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Financial market (6 papers) The paper "Do the RMB exchange rate and global commodity prices have asymmetric or symmetric effects on China's stock prices?" It suggests that hedge fund strategies' betas respond more to illiquidity uncertainty than to illiquidity risk during crises, illiquidity and VIX shocks are the major drivers of systemic risk in the hedge fund industry. Specifically, China's stock prices are more sensitive to increases than decreases in global commodity prices. [Extracted from the article]

The inherent complexity of policy decision-making structures may prevent the interface between science and policy from functioning smoothly and evidence-based policies from actually being implemented, even when the results are understood and accepted by political leaders. Given the medium-run perspective of their research question, the main findings suggest that a combination of demand-side and supply-side fiscal policy measures might be more efficient as purely demand-side policies as the former policy mix also increases potential and not only actual output. Special issue: Evidence based policy making - selected papers of the 2020 Annual Meeting of the Austrian Economic Association. [Extracted from the article]

This study contributes to income equality (IE) literature by examining four important issues. First, the study examines the effects of foreign bank presence (FBP) on IE. Second, the paper identifies the minimum threshold level of FBP which can lead to IE. Third, the effect of economic freedom on IE was investigated. Fourth, the paper determines whether economic freedom interacts with FBP to minimise IE. The findings are based on macro data for 33 African countries from 1995 to 2020. The findings from the two-stage system generalised method of moment indicate that unconditionally, FBP reduces income inequality. Also, results from the threshold effect reveal that whilst FBP reduces income inequality, if it exceeds 52%, it may contribute to it. Additionally, the study reveals that economic freedom dampens IIE. Furthermore, economic freedom conditions FBP to reduce IE. Based on these findings, policymakers are advised to exercise caution in attracting foreign banks and to promote local financial institutions. Policymakers are also advised to implement policies to promote economic freedom. [ABSTRACT FROM AUTHOR]

The eighteenth paper "An empirical behavioral order-driven model with price limit rules" proposes an empirical behavioral order-driven (EBOD) model with price limit rules, which consists of an order placement process and an order cancelation process. The fifteenth paper "A multicriteria credit scoring model for SMEs using hybrid BWM and TOPSIS" developed and validated a system to predict SMEs' credit risk by introducing a multicriteria credit scoring model. The first paper "A wavelet approach of investing behaviors and their effects on risk exposures" develops a Time-Frequency Multi-Betas Model with ARMA-EGARCH errors to analyze short and long exposures to different sources of risk. [Extracted from the article]

This paper analyzes the response of cryptocurrency returns to the movement of economic policy uncertainty (EPU) and stock market volatility (VIX), as well as a few macroeconomic variables: gold price, interest rate, inflation rate, and oil price. Vector error correction model and regression model are applied to examine the linkage between these variables using data from 2015 to 2022. The analysis reveals that the selected variables have a positive and significant impact on cryptocurrency returns. This suggests that cryptocurrency can be considered a safe haven for investment. The paper also suggests a number of policies to ensure the protection of investment, control money supply and stock market instability, stabilize economic uncertainty, and systematize economic variables. This paper advocates a well-connected network and active participation of stakeholders such as government, central bank, security exchange, and financial institutions will help to streamline irrational movements and enhance the acceptability of cryptocurrencies through the framing and implementation of necessary regulations. [ABSTRACT FROM AUTHOR]

As one of the most important macroeconomic regulation methods, fiscal and tax policy is supposed to play an active role in green economic transformation. Industrial structure optimization is a fundamental approach to address environmental problems, which has been fully demonstrated in the current studies. It is necessary to identify whether the fiscal and tax policy can promote the green economic transition through optimizing industrial structure. Taking property tax policy as an example, this paper investigates whether fiscal and tax policy promotes the green transformation of the urban economy from the perspective of industrial structure upgrading. The results show that the fiscal and tax policy implemented for a certain industry has a significant positive spillover effect on the optimization of the city's overall industrial structure. Scientific and reasonable fiscal and tax policy accelerates the intensive development of urban economy by promoting the upgrading of urban industry. These findings suggest that in terms of cities in the new and old kinetic energy transformation period, government should consider the upgrading of industrial structure in the formulation of fiscal and tax policy and attach great importance to the green development of urban economy. [ABSTRACT FROM AUTHOR]

