Review of World Economics最新文献

This paper proposes an analytical framework to quantify the impacts of climate transition narratives on a consistent set of macroeconomic, sectoral and financial variables required for financial risk assessment. Focusing on transition risks, our set-up relies on a suite of models, calibrated on the high-level reference scenarios of the Network for Greening the Financial System (NGFS). Its modular structure and variable coverage ensure a comprehensive assessment of the financial implications of disorderly transition scenarios to a low-carbon economy, from the identification of climate-sensitive sectors to the quantification of the impacts on financial metrics. An application to France evaluates the impacts on financial markets and credit risk parameters. Results indicate that the sectoral disruptions associated with a disorderly transition to a low-carbon economy can be substantial and translate in material financial risks. The study offers further grounds for encouraging policy-makers and financial institutions to support and prepare for an early and orderly transition.

This paper applies a recently developed method (Inoue and Rossi, 2021) to estimate functional inflation expectations and ex-ante real interest rate shocks, and then examines their macroeconomic effects in the context of a Functional Vector Autoregressive model with exogenous variables (Functional VARX). Monthly data from January 1998 to May 2023 for the US, the UK and the euro area are used for the analysis. The estimated impulse responses show significant effects of the functional shocks on both inflation and output. In addition, threshold functional local projections indicate that the effects are nonlinear and depend on central bank credibility. Further, inflation expectations shocks have similar effects to supply (demand) ones when they are driven by long-term (short-term) changes. In the presence of an inverted (steepening) real interest rate term structure, the effects are inflationary (deflationary) and expansionary (recessionary). Finally, the responses of inflation, output and the policy rate are driven primarily by the slope and curvature factors of the term structure shocks, which contain important information not captured by traditional scalar shocks.

This paper analyzes how appropriation impacts comparative advantage through the general equilibrium approach. We find that appropriation can always reshape comparative advantage for both economies with strong and weak appropriation under different economic backgrounds. Specifically, whether the economy with stronger or weaker control on appropriation gains comparative advantage in the labor-intensive or capital-intensive product depends on the type of appropriation. More importantly, controlling on appropriation can make it feasible that a capital-intensive economy obtains comparative advantage in the labor-intensive product, which is against the prediction by the Heckscher-Ohlin theorem and may be helpful to explain the Leontief’s paradox. We also examine the welfare effect of controlling on appropriation and the relationship between appropriation and the optimal tariff.

A well-established literature in open macroeconomics documents the failure of the uncovered interest parity (UIP) condition. While a host of factors have been examined as possible reasons for this failure, the role of uncertainty is not fully understood. This paper examines how economic policy uncertainty affects the UIP condition in a panel of fourteen economies over 2003:1–2021:12. There is evidence of an uncertainty threshold on the UIP condition under risk neutrality. This threshold splits the sample endogenously into two different regimes—a “low-uncertainty regime" and a “high-uncertainty regime." While the UIP condition holds in the former regime, it fails in the latter. This finding is robust to the inclusion of risk-premium proxies to allow for risk aversion, ex-post exchange rates, different deposit maturities, and estimation methods.

This paper estimates fiscal reaction functions to examine the importance of inflation and inflation surprises for fiscal outcomes in the euro area countries, covering the first 12 countries to join the euro area. The effect of HICP inflation on the primary fiscal balance in per cent of GDP is positive, and statistically and economically significant. The positive effect stems from both the revenue side, particularly direct taxes and indirect taxes, and the expenditure side, particularly primary current expenditures. The effects of HICP inflation on the primary balance and other fiscal outcomes appear in large part to stem from inflation surprises, which arise when inflation differs from the inflation forecasts available for preparing budgets. The effects of inflation on the various fiscal outcome do not appear to exhibit noticeable non-linearities.

The EU enlargement process has thrust EU internal border regions into the spotlight of the European single market. This study explores how this specific macro-institutional change has impacted their socio-economic development. Tracking outcomes across four EU enlargement waves from 1986 to 2007, we identify integration effects across EU NUTS3 regions. Pooled over all waves and border regions, positive integration effects emerge for per capita GDP, labor productivity, patents per capita, and night light emissions in border regions compared to non-border areas. These effects diminish with increasing spatial distance from the enlargement border. At a detailed level, structural heterogeneities become evident across enlargement waves and region types. Internal border regions in established EU member countries benefit relatively in terms of GDP per capita and labor productivity but experience relative declines in employment rates and population. In contrast, border regions in new member countries, particularly during the 2004 and 2007 eastern enlargements, gain from deepening economic integration in terms of population and employment growth. Sector-specific estimations indicate post-enlargement specialization of economic activities in border regions in line with standard trade theories.

Water is a limited resource but it lies at the heart of economies and life on Earth. As it ignores borders, its exploitation can affect water resource availability and quality even in geographically distant areas. As a solution, there is a growing interest in international agreements to protect water resources. However, these agreements can influence other aspects of the economy. This article focuses on the effect of water treaties (WTs) with environmental provisions on international trade. We argue that, as a key input in all production activities, protecting water resources can generate additional costs that can be detrimental to international trade. Empirical investigations are conducted using a structural gravity equation with exporter-year, importer-year and bilateral fixed effects. We find that WTs with environmental provisions decrease bilateral trade. Sectoral analyses show that these WTs reduce particularly mining trade and countries’ income levels and climatic conditions are important characteristics to consider when setting up these agreements. We also find that regional trade agreements (RTAs) with environmental provisions reduce mining and agricultural trade. So, while beneficial for sustainable development, policymakers should consider, when signing treaties with environmental provisions, that they constrain international trade in order to propose mitigation provisions.

This paper explores how the international exposure of companies influenced their strategies in responding to the COVID-19 crisis, and the extent to which they were affected. Our conceptual framework formulates two hypotheses that can be empirically tested. First, we posit that international companies, due to their connections with domestic and foreign markets, are more vulnerable to the crisis, being affected through both demand and supply channels. Second, despite their heightened exposure, we anticipate that international companies will exhibit greater resilience during the crisis compared to their domestic counterparts. This resilience can be attributed to their enhanced global connectivity and productivity. The empirical analysis, based on a large firm-level survey undertaken in 2020 in 133 countries, documents how different types of firms were affected by COVID-19 crisis and how they reacted to the disruptions, providing empirical support for both hypotheses.

This study provides novel insights into the debate concerning the external drivers of productivity at local (NUTS-3) level. In particular, it explores the role played by global production networks, measured through ownership ties among multinational firms and their subsidiaries abroad, in shaping patterns of productivity growth of local economies. Focusing on the Italian experience and using spatial econometrics techniques, the article demonstrates that external relations play a crucial role in sustaining the productivity of Italian provinces, even during periods of severe economic downturns, like the Great Recession. In detail, productivity growth is positively correlated with the Intensity of the networks established by multinational firms and their geographical dispersion.

This study elaborates on a methodology that combines industry-level data (exports, HS 4-digits) with country-level indicators to determine which social capabilities are important when explaining patterns of comparative advantage (or structural transformation). The indicators used to characterize these capabilities are associated with different dimensions: economic, institutional, and cultural. Through the product space, we estimate a density measure identifying the proximity between non-competitive products and a country’s current export profile, and then unpack the contribution of different relatedness channels to changes in comparative advantage by redefining densities in terms of social affinities between industries. We find that (i) countries can be competitive in certain industries, even if some of these capabilities are not high; (ii) all dimensions, but not all their components, matter in predicting changes in countries’ comparative advantages; (iii) structural transformations take some time to materialize; and (iv) the inclusion of social affinities diminishes the influence of a density variable measuring overall relatedness to predict product takeoff.