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on Macroeconomics |
| By: | Daudignon, Sandra; Tristani, Oreste |
| Abstract: | Empirical analyses find that the long-run natural rate, or the real rate prevailing over a long-run equilibrium where nominal rigidities are absent, is subject to permanent shocks. How should monetary policy react to such shocks? Our paper answers this question in a variant of the new Keynesian model. Because of the zero lower bound (ZLB) on nominal interest rates, the mere possibility of future movements towards zero of the long-run natural rate imparts a downward bias on inflation expectations. To offset this bias, a central bank optimizing under commitment should not only rely on forward guidance at the ZLB, as recommended by the existing literature, but also adopt an expansionary bias away from the ZLB. The neutral rate, i.e. the real policy rate consistent with stable inflation in the long-run, should fall more than one-to-one with the long-run natural rate, as the latter approaches zero. This is the case both under optimal commitment policy, and if optimal policy is implemented through a price level targeting rule. |
| Keywords: | Zero lower bound; Optimal monetary policy with commitment; Liquidity trap; New keynesian model |
| JEL: | C63 E31 E52 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19528 |
| By: | Cox, Lydia; Feng, Jiacheng; Müller, Gernot; Pasten, Ernesto; Schoenle, Raphael; Weber, Michael |
| Abstract: | The jointly optimal monetary and fiscal policy mix in a multi-sector New Keynesian model with sectoral government spending and productivity shocks entails a separation of roles: Sectoral government spending optimally adjusts to sectoral output gaps and inflation rates---a policy supported by evidence from sectoral federal procurement data. Monetary policy optimally focuses on aggregate stabilization, but deviates from a zero-inflation target; in a model calibration to the U.S., however, it effectively approximates a zero-inflation target. Because monetary policy is a blunt instrument and government spending trades off stabilization against the optimal-level public good provision, the first best is not achieved |
| Keywords: | Optimal monetary and fiscal policy |
| JEL: | E62 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19340 |
| By: | Hella Engerer; Claudia Kemfert |
| Abstract: | Die Blockade der Straße von Hormus ab Ende Februar hat den Ölmarkt in einer Konstellation weltweit schwacher Nachfrage und steigendem Ölangebot getroffen. Aufgrund des Angebotsschocks stieg der Ölpreis kurzzeitig auf über 110 US-Dollar pro Barrel. Die Konstellation von schwacher Nachfrage und Angebotsausweitung würde eigentlich zu einem sinkenden Ölpreis führen – zum Jahresende 2025 kostete ein Barrel Rohöl tatsächlich unter 60 US-Dollar, ein für manche Förderländer nicht mehr tragfähiger Preis. Bisher haben vor allem Nicht-OPEC-Länder ihr Angebot ausgeweitet. Auch innerhalb der OPEC ist die Geschlossenheit brüchig geworden: Die Vereinigten Arabischen Emirate sind im Mai 2026 ausgetreten und planen mehr Öl zu fördern. Wenn Öltanker die Straße von Hormus wieder wie früher passieren können, dürfte erneut die Konstellation von steigendem Angebot bei schwacher Nachfrage zum Tragen kommen. Noch zeichnet sich indes keine vollständige und dauerhafte Öffnung der Straße von Hormus ab, zumal zunächst Minen geräumt und Sicherheitsgarantien geklärt werden müssen. Darüber hinaus bleiben Seewege anfällig, was künftig zu höheren Versicherungsprämien und volatileren Ölpreisen führen dürfte. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwakt:122de |
| By: | Moritz Kuhn; Leanne Nam; Gašper Ploj |
| Abstract: | Labor markets feature large heterogeneity in employment stability: some careers provide lifetime employment, while others involve frequent transitions in and out of work. While this heterogeneity shapes earnings dynamics and labor market risk, its implications for household saving behavior remain poorly understood. We document two new empirical facts. More stable careers (i) exhibit steeper life-cycle earnings growth and (ii) accumulate significantly more wealth per dollar of income, even within narrowly defined worker groups. To interpret these facts, we develop a life-cycle search-and-saving model with heterogeneous employment stability, job-to-job mobility, endogenous human capital accumulation, and incomplete markets. The model matches both life-cycle earnings and wealth dynamics across careers. Our central finding is that heterogeneity in employment stability reshapes the nature of saving. Stable careers generate sustained earnings growth with a focus on life-cycle saving, while unstable careers are characterized by precautionary, buffer-stock behavior that limits long-run wealth accumulation. Quantitatively, differential earnings growth accounts for about 60% of the wealth gap across careers. These microeconomic differences have important macroeconomic implications. We demonstrate that heterogeneity in employment stability amplifies wealth inequality and substantially increases the macroeconomic consumption response to unemployment shocks. |