The 44th issue of Financial Innovation (FIN), Volume 11, No.2 (2024) features 29 papers from authors and co-authors representing 18 countries. The papers are categorized into three sub-themes: Financial Stability and Risk Management, Market Sentiment and Behavioral Finance, and Economic Policy and Its Impact. The papers cover a range of topics including energy and metal price links post-COVID-19, systemic risk in cryptocurrency portfolios, sectoral returns in the US, prediction tools for China's systemic financial crisis, governance and macroeconomic impacts on financial stability, risk management models, supply chain transparency and stock price crash risk, sentiment-based strategies for stock price forecasting, the impact of emotions on crowdfunding success, the relationship between Google Search Volume Index and market volatility, the impact of social media sentiment on stock behavior, the relationship between crude oil and refined products prices, the impact of interest rate uncertainty on oil prices, the economic and environmental impacts of the 2020 oil price shock and COVID-19 on Nigeria, the impact of construction investments in Saudi Arabia, the impact of FDI and trade on Bangladesh's economy, the influence of digitization on inflation, sectoral market risks and macroeconomic effects in Vietnam, and the effects of COVID-19 monetary policy on banking stocks. [Extracted from the article]

This paper explores the predictions of real business cycle theory on the roles of total factor productivity (TFP) and financial frictions to explain business cycles in emerging market economies (EMEs). I obtain evidence about TFP, price of capital, risk premium, and collateral constraint shocks by estimating structural vector autoregressions (SVARs) on a Brazilian sample from 1999Q1 to 2018Q4 and a Mexican sample from 1997Q1 to 2018Q4. On each sample, two SVARs are estimated. One SVAR identifies shocks by imposing restrictions on their short-run impact. The other SVAR is grounded on restrictions that shocks have long-run effects on business cycles in EMEs. Estimates of the SVARs show the TFP shock is the main driver of business cycle movements in Brazil and Mexico. However, this evidence is produced by the SVAR under the long-run restrictions, which indicates the identification of shocks matters to the explanation of business cycles in EMEs. Next, the Brazilian and Mexican business cycles are markedly different, as the contributions of shocks to aggregate fluctuations vary across the two countries. Hence, findings of this paper suggest although not all business cycles are alike in EMEs, "the cycle is the trend" view on aggregate fluctuations in EMEs remains valid. The empirical results of this paper are in support of the economic policies that aim to robustify the productivity process of EMEs. [ABSTRACT FROM AUTHOR]

This paper analyzes shaming attempts in the European Parliament (EP) over a long period. Drawing on existing literature on shaming and stigmatization in International Relations, as well as on studies on blame avoidance (Public administration), this paper explores the extent to which (and how) shaming attempts were used in day-to-day European policymaking. The paper first shows how the word 'shame' has been employed by key policymakers in different policy areas. Data analyzed include EP speech acts (mainly debates) from 1994 to 2014. The second part of the paper consists of an interpretative and contextualizing qualitative analysis, exploring in-depth social and economic policy areas. This paper shows that, in these policy areas, shaming attempts have often served as an ideological tool, or have become entangled in turf wars between supranational institutions and Member States. The in-depth study also illustrates the circumstances under which shaming attempts have led to compliance, non-compliance or shame backlashes. [ABSTRACT FROM AUTHOR]

While the link between financial market movement and economic policy uncertainty indices is well-established in literature, uncertainty in the form of 'foreboding' emanating from catastrophic events has not been explored in literature. This paper explores "foreboding", which reflects uncertainty at its extreme, following the Covid-19 pandemic. Using Natural Language Processing on minute-by-minute news data, I construct two Foreboding Indices, representing 'foreboding' or 'fearful apprehension', for 28,622 Covid-related news for the period July 2020–August 2021. The impact of foreboding on financial market volatility is explored using a logistic regression model. Both the indices show a marked increase in June–July, 2020, in January 2021, April, 2021, and July–August, 2021 and have a positive impact on volatility for hourly S&P 500 Index. Understanding of foreboding sentiment is crucial for central banks looking to monitor financial market volatility. Appropriate signaling in accordance to sentiment can help central banks handle detrimental impacts of market volatility. Moreover, FI can be used for market practitioners to gauge the sentiment and take effective trading decisions. [ABSTRACT FROM AUTHOR]

