|
on Macroeconomics |
| By: | Maarten Meeuwis; Dimitris Papanikolaou; Lawrence D.W. Schmidt |
| Abstract: | We study how aggregate financial conditions shape firm insurance and, through it, labor income risk. In a directed search model with dynamic wage contracts and two-sided limited commitment, firm insurance against idiosyncratic shocks erodes when risk premia rise. Using U.S. administrative data, we document new evidence supporting the model: pass-through of firm shocks to earnings rises in bad times, especially for lower-paid workers near the separation margin. The model reproduces many untargeted time-series and cross-sectional features of earnings risk and implies substantial welfare costs of idiosyncratic risk, high private discount rates on human capital, and large gains from recession-contingent transfers. |
| JEL: | D52 E0 E24 E32 E44 G0 G12 J0 J08 J31 J41 J63 J64 J65 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35781 |
| By: | Kim, Yong Jin |
| Abstract: | The international system is moving away from the relatively coherent post-Cold War order toward layered and contested multipolarity. Military power is diffusing; economic interdependence is increasingly securitized; alliance commitments are exposed to domestic bargaining; and states are embedded in overlapping security, technology, financial, and industrial networks. This paper develops a general framework for alliance choice and strategic autonomy under these conditions. A stylized model with linear preferences and linear technologies treats the United States and China as competing network centers: the sponsor chooses whether and how strongly to support its network, while smaller states compare alternative networks according to security, geography, productivity and supply-chain effects, transfers, political-assimilation costs, and indigenous capability. The model distinguishes decentralized allied defense from a network-planner benchmark and derives an alliance transfer multiplier theorem for alliance transfers. Under a frictionless one-for-one reallocation from direct U.S. military spending to an ally transfer, if the induced present-value increase in allied military effort exceeds one per unit transferred, the alliance multiplier raises U.S.-alliance military capability and, through the modeled hegemonic-power channel, U.S. welfare; allied welfare also rises under the maintained assumptions when the multiplier exceeds one. Although the local theorem holds membership fixed, entry can amplify the effect through network size, productivity, and further induced military effort. Conversely, transfer cuts near participation thresholds can trigger nonlinear alliance weakening. The formal logic is linked to a four-index comparative diagnostic applied across fourteen states. Strategic autonomy is defined not as equidistant neutrality but as the capacity to preserve meaningful choice under pressure. South Korea is retained as a brief hard-case illustration in Appendix A. |
| Keywords: | multipolarity, hegemonic stability, strategic autonomy, alliance networks, U.S.-China competition, network externalities |
| JEL: | F50 F52 F53 H56 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:343529 |
| By: | Thomas Leavitt |
| Abstract: | In the canonical Difference-in-Differences design, the control group's post-treatment change serves as an imputation of the treated group's counterfactual change in the same period, an imputation justified by parallel trends. However, differences in group composition can produce between-group differences in how outcomes would evolve over time, rendering this imputation vulnerable to confounding. An alternative imputation -- such as one based on the treated group's pre-treatment change -- avoids such between-group confounding but introduces the risk of confounding from within-group temporal shifts. Ideally, both imputations, each vulnerable to different sources of confounding, would have concordant values, thereby yielding the same causal conclusions. When the imputations are discordant, conclusions under parallel trends hinge more critically on that assumption since alternative imputations would point to different results. Yet in these scenarios, existing pretrends-based sensitivity analyses can show low sensitivity because they ignore post-treatment deviations from pretrends in the control group. This paper therefore proposes a discordance-based sensitivity model in which parallel pretrends are necessary but not sufficient for low sensitivity. I formally justify this model in terms of the expected distance between the ATT under parallel trends and under alternative assumptions, weighted by the joint plausibility of those assumptions. I then provide a decision-theoretic rationale for benchmarking violations of parallel trends using the worst-case discordance between the parallel trends imputation and alternative imputations. Finally, I apply both pretrends- and discordance-based sensitivity models to assess how a labor supply shock influenced electoral support for apartheid-era policies in South Africa, showing how the two approaches yield different results. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.19081 |
| By: | Sumit Agarwal; Ying Deng; Yi Fan; Qi Gao; Jing Li; Lin Ma |
| Abstract: | We estimate housing externalities in a high-density city, exploiting the staggered rollout of Singapore's nationwide Main Upgrading Programme for public housing. Controlling for nonrandom neighborhood exposure, we find that upgrading raises treated buildings' prices by 11.5% upon completion and neighboring buildings' resale prices by about 2% within 500 meters, decaying to zero beyond. A model with distance-decaying externalities shows that in dense settings spillovers justify the distortions of in-kind provision; this advantage diminishes and reverses at lower densities. Administrative data on over 2 million residents show that upgrading disproportionately retains older incumbents, suggesting age-specific amenities as an underexplored externality channel. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.21478 |
| By: | Anouck Butraud-Assathian (PcEn - Chaire Pluralisme culturel et Ethique du numérique (Paris 1 Panthéon-Sorbonne), CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Joëlle Farchy (PcEn - Chaire Pluralisme culturel et Ethique du numérique (Paris 1 Panthéon-Sorbonne)); Léna Laqueyrerie (PcEn - Chaire Pluralisme culturel et Ethique du numérique (Paris 1 Panthéon-Sorbonne), CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The article examines the shift in the digital cultural ecosystem triggered by the widespread adoption of Generative AI. Historically, the platformization of cultural industries established an attention economy, where recommendation algorithms were essential for guiding users through overwhelming content catalogs. However, the recent influx of synthetic media has disrupted the dynamic, creating a synthetic tsunami that threatens cultural diversity, undermines user trust, and jeopardizes the livelihoods of human creators. Furthermore, this unchecked proliferation risks model degeneration for the AI systems themselves. To mitigate these economic and social tensions, Digital Service Providers are evolving their algorithmic policies. We analyze how platforms handle AI detection tools, transparent labeling, and adjusted recommendation guidelines to filter and distinguish human creations from automated content. Ultimately, this paper argues that platforms transition from a pure attention economy to a trust economy, actively protecting and highlighting human-made works to preserve the integrity and sustainability of the cultural value chain. |