| Keywords: | Employment risk, employment stability, consumption-saving behavior |
| JEL: | J64 E21 E24 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26178 |
| By: | Titatiféi Pouwè Tare (CERSA - Centre d’Excellence et de Recherche en Sciences Aviaires); Walter Ossebi (EISMV - Ecole Inter-États des Sciences et Médecine Vétérinaires de Dakar); Guiguigbaza-Kossigan Dayo (CIRDES - Centre international de recherche-développement sur l'élevage en zone subhumide); Malik Orou Seko (EISMV - Ecole Inter-États des Sciences et Médecine Vétérinaires de Dakar); Essodina Talaki (CERSA - Centre d’Excellence et de Recherche en Sciences Aviaires) |
| Abstract: | The purpose of this study is to analyze the marketing system of local guinea fowl in municipality of Lomé. A survey was conducted among 54 traders in 10 markets in the municipality. A total of three types of actors were identified in the local guinea-fowl marketing chain: The wholesalers, the urban resellers and the retailers. Analysis of the data reveals that the majority of traders are married people (93%) and aged of 41 ± 11 years. The activity is inherited from a parent (72%) and constitutes an essential source of income to meet basic needs. In addition, the study reveals a strong representation of retailers (68%) in the market made up of women, of Ewé ethnic group, 90% of whom originated from Maritime region. Our results showed that the savannah region is the main source of local guinea fowl for the municipality of Lomé in Togo. Wholesalers and urban retailers are the major players, earning profits of 358.33 F CFA and 357.48 F CFA per guinea fowl sold, respectively, which is significantly higher than that of retailers who only earn net unit surplus of 98.48 F CFA. Overall, the marketing of local guinea fowl in the municipality of Lomé is a profitable business and deserves to be supported in order to improve the distribution of income among stakeholders with a view to sustainable development. This support will be more effective if actions are developed to promote local guinea fowl and the marketing of its products. |
| Abstract: | La présente étude a pour but d'analyser le système de commercialisation de la pintade locale dans la commune de Lomé. Une enquête a été réalisée auprès de 54 commerçants dans 10 marchés de la commune. Au total, trois types d'acteurs ont été identifiés dans le circuit de commercialisation de la pintade locale : les grossistes, les revendeurs urbains et les détaillants. Il ressort de l'étude que les commerçants sont majoritairement mariés (93%) avec une moyenne d'âge de 41±11 ans. L'activité est héritée d'un parent (72%) et constitue une source de revenus indispensable à la satisfaction des besoins élémentaires. En outre, l'étude révèle une forte représentativité des détaillants (68%) sur le marché constitué de femmes, d'ethnie Ewé, originaire à 90% de la région maritime. Nos résultats ont indiqué que la région des savanes est le principal pôle d'approvisionnement de la commune de Lomé en pintades locales au Togo. Les grossistes et les revendeurs urbains en sont les grands acteurs et réalisent des bénéfices respectifs de 358, 33 F CFA et de 357, 48 F CFA par pintade vendue significativement plus importants que celui des détaillants qui n'engrangent qu'un excédent unitaire net de 98, 48 F CFA. Globalement, la commercialisation de la pintade locale dans la commune de Lomé est une activité rentable et mérite d'être soutenue pour une meilleure répartition des revenus des acteurs dans la perspective d'un développement durable. Ce soutien sera d'autant plus efficace si des actions et des programmes sont développés en faveur de la promotion de la pintade locale et de la commercialisation de ses produits. |
| Keywords: | marketing, municipality of Lomé, Togo, local guinea fowl, Pintade locale, Commune de Lomé, Commercialisation |
| Date: | 2026–07–25 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05440378 |
| By: | Leogrande, Angelo; di Molfetta, Mauro; Nortarnicola, Valeria; Trotta, Maria Giovanna; Magaletti, Nicola |
| Abstract: | Italy's special legal status for "innovative" small and medium-sized enterprises (SMEs) grants fiscal, financial and administrative benefits intended to strengthen competitiveness, yet whether the status marks a distinctive profile of realised firm performance remains empirically underexplored. Using ten years of balance-sheet data assembled within the LUCE (LUtech Campus Ecosystem) research project on 4, 043 firms (2, 873 innovative and 1, 170 ordinary), we compare the two populations across six performance dimensions—performance persistence, revenue growth, labour productivity, operating profitability, earnings volatility and financial stability. Because the populations differ systematically in size, sector and location, we use propensity-score matching (1, 031 balanced pairs) and interpret the resulting differential as a conditional innovative-status premium rather than as a causal effect. Innovative SMEs display a large and robust revenue-growth premium—a median