Economic zones can be powerful drivers of economic growth in developing countries. However, less is known about their distributional impact on the local society. This paper provides empirical evidence from Indonesian provinces on the relationship between economic zones and within-province income inequality. We apply fixed-effects panel estimation to province-level data for the whole of Indonesia, which we then complement with separate studies on the opening of three economic zones in three provinces using the synthetic control method. The results suggest that the above relationship is positive overall. The estimated rise in income inequality after a zone opens is, however, relatively small on average and may be short-lived. Moreover, the average estimate masks large regional differences, which suggests that the inequality implications of economic zone policies depend on local conditions. One possible explanation for the rise in inequality is that the unskilled population benefits disproportionately less from the policy. [ABSTRACT FROM AUTHOR]

This paper examines the short- and medium-run effects of U.S. federal personal income and corporate income tax cuts on a wide array of economic policy variables in a data-rich environment. Using a panel of U.S. macroeconomic data set, made up of 132 quarterly macroeconomic series for 1959–2018, we estimate factor-augmented vector autoregression (FAVARs) models where an extended narrative tax changes dataset combined with unobserved factors. The narrative approach classifies if tax changes are exogenous or endogenous. This paper identifies narrative tax shocks in the vector autoregression model using the sign restrictions with the Uhlig's (J Monet Econ 52(2):381–419, 2005. https://doi.org/10.1016/j.jmoneco.2004.05.007) penalty function. Empirical findings show a significant expansionary effect of tax cuts on the macroeconomic variables. Cuts in personal and corporate income taxes cause a rise in output, investment, employment, and consumption; however, the effects of corporate tax cuts have relatively smaller effects on output and consumption but show immediate and higher effects on fixed investment and price levels. We validate the model's specification and the identification of tax shocks through a reliability test based on the Median-Target method. Additionally, sensitivity analysis employing the local projection vector autoregression model, number of iterations of the algorithm, and incorporating diverse factor specifications reaffirms tax cuts' persistent and expansionary effects. Our contribution to the narrative tax literature lies in providing empirical evidence that aligns with the notion that reductions in personal taxes demonstrate a higher efficacy as a fiscal policy tool when compared to reductions in corporate income taxes. [ABSTRACT FROM AUTHOR]

Systematic risks in cryptocurrency markets have recently increased and have been gaining a rising number of connections with economics and financial markets; however, in this area, climate shocks could be a new kind of impact factor. In this paper, a spillover network based on a time-varying parametric-vector autoregressive (TVP-VAR) model is constructed to measure overall cryptocurrency market extreme risks. Based on this, a second spillover network is proposed to assess the intensity of risk spillovers between extreme risks of cryptocurrency markets and uncertainties in climate conditions, economic policy, and global financial markets. The results show that extreme risks in cryptocurrency markets are highly sensitive to climate shocks, whereas uncertainties in the global financial market are the main transmitters. Dynamically, each spillover network is highly sensitive to emergent global extreme events, with a surge in overall risk exposure and risk spillovers between submarkets. Full consideration of overall market connectivity, including climate shocks, will provide a solid foundation for risk management in cryptocurrency markets. [ABSTRACT FROM AUTHOR]

The article attempts to overcome the lack of protectionism policy underlying the existing approach to managing sustainable business development, which is due to the fact that such a policy limits the influence of the external environment on business, as well as eliminates its incentives to adaptation and reduces business flexibility. The research methodology is based on the use of the method of regression analysis. Based on the representative international statistics by IMD and the UN for 2021 (60 countries), we use regression analysis to determine the dependence of the indicators of the sustainable development of the business—GDP and SDG 9—on the factors of protectionism and the use of Big Data and analytics based on AI. The reliability of the econometric modeling results is verified by determining their correspondence to the Gauss–Markov theorem. The key conclusion is that change management based on smart technologies contributes to sustainable business development, expressed in an increase in GDP and the result of SDG 9 implementation. The significance of the managerial aspect of the article is that, using the progressive methodology of SAP–LAP, we compile a SAP–LAP model of change management based on smart technologies for sustainable business development, which makes it possible to increase its flexibility and adaptability. The main result of this paper consists in the substantiation of the critical role of the flexibility of business as the main condition for its sustainable development. The paper's novelty lies in the development of a new approach to the management of the sustainable development of the business, which specific feature is change management based on smart technologies—which ensures increased flexibility of the business. The state economic policy implications are connected with the necessity to refuse protectionism in favor of the deregulation of markets to allow competition to create natural stimuli for the increase in the flexibility of business through change management. [ABSTRACT FROM AUTHOR]

