ABSTRACT. No abstract

ABSTRACT. We assess the relevance of macro rates of return on time-varying fiscal and external sustainability. First, we compute the total public and private macroeconomic rates of return for 16 OECD countries from 1980 to 2022. We find that there is a positive impact of higher investment returns on stimulating higher aggregate demand, therefore resulting in higher tax revenues, which in turn lead to greater fiscal sustainability and more external sustainability by lowering the need for foreign capital and imports of goods and services. Accordingly, we demonstrate that macroeconomic rates of return of both public and private investment positively contribute to fiscal sustainability and that public sector investment also displays the same positive effect on external sustainability.

ABSTRACT. This study examines the effects of the tax structure composition for public sector efficiency in a sample of 41 developing countries for the period between 1997-2019. We start by calculating Public Sector Performance (PSP) composite indicators and use them as outputs to compute Data Envelopment Analysis (DEA) efficiency scores under different orientation setups. After using a general-to-specific approach to identify the most determinant variables, we analyze the relevance of different taxes for public efficiency in a panel regression specification. We find that tax effects are significantly different depending on the orientation of DEA scores. Notably, we observe that taxation presents stronger detrimental effects to input-oriented scores in comparison to output-oriented, and that Opportunity PSP indicators seem more affected by property taxes and working contributions, while Musgravian PSP indicators are more closely related to individual and corporate income taxes. Our results allow us to provide policy recommendations regarding tax structures to improve efficiency on the provision of public goods and services.

ABSTRACT. This paper examines the implications of population aging for the political economy of allocating resources between pensions and education in a medium-scale overlapping generations model with heterogeneous households calibrated to the German economy. As a consequence of population aging, the increasing political power of the elderly shifts public policy toward higher pension spending at the expense of investment in education relative to an economy in which public policy is independent of the age structure. Aggregate output and total income inequality fall significantly while wealth inequality rises. Higher pensions discourage capital accumulation, while reduced public investment in education leads to a decline in the economy’s human capital level. Rising tax liabilities to finance relatively higher pension spending distort individual labor supply, further depressing aggregate effective labor. Substantially higher redistributive pensions mitigate total income inequality but discourage capital accumulation, especially at the lower end of the wealth distribution, and increase wealth inequality. The magnitude of the effects decreases strongly with the size of future population growth rates. In a counterfactual experiment, a compulsory voting policy increases political participation, especially among younger individuals, and leads to less severe effects on aggregate output, higher total income inequality, and lower wealth inequality.

ABSTRACT. Forecasting public debt is essential for effective policymaking and economic stability, but it is associated with significant challenges mainly due to data limitations. Machine learning has shown to be a powerful tool for financial forecasting, but its applications to macroeconomic forecasting -especially outside the US- are limited. This is largely due to the lack of long historical time series and the low frequency of available data. In this paper, we address these challenges by combining Dynamic and Stochastic General Equilibrium (DSGE) modeling and machine learning techniques. Our study focuses on the French public debt, where we generate artificial data using an estimated DSGE model to efficiently train machine learning algorithms. These trained models are then fed with real data for debt forecasting. Performance is evaluated using classification. The results show that the best machine learning models outperform a simple AR(1) benchmark, achieving an accuracy of 90%.

ABSTRACT. Assessing potential overvaluation is key in housing economics, in particular for financial stability purposes since many financial crises stem from housing market adjustments. With existing indexes data, economists must use methods such as deviations to the averages, which can be problematic if periods are short and averages are not equilibrium values. Alternatively, house prices in levels do not require these strong assumptions and contain additional information that enables us to construct ratios that signal potential overvaluation such as the price-to-income ratio, while keeping in mind differences in the average quality of dwellings across countries. Using a signalling approach for 40 countries, a price-to-income ratio close to 10 years of income to buy a 100 m2 dwelling for average resident buyers is a reference indicating potential overvaluation, which has better signalling properties than indexes, especially when periods are short.

ABSTRACT. After one and a halve decades of strong housing price growth coinciding with slow real income gains, housing affordability has emerged as a key socioeconomic and political challenge across Europe. However, empirical evidence on the extent and drivers of the housing affordability crisis and its unequal manifestation across space is still very limited. A lack of data availability from statistical offices has played a key role in retaining this lacuna over the last years. In the European ESPON research project, “House4All” we thus developed a set of regional housing cost and affordability indicators to address this gap. The dataset is based on a combination of large-scale web scraping of housing adverts across tenures and regional disaggregation of disposable income data covering 31 European countries. We then utilize this novel data source to jointly investigate the between and within country variations of housing affordability to explore the role of structural drivers and spatial heterogeneities of housing affordability in Europe.

ABSTRACT. This study builds on the finding that parking space requirements in new housing developments in Germany often do not align with actual resident needs. This misalignment results in economic, ecological, and social disadvantages. The research addresses the topic from two perspectives. First, using hedonic price models based on apartments offer data from 2018 to 2023, we identify a price premium of around 10% for new buildings, consistent with the findings of the Baukostensenkungskommission (2015). For existing properties outside metropolitan areas, the premium is even higher, ranging from 23% to 47%, indicating a substantial value attributed to parking from a supply-side perspective. Second, the study examines demand-side preferences by investigating how prospective homebuyers and tenants value private parking. This is explored through a discrete choice experiment (DCE) embedded in an online survey conducted in 2024. A latent class multinomial logit model was used to uncover preference heterogeneity. The results reveal among others a strong willingness to pay for a first private parking space and for a generally relaxed parking situation in the neighborhood. However, demand for a second parking space drops significantly. The findings suggest that parking policies should be tailored to specific locations and demand profiles rather than following uniform requirements. Efficient pricing of public parking and decoupling residential and parking costs may help promote more sustainable urban mobility. By shedding light on preferences and trade-offs in housing decisions, this study contributes to current debates on urban development, smart cities, housing affordability.

ABSTRACT. The efficient allocation of housing space is an increasingly relevant issue in aging societies, particularly in Germany, where many older households occupy dwellings that exceed their spatial needs while younger households face housing shortages. This paper investigates the role of financial constraints and excessive living space in shaping the mobility decisions of seniors. Using panel data from the German Socio-Economic Panel (SOEP) and employing a random-effects logit model, the study examines whether high housing costs or large dwelling sizes serve as key determinants of late-life relocations. The results challenge conventional wisdom by demonstrating that high housing cost burdens do not act as a push factor for senior mobility. Instead, financial constraints appear to discourage relocation, as moving often entails higher housing costs due to rising market rents and transaction expenses. In contrast, the subjective perception of excess living space emerges as a strong predictor of mobility, with seniors who consider their dwelling too large exhibiting a significantly higher likelihood of moving. These findings suggest that policies aimed at facilitating downsizing, such as targeted tax incentives, rental market interventions, and senior-friendly housing initiatives, could contribute to a more efficient use of the existing housing stock. Addressing structural and psychological barriers to relocation, particularly the availability of barrier-free housing, remains crucial for fostering mobility among older residents. The study contributes to the literature on housing market inefficiencies and demographic shifts, providing empirical insights for policymakers seeking to optimize housing allocation in aging societies.

ABSTRACT. Reverse Vending Machines (RVMs) play a fundamental role in a circular economy model, ensuring materials circulate and maintain their greatest utility and value for as long as possible. Location is one of the key factors to the success of RVMs in fulfilling this role, and the fact it should also be in line with the sustainable development of the regions adds to the complexity of the location decision. This paper models different perspectives that can be elicited to disclose the existing compromise when managing simultaneously the three pillars of sustainability, i.e., social, economic, and environmental goals. Spatial interaction models were used to represent the RVMs demand, and the multiple allocation used in the proposed models. Instead of the usual assumption of known and constant demand, we develop a demand function that depends on RVMs attractiveness and distances, closer to the effective demand for RVMs. A case study in the central region of Portugal is used to develop the paper's contribution. The results obtained pinpoint the best location for RVMs aiming the three pillars of sustainability, delivering to the decision makers the range of compromises between them, as well as the impacts of the underlying political options on the location decision.

