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on Macroeconomics |
| By: | Hyeongwoo Kim; Shuwei Zhang |
| Abstract: | This paper characterizes optimal monetary policy responses to technology shocks in a two-country model with sticky prices, local currency pricing, and international technology diffusion. We show that technology shocks originating in the tradable sector, regardless of their country of origin, elicit symmetric and closely coordinated monetary policy responses across countries, providing a rationale for a fixed exchange rate regime. By contrast, technology shocks originating in the nontradable sector generate asymmetric policy responses and depreciate the source country's currency, supporting the case for exchange rate flexibility. We further show that the international transmission of technology shocks amplifies real sector dynamics through news effects, prompting central banks to adopt contractionary policies, a result that stands in sharp contrast to the prior literature. |
| Keywords: | Exchange Rate Regimes; Interest Rate Rules; Local Currency Pricing; Sticky Price; Technology Diffusion |
| JEL: | F31 F41 O0 E52 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:abn:wpaper:auwp2026-05 |
| By: | Stefano Grancini; Mr. Marcos Poplawski Ribeiro; Danila Smirnov |
| Abstract: | Understanding how policies can stabilize household welfare during recessions requires a framework that captures household heterogeneity, unemployment risk, and general-equilibrium labor market dynamics. We study a contractionary demand shock in a Heterogeneous-Agent New-Keynesian model with search-and-matching friction on the labor market (HANK–SAM) and compare the effectiveness of alternative income-stabilization policies. Using a common fiscal envelope, we contrast increases in unemployment insurance generosity, with targeted transfers to hand-to-mouth households, and universal transfers. Policy effectiveness is assessed through the aggregate consumers’ welfare, measured in consumption-equivalent variation units. In an economy calibrated to U.S. data, unemployment insurance yields the largest welfare gain per percentage point of fiscal cost, followed by targeted transfers, while universal transfers are the least effective. A temporary increase in unemployment insurance generates the highest welfare, as it combines immediate cash-flow support with insurance effects, disproportionally benefiting households with high marginal propensities to consume. |
| Keywords: | Income stabilization; Heterogeneous-agent New Keynesian (HANK); Search-and-matching; Unemployment insurance; Targeted transfers; Consumption-equivalent variation; Public debt envelope |
| Date: | 2026–04–10 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/076 |
| By: | Clancy, Daragh (Central Bank of Ireland); Lozej, Matija (Central Bank of Ireland) |
| Abstract: | European countries plan to boost their defence capabilities to deter external security threats. This implies a substantial change in the volume and composition of fiscal expenditure, as well as the structure of the industrial base. We analyse the macroeconomic implications of alternative policy choices to boost national security. We augment a global dynamic general equilibrium model to include a public good role for defence capabilities, a defence industry with R&D externalities, trade in military equipment, and public investment in dual-use goods. We show that rising security concerns can reduce all forms of economic activity. Enhancing defence capabilities mitigates this effect and boosts aggregate output (GDP) through increased defence industry production and government value added. However, this reorientation leads to a permanent crowding out of private consumption and a minimal effect on CPI inflation, unless the shock is temporary. |
| Keywords: | Defence spending; Geoeconomics; Knowledge spillovers. |
| JEL: | E62 F41 F52 H56 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cbi:wpaper:03/rt/26 |
| By: | Sophia Cho; John C. Williams |
| Abstract: | Over the past quarter century, the U.S. economy has experienced significant declines in both the labor share of income and the natural rate of interest, referred to as R*. Existing research has largely analyzed these two developments in isolation. In this post, we provide a simple model that captures the joint evolution of the labor share and R*, which we call the R*–labor share nexus. Our key finding is that structural changes affecting R* also influence the evolution of the labor share, and thereby wages and prices. This highlights a potentially important channel, absent from many macroeconomic models, through which the factors that determine R* also affect the labor share and, in turn, broader macroeconomic developments, with implications for monetary policy. |
| Keywords: | R-star; natural rate of interest; labor share; monetary policy |
| JEL: | C32 E25 E43 E52 |
| Date: | 2026–04–15 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednls:103044 |
| By: | Freire Sergio; Pigaiani Cristian (European Commission - JRC); Tucci Michele (European Commission - JRC); Thestrup Sixten; Batista E Silva Filipe (European Commission - JRC) |