This paper uses a two-regime Markov-switching GARCH model to illustrate that the state-switching of returns in the EU carbon market and its associated energy and stock markets is related to the occurrence of major events. Using the European economic policy uncertainty (EEPU) index as the proxy for the turbulence in the economic policies caused by major events, the Granger causality test shows that EEPU is associated with the three markets. To quantitatively analyze the impact of EEPU on the three markets, the GJRGARCH(1,1)-MIDAS model is constructed to solve the mixed frequency problem. The results indicate that EEPU has a negative effect on the long-term volatility of carbon and energy markets, but a positive effect on the stock market. The forecasting performance of the mixed frequency model considering EEPU is better than that of traditional GARCH models. Based on the decomposition of volatility in the mixed frequency model, the spillover index model is applied to analyze the spillover effects of the "carbon-energy-finance" system at three levels: total volatility, short-term volatility, and long-term volatility. The results indicate that at the level of long-term volatility affected by EEPU, the spillover effect of the system fluctuates more frequently and with greater intensity. The energy and stock markets play different roles at different levels of volatility, but the carbon market is always a risk receiver. The pairwise net spillover effects of the energy and stock markets on the carbon market are time-varying and related to the occurrence of major events. [ABSTRACT FROM AUTHOR]

The paper focuses on the relationship between cryptocurrencies and economic policy uncertainty (EPU) shocks by adopting robust econometric techniques. Results on monthly data from 2016 to 2022 confirm that the volumes of cryptos are stationary, and the short- and long-run impacts of uncertainty shocks are significantly positive, and, in most cases, begin to show already in the first six months after the shock. When uncertainty significantly prevails, investors increase their demand for cryptos. The ARDL(12,11) specifications for Bitcoin show a significant increase in volumes of around 1% occurring over a year after a unit increase in economic policy indices. Conclusions from the findings are related to supervision, and monitoring of markets and financial stability. [ABSTRACT FROM AUTHOR]

This paper examines the effect of economic policy uncertainty (EPU) on the Indian capital market using the generalized autoregressive conditional heteroscedastic mixed data sampling (GARCH-MIDAS) approach. This study also disintegrates the Global EPU (GEPU) on its components using identity functions such as up, down, and composite parts dependent on the adjustment in the heading of the EPU and GEPU and tests the linkages among these parameters and the Indian securities exchange instability. Our empirical study shows that GEPU positively and significantly impacts the Indian capital market's volatility. That indicates that the Indian capital exchange volatility will also be unstable when the global economic policy uncertainty is higher. Further, based on the dynamic directions of EPU and GEPU, our results show that, in diverse situations, directional GEPU may present differently in predicting the uncertainty in the Indian capital market. This is primarily so when EPU and GEPU climb in the same period when our approach can obtain more powerful prediction precision. [ABSTRACT FROM AUTHOR]

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While the EU is working toward the implementation of the world's first Carbon Border Adjustment (CBA) Mechanism, a gap remains between the ways in which carbon leakage and CBAs are discussed in policy spheres and economic evidence on these topics. The aim of this paper is to bridge this gap by presenting the EU's policy context, systematically reviewing the economic literature on carbon leakage and CBAs, and discussing potential future research avenues. Three channels of leakage are identified in our literature review: the competition, energy and innovation channels. The main finding of this paper is that while the competition channel is well understood and taken into account by policymakers, the energy and innovation channels are generally not considered. Policy recommendations are provided to better account for these two channels. [ABSTRACT FROM AUTHOR]

In this paper, we add to the literature studying the effects of uncertainty. We focus on the effects of economic policy uncertainty across borders. In contrast to the existing literature, we focus on the time-varying correlation structure of economic policy uncertainty across countries and with macroeconomic variables. We employ a multivariate GARCH model to estimate the time-varying conditional covariance matrix. Our results show that they are relevant, vary sizably over time, and that spikes in the time series can be related to policy events. We find relevant spillover effects of policy uncertainty in other countries on the US economy. We find that policy uncertainty and spillover effects are lowest in China, but that during the Global Financial Crisis substantial spillovers existed. Our results have implications for macroeconomic policymaking, financial stability policies, asset allocations, and risk assessment modelling. [ABSTRACT FROM AUTHOR]