ABSTRACT. This paper investigates the role of entrepreneurship and firm creation in shaping regional economic resilience at the employment area level in France from 2007 to 2019. Using a dynamic shift-share approach, we isolate the local component of entrepreneurship to better understand its specific contribution to economic adaptability. Regional economic resilience is assessed by examining employment dynamics before, during, and after economic shocks, particularly the 2008 financial crisis. Using a spatial Durbin model, our results highlight the importance of entrepreneurial dynamism in fostering recovery and long-term economic stability. The results offer policy implications for enhancing regional resilience through targeted support for local entrepreneurship.

ABSTRACT. The study introduces an innovative approach to the analysis of complex systems, exploring how the complexity of outputs influences the market structures required to generate them and the consequent impacts on system resilience. By analyzing the connectivity architecture of a system, the work examines how the structure of these networks determines the capacity to produce complex outputs. The relationship between different market forms and resilience is then demonstrated by incorporating them into the model of the trade-off between efficiency and redundancy. The analysis stands out for systematically linking output complexity to specific network architecture and the market form that can support its production. It is shown that high-complexity outputs require market forms tending towards oligopolistic structures characterized by highly organized and centralized networks, whereas low-complexity outputs can be supported by more competitive and fragmented markets. System resilience, understood as the ability to adapt and recover from disturbances, is analyzed through the balance between redundancy and efficiency, with practical implications for resource management and economic policy formulation. The conclusions offer new perspectives for developing innovative strategies to enhance the resilience of economic systems, suggesting future research directions on the impact of innovation in redefining connectivity architectures and market forms.

ABSTRACT. This study examines the relationship between Quality of Government (QoG) and per capita GDP for a panel of 242 NUTS 2 regions in the European Union over the period 2000–2021. The analysis includes conventional determinants and various sectoral covariates. Controlling for spatial spillover effects and potential endogeneity, we confirm that QoG is a significant predictor of regional resilience. In line with theoretical arguments, impartiality has a higher impact on resilience than the quality of public services and control of corruption. In addition, we find that investment, human capital and specialization in service activities are key drivers of regional development.

ABSTRACT. This paper examines how an industry's position within Global Value Chains (GVCs) affects its productivity growth. By linking industries through production networks, GVCs shape how value is created and distributed. Some segments of activities within GVCs, such as R\&D, design, and marketing, are more profitable than others. This uneven distribution suggests that an industry’s position within GVCs can influence its performance. To investigate this, we refine the existing measurement of GVC positioning and conduct an econometric analysis to assess the relationship between positioning and labour productivity growth. Using World Input-Output Tables, we construct a set of position metrics and analyse how different positions in the value chain exert distinct effects on labour productivity growth at the industry level. Our findings reveal that industries closer to high-growth sectors or farther from primary inputs tend to experience higher productivity growth, benefiting from spillover and specialization effects. In contrast, industries positioned far from final consumers exhibit lower productivity growth, suggesting that weak consumer engagement can hinder performance.

ABSTRACT. The crises of recent years underscore the need for more resilient global value chains to address potential future disruptions. The paper explores the concept of economic resilience from the perspective of global value chains based on theory and evidence both from the field of international economics and supply chain management. It introduces a new composite index to measure the vulnerability of global value chains across three dimensions: (geo-)political, economic, and environmental, while considering reliance of the economies on suppliers from high-risk countries. Applying the methodology of this new index to the EU member states reveals that the vulnerability of global value chains has increased in most cases since the onset of the COVID-19 pandemic. While the (geo-)political and economic dimensions yield mixed results, most countries were more susceptible to environmental shocks in 2023 compared to 2019. When examining the implications of global value chains vulnerability in the context of economic performance, measured by growth of per capita GDP, the findings of the empirical analysis indicate that high vulnerability is not necessarily linked to low GDP growth. On the contrary, global value chains are particularly vulnerable in countries with a high degree of openness, which enables them to respond more agilely in times of crisis. In terms of economic policy implications, the analysis highlights the need for careful evaluation of policy responses when implementing measures to enhance economic resilience, as reducing vulnerability of global value chains may come at a cost in terms of efficiency and economic performance.

ABSTRACT. We study foreign investment in European firms using micro-level ownership data from the Orbis database, covering 39 countries from 1999 to 2023. We distinguish between direct investors and ultimate owners who hold controlling stakes and bear the economic risks. Our analysis reveals that a substantial share of Europe’s inward FDI, often attributed to European financial centers, is ultimately owned by North American investors. This discrepancy highlights the limitations of residency-based indicator, typically used in official statistics, and the need for ownership-based measures to assess true financial integration. We show that ultimate ownership, particularly from North America, is significantly associated with improved international consumption risk sharing, while direct investment measures are less informative. These findings support policy calls for greater transparency in ownership structures and deeper integration of European capital markets, as outlined in the Capital Markets Union agenda of the EU.

ABSTRACT. This paper aims to analyze the impact of regional trade agreements (RTAs) with la bor provisions on the labor market conditions of the signatory countries. We focus on (1) the effect of the depth of the labor clauses included in each RTA, and (2) the mechanisms through which labor provisions ultimately affect worker conditions. To measure the hetero geneity of RTAs with provisions, we differentiate between agreements based on the number of clauses related to three categories: obligations, monitoring and cooperation mechanisms, and dispute settlement mechanisms. To address the channels of action of labor provisions, we perform a two-stage regression to capture the direct effect that RTAs have on trade flows and then use the results in a second regression to distinguish between direct and indirect effects of RTAs with labor provisions on labor outocomes. Using data from 153 countries for the period 1990-2023, our findings suggest that RTAs with enforceable provisions have a negative effect on trade flows, almost offsetting the gains of signing the agreement. Secondly, we find that labor provisions mainly affect labor outcomes indirectly through trade, having a positive effect on worker rights de jure but a negative effect de facto

ABSTRACT. This paper examines the dynamic effects of living alone on objective physical and mental health outcomes, with a particular focus on the mediating role of loneliness. Using a Two-Way Fixed Effects Differencein- Difference design, we exploit the event of transition to living alone by analyzing data from the HRS and SHARE surveys, covering the over-50 population in 20 EU countries and the US. Health outcomes include the likelihood of having psychiatric diseases, the number of co-morbidities, the probability of being hospitalized as a proxy for acute shocks, and mortality. The findings reveal that: i) living alone has generally adverse and in some cases persistent effects on health, ii) loneliness is not merely a correlate, but a key mechanism through which living alone affects health, iii) the adverse effects are more pronounced among widows, men, older adults, low-income individuals, and those residing in the US and Western EU countries, where living alone is more common. Our findings bring out living alone and loneliness as pressing concerns that need to be addressed as a global public health priority, especially in light of demographic trends in advanced societies.

ABSTRACT. This study focuses on the analysis of the determinants of premature mortality in the male and female population in Spain, using a set of macroeconomic variables covering the period 1990-2021. From this set of variables, factors are extracted by means of principal components and partial least squares. Using a structural augmented dynamic factor model, common economic and socio-environmental factors that have a different impact on the health of both genders are identified. The results indicate that, although the composition of the selected common factors is similar for male and female, their effect on premature mortality differ significantly. Unfavourable developments in the Spanish business cycle are found to increase premature mortality, especially for males. While living conditions linked to gender and income inequality have a detrimental effect on health, particularly for females. Environmental degradation also negatively affects health outcomes. These results underline the importance of developing specific policies to address gender disparities, especially in preventable deaths.

ABSTRACT. This paper investigates the effects on adult and children height of currency crises experienced during childhood. It uses DHS data collected in 57 countries for hundreds of thousands of adults and children under 5 years-old collected between 2000 and 2023, combined with a dataset indicating the start of currency crises between 1970 and 2017. In this setting, adults having experienced a currency crisis between their birth and 10 years old are on average shorter than their peers, with a maximum effect of about - 3 mm (-0.04 SD) for crises experienced between 5-6 years old. Children under 5 experiencing a currency crisis between their birth and the date of the survey also tend to be shorter, by about - 0.1 SD. Reduced food intake is likely to be the main channel: results are higher in net food importing countries, and children growing up during a currency crisis are less likely to eat any solid food and to have a diversified diet in the days preceding the survey. By contrast, the latter are not less likely to receive vaccines or medication in case of a currency crisis. The effects on height are stronger for poorer households, which is likely to reflect different food and non-food coping strategies compared to richer households. Finally, we show that the effects are smaller when controlling for inflation, suggesting a food affordability channel through higher prices. Additionally we document that our results are unlikely to be influenced by differential selection in parenting across households’ wealth levels.