| Keywords: | trust economy, digitization, recommender systems, GenAI, cultural industries, attention economy |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:hal:cesptp:hal-05751501 |
| By: | Mark Setterfield (Department of Economics, New School for Social Research, USA) |
| Abstract: | According to Blecker (2027), while tariffs per se are not always and everywhere unwarranted (Blecker, 2026), the Trump tariffs will fail on their own terms. Making this argument necessitates suspending disbelief, so as to interpret the Trump tariffs as economic policy -- something that various commentators, who regard the tariffs as no more than political theatre, refuse to indulge. The argument here is that distinguishing between political chicanery and economics in this fashion involves a false dichotomy. Acknowledging the potential relationship between the two permits analysis that points towards an unpleasant political economy rationale for the Trump tariffs. |
| Keywords: | Trump tariffs, Authoritarian Neoliberalism, social structure of accumulation, capital-citizen accord |
| JEL: | B52 E02 F02 F13 P16 P51 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:new:wpaper:2610 |
| By: | Adrien Jean-Guy Passant (Université Paris-Saclay, ISTEC - Institut supérieur des Sciences, Techniques et Economie Commerciales - ISTEC) |
| Abstract: | Les musées du management commencent à se développer en France dans les établissements de formation en gestion. S'ils reflètent de manière originale une vision patrimoniale du management, ils n'en sont pas moins les héritiers d'une initiative voisine, autrefois incarnée par les « musées commerciaux » ouverts dans les écoles de commerce françaises entre le XIX e siècle et le début du XX e siècle. Cet article revient sur l'histoire trop longtemps méconnue de ces singuliers « musées commerciaux ».1 C. Falcoz et Y. Livian, « Des managers en formation au Louvre : usages de la peinture dans un cursus de formation continue », |
| Date: | 2024–12–18 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05714736 |
| By: | Faugeras, Olivier |
| Abstract: | We show how cumulative distribution function estimation (cdf) can be formulated as a regression problem, using order statistics. This results in a nonstandard nonparametric regression problem, with correlated but van- ishing errors. Nonparametric regression estimators can then be leveraged to obtain corresponding estimators of the cdf and of its derivatives. We illus- trate the approach, theoretically with Nadaraya-Watson regression estimator, and numerically with P-splines regression techniques. We discuss the issue of smoothing parameter selection for regression of correlated errors and show how to make use of known techniques from the regression framework to improve on the cdf and density estimation. Eventually, we draw some perspectives and show how the proposed framework could be extended to the multivariate setting. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:132133 |
| By: | Book, Leslie |
| Abstract: | This article examines the Internal Revenue Service’s administration of the Coronavirus Aid, Relief, and Economic Security (CARES) Act economic impact payment program and argues that the agency’s decision to deny and delay stimulus payments to incarcerated individuals constituted an unlawful exercise of administrative power with significant racial justice implications. The CARES Act broadly authorized economic impact payments for eligible individuals, yet the IRS adopted a policy that categorically excluded incarcerated persons from receiving relief despite the absence of statutory language supporting such a restriction. Through an analysis of the ensuing litigation, including the successful challenge brought in federal court, the article contends that the IRS’s policy was inconsistent with both the text and purpose of the CARES Act and violated administrative law principles governing agency action. Beyond the legal deficiencies of the policy, the article situates the controversy within broader discussions of tax administration, administrative burden, and racial equity. Drawing on theories of administrative burden and racialized burden, the article argues that the IRS’s actions imposed disproportionate hardships on incarcerated individuals and their families, many of whom are members of communities already disproportionately impacted by incarceration, poverty, and the COVID-19 pandemic. The article further highlights the practical barriers that incarcerated individuals faced in obtaining payments even after the policy was invalidated, including inadequate communication, limited access to filing mechanisms, and procedural obstacles embedded within IRS processes. By examining the relationship between tax administration and racial justice, the article demonstrates that administrative choices can reinforce existing social inequalities even when facially neutral. The article concludes by proposing a framework for anti-racist tax administration that emphasizes transparency, proactive consideration of racialized burdens, and greater sensitivity to the effects of administrative decision-making on vulnerable populations. [This abstract was written by Microsoft Copilot, a generative artificial intelligence.] |
| Date: | 2026–09–24 |
| URL: | https://d.repec.org/n?u=RePEc:osf:lawarc:qcfk3_v1 |
| By: | Mangelsdorf, Hannes; Rebeggiani, Luca |
| Abstract: | This study investigates the moderating role of household structure on consumption decisions and the dynamics of expenditure elasticity for leisure and sporting goods along the income curve for different household types. Using microdata from the German Income and Consumption Survey (EVS), we employ an extended econometric approach featuring a log-log specification with a quadratic income term to capture non-linearity and interaction terms to model elasticity heterogeneity for different household configurations. While OLS is used for general leisure, advanced censored-data models (Tobit, Heckman, and Hurdle specifications) are applied to sporting goods demand to separate the consumption propensity from the intensity. We confirm significant non-linear demand dynamics for both leisure and sporting goods consumption, characterized by substantially higher expenditure elasticities in lower income brackets that subsequently flatten out with rising income. We find strong household heterogeneity: the most pronounced income effect is observed in households with children, who demonstrate the strongest reaction to additional income in the lower part of the income spectrum for leisure and sporting goods expenditures. This refined approach delivers a significantly improved explanatory power for the variance in leisure and sporting goods demand modelling. |