| Abstract: | Official statistics depend on traditional methods and primary data sources such as censuses, surveys and administrative data. These ensure consistency and reliability but are generally costly and not very flexible or timely to capture emerging trends or phenomena. The increasing availability of non-traditional data sources offers new opportunities to improve the production and quality of statistics. In the specific context of population and housing statistics, non-traditional data hold potential for filling gaps in official statistics, overcome measurement errors, and provide higher spatial and temporal granularity, enabling more accurate, timely and detailed analyses. This report documents the results of a 2-year project carried by the Joint Research Centre in collaboration with Eurostat entitled ‘Testing the feasibility of using Non-traditional data sources to IMprove Population and Housing Statistics’ (NIMPHS). The main objective was to support Eurostat in exploring the potential and limitations of non-traditional sources such as remote sensing and mobile phone data to improve the quality, detail and/or update of population and housing statistics. In doing so, the JRC also produced and released two new pan-European flagship products by combining existing census statistics and fine-scale data derived from remote sensing: a population grid map at 100 m resolution and a housing grid at 1 km resolution. In addition, the project developed and tested a prototype approach and tool to ‘nowcast’ population grids, and thus improve the timeliness of gridded population data. The report discusses and draws conclusions and implications of the work carried throughout the project. Non-traditional data sources hold substantial potential to improve certain dimensions of pan-European population and housing statistics, namely by increasing their detail, timeliness and overall quality, namely through contributions to quality assurance and control. However, such data sources come with challenges, preventing their direct translation into official statistics. Their use requires good knowledge about the details of the data to devise well-thought data cleaning, processing, and fusion protocols. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc145972 |
| By: | Guido Ascari; Andrea Colciago; Marco Membretti |
| Abstract: | Under monetary tightenings, employment at small, high-churn firms con-tracts more than at large incumbents, raising the employment share of large firms. A mixed-frequency BVAR on U.S. data (1983–2018) shows that tight-enings reduce firm entry and new-entrant hiring, severing inflows into small firms, while higher exit destroys small-firm employment. Large incumbents are comparatively insulated, rarely exiting and exhibiting weak sensitivity to entry conditions. This mechanism raises employment concentration, defining an em-ployment concentration channel of monetary policy. An estimated structural model with heterogeneous firms, endogenous entry and exit, and equilibrium unemployment matches this effect, showing that the concentration channel is quantitatively important in accounting for the empirical output-inflation trade-off. |
| Keywords: | Monetary policy; employment concentration; unemployment; heterogeneous firms; BVAR. |
| JEL: | E52 E32 C13 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:dnb:dnbwpp:859 |
| By: | Robert Botha |
| Abstract: | Discusses different ways of measuring public debt, highlighting that debt sustainability has a number of angles |
| Keywords: | fiscal policy, public debt, South Africa |
| JEL: | H62 H63 E62 |
| Date: | 2025–05–23 |
| URL: | https://d.repec.org/n?u=RePEc:cxs:wpaper:202502 |
| By: | Dalibor Stevanovic (University of Quebec in Montreal) |
| Abstract: | This paper studies the 2021 U.S. inflation forecasting failure. I show that the failure was primarily driven by sample composition rather than functional-form misspecification: estimation samples dominated by the Great Moderation underweight supplyshock regimes, and expectations anchored to that regime were slow to recognize the shift. Three historically informed adjustments, an intercept correction, a similarity re-estimation on 1970s data, and a kernel-weighted estimator, substantially close the forecast gap, and the gains extend to eight additional U.S. price indices. Household survey respondents over 60, whose lifetime includes the 1970s, reported higher inflation expectations from early 2021, consistent with experience-based learning; younger cohorts remained anchored to the prevailing regime. A controlled experiment with large language models conditioned on “experienced†and “young†professional personas confirms that experiential priors generate significant forecast differences under a common training leakage assumption. Across all three exercises, the source of the prior mattered more than the sophistication of the model. |
| Keywords: | Inflation forecasting, regime change, historical analogy, experience-based learning, expectations anchoring, large language models |
| JEL: | C22 C53 D84 E31 E37 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:bbh:wpaper:26-02 |
| By: | Thomas Demuynck; Per Hjertstrand |
| Abstract: | We propose a revealed preference method to non-parametrically bound the coefficients of relative (and absolute) risk aversion in an expected utility framework.Our approach abstains from placing functional form restrictions on the Bernoulliutility function. Our method is applicable to any finite number of observations onchoices over Arrow-Debreu contingent claims, and can be efficiently implementedusing linear or quadratic programming techniques. We illustrate our results usinga large-scaled experimental data set |
