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on Macroeconomics |
| By: | Carlos Cañizares Martínez (BANQUE CENTRALE DU LUXEMBOURG); Adriana Lojschová (NATIONAL BANK OF SLOVAKIA); Alicia Aguilar (BANCO DE ESPAÑA) |
| Abstract: | This paper estimates the effects of standard monetary policy shocks on housing and other macro variables in Slovakia, a CESEE country. For that purpose, we use a non-linear local projection model which uncovers asymmetries in these effects around three different dimensions: high versus low economic growth, interest rates and inflation. The main findings in this study are as follows. First, we often find no evidence of standard monetary policy eliciting a contractionary response in house prices or housing investment. Second, evidence is weakest during recessions and periods of low interest rates or low inflation. Third, these findings may be linked to the inability of monetary policy to trigger significant contractionary effects on household lending, which in turn may be linked to the effective lower bound on interest rates, the predominance of fixed-rate mortgages in Slovakia or interaction between monetary and macroprudential policy. We also discuss the possible country characteristics that might drive these results and policy implications. |
| Keywords: | monetary policy, non-linearities, local projections, euro area |
| JEL: | C32 C36 E42 E52 E58 R21 R31 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2602 |
| By: | Tiago Neves Sequeira (University of Coimbra, CeBER and Faculty of Economics); Pedro Lima (University of Coimbra, CeBER and Faculty of Economics); Joshua Duarte (University of Coimbra, CeBER and Faculty of Economics) |
| Abstract: | We develop an overlapping generations endogenous growth model with cash-in-advance constraints for (i) consumers and (ii) R&D firms which is consistent with an effect of inflation on the skill-premium labor share. Inflation decreases the skill premium in both cases and decreases the labor share through (i) which it increases through (ii). The newly described effect of inflation on the labor share is consistent with empirical evidence for a short-run effect. |
| Keywords: | inflation, labor share, human capital |
| JEL: | E24 J64 L11 O33 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:gmf:papers:2025-04 |
| By: | Luis Araujo; Elton Beqiraj; David Hong; Sotirios Kokas; Raoul Minetti |
| Abstract: | Banking is increasingly a complex activity, with financial institutions cooperating in borrowers' financing and monitoring. We study an economy where banks use information to screen investment quality and to recover collateral from investments. Complex banking (lenders' joint production of information on borrowers) eases the salvage of investments but also facilitates the disclosure of investments' fragility. We find that complex banking can be a source of significant macroeconomic non-linearities: it enhances the resilience to small aggregate shocks but can precipitate a crisis following large negative shocks. The predictions of the model are consistent with evidence from matched bank-firm US data. |
| Keywords: | Banking; Aggregate Fluctuations; Information; Investments |
| JEL: | D83 E44 G21 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:sap:wpaper:wp269 |
| By: | Gabriela Araujo; David Rivero Leiva; Hugo Rodríguez Mendizábal |
| Abstract: | This paper develops a general equilibrium banking model where lending and payment flows endogenously link credit, liquidity, and solvency risks. Banks issue deposits at loan origination. As deposits circulate, reserve settlement creates liquidity exposure and repayment shortfalls generate credit and solvency risks. These risks are jointly determined by credit provision and bound balance sheet expansion at an internally determined profitability threshold rather than an external funding or capital limit. We present an application of the theory that provides a new look to the bank lending channel where monetary policy operates through the endogenous generation of bank risks. Our quantitative results align with empirical observations, including declines in deposit growth after monetary policy tightening and its different impact on lending depending on the balance sheet strength of banks as well as the relation of funding costs in interbank markets with liquidity and solvency ratios. |
| Keywords: | banks, credit risk, interbank market, liquidity risk, monetary policy, payments, risk premium, solvency risk |
| JEL: | E10 E44 E52 G21 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1549 |
| By: | Akinlade, Femi |