| Keywords: | Sports consumption, Leisure expenditures, Income elasticity, Household heterogeneity, Nonlinear Engel curves, Participation and expenditure |
| JEL: | D12 Z22 C25 D13 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:tuiedp:343549 |
| By: | Shakeeb Khan (Boston College); Elie Tamer (Harvard University) |
| Abstract: | This paper studies identification in linear quantile panel models with unrestricted individual heterogeneity when the number of time periods is fixed and small. We impose quantile strict exogeneity, whereby the conditional quantile restriction holds given the individual’s complete regressor history and latent individual effect, but otherwise allow the disturbances to be arbitrarily dependent over time. We show that the common slope coefficient can be partially identified from the requirement that the residuals in all periods be compatible with a common latent individual effect. We characterize the sharp identified set as the set of coefficients for which there exists a latent coupling satisfying the period-specific quantile restrictions. This characterization yields observable crossing inequalities that provide computationally convenient outer bounds and an observable dual representation that is sharp. When the regressors and outcomes have finite support, the sharp identified set can be computed exactly using finite-dimensional linear programs, without discretizing the latent individual effect; for continuously distributed regressors, we develop nested dual-sieve procedures that converge to the sharp set. We further characterize how identification depends on directional variation in the regressor paths, showing that additional periods need not generate identification unless they provide sufficiently rich variation relative to the support of the composite residual. Under a finite-width composite-residual condition, we obtain explicit bounds on the identified set and give conditions under which even a two-period model is point identified. Finally, we consider a quantile-varying factor-loading extension in which the latent individual effect is common across quantiles, and show how cross-quantile restrictions can identify economically meaningful relative loadings. |
| Keywords: | panel data, quantile regression, fixed effects, partial identification, sharp identified set, duality, linear programming |
| JEL: | C14 C23 C61 |
| Date: | 2026–08–31 |
| URL: | https://d.repec.org/n?u=RePEc:boc:bocoec:1116 |
| By: | George, Babu (Alcorn State University) |
| Abstract: | Published estimates of how hyperscale computing load affects household electricity prices disagree about sign as well as magnitude. This article argues that much of the disagreement reflects three identification problems that existing designs often absorb rather than model directly. Large loads choose low-cost locations, making exposure endogenous. Average revenue per kilowatt-hour cannot distinguish a change in rates from a change in the composition of customers within a class. In jurisdictions that allow construction costs into rates before a plant enters service, bills may change years before the associated load appears in sales data. I examine each problem using public data. With state-level price and sales data for 2023 and 2024 for the 50 states and the District of Columbia, I find direct evidence of siting selection: the 2023 residential price level explains 22 percent of the cross-state variance in subsequent non-residential sales growth. That sorting appears to follow a state’s general cost level rather than the depth of the discount already received by large customers, a more tractable pattern for identification. Non-residential sales growth has no detectable relation to residential price growth, although the design lacks power to detect elasticities below roughly 0.9, so the null is not substantively informative. The residential-to-industrial price ratio rises with load growth, but decomposition shows that seven-tenths of the movement comes from falling non-residential prices rather than rising residential prices; the same pattern appears relative to the commercial class, and half of the association disappears after adding a four-category regional control. Translating the reduced-form slope into an implied price for incremental load shows that a pure composition account would require these kilowatt-hours to be served at about one-third of the class average, a demanding but possible figure whose confidence interval cannot adjudicate the issue. The evidence favors a regime-dependent interpretation of the literature and indicates that future work should treat capital deployment, rather than realized energy sales, as the central treatment variable. |
| Date: | 2026–09–16 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:4cvd2_v1 |
| By: | Mark Glick (University of Utah); Gabriel A. Lozada (University of Utah); Darren Bush (University of Houston) |
| Abstract: | Research in biology and anthropology shows that humans evolved in largely egalitarian small groups; occasional selfishness was punished. Aversion to inequality is thus an inherited human characteristic. In unequal societies, humans experience stress, leading to many social pathologies, as shown by extensive literature in epidemiology. Well-being can be increased by reducing inequality, independent of increases in GDP. This is obscured by current economic theories, which use unrealistic assumptions and an empirically completely unsupported "equity-efficiency tradeoff" to justify ignoring distribution. Finally, we show that public policy can have an enormous impact on income inequality and has done so in the past. |
| Keywords: | Distribution; Welfare Economics; Microeconomic Behavior; Macroeconomic Policy; antitrust. |
| JEL: | D3 D6 D01 E6 K21 L4 |
| Date: | 2026–04–24 |
| URL: | https://d.repec.org/n?u=RePEc:thk:wpaper:inetwp250 |
| By: | Bayerlein, Michael; Bendiek, Annegret; Hemmelskamp, Jonas; von der Forst, Maik |
| Abstract: | The healthcare sector worldwide is facing an increasing threat from cyberattacks. Between 2022 and 2025, the European Repository of Cyber Incidents (EuRepoC) recorded a total of 351 significant attacks on healthcare facilities. These data provide initial insights into the impact of cyberattacks on healthcare systems and sectors, and the crisis management that follows. They also highlight that such attacks pose a threat to public health and national security. The data analysis shows that national critical sectors and the European and international levels must be interlinked. The National Security Council could do so by developing an integrated national and international situational assessments based on interdisciplinary analyses. Only such an approach can systematically identify threats, derive effective measures from them and comprehensively protect the healthcare sector. |