| Keywords: | Expected Utility; revealed preference; risk aversion |
| JEL: | D11 C14 D81 |
| Date: | 2026–04–01 |
| URL: | https://d.repec.org/n?u=RePEc:eca:wpaper:2013/405675 |
| By: | Helanya Fourie |
| Abstract: | Provides a visual overview of long-term macroeconomic trends in South Africa with a focus on sentiment indicators and investment patterns over the past three decades. |
| Keywords: | macroeconomics, investment, sentiment, South Africa, long-run growth |
| JEL: | E22 E32 O55 |
| Date: | 2025–10–10 |
| URL: | https://d.repec.org/n?u=RePEc:cxs:wpaper:202506 |
| By: | Korobilis, Dimitris; Schroeder, Maximilian |
| Abstract: | This paper extends quantile factor analysis to a probabilistic variant that incorporates regularization and computationally efficient variational approximations. We establish through synthetic and real data experiments that the proposed estimator can, in many cases, achieve better accuracy than a recently proposed loss-based estimator. We contribute to the factor analysis literature by extracting new indexes of low, medium, and high economic policy uncertainty, as well as loose, median, and tight financial conditions. We show that the high uncertainty and tight financial conditions indexes have superior predictive ability for various measures of economic activity. In a high-dimensional exercise involving about 1000 daily financial series, we find that quantile factors also provide superior out-of-sample information compared to mean or median factors. |
| Keywords: | variational Bayes; penalized factors; quantile regression |
| JEL: | C11 C31 C32 C52 C53 |
| Date: | 2024–08–22 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128773 |
| By: | Nattavudh Powdthavee |
| Abstract: | Large language models trained on human feedback may suppress fraud warnings when investors arrive already persuaded of a fraudulent opportunity. We tested this in a preregistered experiment across seven leading LLMs and twelve investment scenarios covering legitimate, high-risk, and objectively fraudulent opportunities, combining 3, 360 AI advisory conversations with a 1, 201-participant human benchmark. Contrary to predictions, motivated investor framing did not suppress AI fraud warnings; if anything, it marginally increased them. Endorsement reversal occurred in fewer than 3 in 1, 000 observations. Human advisors endorsed fraudulent investments at baseline rates of 13-14%, versus 0% across all LLMs, and suppressed warnings under pressure at two to four times the AI rate. AI systems currently provide more consistent fraud warnings than lay humans in an identical advisory role. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2604.20652 |
| By: | Hutschenreiter, Dennis |
| Abstract: | Firms increasingly rely on markets for technology to acquire innovations developed outside their boundaries, yet acquiring intellectual property rights alone often does not guarantee successful implementation. Many technologies depend on tacit know- how that must be supplied by the provider after the transaction is completed. This paper examines whether common ownership between a technology provider and a potential adopter mitigates this implementation problem. I develop a model in which overlapping institutional investors cause the provider to partially internalize the adopter's gains from successful implementation, strengthening incentives to transfer tacit know-how. This mechanism operates only when know-how is unverifiable - absent this friction, common ownership leaves matching and outcomes unchanged. Under moral hazard, the model predicts that common ownership increases the likelihood of technology transfer to a given adopter, that this effect is stronger when tacit know-how is more important, and that common ownership improves post-transfer outcomes conditional on adoption. I test these predictions using U.S. patent reassignments between publicly traded firms. Using within-deal variation across competing potential adopters and plausibly exogenous variation from passive index-fund holdings, I show that common ownership increases the likelihood that a firm acquires a technology, particularly when the transferred bundle is more tacit. Common ownership predicts stronger subsequent innovation and higher future firm value, especially when ownership overlap is concentrated among investors with stronger incentives to monitor the provider. These findings show how ownership structure shapes interfirm technology transfer by affecting not only who acquires a technology, but also how much value is created. |
| Keywords: | common ownership, institutional investors, moral hazard, patent reassignments |
| JEL: | C78 D82 G23 L24 O34 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwhdps:340107 |
| By: | Ryo Masuyama (Kushiro Public University of Economics and Kobe University) |
| Abstract: | This study evaluates personalized pricing in supply chain competition. We consider two supply chains, each comprising an upstream firm with Corporate Social Responsibility (CSR) and a downstream firm investing in quality. A downstream firm's quality investment has two effects: it raises its own consumers' utility and induces the rival downstream firm to lower its price, consequently benefiting the rival's consumers. As personalized pricing is exploitative, the former effect is entirely captured. First, we find that under personalized pricing, a downstream firm's investment benefits only the rival's consumers. In response, the upstream firm with CSR sets a higher input price to expand the rival's market share and increase consumer surplus, which weakens downstream investment incentives and moderates quality competition. Second, we find that personalized pricing may harm consumers while remaining profitable for downstream firms. |