growth rate roughly three-and-a-half times that of matched ordinary peers (+17.3 percentage points per year; rank-biserial 0.53)—coexisting with a fragility penalty of higher earnings volatility and lower financial stability; operating profitability is higher but does not survive our robustness battery, and labour productivity is marginally lower. A within-firm event study around the registration date shows that the growth advantage largely predates registration, indicating that the status certifies and renders visible already-dynamic firms rather than causally upgrading them. The premium is strongly and significantly heterogeneous across space—broadest in the South, where local institutions are weakest—consistent with an institutional-substitution boundary condition that a formal region-by-status interaction confirms. The results are robust to nine alternative estimators, multiple-testing correction and hidden-bias diagnostics. We read the innovative-firm register as an informative screening and monitoring device rather than as a policy whose causal returns we measure. |
| Date: | 2026–07–29 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:h5d7r_v1 |
| By: | Olivier Gossner; Rafael Veiel |
| Abstract: | We study direct representations of information for interim correlated rationalizability. For a fixed finite payoff structure, each type induces a hierarchy of surviving action sets. Pushing the common prior through this map projects the information structure onto the solution concept's output language. When best-response regions are convex, this representation is direct: the solution concept applied to the hierarchy seen as a type is the identity. The induced distributions are characterized by level-by-level obedience constraints. Terminal ICR sets alone do not have this property. For arbitrary finite payoff structures, we refine each hierarchy level with a tag identifying a convex cell of its best-response region. Augmented hierarchies provide a direct representation and project onto the ordinary hierarchy. Full augmented hierarchies may form a continuum, but retaining only the tags at the boundaries of constant stretches of the ordinary hierarchy yields an exact countable representation with finitely many obedience constraints per type. Finite-type models are dense in terminal rationalizability outcome distributions. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.21851 |
| By: | Ben Gilbert; Hannah Gagarin; Maxwell Fleming |
| Abstract: | This project generates population estimates of the local economic impacts of energy development, specifically focusing on wind energy generation facilities. We compare results from two prominent methodologies in the literature: (1) an “outward-propagating†model that aggregates earnings and employment outcomes for workers and establishments located in increasing radii around the locations of a wind generation facilities and control sites, and (2) a “spatial lag†model (which has become the dominant approach in the literature during this project) that uses the individual workers as the unit of observation and aggregates their exposure to wind energy generation facilities at increasing radii around their georeferenced residence locations. We further explore how data aggregation impacts results by repeating these analyses using data that has first been aggregated to the county level before further aggregating to an “outward-propagating†or “spatial lag†framework. We have two main findings. First, we find that the spatial lag approach gives much more reliable results than the outward propagating model, with the latter model likely overstating the aggregate local impacts of a given economic shock and producing less stable estimates. Second, we find that aggregating underlying individual data to the county level before implementing either of the models severely dampens economic impact estimates in most cases, highlighting the importance of either gaining access to representative georeferenced samples or finding another geographic aggregation at which to produce publicly available data products in order to generate reliable estimates of local impacts of economic shocks. |
| Keywords: | LEHD |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:cen:tnotes:26-26 |
| By: | Philippe Silberzahn (EM - EMLyon Business School); Dominique Vian (SKEMA Business School (France, Lille) - SKEMA BS) |
| Abstract: | Effectuation theory seeks to explain how entrepreneurs act under Knightian uncertainty through non-predictive control. However, the mechanism through which this control operates remains unclear, and the theory has been criticized for being akin to a random walk. This paper addresses this issue by integrating effectuation theory with a design science perspective on entrepreneurship. We conceptualize venture creation as the iterative design of an artifact whose structure evolves through decomposition and recomposition. Drawing on the property of near-decomposability, we propose that the artifact provides the structural continuity linking successive entrepre-neurial actions while enabling localized change. Within this framework, the principles of effectuation operate as design mechanisms that guide how subsystems are created, protected, integrated, and recombined during artifact transformation. This perspective explains how entrepreneurial action can be non-predictive yet non-random. By connecting effectuation principles, the evolving artifact, and near-decomposability, this paper contributes to effectuation theory and advances entrepreneurship as a design science. |