| Abstract: | This paper revisits the theoretical and empirical evolution of the Phillips Curve through the lens of modern New Keynesian macroeconomics. While the traditional unemployment–inflation relationship has long been viewed as unstable, recent advances attribute its variability to the interaction of expectations, nominal rigidities, and structural features such as openness and imported marginal costs. The review synthesizes key developments in the New Keynesian Phillips Curve, including forward-looking price setting, hybrid indexation, sticky-information dynamics, and small open-economy extensions. Empirical evidence across advanced, emerging, and transition economies reveals substantial heterogeneity in slope, persistence, and the relative weight of backward- and forward-looking components, particularly across tranquil and recessionary periods. The findings highlight that the Phillips Curve is conditional rather than structural, with inflation dynamics fundamentally shaped by the credibility of monetary policy, the structure of expectations, and the sensitivity of marginal costs to domestic and external shocks. |
| Keywords: | New Keynesian Phillips Curve, inflation |
| JEL: | E3 E31 E5 E52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126878 |
| By: | Lin, Lin; Ortega, David L. |
| Keywords: | Agribusiness |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:360618 |
| By: | Ali, Amjad; Afzal, Muhammad Bilal; Ahmad, Khalil |
| Abstract: | This study investigates how market concentration, specifically, the degree of competition within a sector impacts different innovation strategies, with particular emphasis on the distinction between long-term and short-term innovation approaches adopted by corporations. The research utilizes a dataset comprising an unbalanced panel of U.S based firms. To generate robust and valid conclusions, the analysis incorporates a suite of statistical and econometric methodologies, such as regression analysis, multicollinearity diagnostics, tests for endogeneity, and comprehensive robustness assessments. These tools are employed to examine the connection between market concentration, measured by the Herfindahl-Hirschman Index, and the innovation horizon, defined as the interval between initial research and development investments and the attainment of innovative outcomes. Furthermore, the robustness analyses confirm the reliability of the findings across various modeling specifications, providing empirical evidence that heightened market concentration correlates significantly with a reduced innovation horizon. The results reveal that firms operating in markets characterized by high concentration are inclined toward short-term innovation strategies, likely as a result of intense competitive dynamics among a limited number of dominant players striving to retain market share. These insights advance the understanding of how market structure shapes the strategic timing of innovation within firms, yielding important implications for innovation policy as well as managerial decision-making. |
| Keywords: | Market Competition, Innovation Horizon, Firm Innovation, Herfindahl-Hirschman Index |
| JEL: | M13 O3 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127526 |
| By: | Gabriel M. Ahlfeldt; Elisabetta Pietrostefani; Ailin Zhang |
| Abstract: | We illustrate the coordination problem in the provision of distinctive architectural design that arises from design externalities within a quantitative model. To quantify the model, we conduct a quantitative review of a growing literature concerned with the costs and benefits of distinctive design as well as a survey of architectural design preferences. We find that distinctive buildings sell at a 15% premium, on average. Positive design spillovers from distinctive nearby buildings result in a 9% premium. Distinctive buildings, however, are about 25% more expensive to build. The distribution of design ratings within buildings is well described by a Fréchet distribution with a shape parameter of about 4. Parametrising the model to match these moments, we show in counterfactual simulations that the optimal subsidy of distinctive buildings amounts to 10% of construction costs. |
| Keywords: | Architecture, design, economics, regulation, welfare |
| JEL: | R3 N9 |
| Date: | 2026–01–21 |
| URL: | https://d.repec.org/n?u=RePEc:bdp:dpaper:0088 |
| By: | University of Nottingham |
| Keywords: | Consumer/Household Economics, Marketing |
| URL: | https://d.repec.org/n?u=RePEc:ags:notarc:266545 |
| By: | Volker, Jamey; Handy, Susan |
| Keywords: | Social and Behavioral Sciences |
| Date: | 2025–12–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsdav:qt3fv269rz |
| By: | Guender, Alfred V. |
| Abstract: | The empirical examination of the output-inflation tradeoff in the United States over a 30 year period reveals that both aggregate uncertainty and average inflation were instrumental in shaping the output-inflation tradeoff. The division of the whole sample period into two distinct sets of subintervals suggests that the New Keynesian view according to which the output-inflation tradeoff is sensitive to changes in average inflation held only unambiguously in the latter part of the respective sample period. The empirical results suggest further that the tradeoff appears to have been sensitive only to changes in aggregate uncertainty in the early part of the sample period, a fact consistent with the New Classical view. |