Green finance is key in supporting industries' green transformation and helping achieve low-carbon economic (LCE) development. This paper constructs an LCE development index using panel data from 30 provinces in China from 2011 to 2020. Based on the establishment of the first five pilot green finance zones in China in 2017 as a quasi-natural experiment, the synthetic control method (SCM) is applied to explore the impact of green finance policies on the level of LCE development and to analyze the mechanism and evaluate the policy effects. The empirical results show that (1) the synthetic analysis unit better fits the development trend before the implementation of the pilot. (2) After the implementation of the pilot reform, the level of LCE development in Zhejiang, Jiangxi, Guangdong, and Guizhou provinces has a more significant enhancement effect, but the enhancement in Xinjiang is not significant, which indicates that the reform effect in Zhejiang, Jiangxi, Guangdong, and Guizhou is significantly better than that in Xinjiang to a certain extent. (3) The samples were statistically significant and passed the placebo and ranking tests. Additionally, this paper analyzes the mechanism of policy effectiveness in terms of sci-tech innovation (STI) and energy consumption structure: green finance as a grip for economic transformation can provide financial support for regional STI and energy consumption structure upgrade and promote the capital flow to green low-energy industries, ultimately achieving sustainable economic development. Based on the above findings, policy insights can be provided for the improvement of green finance pilot regions. [ABSTRACT FROM AUTHOR]

They hypothesize that fiscal governance is a key signal to investors about the creditworthiness of a particular country and that better fiscal governance can improve a country's access to market-based external finance. A first group of papers investigates the migration-governance nexus, the capital mobility over the long term, as well as countries' ability to tap international capital markets for funds, based on the quality of their fiscal governance. This special issue contains a selection of nine policy-relevant peer-reviewed articles in the field of international (macro)economics. [Extracted from the article]

Constraints and incentives of the ecological policy have an important impact on the coordinated development of ecological areas. Based on the panel data of 1613 counties in 23 provinces in China from 2002 to 2019, this paper analyzes the impact of this policy on economic development using the quasi-natural experiment of the transfer payment in national key ecological functional areas (TPNKEFA) and studies the impact of the transfer payment scale on economic development based on the panel threshold model. First, the results reveal that the TPNKEFA can significantly boost economic development, compared with the control group, TPNKEFA can increase gross domestic product (GDP) and per capita GDP by 6.14% and 10.72%, the results have been validated by some placebo tests, and the impact of this policy on economic development is sustained and effective. Second, heterogeneity results show that TPNKEFA has the greatest positive effect on the economic development in the eastern region, followed by the central region, and the least positive effect on the western region. Furthermore, the TPNKEFA facilitates local economic development primarily by increasing human capital in ecological functional areas. Third, the capital scale of TPNKEFA has the double-threshold effect on economic development, the larger the scale is, the stronger the effect is. The capital size of TPNKEFA has the greatest impact on regional economic growth in eastern region, whereas it has the weakest impact in western region. [ABSTRACT FROM AUTHOR]

While the literature on entrepreneurial support organizations (ESOs) proliferates, we still do not understand whether local ESOs benefit some founders more than others. Drawing on organizational sponsorship and inclusive ecosystems literatures, this paper empirically examines whether founder characteristics of gender, immigrant, and racial minority group membership moderate the relationship between participation in different types of ESO services (incubator, mentoring, and education programs) and funding received from state, federal, and venture capital (VC) sources. Relying on a detailed database of life sciences firms founded in North Carolina's Research Triangle region, the paper uncovers how funding outcomes differ depending on the funding source and the moderating ESO and founder traits. The paper concludes with practical implications for how women, immigrant, and minority founders may be better supported by ESOs for broader, inclusive ecosystem building. Plain English Summary: Do entrepreneurial support organizations (ESOs) have different benefits for different founders? This paper finds the answer is yes, which has implications for how to create a more inclusive entrepreneurial ecosystem. While the literature continues to reveal more about the role of organizations like accelerators, business incubators, and mentoring programs for entrepreneurial success, we lack understanding of the different roles these organizations might play in fostering more inclusive entrepreneurial regions. This research analyzes whether women, immigrant, and racial minority founders benefit differently from participating in different types of mainstream entrepreneurial support organization programs including incubation, education, and mentoring. Results show great variation in how founders benefit from these programs with implications for inclusive ecosystem building. Since these organizations are often publicly funded or supported, the findings have implications for policy and economic development practice as well as for entrepreneurial firm strategy. [ABSTRACT FROM AUTHOR]

