |
| By: | Dubrie, Artie; Katwaroo, Arista |
| Abstract: | Caribbean Small Island Developing States (SIDS) face significant environmental, economic, and social challenges due to the impacts of the massive influxes of Sargassum seaweed (henceforth, "Sargassum"). Conventional reactive interventions have demonstrated limited efficacy in addressing the recurrent proliferation of Sargassum blooms. These impacts are attributable to the immense scale and volumetric magnitude of these events, alongside their considerable spatiotemporal variabilities across the Caribbean sub-region. Furthermore, the absence of robust, harmonized management frameworks across affected jurisdictions exacerbates these challenges. Governmental bodies, development partners, and other stakeholders are seeking sustainable management strategies to address the persistent annual recurrences of these blooms. This study examines and proposes an exploratory framework based on the principles of integrative and adaptive natural resources management (IANRM) and its application to Sargassum management. The framework integrates diverse management strategies, considers interconnected environmental, social, and economic factors in stakeholder engagements, and promotes adaptive learning. Adopting an IANRM approach enables a shift from reactive crisis management to proactive resilience, potentially transforming Sargassum from a challenge to a valuable resource while safeguarding coastal ecosystems and livelihoods. The study provides recommendations for future research on implementing an IANRM approach to promote sustainable Sargassum management in the SIDS region. |
| Date: | 2025–12–23 |
| URL: | https://d.repec.org/n?u=RePEc:ecr:col033:84504 |
| By: | Le Vu, Mathilde; Matthes, Katarina L.; Schneider, Eric B.; Moerlen, Aline; Hösli, Irene; Baud, David; Staub, Kaspar |
| Abstract: | Exposure to the 1918 influenza pandemic may have been associated with preterm birth ( |
| Keywords: | birth; birth weight; history of medicine; infants; low birth weight; miscarriage; pandemics; pregnancy; preterm birth; signs and symptoms; stillbirths; permission request sent to publisher |
| JEL: | I10 J13 |
| Date: | 2025–11–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129897 |
| By: | Deininger, Klaus; Ali, Daniel A. |
| Abstract: | This paper uses a rich set of geo-coded administrative and remotely sensed data on more than 1 million agricultural land transactions in Ukraine to explore how informality, size, and recent land reforms affect land prices. Three main findings are highlighted. First, absence of registered rights generates large negative externalities, the size of which plausibly exceeds the cost of registering all land. By contrast, informality of lease contracts is a choice that may enable owners to evade regulatory obstacles that prevent them from renegotiating contracts to obtain more favorable terms. Second, while land market liberalization generated significant indirect benefits, gains are unevenly distributed. Furthermore, competition in sales markets remains limited, pointing to scope for measures—including reducing the transaction costs of selling land and accessing mortgage finance, improving publicity of pending land sales, and use of electronic auctions—to enhance the reforms’ impact on efficiency and equity. Third, size at the parcel, field, and farm levels is associated with higher per hectare prices, pointing to scope for market-based land consolidation and growth of medium-size farms to increase land values and productivity. Achieving this potential will require measures to limit speculative land acquisition and exercise of market power by making local land markets more competitive and using market-based land valuation as a basis for taxing land on a recurrent basis and any capital gains due to land appreciation. |
| Keywords: | International Development |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:361025 |
| By: | Bohne, Albrecht; Hines, James R.; Koumpias, Antonios M.; Tassi, Annalisa |
| Abstract: | The purpose of this paper is to evaluate the effect of reverse-charge mechanism (RCM) implementation on VAT compliance using an overall, countrylevel measure of VAT compliance, the VAT gap. The VAT gap is defined as the overall difference between expected and realized VAT revenues and is a broader measure than outcomes employed in previous research, incorporating all types of VAT evasion. Exploiting the staggered adoption of RCM across Europe and the size of industries targeted by RCM, we compare changes in the VAT gap before and after RCM implementation. Evidence from difference-in-differences, event study, and heterogeneous treatment effects estimators indicates that the adoption of the RCM does not lead to significant EU-wide changes on the aggregate VAT gap. Moreover, our results illustrate the mixed impacts of RCM on different goods and industries, with measurable decreases in VAT losses in the construction and industrial crops industries. This study's findings do not provide strong support for policy changes that cast the net of the RCM wider on all industries and EU member states, although bilateral coordination in RCM adoption with top trading partners may assist in curbing VAT fraud relocation. |
| Keywords: | Tax evasion, VAT, VAT gap, reverse-charge mechanism, carousel fraud |
| JEL: | H26 K42 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:333928 |
| By: | Dumont, Michel; Rayp, Glenn |
| Abstract: | We attempt to map out as comprehensively as possible the Belgian companies that offer goods or services with an AI component. The 744 Belgian AI start-ups that we identified (founded since 2010) appear, in comparison with non-AI start-ups, to focus primarily on revenue growth, which is often accompanied by a sharp increase in the number of employees. On the other hand, many of the AI start-ups are not yet profitable, especially those with venture capital. AI start-ups without venture capital are overrepresented in the very small group of the most successful Belgian start-ups, which have high turnover, many employees and are very profitable. |
| Keywords: | Artificiak Intelligence, start-ups, Belgium |