ABSTRACT. This paper examines the relationship between psychosocial risk factors in the workplace and the mental health outcomes of workers in France, using data from the French Medical Monitoring of Employees’ Exposure to Occupational Risks. By analyzing a large and representative dataset of over 20,000 workers, this study highlights the significant role of psychosocial risks—such as high psychological demands, low decision latitude, lack of social support, and job insecurity—in the prevalence of mental health issues, including depressive disorders, loss of motivation, attention deficits, and fatigue syndromes.

Our analysis also explores the protective role of workplace resources, such as meaningful work, clear communication, and supportive colleagues, which mitigate the negative impacts of these psychosocial risks. Through advanced statistical techniques, including logistic regression and structural equation modeling, we demonstrate the substantial influence of psychosocial risks on workers’ mental well-being and the importance of fostering resource-rich work environments to reduce these adverse outcomes.

The findings have significant implications for both employers and policymakers, emphasizing the need for targeted interventions to address psychosocial risks in the workplace. The study concludes with recommendations for improving occupational health policies to enhance workers' mental health and well-being.

ABSTRACT. This paper develops a multi-country AK model of endogenous growth with international knowledge transmission to analyze the impact of productive public expenditure on growth and convergence. A leader economy drives knowledge advancement, while follower countries benefit from spillovers if their knowledge exceeds a threshold. The findings suggest that public expenditure helps laggard followers acquire foreign technology but does not enhance long-term growth. Empirical analysis using a dynamic panel model confirms the threshold effect: public investment boosts growth only in countries far from the technological frontier, while it is ineffective for those at or beyond the threshold.

ABSTRACT. In the United States, total factor productivity growth has a hump-shaped pattern since the mid-1970s, peaking in the early 2000s and declining thereafter. In the same period, research and development (R\&D) expenditures per firm and as a share of firm sales have steadily increased, together with increasing gross profit ratios. Motivated by these trends, we develop an endogenous growth model in which dominant firms face a competitive fringe and charge variable markups. We assess the model's ability to reproduce the trends and use it to simulate counterfactual scenarios based on different technologies for goods and knowledge production. The model identifies increasing fixed costs associated with knowledge production and growing market concentration as key factors in explaining the data. Furthermore, the model aligns with firm-level data on the decline in research productivity.

ABSTRACT. This paper develops a dynamic general equilibrium model that integrates both incremental and disruptive innovations, offering a tractable approach to understanding their interplay. By incorporating Schumpeter’s concept of creative destruction into a growth model that accounts for endogenous market structure and incremental innovation by incumbents, we analyze industries where a dominant firm coexists with a competitive fringe. The incumbent temporarily leads the market, accumulating industry-specific knowledge through incremental innovation, while disruptive innovation enables fringe firms to challenge incumbents, driving cycles of leadership turnover. Our analysis highlights how incremental and disruptive innovation interact: while incremental advances reinforce market leadership, they also set the stage for disruptive breakthroughs. The model captures key empirical patterns, illustrating how higher fixed operating costs can contribute to rising market concentration and slower leadership turnover, thereby reducing industry dynamism and aggregate productivity growth.

ABSTRACT. This paper develops a novel R&D-based growth model that incorporates Environmental Corporate Social Responsibility (ECSR). In the model, ECSR plays two distinct roles: it increases product demand, functioning similarly to advertising, and it enhances environmental quality. The paper analyzes the effects of ECSR on long-run economic growth and social welfare, identifying the conditions under which these effects are either beneficial or detrimental.

ABSTRACT. We assess the extent to which environmental provisions in Preferential Trade Agreements (PTAs) impact CO2 emissions of exporters in member countries as well as non-members input suppliers to preferential exporters. Using a gravity model of bilateral export flows we found that the inclusion of environmental provisions reduces CO2 emissions of member countries and has no impact on CO2 emissions of non-member suppliers of inputs, putting to rest potential fears of carbon leakage.

ABSTRACT. Credit tightening and its impact on international trade have garnered significant academic attention, particularly in the aftermath of the Great Financial Crisis, which underscored how financial disruptions constrain credit access and hinder global trade. While firm-level studies examine credit rationing, they often fail to account for cross-country heterogeneity and systemic factors. Conversely, most country-level analyses primarily focus on credit costs, often overlooking the credit access conditions, such as the standards required by banks to extend credit. This study advances the literature by providing a cross-country analysis of the effects of credit tightening, specifically in terms of stricter credit standards for firms, on trade. It introduces a novel focus on GVC (Global Value Chain)-related trade across a set of European countries. Our findings reveal a significant response of both GVC-related and export trade to shifts in credit conditions. The results remain robust across different model specifications, accounting for sectoral heterogeneity and addressing endogeneity concerns, thereby filling a critical gap in the existing literature.

ABSTRACT. We investigate the link between green trade and environmental patenting in Italian provinces over the period 2008-2020. The research aims to show whether the dynamics of green patent innovation are influenced by trade in environmental goods, thus highlighting the fundamental link between environmental trade and potential knowledge spillovers in the promotion of green innovation. To conduct the analysis, we propose a new classification of environmentally traded goods at the NUTS3 level - based on the environmental footprint of different economic activities - and we link the level of technological development in green technologies of trading partners to the green innovation performance of Italian provinces. Our results suggest the existence of knowledge spillovers between green innovators through trade.

ABSTRACT. Developing countries implement policies to maintain a stable exchange rate, with export-led growth strategies to spur economic growth and stability. The real exchange rate is a key factor of external competitiveness but can also cause economic and financial disruptions. These countries are dependent on external financing which impacts the real exchange rate movements over the medium and long run. We empirically explore the response of the real exchange rate to external public indebtedness in developing countries, from 1975 to 2017, using the iterative Bayesian shrinkage procedure to handle the cross-country differences in panel data. The contribution to the literature is twofold. First, we find that the change in the real exchange rate depends on the external public indebtedness in an inverted U-shape relationship in developing countries. Second, we determine an external debt threshold that minimizes changes in the real exchange rate for each country.

ABSTRACT. Public investment is a fiscal policy instrument that can be used to affect the economy over the business cycle, but also to boost its long-term potential. However, a feature of public investment is that it is often subject to delays related to planning, construction, or both. We show that these delays can materially affect the usefulness of public investment for managing the economy. In particular in the case of a downturn, a delay in delivering an announced public investment can worsen the downturn if public investment is not delivered quickly. If public investment that has been planned during the recession is delayed so that it occurs when the recession is over, it risks overheating the economy. Delays in the delivery of public investment shift the benefits from higher public capital further into the future and reduce welfare in the short run, even though an increase in public capital is welfare-increasing in the long run. These findings hold both in the standard model as well as in the model with search frictions. From a political economy perspective, the temporary decline in welfare related to delays may lead to governments being more reluctant to announce or implement investment plans, because there is a risk that the resulting welfare increase would occur under the next government.

ABSTRACT. This study applies the tax-smoothing framework to fiscal policy and optimal public deficits to derive time-varying country-specific tax-tilting parameters across European Monetary Union (EMU) member states for 1970--2024. The methodological contribution of this research lies in implementing a panel time series model that captures heterogeneous fiscal behaviors while controlling for fundamental sources of cross-country heterogeneity. The econometric approach employs a comprehensive state-space framework that advances beyond conventional models by incorporating a panel-data time-varying parameter structure with fixed (common and country-specific) and varying components. The empirical findings reveal pronounced and temporally dynamic tilting behavior, which may be attributed to substantial variations in intertemporal preference rates across countries, an important consideration for policymakers developing a more integrated fiscal union.

ABSTRACT. This paper empirically investigates the economic and political consequences of populist governments. We focus on Italian local governments (i.e. municipalities) over the 2010-2023 period, when populists, i.e. the Five Stars Movement, became the most voted party in the country. Using a staggered difference-in-differences design combined with unique survey data, we document a significant and substantial decline in trust toward national institutions and interest in politics following the election of a populist mayor. Populist mayors fail to implement social and economic policies that align with their voters’ political demands, ultimately leading to voter disengagement from political and democratic participation.