| Keywords: | cyber security, healthcare sector, public health, crisis management, resilience, national security, critical infrastructure, KRITIS, ransomware attacks, data theft, digitalisation, EU, WHO, National Security Council, BSI, ENISA, SSA, national security, health risks, cyberattacks |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swpcom:344002 |
| By: | Gerrit Bauch; Arthur Dolgopolov; Manuel Foerster |
| Abstract: | We investigate the strategic communication of narratives under model uncertainty. The sender has private information about the true data-generating process of publicly observable data. The receiver is uncertain about how to interpret the data, but aware of the sender's incentives to strategically provide interpretations (``narratives''). We theoretically show that the size of the conflict of interest between the sender and the receiver is a crucial determinant of equilibrium communication. In particular, the stronger the sender's bias, (i) the more senders exaggerate their information and (ii) the more receivers correct the sender's action recommendations. In a laboratory experiment, we find evidence in line with both predictions, suggesting that people in complex and uncertain environments take a narrator's strategic incentives into account. Additional analyses reveal that narrative likelihood does not drive receiver behavior and that narratives are, on average, slightly persuasive only when bias is low. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.10074 |
| By: | Madiha Riaz (Pakistan Institute of Development Economics) |
| Abstract: | This knowledge brief examines the ongoing structural shift in the global monetary and energy-pricing system from the long-standing U.S. dollar-based petrodollar regime toward the emerging Petroyuan framework. Drawing on historical analysis, theoretical insights, and empirical data from 1970 to 2026, it explores how oil pricing shapes global liquidity, inflation, exchange rates, capital flows, and financial stability. The petrodollar system historically reinforced U.S. dollar dominance and enabled the large-scale recycling of oil revenues into global financial markets. Recent structural changes - geopolitical fragmentation, China's rise, Western sanctions, and diversification of energy trade - have begun to erode these relationships. The emerging Petroyuan introduces a more multipolar monetary landscape. For oil-importing economies such as Pakistan, currency diversification may offer marginal but meaningful benefits, yet external vulnerabilities remain binding constraints. Pakistan's structural deficit with China - $9.5 billion in imports versus $1.2 billion in exports in H1 FY2025-26 - combined with $29-30 billion in Chinese bilateral debt, creates a paradoxical yet compelling case for a calibrated yuan-based settlement that could reduce dollar dependence without deepening single-counterparty risk. The brief concludes that the transition will be gradual and potentially destabilizing without coordinated domestic and multilateral policy responses. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pid:kbrief:2026:152 |
| By: | Gurung, Nirmal |
| Abstract: | External debt sustainability is a matter of great concern for many developing countries like Nepal since a part of the borrowed money is regarded as the liability that threatens to criticize the value of their local currency and increases their fiscal burden. This paper performs an analysis of the external debt indicators of Nepal and the risk of a debt distress using the information provided by Nepal Rastra Bank (NRB), International Monetary Fund (IMF) and World Bank. According to the results, the total public debt in Nepal is expected to reach about Rs 2.97 trillion (USD 19.21 billion) by the end of fiscal year 2025/26, which is equivalent to 45.07 percent of GDP, as compared to 43.79 percent in the previous year. The external debt increased to about 25.3 percent of GDP from 20.6 percent, and that of domestic one remained at about 22-23 percent. Nepal still belongs to the countries with low risk of experiencing a debt distress, according to the joint World Bank-IMF Debt Sustainability Analysis (DSA). However, the study highlights several vulnerabilities in the external debt of Nepal as the present value of the external debt-to-exports ratio exceeds the indicative threshold in the export shock scenario. The Nepali rupee has depreciated by around Rs 8 against the US dollar in the first seven months of FY2025/26, adding Rs 92.96 billion to the external debt of the country. Only around one-third of the capital budget has been spent, which implies that the borrowed money is used for sustaining the recurrent expenditure rather than capital spending. The paper concludes that Nepal’s debt is sustainable in the near term. However, the increasing vulnerabilities in the form of currency depreciation, inadequate revenue mobilization efforts and low efficiency utilization of the borrowed funds should be responded to in order to address long-term sustainability. |
| Date: | 2026–09–25 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:yrzbe_v1 |
| By: | Iñaki Aldasoro; Sebastian Doerr; Daniel Rees |
| Abstract: | Artificial intelligence (AI) and robots have the potential to offset the macroeconomic consequences of an ageing workforce, but the ability to automate jobs depends on which industries are ageing. AI and robots substitute most readily for jobs in industries with younger workforces (eg finance), while older, high-employment industries (eg agriculture, health) have less scope for automation. A new ageing–automation scorecard for over 130 economies shows that some of the fastest-ageing economies may face more substantial challenges in easing demographic pressures through automation. |
| Date: | 2026–08–26 |
| URL: | https://d.repec.org/n?u=RePEc:bis:bisblt:135 |
| By: | Silvija Vlah Jerić (Faculty of Economics & Business, University of Zagreb); Margareta Gardijan Kedžo (Faculty of Economics & Business, University of Zagreb); Zrinka Lovretin Golubić (Faculty of Economics & Business, University of Zagreb) |
