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on Mining |
| By: | MUDERHWA, Victoire; Henry, Ngongo |
| Abstract: | This research aims to analyse the role of governance in economic sustainability in natural resource-dependent countries and applies the framework empirically to the case of the Democratic Republic of the Congo, which is heavily reliant on the mining sector. It employs the STAR (Smooth Threshold Auto-Regressive) model, using the government efficiency function as an indicator of total factor productivity rather than a linear variable over the period from 1994 to 2024. The results identify the sustainability survival threshold at which the rent derived from natural resources defines the government predation function in its pursuit of rent. This threshold stands at -6.027%. Consequently, when the ratio rent derived from natural resources on GDP falls below 6.027%, the Congolese political elite, in order to maintain its standard of living, takes actions that jeopardise the country’s economic sustainability and intergenerational equity by funding budget-draining institutions, primarily in the non-productive sectors of the economy, thereby perpetuating unsustainability. Above this threshold, the government efficiency function allows Hartwick’s rule to be verified, but the country remains under the threat of falling into unsustainability. Under this regime, the moderating effect of governance on adjusted net savings produces positive but less proportional effects (an estimated coefficient of 0.312) in the dynamic accumulation of sustainable capital during the period under study. This situation shows that governance would enable the DRC to align itself even more closely with the sustainability trajectory if the government efficiency function is improved. This research provides a dynamic framework for sustainability and the confident interval for the government efficiency function has been computed using first order condition from the Bellman equation. |
| Keywords: | Governance, Efficiency, Sustainability, Rentier countries, STAR, DR Congo |
| JEL: | A10 A11 C14 C22 C51 C52 C54 C6 C61 E61 E65 H0 H1 H11 O11 O43 O55 Q55 Q56 |
| Date: | 2026–04–16 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128953 |
| By: | Collart, Lara; Desbureaux, Sébastien; Stoop, Nik; Verpoorten, Marijke; Kabakaba, Christelle |
| Abstract: | This paper presents evidence from a field study in the Democratic Republic of Congo showing that low-cost heat‑retention bags can reduce household charcoal use and spending by about 40%, offering a highly cost‑effective clean cooking solution with adoption shaped by households’ ability to plan meals. |
| Keywords: | Kivu, charcoal, energy, DRCongo, DRC, heat retention bags |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iob:wpaper:2026.03 |
| By: | Amigues, Jean-Pierre |
| Abstract: | The energy transition is often described as a ’wall of investment’ issue. But not only renewable energy expansion must cope with the carbon free energy needs result-ing from the Paris agreement but most of the present day fossil energy production capital will have to be abandoned by the middle of the century. We consider a partial equilibrium model where energy is produced from a CO2 polluting source and a carbon free source. Crude energy transformation into energy services requires specific capital infrastructures, accumulated through a costly investment process submitted to ad-justment costs. Fossil fuels burning generates CO2 emissions and the total cumulated emissions is caped by a global atmospheric CO2 concentration stabilisation objective. We describe the socially optimal policy in this context. Prior to the phase when the society is actually constrained by the climate cap, we show that the pattern of evo-lution of the production capacities of the fossil fuel industry exhibits a three regimes structure: fist an ascending phase, followed by a stabilisation phase when the industry stops investing and its production capacity peaks before falling when approaching the time at which the climate constraint becomes binding. During the two first phases, the energy transition occurs in a context of increasing energy supply while it happens in a context of increasing energy scarcity during the last phase, capacity accumula-tion in the renewable energy industry being lower than the scraping of capacities in the fossil fuels industry. The non-monotonicity of the energy price path induces the possibility of waves of investment in the clean renewable energy sector. If fossil energy gets a larger share in the fuel mix at the beginning of the climate regulation, fossil energy production will peak at a larger level. We show that the regulator must adapt to this situation not by preventing a larger peak but by making it happen earlier, thus building initially a form of carbon ’saving’ that will be progressively consumed afterwards before the climate constrained episode. |