| Keywords: | personalized pricingï¼› uniform pricingï¼› Corporate Social Responsibilityï¼› quality investmentï¼› supply chain management |
| JEL: | D43 L10 L13 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:koe:wpaper:2607 |
| By: | Nicolay, Katharina; Spix, Julia; Steinbrenner, Daniela |
| Abstract: | We conduct a data-based policy evaluation of the first large-scale, EU-wide excess profit tax, implemented during the 2022 European energy crisis to tax the windfall profits of inframarginal electricity producers. In particular, we evaluate the inherent trade-off of excess profit taxation: the benefits from generating additional tax revenues for crisis mitigation versus the costs of potential distortions to production and investment decisions. On tax revenues, our analysis indicates that the inframarginal revenue cap could cover almost one quarter of the crisis-related government support, although the distribution of tax revenues and thereby the cost coverage is highly uneven across EU Member States. On distortions, we distinguish between impact on long-run investment and short-run production decisions. While we find only a limited negative impact on profitability, which could discourage investment in the long run, we find, using a difference-in-differences design, that electricity producers slightly adapt their short-run production decisions to improve their profitability. Our conclusions help to guide policymakers in future supply shocks. Excess profit taxes only provide a beneficial cost-benefit perspective under specific conditions. Policymakers must carefully time the implementation and accurately identify excess profits. Even with a generous definition of profits, excess profit taxes can be distortionary and, hence, fail to be pure windfall taxes. While retroactive implementation could be an avenue to enhance the cost-benefit profile of excess profit taxes as a crisis measure, it may undermine the credibility and predictability of the tax framework. |
| Keywords: | Excess profit taxes, windfall profit taxes, inframarginal revenue cap, European electricity crisis, non-distortionary taxation, real effects of taxation |
| JEL: | H21 H23 H32 H12 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:340104 |
| By: | Veronique Sanguinetti (toudoire) (LARSH - Laboratoire de Recherche Sociétés & Humanités - UPHF - Université Polytechnique Hauts-de-France - INSA Hauts-De-France - INSA Institut National des Sciences Appliquées Hauts-de-France - INSA - Institut National des Sciences Appliquées); Isabelle Alphonse-Tilloy (LARSH - Laboratoire de Recherche Sociétés & Humanités - UPHF - Université Polytechnique Hauts-de-France - INSA Hauts-De-France - INSA Institut National des Sciences Appliquées Hauts-de-France - INSA - Institut National des Sciences Appliquées); Marjorie Meunier |
| Abstract: | The concept of a social learning space is being used to rethink management training. Creating a social learning space involves a complex process, both to describe and to implement. Although the social and educational sciences have been interested in this concept since their inception, a certain mystery remains regarding its co-creation by a group of individuals. Using an auto-ethnographic methodology, we demonstrate that, contrary to assumptions, it is not the creation of a new solution that establishes a social learning space, but rather the collaborative definition of the problem. The emergence of tensions and the creation of a shared understanding of the situation thus bring individuals together in a social learning space centred on a common goal. Design Thinking tools are useful for facilitating this process of collaborative problem-framing. This has implications for management education. |
| Abstract: | Le concept d'espace social d'apprentissage est utilisé pour repenser la formation au management. Créer un espace social d'apprentissage renvoie à un processus complexe, autant à décrire qu'à mettre en place. Même si les sciences sociales et de l'éducation s'y sont intéressées depuis leur commencement, un élément mystérieux demeure, autour de sa cocréation par un groupe d'individus. Par le biais d'une méthodologie auto-ethnographique, nous mettons en évidence que, contrairement aux présupposés, ce n'est pas la création d'une nouvelle solution qui fonde un un espace social d'apprentissage, mais plutôt la définition collaborative du problème. Emergence des tensions et création d'une compréhension commune de la situation viennent ainsi souder les individus en un espace social d'apprentissage autour d'un but commun. Les outils de Design Thinking sont utiles pour mettre en place le processus de cette problématisation collaborative. Ceci présente des implications pour la pédagogie en management. |
| Keywords: | Espace social d'apprentissage, Problématisation collaborative, Design Thinking, Innovation collaborative, Auto-ethnographie |
| Date: | 2025–06–03 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05589699 |