| Abstract: | This paper examines whether ridge regularization improves portfolio performance in the Croatian equity market and whether it adds value when individual portfolio weights are already capped. We compare long-only global minimum variance (GMV) and minimum conditional value-at-risk (CVaR) portfolios using CROBEX constituent returns from 2004 onward, covering 43 index revisions and six estimation and holding-window schemes. The regularization parameter is selected adaptively using information from previous holding periods. Performance is assessed against corresponding unregularized portfolios, an equally weighted portfolio, and the CROBEX index. We also examine turnover, transaction costs, and crisis performance. Under the baseline 30% maximum-weight constraint, adaptive ridge regularization does not produce a statistically significant improvement in Sharpe ratios over the corresponding unregularized portfolios. For CVaR portfolios, the weight constraint accounts for a substantial part of the observed Sharpe-ratio improvement, while the additional benefit of ridge regularization is limited and varies across specifications. Both mechanisms have only small effects on GMV performance. Although selected CVaR specifications outperform CROBEX in cumulative returns, GMV generally provides better realized downside protection. These results suggest that ridge regularization and maximum-weight constraints are partly substitutable in this small frontier market. |
| Keywords: | portfolio optimization, ridge regularization, maximum-weight constraints, conditional value-at-risk, global minimum variance, frontier markets, CROBEX |
| JEL: | G11 C61 C58 |
| Date: | 2026–09–15 |
| URL: | https://d.repec.org/n?u=RePEc:zag:wpaper:2605 |
| By: | Melissa Dell; Ashesh Rambachan |
| Abstract: | Artificial intelligence (AI) is transforming measurement in economics. AI models convert unstructured data, such as text and images, into structured variables at low cost, making previously prohibitive measurement feasible at scale. This shifts the bottleneck from finding any scalable measure of a phenomenon to choosing among many plausible ones, which may support different empirical conclusions. This review provides guidance for navigating that shift. We describe three stages at which AI enters the measurement pipeline—discovery, construct definition, and observation—and what each demands of researchers. We argue that credible inference with AI-generated variables requires appropriately designed validation: anchoring measurement to explicit criteria, rather than informal claims that a proxy is reasonable. We then examine how validation samples support valid inference even when AI predictions are arbitrarily biased, and what can be done when a random validation sample is unavailable. |
| JEL: | C1 C45 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35744 |
| By: | Nano Barahona; Cristóbal Otero; Sebastián Otero; Joshua J. Kim |
| Abstract: | We study the aggregate and heterogeneous effects of a front-of-package labeling policy implemented in Chile. We find that consumers reduced their sugar and caloric intake by 9% and 6%, respectively. On the demand side, labels prompt consumers to substitute within categories rather than switching between categories. Within-category responses are more pronounced when labels provide new information. On the supply side, we observe bunching at regulatory thresholds, with substantial heterogeneity across categories, consistent with differing costs of product reformulation. We conclude that considering policy-response heterogeneity is key for effective policy design. |
| JEL: | D12 D22 I12 I18 L11 L81 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35737 |
| By: | Pingyang Gao; Jinzhi Lu; Zhenpeng Yang |
| Abstract: | This paper provides a theoretical framework to evaluate the trade-off between the self-regulated peer review system and independent government inspection (PCAOB) in the auditing profession. We model the peer review system as a Judgment Regime, where a stakeholder utilizes professional expertise, captured as a private signal, to make ex-post decisions on verifying audit failures. In contrast, PCAOB inspection is modeled as a Commitment Regime, where the stakeholder lacks private information but can commit ex-ante to a predetermined level of verification. We find that the Judgment Regime benefits from a resource-allocation effect and a deterrence effect driven by informed verification, whereas the Commitment Regime deters audit failures through the first-mover advantage of ex-ante commitment. Our analysis demonstrates that the stakeholder prefers the peer review system if and only if the private signal is sufficiently informative. Furthermore, comparative statics reveal that higher verification costs or stronger audit incentives shift the stakeholder's preference toward PCAOB inspection. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.24020 |
| By: | Hellenkamp, Detlef |
| Abstract: | This paper analyses how generative artificial intelligence is reshaping the requirements of academic authorship in higher education and explores the implications this development holds for a contemporary culture of assessment. It begins from the observation that generative systems can substantially accelerate scholarly work in areas such as structuring, drafting, and tutorial support, while simultaneously generating new risks for academic integrity, validity, and reliability. To address this development, the paper develops the theoretical framework of functional tool indifference. What matters, on this view, is not the tool as such, but whether validity, traceability, and human responsibility are preserved throughout the scholarly process. On this basis, the paper proposes a distinction between a merely technical product and a human artefact. An AI-generated output becomes a human artefact attributable in scholarly terms only through the human act of validation – that is, through review, selection, revision, source checking, and responsible contextualization. From this perspective, academic authorship shifts away from mere text production towards capacities of validation, verification, and judgement. For higher education, this entails the need for a transformed assessment culture that evaluates not only end products, but also processes of production, reflective performance, and the logic of evidentiary support. The paper therefore argues for a dual model of assessment based on process integrity and artefact validity, and for sustained AI governance that strengthens higher education institutions as sites of methodological, reflective, and validation competence. |
| Keywords: | Generative AI, higher education, academic integrity, assessment culture, academic authorship, AI-assisted assessment, future skills, validation competence |
| JEL: | I21 I23 I28 O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:343650 |
| By: | Pinar Tat (Department of Economics, Gebze Technical University); Abdullah Altun (Department of Economics, Gebze Technical University); Halit Yanikkaya (Department of Economics, Gebze Technical University) |
| Abstract: | This paper examines the impact of foreign direct investment (FDI) on the trade-related intensity of greenhouse gas (GHG) emissions. By integrating sector-level FDI inflows with detailed trade-related emission data, the study goes beyond conventional approaches by focusing not only on aggregate emissions but specifically on emissions embedded in exports. Using a comprehensive dataset covering 38 countries and 35 sectors from 2005 to 2020, the analysis provides new insights into how multinational production activities lead to global environmental outcomes. The findings reveal that FDI inflows increase emission intensity in trade in both developed and developing countries. The findings are particularly valid for the manufacturing sectors, regardless of trading partners. These results support the pollution haven and race to the bottom hypotheses, highlighting the need for stronger international environmental coordination. The study thus fills a critical gap in the literature by linking international investment strategies to trade-induced emissions and offers clear policy recommendations to align FDI policies with global climate objectives. |