| Keywords: | Climate change; Energy transition; Capacity constraints, Adjustment costs. |
| JEL: | Q32 Q35 Q42 Q54 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:131791 |
| By: | Shujiro Urata (Waseda University) |
| Abstract: | In this paper, I offer a brief survey of Japanese industrial policy from the 1950s to the 2020s and on this basis discuss the industrial policies currently being formulated by the Japanese government. My analysis focuses on industrial policies aimed at fostering specific industries, which once attracted particular attention.<p> Specifically, the paper examines industrial policies that promoted industrialization through heavy industries like steel, shipbuilding, and chemical manufacturing when the Japanese economy was rapidly growing, and using this analysis as a foundation, it considers the new industrial policies implemented since the 2020s that aim to achieve economic growth while advancing economic security. I address the objectives, instruments, and impacts of industrial policies throughout the paper.<p> The paper is organized as follows. Chapter 2 comprises a brief historical survey of Japanese postwar industrial policy. Chapters 3 and 4 analyze the industrial policies implemented during the high-growth period and since the 2020s, respectively. Chapter 5 concludes the paper.<p> This paper is part of KIET's Global Perspectives series, commemorating the 50th anniversary of its founding. Shujiro Utaro is one of Japan's leading trade economists . He is currently a professor emeritus at Waseda University and the Chairman Emeritus of the Research Institute of Economy, Trade, and Industry. <p> Keywords: industrial policy, Japan, economic security, global value chains, GVCs, manufacturing, trade, trade policy |
| Keywords: | industrial policy; Japan; economic security; global value chains; GVCs; manufacturing; trade; trade policy |
| JEL: | F02 F13 F21 F51 F52 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kieter:022552 |
| By: | Fawzi, Banao |
| Abstract: | In a context where securing African borders remains a persistent security challenge, cross-border crime continues to pose significant risks. This study examines how the size of armed forces influences illicit trade measured through gold-related customs fraud across Africa from 2000 to 2019. We use as empirical methods OLS, 2SLS, and GMM. The findings show that larger armed forces significantly reduce gold customs fraud, with the effect being even more pronounced in the Sahel. Overall, the study highlights that expanding armed forces personnel is an effective policy tool to curb illicit gold trade in Africa. It also offers strategic policy recommendations, particularly for high-risk areas such as the Sahel, where the deterrent impact of increased troop presence is strongest. |
| Keywords: | Cross-border crime, Military Defence, National armed forces personnel |
| JEL: | H56 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:341126 |
| By: | Hong Lee (Korea Institute for Industrial Economics and Trade); Sung Wook Hong (Korea Institute for Industrial Economics and Trade) |
| Abstract: | This study examines worsening instability in the oil industry’s supply chain due to the ongoing conflict in the Middle East and the blockade of the Strait of Hormuz, which has placed severe upward pressure on international oil prices. Prices of petroleum-based products in South Korea have risen rapidly, increasing the burden on consumers and fueling inflation concerns. Rising international oil prices are highly likely to feed through to the real economy through increased transportation, logistics, and manufacturing costs. Skyrocketing prices for Dubai crude (up 49.8 percent) and domestic gasoline prices (up 12.7 percent) since the US and Israel began their campaign against Iran have exceeded the initial increases seen when Russia invaded Ukraine. In response, the Korean government implemented a price cap system to mitigate market anxiety and the spread of inflation expectations. This system, which sets a cap on the prices that oil refiners are allowed to sell at every two weeks, has been in effect since March 13, 2026. Following its implementation, national average gasoline and diesel prices fell by KRW 70 to KRW 120 from their peaks, showing a stabilizing trend. The government is also considering a packaged response that combines price caps with other policy instruments, such as fuel tax cuts and direct subsidies to consumers. This package of policies could temporarily suppress rapid price surges and ease the burden on consumers, but it also risks exacerbating non-price rationing and long-term supply shortages. <p> Ceilings on prices prevent