| Keywords: | Near-decomposability, Design, Control, Artifact, Effectuation |
| Date: | 2026–12–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05704523 |
| By: | Rob Collinson; Deniz Dutz; John Eric Humphries; Winnie van Dijk; Daniel Tannenbaum |
| Abstract: | We merge external eviction and homeless shelter records with BOC Master Address File Auxiliary Reference File (MAFARF) to analyze and document the quality of the data produced for Title 13, Chapter 5 surveys and estimates. When an eviction is executed by the Sheriff's office, we know the tenants no longer occupy the unit and the locks have been changed. Similarly, when a person engages with the homeless shelter system in a way that implies literal homelessness (e.g., staying at a homeless shelter), it is very unlikely they still live at their prior address. Through our linkage of PIKed external data on executed evictions and homeless shelter system engagement, we check, document, and validate whether address histories constructed from MAFARF correctly captures moves for individuals known to have left their previous address. |
| Keywords: | MAFARF, HMIS |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:cen:tnotes:26-31 |
| By: | Ekaterina Siniakova (University of Amsterdam); Oda Sund (Nordic Institute for Studies in Innovation); Joël van der Weele (University of Amsterdam) |
| Abstract: | Inequality statistics highlight specific aspects of economic reality. Economists traditionally rely on technical indices such as the Gini coefficient, valued for their formal properties. More recently, scholars have emphasized measures like the income share of the Top 10%, which more directly evoke political conflict. We investigate whether inequality metrics shape public perceptions and support for redistribution, and how they are used in the media. In an online experiment (N = 1, 246) among the general public, we show that "political'' measures reduce acceptance of inequality relative to the Gini coefficient, which itself has a desensitizing effect on fairness and emotional ratings. The behavioral effect of switching from the Gini to the Top 10\% share is quantitatively similar to switching 0.12-0.17 Gini points, e.g. from an equal society like the Netherlands to much more unequal Argentina. Academic experts and policy makers are less susceptible, but not immune to the metric effect, and predict a strong behavioral effect on the general public. Finally, we show that left-wing media are more likely to report top-share metrics and less likely to report the Gini coefficient than right-wing media, likely amplifying political divisions. Our findings show that inequality statistics do not merely describe economic reality, but shape normative assessments of the income distribution. |
| JEL: | C91 D63 P16 |
| Date: | 2026–08–02 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20260050 |
| By: | Divyanee Garg |
| Abstract: | Understanding similarity among financial assets is essential for effective portfolio diversification. This paper proposes a novel sentiment-adjusted portfolio optimization framework that integrates Topological Data Analysis (TDA) with technical indicators and FinBERT-based sentiment scores extracted from financial news. A TDA-based distance measure is employed within an agglomerative clustering framework to identify topologically dissimilar assets for portfolio construction. By incorporating sentiment information, the framework captures rapid changes in market perception and investor behavior that are not reflected by technical indicators alone. Unlike conventional correlation and Euclidean distance based approaches, the proposed method characterizes complex nonlinear relationships through topological summaries. To account for the transient nature of market sentiment, a dynamic rolling-window rebalancing strategy with frequent portfolio updates is adopted. A retention mechanism is further introduced to preserve high-quality assets across consecutive rebalancing windows, thereby reducing portfolio turnover and transaction costs. Extensive empirical analysis on S&P 500 constituents demonstrates that the proposed framework consistently outperforms correlation and Euclidean distance based methods, as well as benchmark strategies including Na\"ive, Index, and full-universe portfolios, in terms of returns and reward-risk performance. Furthermore, the framework exhibits strong robustness by delivering positive performance during periods of heightened market uncertainty, such as the U.S.-Israel-Iran conflict. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.21170 |