| Keywords: | Foreign Direct Investment (FDI), Trade-related Emissions, Emission Intensity, Greenhouse Gases (GHG) |
| JEL: | F18 F21 Q53 Q56 |
| Date: | 2026–09–14 |
| URL: | https://d.repec.org/n?u=RePEc:geb:wpaper:2026-01 |
| By: | Eduardo Fonseca Mendes |
| Abstract: | We provide sufficient conditions for the consistency of penalized least squares procedures that select the order (dimension) of a regression model from a sequence of nested classes, allowing for dependent, martingale-difference errors. The main contribution is to relax the classical identifiability requirement: parameters indexing classes larger than the true order need not be identified, provided the additional, excess directions admit a linear approximation to the truth in a neighbourhood of the true parameter. This relaxation lets the number of candidate models grow with the sample size, removing the usual need for a fixed upper bound. We verify the resulting high-level conditions for two classes of nonlinear regression models used in applied work: multiple-regime smooth transition regression and mixture-of-experts models with generic generalized linear model experts. Under a BIC-type penalty, the resulting order selection rule is consistent in either model class whenever the number of candidate models grows slower than the logarithm of the sample size. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.23220 |
| By: | Jun Maeda |
| Abstract: | Variance swaps are a convenient instrument for trading vega and convexity, and a listed contract now trades on Cboe. We ask when a trader should put such a position on and when she should take it off, and for a perpetual, continuously settled contract we answer both in closed form: each threshold is the unique root of a smooth-pasting equation in confluent hypergeometric functions. Under the pricing measure the question has no content, the mark-to-market being a martingale. Under the physical measure with a variance risk premium it becomes meaningful, and then reduces: the accrued variance separates exactly, the maturity, strike and costs are absorbed into a single forcing term whose sign fixes the geometry of the exercise region, and what is left on the perpetual is an affine reward on a CIR process, which the optimal-stopping literature already solves. Entering the position and exiting it are not mirror images. An exit rule follows from the premium and the trading spread, both observable. For the short --- the only side worth opening under the empirical sign of the premium --- an entry rule exists only for an interval of carrying charges, and even there triggers only deep in the upper tail of the physical law: a trader who is out of the market pays nothing to stay out, so an operational entry rule needs a cost of idle capital that the exit rule does not. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.19102 |
| By: | Ashraf, Shafaq; Clinton, Edward; Scheer, Antonina |
| Abstract: | Many companies are beginning to act on climate change by cutting their greenhouse gas emissions. However, the activities and new infrastructure this requires can have both positive and negative impacts on local communities. A central aspect of planning for a just low-carbon transition involves managing the social impacts of new infrastructure related to decarbonisation, such as renewable energy projects and transition mineral mines. If companies are to maintain their social licence to operate and mitigate the risk of public resistance to their operations, they will need to cultivate trust with local communities. The loss of a company’s social licence to operate can translate into material financial risk through project delays and cancellations. We focus on the negative social impacts of activities linked to the low-carbon transition, setting out an exploratory, evidence-based framework that can help investors and companies anticipate such risks. Combining insights from the academic literature with empirical data on corporate disclosure, the framework can support investors with identifying sector-specific priorities for shareholder engagement with companies. |
| JEL: | R14 J01 |
| Date: | 2026–09–08 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:140918 |
| By: | Azinovic-Yang, Li; Kepler, John D.; Speros, Ava E.; Stewart, Christopher R. |
| Abstract: | We study how the durability of customer relationships shapes competition, innovation, and the allocation of economic activity. Using novel data from M&A accounting disclosures, we construct a forward-looking measure of customer durability based on firms' expected useful lives of their customer relationship-related intangible assets, covering nearly 9, 500 acquisitions and $8 trillion in assets from 2002 through 2024. We document a substantial rise in durability across industries and examine its implications in an endogenous growth model in which longer-lasting customer relationships amplify incumbents' market power. Empirically, greater durability is associated with higher markups and profit shares, increased concentration, reduced entry and exit, lower job reallocation, slower wage growth, and a declining labor share. Consistent with our model, we also find an inverted-U relationship between durability and innovation, with high durability reducing both the quantity and quality of innovation, partly through lower R&D investment. Taken together, our findings highlight rising customer durability as a novel mechanism that helps reconcile the simultaneous increase in market power and decline in U.S. business dynamism, with important implications for competition policy. |
| JEL: | L11 L25 L41 O31 E25 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cbscwp:343992 |
| By: | Randall Akee; Emilia Simeonova |
| Abstract: | There is substantial heterogeneity in economic, educational, and health outcomes among American Indians, shaped by factors such as geographic location (urban vs. rural), resource endowments, and historical experiences with federal policies. Nonetheless, there is clear evidence that historical policies, including forced relocation, boarding schools, and assimilation efforts, have had long-lasting negative effects on human capital development and intergenerational mobility in these populations. Recent decades have seen improvements in some areas, particularly where tribes have exercised greater self-governance and implemented innovative economic development strategies. This paper emphasizes that a “one-size-fits-all” approach is inadequate for analyzing the sources and potential remediation of disparities across various outcomes between Native populations and descendants of later arrivals. A unique challenge is that the measurement and analysis of American Indian outcomes are complicated by issues of racial and tribal identification, data limitations, and changing definitions. These challenges can obscure true trends and make it difficult to evaluate the effectiveness of policies or programs, underscoring the need for more precise and disaggregated data. This essay comments on the need for caution and clarity in the use and analysis of data for this population in both historical and contemporary settings. |