the price signal from constraining demand, which during a supply shock can worsen shortages, lead to long lines at the pump, and eliminate price competition among retailers. Therefore, price caps on petroleum need to be utilized with great care as a short-term market stabilization tool, rather than as a permanent feature. <p> Future policy responses should take a package approach that combines various policy instruments, including fuel tax cuts, direct support, the utilization of strategic petroleum reserves, and diversification of import sources. Given that fuel dependency and cost structures vary by industry, a differentiated policy response considering industry-specific characteristics is necessary, rather than a uniform price regulation. Industries such as logistics, freight, fisheries, agriculture, and public transportation are particularly exposed to fuel costs, meaning oil price shocks are highly likely to be passed through to production and transportation costs. Thus, the government should design targeted support or fuel-cost subsidies. For the oil refining, petrochemical, and energy-intensive manufacturing sectors, a policy approach considering supply stability and cost buffering is needed so that medium- to long-term security of supply and investment incentives are not adversely affected |
| Keywords: | energy; energy supply and demand; energy pricing; price ceilings; price caps; energy policy; energy markets; oil prices; US-Iran war; Hormuz |
| JEL: | Q41 Q43 Q48 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kietia:022568 |
| By: | Karima Ouederni (HEC Montréal); Georges Dionne (HEC Montréal) |
| Abstract: | This paper tests the real effect of corporate risk management on dividend policy within a signaling theory framework. According to this theory, in the presence of information asymmetry, managers use dividends as a costly signal to convey private information to investors. This prediction has been extensively examined in the empirical literature (Baker et al., 2016). The risk management literature generally argues that firms facing high earnings volatility are more likely to hedge to stabilize their cash flows (Chay & Suh, 2009), allowing them to send more credible signals through dividend payments. We suggest that these policies are complementary and should therefore be positively related. Actual empirical results diverge regarding the sign and significance of this relationship. One potential explanation for this mixed evidence is reverse causality between dividend payments and hedging intensity. We extend the theoretical framework of Bhattacharya (1979) by allowing firms to hedge future cash flows. The theoretical results suggest that dividend policy and corporate hedging are positively related, confirming that they operate as complementary rather than substitute mechanisms. In the empirical section, we test the joint effect of hedging intensity and dividend payments on firm value. Using an instrumental variable approach, we show that once the endogeneity between both policies is adequately addressed, corporate hedging emerges as a positive and significant determinant of dividend policy. Joint dividend and risk management decisions increase firm value. |
| Keywords: | Corporate risk management; dividend policy; firm value; signaling theory; information asymmetry; hedging; oil and gas industry; instrumental variable |
| JEL: | G32 G35 Q43 D81 C26 C25 |
| Date: | 2026–05–16 |
| URL: | https://d.repec.org/n?u=RePEc:ris:crcrmw:022517 |
| By: | Shehab, Elmekdad |
| Abstract: | Between February and April 2026, a joint American-Israeli air campaign against Iran drew retaliatory strikes across the six Gulf Cooperation Council (GCC) states. Global commentary settled quickly into a familiar frame, asking what the disruption meant for oil prices, shipping routes, and world supply chains. The question of what it meant for the Gulf itself, for its sixty million people and the trajectory of its development model, received far less attention. This monograph asks what the war revealed about the structure of the Gulf economy and where vulnerability proved greatest. It applies the Vulnerability Assessment Framework, a three- dimensional analytical tool rooted in the IPCC tradition and extended to economic systems by Briguglio et al. (2009) and Guillaumont (2010), to three foundational sectors: energy, food, and water. Across each, the framework decomposes vulnerability into exposure, sensitivity, and adaptive capacity. Two patterns emerge, one sectoral and one systemic. At the sectoral level, exposure is uniformly high across all three sectors. Sensitivity varies with the time each sector grants for a response, lowest in energy and highest in water. Adaptive capacity moves in the opposite direction: strongest where urgency is least, weakest where it is greatest. At the systemic level, the analysis argues that Gulf diversification ambitions are geographically constrained. Despite two decades of effort, the economic tracks built to move beyond hydrocarbons, namely finance, tourism, aviation, and digital infrastructure, rest on the same foundational geography as the hydrocarbon model itself. What the war revealed is the need for a reframing of the challenge ahead away from the familiar question of how to move beyond oil and gas, and toward a harder one. How does a state build what this study terms a geographically hedged economy, one whose resilience does not depend on the stability of the very geography it cannot leave? |