Macroprudential policy yields important benefits in terms of preventing and mitigating systemic risk, but it can also have an impact on economic growth, particularly on the left tail of the growth distribution. In this context, policymakers need to consider the effects of macroprudential policies on the entire growth distribution, and not only on average growth. The growth-at-risk (GaR) approach represents a useful framework for such an assessment. This paper describes the use of the GaR method and illustrates its implementation for assessing the impact of macroprudential policy on GaR in Indonesia. As a first step, I select 26 macrofinancial variables that are relevant for the Indonesian economy and build three partitions that capture financial conditions, macrofinancial vulnerabilities and other relevant factors. Results from quantile regressions have important policy implications, suggesting that an early tightening of macroprudential policy would reduce downside risks to Indonesia's gross domestic product (GDP) growth by increasing the resilience of the financial system. Results further show that a materialization of risk, stemming from either a loosening of financial conditions, an increase of macrofinancial vulnerabilities or a deterioration of the macroeconomic environment have important effects on Indonesia's GDP growth distribution and particularly on the left tail of the distribution, which represents the GaR. Under each of these scenarios, a tightening or loosening of the macroprudential stance, depending on the underlying vulnerabilities, yields high benefits in terms of improving Indonesia's GaR, which range from 0.06 and 0.14 percentage points. [ABSTRACT FROM AUTHOR]

This paper examines the macroeconomic effects of oil demand and supply shocks on an emerging market economy using a Bayesian vector autoregressive model combining zero and sign restrictions. The empirical analysis relies on a rich set of macroeconomic indicators mirroring the economic performance in Brazil. The effects on the Brazilian output of oil price changes driven by global demand shocks are much larger and more persistent than those driven by oil production. Oil price changes that are not related to changes in oil supply or global economic activity have a small impact on the Brazilian variables. The main policy implication of this study is that emerging market economies should identify correctly the source of oil price fluctuation for implementing the best economic policy. [ABSTRACT FROM AUTHOR]

This paper investigates the role that two key methodological choices play in the construction of dictionary-based indicators: the selection of local versus foreign newspapers, and the breadth of the press coverage (i.e. the amount of newspapers considered). The large literature in this field is almost silent about the robustness of research results to these two choices. These questions are relevant since the production of newspaper-based economic indicators is growing fast. We use as a case study the well-known economic policy uncertainty (EPU) index, taking as examples the six largest Latin American economies (Argentina, Brazil, Chile, Colombia, Mexico and Peru) and Spain. First, we develop EPU measures based on press with different levels of proximity, i.e. local versus foreign, and corroborate that they deliver broadly similar narratives. Second, we examine the macroeconomic effects of EPU shocks computed using these different sources by means of a structural Bayesian vector autoregression framework and find similar responses from the statistical point of view. These two applications should reassure researchers that they can rely on foreign sources to construct EPU indexes. This option may foster the comparability of results across countries and lay the groundwork for cross-country studies of uncertainty. Finally, we show that constructing EPU indexes based on only one newspaper, an option followed by many studies, may yield biased responses. Increasing the number of sources reduces the chances of obtaining biased responses. This suggests that it is important to maximize the breadth of the press coverage when building text-based indicators, since this would improve the robustness and credibility of results. [ABSTRACT FROM AUTHOR]

Increased risks of economic policy uncertainty and overexploitation of natural resources exist in China. At the same time, the growth rate of urban residents' consumption has generally declined. The paper analyses the role of economic policy uncertainty (EPU) and natural resource exploitation on the urban residents' consumption in China. Based on the data from the first quarter of 2002 to the third quarter of 2021, the paper uses a nonlinear autoregressive distributed lag model to verify the asymmetric effects. Then the paper constructs a time-varying parameter vector autoregressive model with stochastic volatility term to analyze the nonlinear responses. Impulse response analysis was used to further explain the relationship between the three. The negative impact of rising EPU on urban residents' consumption is larger than its reduction. Negative shocks to natural resource development increase the urban residents' consumption. Positive shocks reduce the urban residents' consumption. There is a time-varying non-linear effect of EPU and natural resource development on urban residents' consumption in China. The negative impact of EPU on urban consumption has been further exacerbated by major crises such as the financial crisis, COVID-19 and the post-crisis period. The negative impact of natural resource development diminished after the government introduced industrial upgrading policies and environmental regulations. This study provides constructive suggestions for the optimization of economic policies and the improvement of urban consumption. This study also enriches consumer theory and provides new evidence for the resource curse hypothesis. [ABSTRACT FROM AUTHOR]