ABSTRACT. With the proliferation of financial technologies (Fintech), the environmental impacts of digitalisation are becoming increasingly visible. At a time when digitalisation and Fintech solutions are rapidly spreading globally, empirical evidence on the environmental consequences of this transformation is still limited. The digitalisation process creates a multidimensional transformation that needs to be evaluated together with its impacts on environmental sustainability. In this context, understanding the effects of internet use, digital security infrastructure and Fintech applications on environmental outcomes in a holistic framework is becoming increasingly important both at the theoretical and applied level. The aim of this study is to analyse the impact of Fintech indicators on environmental sustainability within a multivariate framework. In this direction, a model proposal is presented using the data set of 27 countries covering the 2019-2024 period and analysed with SEM. In this context, the relationships between the variables of internet user ratio, number of secure internet servers, cryptocurrency adoption, energy consumption and carbon emissions per capita are analysed holistically with this model. The findings of the analysis show that digitalisation indicators affect carbon emissions both directly and indirectly through energy consumption. In particular, internet usage and cryptocurrency adoption are significantly associated with environmental outcomes. These findings point to the importance of systematically addressing the environmental impacts of digital transformation and provide theoretical and practical contributions to sustainable digital policy development.

ABSTRACT. We study the formation of international climate coalitions with sophisticated policy makers. They strategically predict the consequences of their membership decisions in climate negotiations, and they use an integrated assessment model of the economy and the climate in their decision making. We analytically characterise the equilibrium number of coalitions and their number of signatories with certain types of heterogeneity. With a richer structure of energies we also investigate numerically possible coalition outcomes for a calibrated model. We confirm our analytical heterogeneity results and in contrast to earlier approaches to coalition formation based on internal and external stability, much larger coalitions can be sustained in equilibrium and large and small coalitions can exist alongside each other. Sophisticated policy makers would lead to more mitigation of global warming.

ABSTRACT. This paper analyzes the impact of energy transition metals (ETMs) on institutional quality in Latin American regions. As ETM demand is expected to rise in line with energy transition needs, several ETM-producing countries may either benefit from the boom or, conversely, fall into the natural resource curse. We aim to identify these effects at a disaggregated level. To do so, we construct and use an original dataset covering 18 Latin American countries at the regional level, employing geo-localized data on ETM mine locations. We also develop a new regional index of institutional quality. Using a Synthetic Difference-in-Differences approach, our findings indicate that while ETM mining does not significantly reduce overall institutional quality, it consistently increases perceived corruption. This effect is driven by regions with relatively large mining operations. Furthermore, in specific cases, mining can lead to a decline in trust in institutions and mixed effects on government effectiveness.

ABSTRACT. Ensuring a stable supply of critical minerals at reasonable prices is essential for the clean energy transition. The security of supply of critical minerals is particularly susceptible to geopolitical risk. In this paper, we use constant and time-varying parameter local projection (TVP-LP) regression models to examine the effect of geopolitical risk on prices of six critical minerals: aluminium, copper, nickel, platinum, tin and zinc. We propose a conceptual framework in which we make two predictions. The first is that the responsiveness of prices for critical minerals to geopolitical risk will depend on the non-technical risk associated with procuring each critical mineral, which will be reflected in the elasticity of supply. The second is that geopolitical threats will have a bigger effect on critical mineral prices than geopolitical acts. With the exception of platinum prices, which have suffered a downward structural demand side shock associated with the growth of the electric vehicle market, we find empirical support for the first prediction. Our results are also consistent with the second prediction. We find considerable evidence that the effect of geopolitical risk on the prices of critical minerals are time varying with time-varying effects of geopolitical shocks observed during the Gulf War, following the 9/11 terrorist attacks and during the COVID-19 pandemic with the time varying effects generally being stronger for geopolitical threats than geopolitical acts.

ABSTRACT. This paper empirically studies the relationship between economic growth and inflation for a selected group of emerging market economies. We applied panel linear estimators, namely, static fixed effects and a dynamic GMM estimator to a sample of 31 countries. Our preliminary results point to the negative impact of inflation on economic growth. We further relaxed the linearity assumption and applied a dynamic threshold GMM model where the threshold variable (inflation) and other regressors are considered endogenous. Our subsequent results indicate that it is reasonable to distinguish between different inflation regimes, as we find a positive impact of inflation on economic growth in a low inflation regime. In contrast, high inflation exerts a negative effect on growth. Thus, we claim that inflation is not harmful to economic growth per se, but it needs to be considered in which inflation regime/situation the economy is situated. We find a threshold of about 2% above which inflation harms the economy.

ABSTRACT. This paper explores the intricate relationship between human capital and foreign direct investment (FDI) across 28 European countries from 2003 to 2022. To address this relationship’s complex and often ambiguous nature, a Bayesian shrinkage estimator is utilized to capture significant heterogeneity across different regions. The results indicate that the discouraging role of human capital in FDI is most pronounced in the “Eastern bloc,” where cost-effectiveness serves as the primary driver of investment. In contrast, efficiency-seeking motives prevail in Western Europe, where higher levels of human capital contribute to increased FDI. Sectoral analysis further reveals that the critical transition for attracting FDI occurs not between the secondary and tertiary sectors, as traditionally believed, but between the tertiary and quaternary sectors. In these advanced sectors, quaternary FDI leverages innovation potential through high-skilled labor, underscoring the critical importance of human capital. These findings highlight the nuanced and region-specific dynamics of FDI, emphasizing the need for tailored policies to maximize the benefits of human capital in attracting foreign investment.

ABSTRACT. This paper investigates the impact of foreign protectionism on sectoral performance in the 27 member countries of the European Union (EU), focusing on productivity and wages. Using comprehensive data from the Global Trade Alert database, this study systematically assesses how various tariff- and non-tariff barriers implemented abroad affect EU industrial sectors. To address potential endogeneity, a dynamic panel data approach is applied. The findings reveal a mixed picture: while foreign protectionism tends to depress sectoral wages, productivity exhibits some gains, suggesting that firms may respond with efficiency improvements to mitigate adverse effects. These results contribute to the limited but growing body of research on the broader consequences of protectionism, particularly the impact of non-tariff trade barriers on affected economies.

ABSTRACT. We examine the effects of World Uncertainty and Geopolitical Risk on Trade flows for 31 European economies between 1995 and 2023. To do so, we resort to Panel estimation techniques, including OLS and Poisson Pseudo Maximum Likelihood (PPML). Our findings reveal that European nations primarily respond to global uncertainty by concentrating their exports and imports among top trading partners particularly their top 5 highest trading partners. This result is more pronounced when uncertainty is driven by low-income countries. Moreover, there is a stronger relationship between imports and global uncertainty compared to exports. Our study underscores the importance of European economies strategically adapting their export and import approaches in response to these challenges.

ABSTRACT. The paper analyzes the current gender dynamics in Georgia's manufacturing sector and provides recommendations for improving gender policies in the industry. The relevance of this study is linked to the Sustainable Development Goals (SDGs) 5 and 9. The research is based on advanced academic studies on gender equality in manufacturing, the UN Industrial Development EQuIP Indicators (10th tool) methodology, and reports from the International Labor Organization, the World Bank Group, and gender research platforms. The study explores the challenge of maintaining gender balance in the industry to ensure that women benefit equally from industrial development. Notably, no prior research has specifically addressed gender balance in Georgia’s manufacturing sector. A structural analysis of gender inequality across manufacturing sub-sectors was not possible due to a lack of statistical data. The absence of relevant data prevents in-depth research in this area. However, based on available statistics, the study found that women’s participation in Georgia’s manufacturing industry remains limited. Cultural norms, education, family responsibilities, and labor market conditions all influence women's employment in the sector. A SWOT analysis revealed that women face disadvantages compared to men in employment opportunities and income stability. However, women in Georgia have demonstrated higher engagement in digital and internet banking transactions and possess the potential to pursue STEM professions. The findings indicate that men dominate the manufacturing sector, with access to higher wages reflecting gender inequality. Nevertheless, Industry 4.0 technologies offer new opportunities for women to enter the field.