| Keywords: | Gulf economies, economic vulnerability, GCC, Strait of Hormuz, energy security, food security, water security, Iran, vulnerability assessment framework, economic diversification |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:341147 |
| By: | Hilde C. Bjornland; Nicolas Hardy; Dimitris Korobilis |
| Abstract: | We develop a Quantile Bayesian Vector Autoregression (QBVAR) to forecast real oil prices across different quantiles of the conditional distribution. The model allows predictor effects to vary across quantiles, capturing asymmetries that standard mean-focused approaches miss. Using monthly data from 1975 to 2025, we document three findings. First, the QBVAR improves median forecasts by 2-5%relative to Bayesian VARs, demonstrating that quantile-specific dynamics matter even for point prediction. Second, uncertainty and financial condition variables strongly predict downside risk, with left-tail forecast improvements of 10-25% that intensify during crisis episodes. Third, right-tail forecasting remains difficult; stochastic volatility models dominate for upside risk, though forecast combinations that include the QBVAR recover these losses. The results show that modeling the conditional distribution yields substantial gains for tail risk assessment, particularly during major oil market disruptions. |
| Keywords: | oil price forecasting, quantile regression, Bayesian VAR, tail risk, distributional forecasting |
| JEL: | C32 C53 Q41 Q47 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2026-39 |
| By: | Thomas K. Kloster; Fred Espen Benth |
| Abstract: | We study forecasting of the realized covariation in electricity markets. The realized covariation in this context is a matrix-valued representation of the latent infinite-dimensional covariance operator and a parsimonious matrix-HAR type model is constructed to facilitate estimation. We test the model on one-week ahead forecasts of the weekly realized covariation and find that the inclusion of longer time horizons and renewable generation information adds important predictive power. We also investigate the prediction of risk premia in electricity forward markets and find that our variance forecasts provide substantially improved forecasts of spread risk premia compared to standard methods relying on backward looking volatility. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2606.05991 |
| By: | Schroeder, Christofer |
| Abstract: | This paper studies the employment effects of carbon pricing under the European Union’s Emissions Trading System (EU-ETS). I refer to standard methods from the literature to define and measure the environmental properties of jobs along two dimensions: how “green” a job is, and how polluting it is. I then leverage a series of shocks to EU-ETS prices to estimate their dynamic impacts on employment. The panel local projections estimates reveal that an exogenous 1% increase in EU-ETS prices leads to a roughly 0.2% decline in employment after one and a half years. Impacts on employment in more polluting jobs are estimated to be even stronger, while impacts on employment in greener jobs are also estimated to be negative, albeit less pronounced. Two factors play an important role in shaping these responses: the allocation of free emissions allowances and the stringency of employment protection legislation. When relatively fewer emissions are covered by free allowances, the negative employment effects of EU-ETS price shocks are stronger. Similarly, when employment protection is greater, the estimated impact is more muted. Average weekly hours of work is found to be an additional margin along which EU-ETS prices impact employment yet the estimated effects are relatively small and short-lived. Together, these findings underscore the economic consequences of carbon pricing, offering valuable insights for policymakers balancing climate objectives with labour market considerations. JEL Classification: E24, J21, H23, Q54, Q58 |
| Keywords: | carbon pricing, climate change, employment, green jobs, polluting jobs |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20263237 |