| Keywords: | Financial Economics |
| URL: | https://d.repec.org/n?u=RePEc:ags:canzdp:263747 |
| By: | Jaforullah, Mohammad; Whiteman, John L. |
| Abstract: | The objective of this paper is to measure the scale efficiency of the New Zealand dairy industry and to examine the relationship between farm size and efficiency. Data envelopment analysis (DEA) is applied to a sample of 264 dairy farms. The results suggest that 19 per cent of these farms are operating at optimal _scale, 28 per cent at above optimal scale, and 53 per cent at below optimal scale. On average the optimal size for New Zealand dairy farms is estimated at 83 hectares with a herd of 260 animals. Average technical efficiency is estimated at 89 per cent. |
| Keywords: | Farm Management, Livestock Production/Industries |
| URL: | https://d.repec.org/n?u=RePEc:ags:copspp:266388 |
| By: | Matteo Barigozzi; Diego Fresoli; Esther Ruiz |
| Abstract: | Factor extraction from systems of variables with a large cross-sectional dimension, $N$, is often based on either Principal Components (PC)-based procedures, or Kalman filter (KF)-based procedures. Measuring the uncertainty of the extracted factors is important when, for example, they have a direct interpretation and/or they are used to summarized the information in a large number of potential predictors. In this paper, we compare the finite $N$ mean square errors (MSEs) of PC and KF factors extracted under different structures of the idiosyncratic cross-correlations. We show that the MSEs of PC-based factors, implicitly based on treating the true underlying factors as deterministic, are larger than the corresponding MSEs of KF factors, obtained by treating the true factors as either serially independent or autocorrelated random variables. We also study and compare the MSEs of PC and KF factors estimated when the idiosyncratic components are wrongly considered as if they were cross-sectionally homoscedastic and/or uncorrelated. The relevance of the results for the construction of confidence intervals for the factors are illustrated with simulated data. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2601.04087 |
| By: | Jiatong Zhong (University of Alberta) |
| Abstract: | This paper explores learning-by-doing in the context of creative tasks using detailed data on fiction writers from a digital publishing platform. I construct measures to quantify authors’ performance over time and document significant variation in both starting levels and rates of improvement. Learning manifests as an improvement in quality instead of the speed of production. Writers improve slowly at the beginning, but quality improvement can last for several years, much longer than typically observed in manufacturing settings. |
| Keywords: | learning by doing; learning curves; creative tasks |
| JEL: | D83 J24 J46 L82 |
| Date: | 2026–01–20 |
| URL: | https://d.repec.org/n?u=RePEc:ris:albaec:022118 |
| By: | Janda, Karel; Rozsahegyi, Marketa; Quang Van Tran; Zhang, Binyi |
| Abstract: | This paper investigates the role of investor sentiment in the pricing and volatility dynamics of green bond exchange-traded funds (ETFs). The paper combines verbal description with a literature review, and it does not engage in actual data-based research analysis. While the literature on sentiment finance and ESG investing has expanded rapidly, empirical evidence focusing on fixed-income ESG instruments remains limited. We address this gap by employing modern natural language processing (NLP) techniques to construct sentiment indicators derived from news coverage and sustainability-related textual information. These indicators may be used to examine their impact on returns and volatility of selected green bond ETFs. By combining behavioural finance insights with state-of-the-art NLP methods, the paper contributes to sustainable finance research and highlights the informational role of textual data in green financial markets. |
| Keywords: | NLP model, ESG, Exchange Traded Funds |
| JEL: | C45 C55 G11 G17 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:335572 |
| By: | Menon, Jayant |
| Abstract: | The volatility displayed by floating exchange rates has revived interest in the relationship between exchange rates and traded goods prices. This paper aims to provide a theory of exchange rates and traded goods prices in the short-run. In particular, it examines how various factors can cause exchange rate pass-through to be incomplete in the short-run but not in the long-run. These include: (i) menu costs, (ii) the costs of changing supply, (iii) the dynamics of demand response to price changes, (iv) orderdelivery lags, (v) forward exchange cover, and (vi) the currency denomination of trade contracts. From a policy perspective, the presence of these factors could account for the often prolonged adjustment of trade balances to exchange rate changes, and the failure of exchange rate volatility to perceptibly affect the volume of international trade flows. |