ABSTRACT. This study is the first to investigate, at the firm level, the effects of financialization on the investment strategies of non-financial corporations (NFCs) in Portugal and extend the analysis to non-listed NFCs. Financialization, characterized by the growing dominance of financial markets, motives, and actors, along with a shareholder value orientation (SVO), has reshaped corporate in a way that has the potential to undermine sustainable economic growth and fixed investment. This article, using an extensive panel dataset, tries to deepen the understanding of financialization's effects in a European economy outside the core market and emerging economies, specifically in a semi-peripheral European economy with high private debt levels, predominantly composed of small and medium enterprises, and operating within a bank-dominated financial market. Our results reveal that the effects of financialization on investment in Portugal contrast with literature findings and highlight differences between medium and large companies. Considering the full sample, there is no evidence of NFCs using financial markets as their main source of income or as a replacement for operational income. However, medium-sized companies, which face financial constraints, use financial markets as a source of financing investment in fixed assets, with no evidence of shareholder value orientation (SVO) analogous practices. In contrast, large companies, which are not financially restricted, use financial markets for financial extraction purposes, negatively impacting investment in fixed capital. Additionally, there is evidence of negative effects of SVO on investment.

ABSTRACT. In the competitive market of Online Social Networks (OSNs) used by the popula- tion, explaining why one platform outperforms another, or why users migrate, remains a complex challenge. While existing literature often emphasizes the competitive ad- vantage created by network effects, our research proposes that network protocols - the foundational rules shaping the creation of OSNs and the interactions within them - play a crucial role in why users prefer one platform over another. To substantiate our argument, we employ computer simulations of different network structures, derived from various network protocols. Our findings reveal significant insights; for instance, directed networks can markedly impede the diffusion of information, and the pres- ence of sub-communities is vital for enhancing collective actions. These simulations demonstrate that the nuances of network design can lead to vastly different outcomes, providing a deeper understanding of user behavior and platform dynamics in online social networks.

ABSTRACT. A fair access to pharmacological and non-pharmacological mental health treatments for immigrants is essential to reach health equity goals and to support immigrants’ integration. Several studies document country-specific inequalities between immigrants and natives in the prevalence and incidence of anxiety and depression disorders. This paper examines inequalities in doctors' prescriptions for benzodiazepines (BZDs) and selective serotonin reuptake inhibitors (SSRIs) between native-born and immigrant groups in Spain, using administrative health data to assess both disparities in drug access and differences in the quantity of medication consumed.

Results show that all immigrant groups are less likely than natives to be prescribed benzodiazepines (BZDs) and selective serotonin reuptake inhibitors (SSRIs), controlling for standard demographic and socioeconomic factors, areas of origin, and doctors’ diagnoses of health problems as an indicator of medication needs. This disparity persists particularly among individuals with diagnosed health conditions. Additionally, the results indicate that immigrant groups also receive fewer units of BZD and SSRI medications compared to native-born individuals.

By also controlling for time-varying predictors, including a vector of weather variables across provinces over the 12 months of 2018, immigrants are less treated than Spaniards both in terms of number of monthly prescriptions and in terms of monthly defined daily doses, a standardised measure of drug consumption capturing the quantity of active principle. Disparities in BZDs and SSRIs prescriptions reflect barriers in drug access, differences in individual preferences, as well as cultural beliefs and stigmatisation of mental health services in Spain.

ABSTRACT. This paper investigates the determinants of COVID-19 transmission in Italian prisons during the first pandemic wave (February–April 2020) by combining novel institutional data with external epidemiological information. Leveraging a unique panel dataset of daily positivity rates across Italian correctional facilities, we explore how structural prison characteristics, external infection dynamics, and policy interventions shaped the diffusion of the virus. The empirical strategy exploits the quasi-experimental variation induced by the March 2020 prison riots and the staggered implementation of COVID-19 isolation units. Our estimates reveal that the infection rate in the surrounding community was the dominant predictor of prison outbreaks, confirming that prison facilities were primarily exposed to external contagion sources via staff, new admissions, or external service providers. In contrast, factors traditionally associated with higher transmission risk in closed environments—such as overcrowding and staff-to-inmate ratios—display limited explanatory power during the initial outbreak phase. Furthermore, detention houses, characterized by high inmate turnover, exhibit systematically higher positivity rates, emphasizing the role of institutional dynamics in amplifying contagion risk.

The analysis also shows that neither the establishment of isolation units nor the occurrence of riots had a significant causal effect on mitigating or aggravating outbreaks. The findings highlight that policies focusing on controlling external flows—such as systematic staff screening and intake quarantines—are more effective than interventions purely targeting internal prison conditions. These insights offer broader implications for managing epidemic risks in other closed or semi-closed institutions.

ABSTRACT. This paper examines the impact of robotisation on workplace safety in EU manufacturing sectors between 2011 and 2019. To address endogeneity concerns, we employ an instrumental variable approach and find that robot adoption reduces both injuries and fatalities. Specifically, a 10% increase in robot adoption is associated with a 0.066% reduction in fatalities and a 1.96% decrease in injuries. Our findings highlight the context-dependent nature of these effects. The safety benefits of robotisation materialise only in high-tech sectors and in countries where industrial relations provide strong worker protections. In contrast, in traditional industries and countries with weaker institutional frameworks, these benefits remain largely unrealised. The results are robust to several sensitivity tests.

ABSTRACT. This paper relies on the literature on poverty and deprivation and examines the trends in inequality and inequity in the delivery of healthcare services among Italian provinces between 2008 and 2013. While universal health coverage aims to ensure equitable access to healthcare, significant geographic disparities persist, disproportionately affecting high-need populations in segregated areas where access to some health treatment appears limited. We develop a normative framework that integrates healthcare utilization and need-based segregation data to assign social weights, prioritizing provinces with high unmet demand. Provinces with lower healthcare access and greater segregation are given higher priority, highlighting areas where deprivation is most severe. Conversely, regions with better access receive lower priority, reflecting relatively equitable healthcare distribution. Using sequential dominance conditions, we analyze healthcare deprivation trends over time, ensuring robust comparisons across provinces.

ABSTRACT. The Spanish Civil War (SCW) caused a significant population decline, disproportionately affecting young men who were married or of marrying age. This study investigates whether the male scarcity resulting from the war’s exogenous shock had transitory or permanent effects on the Spanish marriage market. Using annual data from 1900 to 2011 for two spatial units—provinces and provincial capitals—we employ a range of analytical methods to explore these effects. Time series analysis and panel data unit root tests indicate that marriage rates are stationary, suggesting that, despite a major shock like the SCW, marriage rates tend to revert to their long-term mean, although structural break tests reveal significant negative shifts in the mean marriage rates during the war period in many cases. Panel data models further show that the SCW had a significant but temporary negative effect on marriage rates at both the provincial and city levels, with the impact dissipating within 5–6 years after the war. At the provincial level, which captures the total number of marriages and population in the country, a subsequent decline in marriage rates is observed two decades after the SCW. This later decline is attributed to the ‘missing generation’ caused by the war.

ABSTRACT. The January 11, 1994, CFA franc devaluation stands as the most significant macroeconomic reform in nearly a century of the Franc Zone system, particularly following the political independences of former African French colonies in the 1960s. Whilst conventional narratives attribute it to fiscal excesses in major economies like Côte d’Ivoire and Cameroon, newly uncovered archival data from the Banque de France, the Bank of England, the Bundesbank (the latter two sourced from Eichengreen and Naef, 2022), and the IMF challenge this view. Instead, I reinstate the devaluation within a much broader common African-European experience: the 1992–93 European Monetary System (EMS) crisis. Evidence unveils its critical role in shoring up the French franc’s credibility amidst the crisis, and suggests a new ‘democratic Franc Zone’s Transition Committee’ within the Banque de France/Eurosystem for future governance.

ABSTRACT. In this paper we follow a Principal Component Analysis and, more specifically, we use the Uniform Manyfold Approximation and Projection (UMAP) methodology for dimension reduction to cluster the European regions according to the particular stage of the structural change process in which they are, regardless of the time dimension and the income level of the region. The dimensions considered for clustering are those that define the structural change process (employment share in agriculture, employment share in industry and employment share in services). Moreover, given the relevance that the agglomeration forces are taking in explaining divergence across the European regions, we also consider a fourth dimension, the population density. It let us to cluster separately those regions that resemble different to the others according to their degree of concentration of population and/or economic activity. Then we cluster the regions in four groups, three of which represent very well the different stages of the economic development in terms of the role played by the three main sectors of the economy unless we are not considering the income level and the time dimension. Additionally, when we observe the time dimension over the map of clusters we find that it matches very well with the history of the European regions across the 20th century.