| By: | Rey, Hélène; Stavrakeva, Vania; Tang, Jenny |
| Abstract: | The paper explores empirically the tight links between exchange rates and the global network of equity holdings. Exchange rates can be expressed in terms of "equity net currency supplies", i.e. local currency stock market capitalization minus equity holdings, denominated in investors' currencies, as well as elasticities, reflecting the "centrality" of currencies in global equity markets. The observed components of our exchange rate decomposition account for, on average, 95% of the monthly variation of 28 bilateral currency crosses vis-Ã -vis the USD and 98% vis-Ã -vis the EUR. We use the decomposition to elucidate the unique role of the USD in transmitting risk aversion and U.S. macroeconomic news throughout the global equity network. Our findings contribute towards explaining global financial cycles and "risk-on"/"risk-off" episodes. |
| JEL: | F3 G15 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19508 |
| By: | Mohamed, Shima; Abushama, Hala; Kirui, Oliver K.; Suliman, Gotada; Siddig, Khalid |
| Abstract: | The 2026 Sudan Conflict Conference, organized by the International Food Policy Research Institute (IFPRI) in Cairo and held on 14 and 15 April, brought together researchers, policymakers, and development partners to discuss the impacts of Sudan’s protracted conflict on the nation’s economy and agrifood systems and to identify evidence‑based pathways for recovery. This proceedings report documents the key evidence, discussions, and policy insights generated during the conference, capturing technical research, operational perspectives, and contextual nuances. Three years into the crisis, Sudan faces a systemic breakdown affecting agricultural production, markets, institutions, and human capital, leaving more than half of the population in need of humanitarian assistance. Evidence presented during the conference highlighted severe disruptions to agrifood systems and increasingly fragmented markets, with food insecurity driven primarily by affordability and accessibility constraints. While firms and households have shown adaptive capacity, these responses to the conflict remain constrained and often rely on unsustainable coping strategies, including asset depletion and reduced investment. Displacement continues to deepen vulnerability but also offers the potential for increased economic integration supported by inclusive approaches, while the erosion of health and education systems poses serious long‑term risks to human capital and growth. Across the conference sessions, a clear consensus emerged on the need for integrated, system‑wide responses that link humanitarian assistance with recovery and development interventions. Agriculture and market systems were identified as critical entry points, while cash assistance is most effective when combined with livelihood and market support. Moving forward, the recovery of the nation’s economy and agrifood systems coming out of the conflict will require coordinated strategies to restore markets, rebuild livelihoods, invest in human capital, and strengthen data‑driven decision-making, supported by sustained international engagement and locally grounded approaches. |
| Keywords: | capacity building; conflicts; economic recovery; resilience; Sudan; Africa; Northern Africa |
| Date: | 2026–06–26 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:ssspwp:183517 |
| By: | Alberto Acedo |
| Abstract: | The Triadic Stress Index (TSI) takes a network index whose four factors were first observed in soil microbiome co-occurrence networks and applies it, without alteration, to the correlation network of financial assets. We test it on five markets spanning 2006-2026 (equities including banking crises and the AI sector, cryptocurrencies, commodities, foreign exchange and sovereign debt), against three independent definitions of a crisis episode, at a fixed alarm budget, out of sample, with block-bootstrap intervals and a Holm correction across the family of tests. The benchmarks are the Absorption Ratio, the industry standard used by MSCI and central banks; the effective rank and the Vendi score, the sharpest spectral measures available; Ollivier-Ricci curvature; and the global and local balance indices of signed correlation networks. Three comparisons favour the index. It carries a per-node decomposition, diag(A^3), naming which asset is carrying the concentration with no parameter to select, and scores 0.97-0.99 against 0.33-0.84 for the only published per-node alternative, whereas spectral attribution must first choose how many components to read and collapses under a standard but wrong choice. Its alarms are the cleanest of anything tested, 4.0% of them with no matching episode against 14.7% for the effective rank and roughly 59% for the Absorption Ratio. And it beats the Absorption Ratio on detection by 0.273 in F1 out of sample, p |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.10788 |
| By: | Bohren, Noah; Hakimov, Rustamdjan; Lalive, Rafael |