| Keywords: | Demand and Price Analysis, International Relations/Trade |
| URL: | https://d.repec.org/n?u=RePEc:ags:copspp:266368 |
| By: | University of Nottingham |
| Keywords: | Livestock Production/Industries, Production Economics |
| URL: | https://d.repec.org/n?u=RePEc:ags:notarc:266274 |
| By: | Tomohiro Hirano; Alexis Akira Toda |
| Abstract: | Since McCallum (1987), it has been well known that in an overlapping generations (OLG) economy with land, the equilibrium is Pareto efficient because with balanced growth, the interest rate exceeds the growth rate (R > G), precluding infinite debt rollover (a Ponzi scheme). We show that, once we remove knife-edge restrictions on the production function and allow unbalanced growth, under some conditions an efficient equilibrium with land bubbles necessarily emerges and infinite debt rollover becomes possible, a markedly different insight from the conventional view derived from the Diamond (1965) landless economy. We also examine the possibility of Pareto inefficient equilibria. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:cnn:wpaper:26-002e |
| By: | François Facchini (UP1 UFR02 - Université Paris 1 Panthéon-Sorbonne - École d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Louis Jaeck (School of Business Administration, American University of Sharjah, Sharjah); Hajer Kratou (College of Business Administration, Ajman University) |
| Abstract: | This appendix complements the results of an article published in the Journal of Institutional Economics. It explains the institutions productivity indicator used to show how the nature of inequalities impacts the migration and presents several robustness checks by substituting our institutions' productivity variable by institutional quality indicators with a larger scope of analysis such as those driven by the Worldwide Governance Indicators (WGI) database of the World Bank as well as the indicator of Economic Freedom (EF) from the Fraser Institute Economic Freedom index (Gwartney et al. 2021). The results confirm our main findings. |
| Keywords: | Inequality, Rent seeking, Migration, OECD, Inégalité, Recherche de rente, OCDE |
| Date: | 2025–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:hal:cesptp:hal-05463401 |
| By: | Clague, Christopher |
| Keywords: | Production Economics |
| URL: | https://d.repec.org/n?u=RePEc:ags:cladsp:262865 |
| By: | Massimo Cervesato (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UP1 - Université Paris 1 Panthéon-Sorbonne); Mathieu Guigourez (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UP1 - Université Paris 1 Panthéon-Sorbonne) |
| Abstract: | This paper introduces the Kovenant model, a formal framework for understanding ecological choices as resulting from norm-guided individual commitments that emerge in fragmented collective contexts. Rather than primarily seeking to optimise outcomes or induce cooperation through incentives, the model represents how agents act as if an ecological covenant were in place, thereby reshaping their own decision-making structure. The model captures key behavioural features such as over-investment or crowding-out effects, showing that these are not irrational deviations, but responses to the absence of well-defined shared normative expectations. The Kovenant model offers, thus, theoretical ground for explaining ecological behaviours in emerging social norms. |
| Keywords: | As if reasoning, Common-Pool Resources, Ecological Behaviours, Collective Action, Commitments |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:hal:cesptp:halshs-05450446 |
| By: | Benjamin Avanzi; Ronald Richman; Bernard Wong; Mario W\"uthrich; Yagebu Xie |
| Abstract: | Outstanding claim liabilities are revised repeatedly as claims develop, yet most modern reserving models are trained as one-shot predictors and typically learn only from settled claims. We formulate individual claims reserving as a claim-level Markov decision process in which an agent sequentially updates outstanding claim liability (OCL) estimates over development, using continuous actions and a reward design that balances accuracy with stable reserve revisions. A key advantage of this reinforcement learning (RL) approach is that it can learn from all observed claim trajectories, including claims that remain open at valuation, thereby avoiding the reduced sample size and selection effects inherent in supervised methods trained on ultimate outcomes only. We also introduce practical components needed for actuarial use -- initialisation of new claims, temporally consistent tuning via a rolling-settlement scheme, and an importance-weighting mechanism to mitigate portfolio-level underestimation driven by the rarity of large claims. On CAS and SPLICE synthetic general insurance datasets, the proposed Soft Actor-Critic implementation delivers competitive claim-level accuracy and strong aggregate OCL performance, particularly for the immature claim segments that drive most of the liability. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2601.07637 |