ABSTRACT. The European Union's reliance on imported fossil fuels, especially oil, has been highlighted by the energy crisis triggered by the war in Ukraine, exposing vulnerabilities in energy security. This study examines the drivers of international oil dependency, emphasising technological and trade lock-ins. Employing complex network theory and panel data models, it evaluates trade patterns and the effectiveness of environmental policies in mitigating oil dependency across EU countries from 1999 to 2019. Results indicate that trade lock-ins with major oil-exporting nations deepen dependency, especially for countries with strong geopolitical ties to these exporters. Stringent environmental policies, including energy taxes and technology-push initiatives, are shown to facilitate the ecological transition, with public R&D investments in renewable energy technologies playing a pivotal role. Countries with a comparative advantage in low-carbon technology exports benefit most from such investments. Importantly, no evidence supports the green paradox, confirming that well-designed policies can harmonise decarbonization and economic stability. The findings underscore the need for EU-wide strategies to address disparities in energy dependency. Recommendations include increasing public investment in clean energy innovation, diversifying energy imports, and fostering intra-EU collaboration to capitalise on renewable technology export potential. These measures are essential for enhancing energy security and reducing geopolitical risks.

ABSTRACT. This paper analyses the lithium-ion battery (LIB) supply chain identifying the segments in which bottlenecks and dependencies are stronger, defining specific spaces for policy action. Second, it maps countries’ positioning and their evolution, looking at the relationships between production, technological capabilities and international competitiveness. Last, it discusses how the design of a balanced policy mix could be leveraged to overcome technological, productive, and geopolitical obstacles to the achievement of net-zero targets. Building on the analytical framework proposed by Caravella et al. (2024), we integrate data from BACI-UNComtrade and the OECD Regpat database, keeping the finest possible level of detail. Inputs to the LIB supply chain are identified through a literature review and are associated with different technological classes. Preliminary evidence shows that the LIB supply chain has undergone significant structural changes in recent years (IEA, 2024). New incumbents have emerged (e.g. China), others have weakened their position (e.g. EU and US), and concentration has increased in almost all market segments. China established as the main production leader, covering 60% of global LIB exports in 2022, and showing increasing activity in all strategic nodes of the supply chain. In terms of technological capabilities, former followers have become leaders, exploiting both technology-push as well as demand-pull factors. The locus of innovation shifted from the US and Japan to South Korea and China, with an important acceleration from 2020 onward. Cell components, especially innovative battery chemistries with lower CRM intensity, have attracted most of the attention.

ABSTRACT. In this paper, we analyze how robotization is associated with industry output and its production inputs. We therefore link data on occupational employment, robotization, and input-output relations for 15 manufacturing industries across 35 countries for the decade prior to 2018. We show that robotizing industries experience increases in output and approximately proportionate increases in value added, employment, domestic intermediate inputs, and foreign intermediate inputs. Due to this proportionality, robotizing sectors do not significantly alter its domestic input ratio (value added plus domestic intermediates relative to foreign inputs).

Our empirical results are at odds with claims that robots induce reshoring. Rather, we document that robotizing industries are thriving in terms of output generation, that those thriving industries are internationally well-integrated, and that they generate employment. However, we also document that beneath those aggregate production input categories, some substitution effects take place and reconfirm that particularly workers that perform manual routine tasks are at risk when robotization occurs.

ABSTRACT. Fiscal policy support was at the heart of the COVID-19 crisis, and governments used it extensively across the globe. Yet, the volume of the fiscal support packages varies significantly across countries. To explain these differences, we investigate the impact of national culture on fiscal policy interventions, using an international sample of 48 countries that received financial support from the government during the COVID-19 crisis. These findings support the hypothesis that culture affects governments’ behavior toward the fiscal allocation of resources and demonstrate that individualism and uncertainty avoidance are significant drivers that increase the size of fiscal support. Moreover, a higher quality of formal institutions, like government effectiveness, regulatory quality, and control of corruption, intensifies the positive effects of uncertainty avoidance on fiscal support. These findings have policy implications, suggesting that the design of fiscal packages should consider cultural values, complementary to the institutional reforms.

ABSTRACT. The objective of this paper is to enhance comprehension of the impact of fiscal shocks on the financial stability and financial cycles of the euro area, focusing especially on public debt levels. To do this, we use i) the methodology developed by Hansen (2000) and ii) the non-linear panel local projection impulse response function approach developed by Jordà (2005). Our results are numerous. First, we identify a threshold of 71% for the public debt to GDP ratio, surpassing the Maastricht criterion of 60%. Second, in instances where public debt is high, shocks in government spending have a negative influence on the financial cycle; yet they bolster financial stability, indicating intricate interactions. Conversely, in situations where public debt is low, these shocks initially stimulate both the financial cycle and stability, but their effects diminish over time. Third, revenue shocks in high debt regimes moderately stimulate the financial cycle, but they have a detrimental impact on financial stability. These findings highlight the importance of coordinating fiscal and macroprudential policies and contemplating the implementation of a fiscal union within the euro area to ensure enduring financial stability and resilience.

ABSTRACT. This paper investigates the impact of escape clause (EC) activation within fiscal rule (FR) frameworks, focusing on macroeconomic and financial variables. Leveraging the Synthetic Control Method (SCM), we estimate the effects of EC activation on debt-to-GDP ratios, the Emerging Markets Bond Index (EMBI), and Credit Default Swaps (CDS). Our analysis spans both emerging and advanced economies that activated ECs during major shocks, including the Global Financial Crisis and the COVID-19 pandemic. A key methodological contribution is the integration of machine learning-based clustering techniques to enhance donor pool selection, thereby strengthening the robustness of SCM estimates. The findings reveal that EC activation lowers debt levels, reduces sovereign risk premiums, and increases fiscal space, with effects on financial variables persisting for two to twelve months. These results underscore the dual role of ECs in enabling fiscal flexibility while safeguarding the fiscal discipline objectives embedded in FR frameworks.

ABSTRACT. The 21st century is facing climate change challenge, which has rapidly intensified, impacting global systems in various ways. The need to mitigate climate change necessitates deep, fast and sustainable reductions in greenhouse gas (GHG) emissions. Efforts should go through several channels including Scope 3 emissions, which encompass indirect emissions from a company’s entire value chain. However, accurately estimating Scope 3 emissions at the company level remains challenging due to data scarcity and reliability issues. This paper presents a new empirical methodology designed to estimate Scope 3 emissions at the company level, taking into account the dynamics of value chains and company-specific factors. Using input-output tables and sectoral emissions data, we reconstruct company value chains and calculate emissions from upstream and downstream sectors. We address the challenge of missing data by using parametric and machine learning techniques, to predict both reported and unreported emissions. Our model, applied to french companies’ data, shows that company-specific characteristics play a key role in scope 3 emissions, and sectors’ emissions in the value chain as a whole significantly influence scope 3 emissions. The results suggest that machine learning models, particularly Random Forest, outperform traditional models in predicting Scope 3 emissions. The study also highlights the importance of expanding data reporting and designing comprehensive climate policies to better manage emissions across all sectors.

ABSTRACT. This paper examines the relationship between packaging waste evolution and economics. To that end, we consider a sample of 15 EU countries over the period 1997–2019. Given the growing concern about plastic waste, we disaggregate total packaging waste into plastic and non-plastic components. Our findings indicate that the relationship between these types of waste and economic activity is not constant over time, with the Great Recession playing a significant role in shaping this dynamic. Moreover, our results highlight the existence of a relative decoupling between total packaging waste and economics. However, this is not the case for plastic packaging waste, which poses a clear threat to the overall sustainability of the economies analyzed. Additionally, our findings reveal that the COVID-19 pandemic led to a surge in plastic packaging waste generation while its recycling rates declined. Therefore, our results suggest a setback in the degree of circularity within these economies, a particularly concerning trend given the growing share of plastics in the overall composition of municipal solid waste.