| Abstract: | Generative artificial intelligence (AI) has made substantial progress, but some capabilities of AI are not well understood. This study compares the ability of AI to a representative population of US adults in creative and strategic tasks. The creative ideas produced by AI chatbots are rated more creative than those created by humans. Moreover, ChatGPT is substantially more creative than humans, while Bard lags behind. Augmenting humans with AI improves human creativity, albeit not as much as ideas created by ChatGPT alone. Competition from AI does not significantly reduce the creativity of men, but it decreases the creativity of women. Humans who rate the text cannot discriminate well between ideas created by AI or other humans but assign lower scores to the responses they believe to be AI-generated. As for strategic capabilities, while ChatGPT shows a clear ability to adjust its moves in a strategic game to the play of the opponent, humans are, on average, more successful in this adaptation. |
| Keywords: | ChatGPT; Creativity; Experiment |
| JEL: | I24 J24 D91 C90 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19507 |
| By: | Matsuyama, Kiminori |
| Abstract: | This article reviews homothetic non-CES demand systems and their implications when applied to monopolistic competition, to offer guidance to those looking for flexible and yet tractable ways of departing from CES. Under general homothetic symmetric non-CES, two measures, substitutability and love-for-variety, are introduced to identify the condition under which the equilibrium product variety is excessive or insufficient. Because homotheticity and symmetry alone impose little restriction to make further progress, we turn to the Homothetic Single Aggregator (H.S.A.) class. H.S.A. is more flexible than CES and translog, which are its special cases, and yet equally analytically tractable, because all cross-variety interactions are summarized by the single aggregator. Under H.S.A., substitutability is increasing in product variety iff Marshall’s 2nd law holds, which is a sufficient condition for love-for-variety to be diminishing in product variety and for the equilibrium product variety to be excessive. Monopolistic competition under H.S.A. remains tractable even under various forms of firm heterogeneity and in multi-market settings. |
| Keywords: | Substitutability vs love-for-variety; Equilibrium vs optimal; Homothetic single aggregator; 2nd and 3rd laws of demand; Firm heterogeneity |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19376 |
| By: | Lindner, Thijs (Erasmus University Rotterdam); de Koster, Willem; van der Waal, Jeroen |
| Abstract: | The relationship between ethnic diversity and welfare attitudes has been the subject of much research. However, little is known about how exposure to information on the overrepresentation of ethnic minority individuals among welfare recipients affects attitudes to welfare recipients in general. We scrutinize a potential information exposure effect, and assess two contrasting scenarios, i.e., exposure to aforementioned information might strengthen either negative stereotypes of welfare recipients or the notion that welfare dependency is the result of structural conditions. Additionally, we hypothesize that the former (latter) response is more likely among those with more (less) ethnocentric attitudes. We tested this by conducting an original pre-registered survey experiment among members of a high-quality probability-based panel designed to represent the Dutch population (n = 1, 527). The treatment group was exposed to information depicting the overrepresentation of Dutch citizens with a Moroccan migration background among welfare recipients in the Netherlands, while the control group was not. It was only among the more ethnocentric respondents that exposure to the treatment increased support for the notions that welfare recipients: 1) are lacking work ethic; and 2) are themselves to blame for their condition. There was 3) no treatment effect on support for welfare schemes in general. We discuss the implications of these findings for a variety of academic debates and make suggestions for further research. |
| Date: | 2026–07–29 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:6r32b_v1 |
| By: | Qiao, Xinghao; Wang, Zihan; Yao, Qiwei; Zhang, Bo |
| Abstract: | The factor modeling for high-dimensional time series is powerful in discovering latent common components for dimension reduction and information extraction. Most available estimation methods can be divided into two categories: the covariance-based under asymptotically-identifiable assumption and the autocovariance-based with white idiosyncratic noise. This article follows the autocovariance-based framework and develops a novel weight-calibrated method to improve the estimation performance. It adopts a linear projection to tackle high-dimensionality, and employs a reduced-rank autoregression formulation. The asymptotic theory of the proposed method is established, relaxing the assumption on white noise. Additionally, we make the first attempt in the literature by providing a systematic theoretical comparison among the covariance-based, the standard autocovariance-based, and our proposed weight-calibrated autocovariance-based methods in the presence of factors with different strengths. Extensive simulations are conducted to showcase the superior finite-sample performance of our proposed method, as well as to validate the newly established theory. The superiority of our proposal is further illustrated through the analysis of one financial and one macroeconomic datasets. Supplementary materials for this article are available online, including a standardized description of the materials available for reproducing the work. |