| JEL: | D22 D83 L25 L26 O14 O33 |
| Date: | 2025–11–25 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126994 |
| By: | Martin Dhaussy (Aix-Marseille Univ., CNRS, AMSE, Marseille, France); Nandeeta Neerunjun (Univ. Grenoble Alpes, CNRS, INRAE, Grenoble INP, GAEL, 38000 Grenoble, France); Hubert Stahn (Aix-Marseille Univ., CNRS, AMSE, Marseille, France) |
| Abstract: | The expansion of intermittent electricity increases supply variability and requires greater flexibility from consumers. This results in welfare losses for these agents, which can nevertheless be mitigated by energy storage. Our model analyzes these welfare consequences in the context of short-term variability in renewable energy given fixed dispatchable and storage capacities. We explore an optimal control problem that determines a welfare-maximizing electricity consumption path by adjusting dispatchable and stored energy throughout the short-term production cycle of renewables. This optimization problem identifies three regimes (no storage and active storage, with or without capacity constraints) and provides the associated consumer welfare over this cycle. Under all three regimes, a certain degree of consumer flexibility is part of the optimal solution and entails welfare losses. Active storage reduces these losses but cannot eliminate them completely due to the energy conversion losses induced by this activity. However, when storage capacity is constrained, a proactive adjustment of this capacity can offset the losses. |
| Keywords: | intermittent renewable, energy storage, electricity consumption, welfare analysis, optimal control |
| JEL: | D61 Q40 Q42 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:aim:wpaimx:2525 |
| By: | Mariluz Mate |
| Abstract: | Many empirical studies estimate causal effects in environments where economic units interact through spatial or network connections. In such settings, outcomes are jointly determined, and treatment induced shocks propagate across economically connected units. A growing literature highlights identification challenges in these models and questions the causal interpretation of estimated spillovers. This paper argues that the problem is more fundamental. Under interdependence, causal effects are not uniquely defined objects even when the interaction structure is correctly specified or consistently learned, and even under ideal identifying conditions. We develop a causal framework for firm-level economies in which interaction structures are unobserved but can be learned from predetermined characteristics. We show that learning the network, while necessary to model interdependence, is not sufficient for causal interpretation. Instead, causal conclusions hinge on explicit counterfactual assumptions governing how outcomes adjust following a treatment change. We formalize three economically meaningful counterfactual regimes partial equilibrium, local interaction, and network, consistent equilibrium, and show that standard spatial autoregressive estimates map into distinct causal effects depending on the counterfactual adopted. We derive identification conditions for each regime and demonstrate that equilibrium causal effects require substantially stronger assumptions than direct or local effects. A Monte Carlo simulation illustrates that equilibrium and partial-equilibrium effects differ mechanically even before estimation, and that network feedback can amplify bias when identifying assumptions fail. Taken together, our results clarify what existing spatial and network estimators can and cannot identify and provide practical guidance for empirical research in interdependent economic environments |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2601.00279 |
| By: | Jettawat Pattararangrong; Wisarut Suwanprasert |
| Abstract: | How rapidly can firms re-time international shipments when faced with sudden changes in trade policy? We provide new evidence on this high-frequency adjustment margin using the United States’ Liberation Day tariffs (LDT) as an unexpected policy shock, together with confidential daily customs data from Thailand. Our identification strategy exploits a novel shift–share exposure measure, the "LDT gap, " which captures product-level variation at the HS6 level in relative tariff increases faced by Thai exporters. We find that exporters adjust within days: products with higher LDT gaps experience increases in export values and quantities, with no statistically significant change in export prices, and these responses are mainly concentrated in the announcement period. The effects are stronger for agricultural than for manufacturing products. Across product use categories, the strongest responses are observed among consumer goods. The paper provides the first daily-frequency evidence on rapid shipment reallocation under sudden policy shocks and introduces a transparent exposure measure for identifying heterogeneous effects. |
| Keywords: | TradeWar; Liberation Day; Reciprocal Tariffs; Trade Policy Uncertainty; Thailand |
| JEL: | F1 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:pui:dpaper:244 |
| By: | Foong, Gerald (Singapore Management University); Machin, Stephen (London School of Economics); Sandi, Matteo (London School of Economics) |
| Abstract: | We study whether economic incentives matter for crime in a novel way, through study of expensive precious metal thefts by thieves stealing catalytic converters. We combine sharp, plausibly exogenous variation in the prices of precious metals embedded in converters with newly assembled U.S. data and multiple research designs. We show that phenomenally fast increases in precious metal prices generated a sizeable and rapid rise in auto-part thefts, while subsequent price declines and policy responses quickly reversed this pattern. The resulting boom-and-bust dynamics provide clean evidence that both demand- and supply-side economic forces shape property crime and inform targeted deterrence policies. |
| Keywords: | auto-part theft, expensive precious metals, catalytic converters |
| JEL: | K42 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18353 |