ABSTRACT. The adoption of green technologies as part of the transition to a more sustainable economy must be accompanied by the development of specific organizational capabilities and skills. Firms are required to transform both their production processes and human resource structures to better adapt to this shift. However, the lack of these human skills and capabilities could lead to a bottleneck problem difficult to overcome by organizations. Our purpose is to look inside the necessities of small and medium-sized enterprises (SMEs) in Europe to transit into their greener activities. Our contribution is going inside of how the lack of skills and competences that a firm faces in this process. In particular, we first evaluate the drivers behind firms' capability shortages and, second, investigate how this shortage of capacities impact in their efforts to become greener. To carry out the empirical analysis, we have used the Flash Eurobarometer Survey 537 'SMEs and Skills Shortages that provides information on more than 13.000 companies. The results of the analysis show that firms face significant difficulties in finding the appropriate green skills. This is a complex problem, because is affecting mainly at vocational educational level and it is explained by a multiplicity of reasons. The availability of specific and technical skills plays a crucial role in mitigating the negative impact on the environment.

ABSTRACT. We investigate the impact of air quality regulations targeting fine particulate matter (PM2.5) on farmland values in corn‐ and soybean‐producing counties in the United States over the period 1997–2022. Using self-reported farmland value data from the Agricultural Census and county-level pollution classifications provided by the Environmental Protection Agency, we employ a difference-in-differences event-study design—incorporating inverse probability weighting and doubly robust estimators—to estimate the causal effect of regulatory interventions. Our primary analysis contrasts “non-attainment” counties, which failed to meet the National Ambient Air Quality Standards for PM2.5, with those that consistently maintained compliance. We further assess heterogeneous treatment effects by extending our analysis with a triple-difference specification comparing counties with high versus low fertilizer use. Additionally, we employ the recentered influence function to conduct an unconditional quantile analysis across the entire distribution of farmland values. Our estimates indicate an 8.80–8.94% decline in farmland values in “non-attainment” counties in response to the enforcement of PM2.5 standards, suggesting that the economic costs of the prescribed standards were capitalized into farmland values, particularly in regions with higher fertilizer use. However, this impact was not uniform, with more pronounced effects observed among counties at the lower end of the farmland value distribution.

ABSTRACT. This paper focuses on the uncertainty effect on consumer price inflation based on a panel of 82 advanced, emerging, and developing economies studied over a sample period running from 1995 to 2022. In contrast to the previous literature, we particularly control for the role of monetary policy credibility by considering the monetary control classification of Cobham (2021) and by measuring the degree of anchoring of survey inflation expectations. We argue that the interpretation of uncertainty as a negative demand shock is appealing from a theoretical perspective but is unlikely to reflect uncertainty dynamics for countries with high inflation and/or low monetary policy credibility. We find that higher uncertainty boosts inflation. However, this effect is significantly reduced (or even eliminated) by both a strong degree of monetary control and a strong anchoring of inflation expectations, illustrating that both factors are of key importance for the propagation of uncertainty shocks.

ABSTRACT. This paper studies how exchange-rate regimes affect the pricing and production decisions of multi-product exporting firms. We introduce a framework in which firms respond to shifts in future exchange-rate volatility by adjusting output, prices, and markups. Using detailed microdata for the European car market between 1970 and 1999, we structurally estimate the resulting demand and supply system and recover product-level markups. We find that transitions from fixed to floating rates are associated with falling markups and higher dispersion, which gradually revert to their initial levels within about three years. We rationalize these patterns using a model that incorporates risk aversion and pricing-to-market. Our findings suggest that price setting plays an important role in transmitting cross-border nominal shocks, and has implications for the exchange-rate disconnect and the Mussa facts.

ABSTRACT. This paper investigates the impact of the International Monetary Fund's (IMF) multilateral surveillance through Article IV consultations on hard-currency sovereign debt markets. Using a panel matching difference-in-differences framework covering 67 countries from 2004 to 2023, we find that IMF consultations significantly reduce sovereign spreads by around 10 basis points relative to comparable untreated countries, indicating reduced perceived country risk. Correspondingly, sovereign debt issuance—particularly in US dollars—increases following these consultations. To explore the underlying mechanisms, we leverage natural language processing (NLP) to quantify sentiment in Public Information Notices (PINs) published post-consultations. Our results reveal pronounced market responses driven primarily by optimistic sentiment. Further analysis shows that countries geopolitically aligned with the United States experience even greater increases in debt issuance following positive IMF assessments. Overall, our findings underscore the importance of institutional transparency, public information dissemination, and geopolitical context in shaping emerging markets' access to international capital markets.

ABSTRACT. Bargaining over losses in groups is a common economic interaction with a set of unique characteristics, and the subject of this paper. We conducted an experimental game in which groups of four agents each start with differing initial endowments. These are assigned to the players either via a random mechanism (luck) or, in a different treatment, according to the individual success in a real-effort task (merit). The agents are informed that a certain amount of the initially given resources has to be returned. Both treatments were run in two variants, one with a veil of ignorance and one without. In the luck treatment, participants are either not informed about their initial status before the bargaining process begins, or they are. In the treatment with the real-effort task, the agents’ relative success either remains undisclosed or is made known to them. Among other things, we find that players with the highest endowment contribute significantly less under effort than under luck, while the opposite holds for agents with the lowest endowment. Without a veil, the latter is primarily driven by the choices of agents with the lowest endowment. We find virtually no differences between agreed distributions with and without a veil.

ABSTRACT. We develop a theoretical model of the European Union emissions trading scheme (EU ETS) in which participants design collectively optimal policy, understanding that they will face heterogeneous political pressure to conduct more or less ambitious policy ex post. Member states can commit to an ex ante minimum requirement on complementary emission reduction technologies. If policy on these complementary technologies is designed at the Union level, this minimum requirement will also take into account the redistributive effect through permit allocation and the global externality. However, asymmetric information still distorts the emission cap away from the constrained-efficient outcome.

ABSTRACT. Policymakers are challenged to define policies that ensure market efficiency while promoting equitable resource redistribution. However, achieving this balance is difficult, as efforts to promote fairness often result in economic distortions, such as those caused by taxation.

This paper contributes to the broader debate on the equity-efficiency tradeoff by examining how individuals perceive and respond to it through a theory-driven experiment. Participants, engaged in a dyadic proposer-responder interaction, are tasked with redistributing an income between themselves and an anonymous counterpart while we manipulate levels of efficiency loss and the responder's veto power.

Our findings show that the interplay between equity and efficiency is dynamic and context-dependent. As the costs of redistribution rise, individuals converge toward an efficiency-oriented behavior to avoid resource wastage. This convergency is further amplified as the ability to influence the outcome is concentrated in the hands of one.

ABSTRACT. We investigated the relationship between young adults' investment decisions, risk attitudes, and financial literacy, which is crucial for understanding the limited participation in the Romanian capital market. We conducted an online survey and collected responses from 479 university students aged 18 to 25. Using LASSO method, we found that basic and overall financial literacy are primary predictors of quantitative-assessed risk attitudes, although the impact is relatively small. The self-assessed risk attitudes are mainly shaped by a larger number of factors dominated by employment, early exposure to financial education and academic background. We also found that risk profile and financial literacy level do not significantly affect young adults’ investment decisions.

ABSTRACT. Our article focuses on the interaction between monetary policy and macroprudential policy in the context of the transmission channels of monetary policy, particularly the risk-taking channel that came to light in the wake of the subprime crisis. This is all the more important as macroprudential and monetary policies affect the financial conditions of an economy or zone, which calls for a debate on the relationship between these two types of policy and, more broadly, on the objectives of these types of policy. For that purpose, we use a panel dataset of 126 banks from 20 European countries from 2000 to 2015 and implement linear static and dynamic multiplicative interaction models. We show that monetary policy and macroprudential variables interact to explain the bank risk-taking channel and that interaction is not linear. The results shed further light on the complex transmission mechanisms of monetary policy and their impact on financial stability

ABSTRACT. This study empirically investigates the long-run equilibrium relationships among the interbank rates of the United States, the Eurozone, the United Kingdom, and Japan. Making use of a fractional cointegrated vector autoregressive (FC-VAR) model, evidence support a positive long-run equilibrium among the US interbank rate and the other areas. Recursive estimates indicate that the GFC (Global Financial Crisis) significantly strengthens the positive long run relationship between US-UK and US-Eurozone pairs (i.e., supporting an increasing degree of integration), while it has an inverse effect to US-Japan pair (i.e., weaker positive effect). Finally, monetary interventions (QEs), have a significant impact on these relationships, except for the Japanese case. These results are valuable for central banks, policy makers as well as international investors.