| Keywords: | autocovariance;covariance;eigenanalysis;factor strength;reduced rank autoregression;weight matrix |
| JEL: | C1 |
| Date: | 2026–07–27 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:138585 |
| By: | Tarsia, Romano |
| Abstract: | This paper provides novel firm-level estimates of the economic damages caused by temperature shocks to European firms. I rely on a panel data analysis to show wide heterogeneities in the impact of temperature shocks, which depend on firm characteristics. This paper reveals the importance of micro-level data for quantifying climate damage estimates, as the average relationship between temperature and economic outcomes masks firms’ different susceptibilities to weather shocks. These create both winners and losers, harming less productive firms, particularly those in warmer regions, while benefiting more productive ones. Compared with the pooled marginal effect, the least-productive firms experience negative effects roughly ten times as large, while the most-productive firms experience positive effects roughly three times as large. Additionally, higher temperatures increase exit probability among the least productive firms in warmer regions. I highlight the distributional effects of climate change, and offer insights for adaptation policies. |
| Keywords: | climate change;firms;climate damages;economic performance |
| JEL: | D24 O13 O52 Q54 R11 |
| Date: | 2026–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:140233 |
| By: | Uehara, Masatoshi; Shi, Chengchun; Kallus, Nathan |
| Abstract: | Reinforcement learning (RL) is one of the most vibrant research frontiers in machine learning and has been recently applied to solve a number of challenging problems. In this paper, we primarily focus on off-policy evaluation (OPE), one of the most fundamental topics in RL. In recent years, a number of OPE methods have been developed in the statistics and computer science literature. We provide a discussion on the efficiency bound of OPE, some of the existing state-of-the-art OPE methods, their statistical properties and some other related research directions that are currently actively explored. |
| Keywords: | off-policy evaluation;semiparametric methods;causal inference;dynamic treatment regime;offline reinforcement learning;contextual bandits |
| JEL: | C1 |
| Date: | 2026–08–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127940 |
| By: | Dongwei Zhao; Stefanos Delikaraogloub; Vladimir Dvorkin Alberto J. Lamadrid L.; Audun Botterud |
| Abstract: | Coordination of day-ahead and real-time electricity markets is imperative for cost-effective electricity supply and also to provide efficient incentives for the energy transition. Although stochastic market designs feature the least-cost coordination, they are incompatible with current deterministic markets. This paper proposes a new approach for compatible coordination in two-settlement markets based on benchmark bidding curves for variable renewable energy. These curves are optimized based on a bilevel optimization problem, anticipating per-scenario responses of deterministic market-clearing problems and ultimately minimizing the expected cost across day-ahead and real-time markets. Although the general bilevel model is challenging to solve, we theoretically prove that a single-segment bidding curve with a zero bidding price is sufficient to achieve system optimality if the marginal cost of variable renewable energy is zero, thus addressing the computational challenge. In practice, variable renewable energy producers can be allowed to bid multi-segment curves with non-zero prices. We test the bilevel framework for both single- and multiple-segment bidding curves under the assumption of fixed bidding prices. We leverage duality theory and McCormick envelopes to derive the linear programming approximation of the bilevel problem, which scales to practical systems such as a 1576-bus NYISO system. We benchmark the proposed coordination and find absolute dominance over the baseline solution, which assumes that renewables agnostically bid their expected forecasts. We also demonstrate that our proposed scheme provides a good approximation of the least-cost, yet unattainable in practice, stochastic market outcome. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.18732 |
| By: | Littlechild, S.; Baldick, R. |