| JEL: | J0 N3 O10 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35730 |
| By: | Anna Kurowska (University of Warsaw, Faculty of Economic Sciences, Interdisciplinary Centre for Labour Market and Family Dynamics (LabFam)); Magdalena Grabowska (University of Warsaw, Faculty of Economic Sciences, Interdisciplinary Centre for Labour Market and Family Dynamics (LabFam)); Maciej Świtała (University of Warsaw, Faculty of Economic Sciences); Beata Osiewalska (University of Warsaw, Faculty of Economic Sciences, Interdisciplinary Centre for Labour Market and Family Dynamics (LabFam); Cracow University of Economics) |
| Abstract: | While studies highlight COVID-19's disruptive impact on fertility, whether pandemic-era childbearing predictors remain informative post-crisis is less clear. Using Polish Familydemic panel data from 2021–2024 (N = 1, 925, aged 18–49), we apply theory-guided machine learning to evaluate a broad set of individual, employment, partnership, and family characteristics. Because short-term fertility intentions prove most predictive of childbearing, we model both actual births and firm positive intentions using random forest. The pandemic-trained model retained strong post-pandemic predictive performance (AUC-ROC = 0.86), demonstrating that pandemic-era drivers remain informative. Childbearing and intentions shared 16 of their top 20 predictors, highlighting common relational, demographic, and work–family factors. Relationship satisfaction, work–life balance, and domestic work division were particularly prominent, whereas prolonged school and childcare closures lowered predicted probabilities for both outcomes among parents. Ultimately, post-pandemic fertility dynamics reflect persistent constraints embedded in everyday family and working lives. |
| Keywords: | childbearing, fertility intentions, COVID-19 pandemic, machine learning, relationship satisfaction, childcare closures |
| JEL: | J13 J12 J22 C53 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:war:wpaper:2026-32 |
| By: | Junaid Ahmed (Pakistan Institute of Development Economics); Wajid Islam (Pakistan Institute of Development Economics) |
| Abstract: | 1. Introduction European market remains one of the top export destinations for South Asian economies. Countries like Pakistan benefit from preferential market access under the EU's Generalized Scheme of Preferences Plus (GSP+). It helps to expand exports in labor-intensive sectors like textiles and apparel. However, the recent EU-India Free Trade |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pid:kbrief:2026:147 |
| By: | Fan, Yibin |
| Abstract: | Local-oriented online communities increasingly serve as informal spaces where residents exchange local knowledge, discuss public issues, and encounter local news. Yet existing research often treats these communities as digital third spaces, with less attention to how civic labor is distributed among participants. This study understands these communities as components of local information infrastructures, examining how civic roles are distributed by analyzing year-long data from 50 highly active North American city subreddits in 2024. Focusing on 43, 263 sustained users, we combine media-domain matching, LLM-assisted topic classification, latent profile analysis, and qualitative case comparison. The analysis identifies six behavioral civic roles: National News Commentators, Platform-Native Political Discussants, Local Civic Respondents, Cross-Scale Media Brokers, Local News Brokers, and Peripheral Generalists. The findings show that local-oriented online communities function as local information infrastructures which depend on uneven but complementary forms of resident participation. |
| Date: | 2026–09–24 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:29y4x_v1 |
| By: | Pinar Tat (Department of Economics, Gebze Technical University); Sebnem Sahin (UNDP Eurasia); Abdullah Altun (Department of Economics, Gebze Technical University); Halit Yanikkaya (Department of Economics, Gebze Technical University) |
| Abstract: | This study examines the existence of greenhouse gas (GHG) emissions leakage within the framework of global value chains (GVCs) by comparing production-based and consumption-based accounting. We contribute to the literature by applying the most recent value-added decomposition methodology developed by Wang et al. (2017) and by using sector-level data from 186 countries across 25 sectors for the period 1990-2023. Our descriptive evidence demonstrates substantial differences between PBE and CBE and reveals the existence of emissions leakage across countries and sectors. Developing countries and upstream sectors appear as net exporters of emissions, while developed countries and downstream sectors emerge as net importers through global value chains. The empirical results demonstrate that GVC participation plays a central role in shaping this difference. The forward GVC participation is positively associated with net emission exports, whereas backward GVC participation is positively related to net emission imports. These findings highlight that emission responsibility cannot be adequately assessed using production-based measures alone. Instead, effective policies should account for consumption-based measures to reach an equitable responsibility-sharing framework in an increasingly fragmented global economy. |
| Keywords: | Greenhouse Gas Emissions, Leakage, Production and Consumption-Based Accounting, Forward GVC Participation, Backward GVC Participation |
| JEL: | F18 F64 Q56 |
| Date: | 2026–09–14 |
| URL: | https://d.repec.org/n?u=RePEc:geb:wpaper:2026-02 |
| By: | Fr\'ed\'eric Vrins; Damiano Brigo |