ABSTRACT. We present a model for data reduction and provide time-fixed indicators for macroprudential policies. Using a panel of 119 countries from 2000 to 2015, we empirically assess the effectiveness of macroprudential policies in reducing volatility in private credit. Unobserved heterogeneity among countries is an important factor. We employ an econometric model that accounts for this heterogeneity and document that the impact of macroprudential policies on financial stability varies, leading to either deterioration or improvement, depending on the macroeconomic conditions of the country in which they are implemented.

ABSTRACT. We develop a dynamic general equilibrium model to assess how information produced by financial analysts about banks impacts financial stability and economic performance. In the model, banks screen projects and originate loans but may then sell some of these loans on a secondary market in order to redeploy capital. A financial analyst produces and releases information about banks' asset quality, thus increasing transparency on the secondary market and reducing banks' ability to sell bad projects. Our results reveal that the presence of financial analysts increases banks' incentive to invest in initial project screening, thereby improving market discipline and stability in the banking sector. We also show that the information produced by the financial analyst allows to stabilize investment and economic activity in case of financial shocks.

ABSTRACT. We examine the effect of diversity of values within a country on the institutional quality. We develop a tractable and straightforward measure of diversity in human values using World Value Surveys. We find that cultural diversity in human values promotes efficient institutions

ABSTRACT. This work extends the basic analytical framework of macroeconomic growth to encompass the notion of social inclusion and reduce the inconsistencies between growth and development. Specifically, we introduce the social and solidarity economy (SSE) into the macroeconomic debate on economic growth to acknowledge and making visible its contribution to total output increase, while working towards greater inclusion. Our analytical strategy relies on the discussion of two theoretical models. First, we illustrate a modified version of the Solow model in which we introduce social inclusion as a labour-augmenting factor. Then, we modify a simplified model of endogenous growth by introducing among the arguments of the production function social inclusion as a labour-augmenting factor and by replacing the R&D with the SSE production function. The added value of our research is that we lay the foundations for an alternative pattern of development that may fit well the initial conditions of a low resource economy lacking endogenous technological progress.

ABSTRACT. This article contributes to the emerging literature on the determinants of irregular migration by re-assessing the effect of income on irregular migration aspirations. Using proxies for income and not income itself, previous research asserts that the relationship between income and irregular migration aspirations is negative. In this paper, we use the seventh wave of the Arab Barometer survey conducted between 2021 and 2022 in 12 Arab countries, which allows, for the first time, to link individuals’ exact income to theirapsirationsto migrateirregularly. Contrary toexistingliterature, we show thatthe relationship between income and irregular migration is characterized by an inverted-U curve, with an annual income threshold of around US$ 2500-4500. This finding implies that foreign aid policies are no more effective at containing irregular migration than they are at controlling regular migration.

ABSTRACT. This paper investigates whether financial digitalization contributes to economic growth, by reducing substantial disparities in traditional financial development, such as domestic bank credit across countries, between countries. Panel data analysis from the Global Financial Inclusion Database for 127 countries in 2014, 2017, and 2021, reveals that financial digitalization accelerates economic growth and lowers unemployment rates, particularly in developed countries where digital transformation and traditional finance are both well developed. The more widespread and frequent use of digital payment by the richest 60% of the population in developed countries positively affects economic growth. However, Asian and African countries, as well as the poorest 40% in developed countries, struggle to benefit from these positive effects. Moreover, these uneven effects become more pronounced in the post-Covid-19 period.

To address the seemingly counterintuitive finding from the panel analysis that digital financial deepening has a negative impact on developing countries, this paper applies a panel threshold regression with the level of traditional financial deepening as a threshold variable. This analysis focuses on 35 African countries since 2000. The results indicate that African countries with underdeveloped traditional financial systems experience significant gains from financial digitalization, except in the aftermath of the global financial crisis. More recently, countries with more mature banking systems have also leveraged digital transformation in their economic growth processes. 

Furthermore, to examine whether financial digitalization benefits all African countries equally or whether it favors some disproportionately, this paper conducts a convergence analysis of per capita outputs for 24 African countries over the period 1961–2022. The results suggest that the finance-related ICT variables in seven African countries, including Kenya and Tanzania, can push up their growth paths to converge towards that of the Republic of South Africa. These countries, particularly Kenya, implement the ICT-oriented national policies to become a technological and innovation hub in East Africa, which likely contributes to these results. Financial digitization can lead to financial inclusion in a limited number of developing countries. However, particularly in the post-pandemic period, the digital divide widens disparities in access to financial services.

ABSTRACT. Given the contrasting evidence on the redistributive role of taxation, this study seeks to isolate the redistribution process performed through the tax and transfers system and address the effects of several taxes on the difference between pre- and post-tax Gini coefficients, commonly referred as the Reynolds-Smolensky Index (RSI), in a panel of 107 advanced and developing economies for the period between 1990 to 2020. Contrary to previous evidence, results obtained show little evidence that direct taxation had significant redistributive effects, whereas indirect taxes only presented negative impacts on developed economies. Still, robust redistributive effects of social security contributions were observed for both groups, while property taxes only seem to be associated with higher redistribution in the long run. Finally, several robustness tests are performed and the importance of total investment and employment levels for redistribution is underlined.

ABSTRACT. I present a multisectorial neoclassical growth model with climate externality, heterogeneous households and input' market frictions to explore the connection between climate change and inequality. A final good is produced by two intermediate energy good, a dirty one and a clean one. The former causes damage to the final good, Total Factor Productivity. Intermediate energy goods are produced by combining green/dirty capital goods and high-skill/low-skill labour. Capital and labour are sector-specific. The representative high-skill household supplies labour only in the clean sector, while the representative low-skill household can only be employed for the dirty intermediate energy good production. I investigate the impact of the inputs' market frictions on the per-unit optimal carbon tax, and the effect of the tax on the aggregated and disaggregated welfare. First, the tax, unlike the reference literature, exhibits a different magnitude. Second, the low-skill representative household is hurt by the environmental policy, notwithstanding that the aggregate welfare improves. Third, I explore an alternative taxation scheme, i.e, a dirty capital good tax instead of a per-unit carbon tax, showing that the negative effects for the low-skill household are mitigated by implementing this policy.

ABSTRACT. The debate on how new technologies impact the economy—particularly in terms of income and inequality—has been reignited with the rise and growing adoption of Artificial Intelligence (AI). Unlike previous technological advancements, AI stands out due to its broad applications in complex, non-mechanical tasks. This raises a crucial question: how does AI affect inequality and could it mirror the impact of past technological progress? To address this question, we analyse data from 14 OECD member countries spanning the years 2000 to 2019. The findings suggest an inverse relationship between AI and inequality—specifically, an increase in AI-related patents and publications appears to mitigate or reduce inequality. This result suggests that the economic dynamics associated with AI differ from those observed in earlier waves of technological adoption. AI, in this context, serves as a complement to the workforce in various tasks, while also having the potential to replace more highly skilled workers, thereby reducing their demand and relative earnings. This conclusion is particularly relevant given how policymakers and economic agents with varying skill levels are likely to perceive the introduction of AI and other emerging technologies.

ABSTRACT. Around one third of Europeans are conspiracy believers. Using European Social Survey data, we find that income inequality is an important driver of political, scientific and COVID-19 conspiracy beliefs, with regional inequality being positively and significantly correlated with conspiracy beliefs at individual level. Believers argue significantly more that the local government should address income inequality problems, while it is not doing enough for them. Furthermore, average sample moods about government commitment on inequality at regional level are significantly and positively correlated with conspiracy beliefs, even after controlling for individual opinions. Instrumental variable approaches suggest that the observed correlation hides a causality link. Our findings identify a novel underinvestigated effect of income inequality and suggest another positive effect of policies aimed at reducing it.