| Abstract: | The Texas Competitive Renewable Energy Zones (CREZ) process remains highly relevant to current transmission planning. Its significance lies not in providing a template to be copied mechanically, but in showing how a regulator can address a transmission "chicken and egg" problem that ordinary incremental planning is poorly equipped to solve. Senate Bill 20 of 2005 required the Public Utility Commission of Texas (PUCT) to designate renewable zones and develop transmission to deliver their output "in a manner that is most beneficial and cost-effective to the customers." In 2008 the Commission approved a transmission plan capable of supporting about 18, 500 MW of wind generation, and by early 2014 nearly 3, 600 miles of new transmission had been built. The process may be understood as a hybrid institutional mechanism combining legislative mandate, regulatory planning and backstop, and negotiated implementation in provider selection and siting. The CREZ experience also illustrates the limits of anticipatory transmission planning: it relied on only partial ex ante cost -benefit discipline, imposed local burdens that were not always fully compensated, and used a competitive designation model that Texas later curtailed. Current transmission policy could recover the logic of CREZ, but improve the instruments: by using more explicit benefit tests, transparent cost allocation, better treatment of local burdens, safeguards against incumbent control, and deliberate use of negotiated-settlement techniques under a regulatory backstop. |
| Keywords: | Transmission Planning, CREZ, ERCOT, Renewable Energy Zones, Negotiated Settlements, Cost Allocation, Anticipatory Investment |
| JEL: | L94 L51 Q48 D02 |
| Date: | 2026–07–27 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2662 |
| By: | Toxvaerd, Flavio |
| Abstract: | In this paper, I revisit and synthesize the rich literature on price formation in bilateral monopoly. I show how traditional flat-rate price posting (e.g. price setting and price taking) is akin to Nash bargaining over wholesale price with subsequent `right-to-manage', while two-part tariffs are akin to bilaterally efficient Nash bargaining over both wholesale price and quantity. Outcomes under the former protocol nest price posting and the cases of pure monopoly and pure monopsony. Outcomes under the latter protocol nest all-or-nothing offers, the Walrasian outcome under two-sided price taking and trace out the contract curve. With lopsided bargaining power, outcomes under right-to-manage can lead to socially superior outcomes to those that are bilaterally efficient, but may also lead to socially inferior over production. Last, effects of bargaining power on markups, markdowns and cost pass-through are characterized. |
| Keywords: | Bilateral monopoly |
| JEL: | L13 L42 D42 C78 J42 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19338 |
| By: | Becker, Bo; Josephson, Jens |
| Abstract: | Many countries' insolvency systems focus on restructuring financial liabilities, and ignore operational liabilities such as leases and long-term supplier contracts. We model insolvency procedures with and without operational restructuring options. Such options avoid excessive liquidation of firms with significant non-financial obligations. Ex-ante, this option should increase debt capacity, especially in industries with inputs supplied under executory contract. We test this hypothesis around the introduction of a new law in Israel which facilitated the rejection of contracts, and by comparing capital structures for industries with high lease obligations between the U.S. and other countries. Empirical results confirm that operating restructuring is a key aspect of insolvency. |
| Keywords: | Insolvency; Bankruptcy; Restructuring |
| JEL: | G30 G32 G33 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19449 |
| By: | Atkeson, Andy; Heathcote, Jonathan; Perri, Fabrizio |
| Abstract: | We present two valuation models which we use to account for the annual data on price per share and dividends per share for the CRSP Value-Weighted Index from 1929 to 2023. We show that it is a simple matter to account for these data based purely on a model of variation over time in the expected ratio of dividends per share to aggregate consumption under two conditions. First, investors must receive news shocks regarding the expected ratio of dividends per share to aggregate consumption in the long run. Second, the discount rate used to evaluate the impact of this news on the current price per share must be low. We use the approach of Campbell and Shiller (1987) and Campbell and Shiller (1988) to argue that the cash flow news in our model is not a stand-in for changes in expected returns: with our model parameters, returns are not predictable and price dividend spreads and ratios predict dividend growth at model-implied magnitudes. We illustrate which parameter choices account for differences between our results and prior findings in the literature. We conclude that the answer to Shiller’s (1981) question “Do stock prices move too much to be justified by subsequent movements in dividends?†is “not necessarily.†|
| JEL: | G12 G14 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19411 |