| Abstract: | In this note, we propose a general structural approach to model a default time $\tau$ as the first-passage time (FPT) of a (``firm-value'') process $S$ below a (``debt'') barrier $K$ that comply with a pre-specified survival probability curve $G(t)=\Pr(\tau>t)$. Following an idea of Mbaye and Vrins (Mathematical Finance, 2022) applied to reduced-form models, our approach consists in two steps: choose a latent FPT model driven by a barrier $\tilde{K}$ and process $\tilde{S}$, and time-change those using a deterministic clock $\Theta$ to get $K_t=\tilde{K}_{\Theta(t)}$ and $S_t:=\tilde{S}_{\Theta(t)}$, leading to the final FTP model $(K, S, \Theta)$. As the market curve $G$ and the latent model $(\tilde{K}, \tilde{S})$ are assumed to be given, the calibration step simply consists in finding the clock $\Theta$ such that the distribution of the FPT of $S$ below $K$ coincides with the survival curve $G$. We show that this is achievable for a broad class of specified curves $G$ and latent FTP models. The calibration amounts to a simple inversion of a function, which is almost immediate provided that the latent model is tractable enough. In particular, we show that the AT1P model of Brigo, Morini and Tarenghi \--- which is able to reproduce a broad range of CDS term-structures \--- can be regarded as the FPT of a time-changed drifted Brownian motion to a constant barrier: $\tilde{V}_t=\mu t+W_t$ and $\tilde{K}_t=k |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.12666 |
| By: | Parush Arora (Ashoka University) |
| Abstract: | Applied instrumental variables (IV) practice reports a first-stage F, now often the conditional F of Sanderson and Windmeijer (2016), and reads a large value as a license to interpret the second stage. We show that no first-stage diagnostic can deliver that license. With a scalar instrument, a scalar treatment, and covariates entered linearly, the 2SLS estimand splits into a signal that a saturated specification would target and a contamination, the covariance between curvature in the instrument propensity and a level function of the covariates. The same nuisance sits in both terms, so it biases the estimand and inflates the reported strength at once. When the instrument is nearly collinear with the covariates the signal vanishes and the strength is manufactured. When the strength is honest the curvature still biases the estimand through the outcome, where no first-stage number reaches it. We prove that no functional of the joint distribution of instrument, treatment, and covariates can detect this second bias, and we build a directed test from reduced-form regressions, a corrected estimator, and a reportable contamination share. Two applications show both failures. A husband’s insurance instrument (Olson, 1998) has a conditional F above 36, 000, yet correcting a linear income control more than doubles the estimate. The instrument of Nunn and Wantchekon (2011) loses most of its first stage once geography enters flexibly. |
| Date: | 2026–09–18 |
| URL: | https://d.repec.org/n?u=RePEc:ash:wpaper:170 |
| By: | Parush Arora |
| Abstract: | Applied instrumental variables (IV) practice reports a first-stage F, now often the conditional F of Sanderson and Windmeijer (2016), and reads a large value as license to interpret the second stage. We show that no first-stage diagnostic can provide it. With a scalar instrument, a scalar treatment, and covariates entered linearly, the 2SLS estimand splits into a signal that a saturated specification would target and a contamination, the covariance between curvature in the instrument propensity and a covariate level function. The same nuisance sits in both terms, so it biases the estimand and inflates the reported strength at once. When the instrument is nearly collinear with the covariates the signal vanishes and the strength is manufactured. When the strength is honest the curvature still biases the estimand through the outcome, where no first-stage number reaches it. We prove that no functional of the joint distribution of instrument, treatment, and covariates can detect this second bias, and we give a directed test built from reduced-form regressions, a corrected estimator, and a reportable contamination share. Two applications show the modes. A husband's insurance instrument (Olson, 1998) has a conditional F above 36, 000, yet correcting a linear income control more than doubles the estimate. The instrument of Nunn and Wantchekon (2011) loses most of its first stage once geography enters flexibly. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.18172 |
| By: | Giulia Aliprandi (International Tax Observatory); Teona Cretu (International Tax Observatory); Vytautas Valuta (International Tax Observatory) |
| Abstract: | The European Union's Public Country-by-Country Reporting (CbCR) Directive aims to make where multinationals operate and where they pay tax visible to investors, regulators, and the public. This report asks whether the Directive delivers on that objective, examining three questions: does the regime add new public information, how complete is the disclosure, and how much of multinational activity does its geographical design make visible? Using the first comprehensive dataset of public CbCR filings under the Directive — 144 multinationals from 24 headquarters countries, covering financial years 2023 and 2024, for a total of 164 reports, drawn from Romania's early transposition — three findings emerge. First, the Directive adds new public information, since most multinationals now publishing have no prior voluntary disclosure history, but coverage falls short of its theoretical scope: only 20% of the 569 non-EU multinationals estimated to be in scope have published a report. Second, 38% of reports are incomplete, most commonly limited to Romania only, driven mainly by parent non-cooperation and safeguard clause invocations. Third, the Directive's geographical design leaves a large share of multinational activity aggregated into a residual "Others" category, which absorbs 71% of profits and 74% of revenues in the Romanian data. The report recommends the Commission's review prioritise widening disclosure, addressing parent non-cooperation, and establishing a centralised repository for filings. |
| Keywords: | Public country-by-country reporting; Country-by-country reporting; Tax transparency; Corporate tax transparency; Multinational enterprises; Profit shifting; Tax avoidance; EU tax policy; Tax disclosure; Base erosion and profit shifting |
| JEL: | H25 H26 F23 K34 M41 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:dbp:report:011 |
| By: | Carlos Fernando Avenancio-León; Yutao He; Michael Reher |
| Abstract: | Political representation is systematically aligned with economically consequential differences in individual behavior: homeowners who are most deeply incorporated into electoral institutions are systematically more effective at accumulating housing wealth. Using a nationwide voter-property dataset, we find that realized housing appreciation increases monotonically with electoral participation, robust to controls for geography, partisanship, demographics, wealth proxies, and income. Politically engaged homeowners actively generate value by purchasing undervalued properties, investing more in improvements, and selling at a premium, indicating individual-level differences rather than passive market exposure. An original survey shows that these homeowners also systematically differ in personality traits, pointing to deeper individual differences associated with both political engagement and housing-market performance. |
| JEL: | D72 D91 R21 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35731 |