The promises and risks of Artificial Intelligence permeate current policy statements and have attracted much attention by AI governance research. However, most analyses focus exclusively on AI policy on the national and international level, overlooking existing federal governance structures. This is surprising because AI is connected to many policy areas, where the competences are already distributed between the national and subnational level, such as research or economic policy. Addressing this gap, this paper argues that more attention should be dedicated to subnational efforts to shape AI and asks which themes are discussed in subnational AI policy documents with a case study of Germany's 16 states. Our qualitative analysis of 34 AI policy documents issued on the subnational level demonstrates that subnational efforts focus on knowledge transfer between research and industry actors, the commercialization of AI, different economic identities of the German states, and the incorporation of ethical principles. Because federal states play an active role in AI policy, analysing AI as a policy issue on different levels of government is necessary and will contribute to a better understanding of the developments and implementations of AI strategies in different national contexts. [ABSTRACT FROM AUTHOR]

The study aims to clarify how and why South Korea initiated and maintained a fragmented aid structure, even though discussions about integration existed before the establishment of its aid institutions. The research utilises a path dependence framework for its analysis. This analysis reveals that discussions concerning the fragmented structure of South Korean aid began in the 1960s and ultimately led to the establishment of South Korean aid agencies. This paper delves into the issue of integrating fragmented aid within the South Korean government by using newspaper articles, government documents, and reports. Path dependence is further illuminated by its relationship to the policy environment and institutional context. In conclusion, the persistence of this fragmented structure can be ascribed to factors such as the intricate nature of the aid policy, which combines diplomatic and economic policies within the policy environment. In terms of the institutional context, the claims of legitimacy for preserving the policy authority of aid-related ministries and the diminished coordination authority of the Economic Planning Board in the 1980s steered the path dependence of the fragmented aid structure. [ABSTRACT FROM AUTHOR]

The Belt and Road Initiative (BRI) is a well-acknowledged central economic and diplomatic policy of the Chinese government, which was proposed by President Xi Jinping in 2013. This paper intends to discover the relationship between the public diplomacy narratives of the BRI and its implementation. By using content analysis, this paper analyzes Chinese President Xi's speeches from 2013 to 2020 about the BRI, as well as official statements of the Chinese central government. It identifies the public diplomacy narratives of the BRI: an assemblage of constantly changing policy settings that accommodates various economic and political interests. Also, this paper draws on differences between countries joining the BRI or not, and several case studies to elucidate the implementation of the BRI. Different from repetitive literature that explores either the BRI narratives or its implementation, this paper contributes by combining and comparing the two. Despite positive interpretations of the BRI the Chinese government has adopted, the paper argues that there are no deceptive tricks with skeletons in the closet of the Chinese government, as the BRI public diplomacy narratives are, in general, consistent with its implementation. [ABSTRACT FROM AUTHOR]

This paper uses causal graphs to test for the direction of instantaneous causality between economic policy uncertainty (EPU) and stock market volatility. The paper derives simple test regressions from a causal graph, applies the regressions to data for 23 countries, and shows how causal graphs can be used to examine the robustness of the results. The empirical results imply that stock market volatility is not a cause of EPU and that domestic EPU and US EPU are often instantaneous causes of stock market volatility. A comparison of the graph-based approach with a VAR-based causality analysis demonstrates that both approaches yield consistent statistical results. However, in contrast with the VAR approach, the graph-based approach utilizes the additional information provided by the causal graph to infer the direction of instantaneous causality. [ABSTRACT FROM AUTHOR]

In the literature on the effects of charging user fees for healthcare on health outcomes, Shinsuke Tanaka's 2014 AEJ: Economic Policy paper evaluating South Africa's 1994 user fee reform, "Does Abolishing User Fees Lead to Improved Health Status? Evidence from Post-Apartheid South Africa," is regarded as a seminal piece of evidence demonstrating that eliminating user fees significantly improves population health. Tanaka finds that South Africa's elimination of user fees for pregnant women and young children caused children's weight-for-age z-scores (WAZ) to rise by 0.6, making it one of the most successful child nutrition interventions ever studied. However, evaluations of the same reform employing other methodologies have found that it had little to no effect on outcomes like healthcare utilization, making it difficult to understand how it might have had such large effects on WAZ. In this paper, I replicate, reanalyze, and extend Tanaka, 2014, considering its use of a two-way fixed effects model (TWFE) with additional covariates in the context of recent methods literature exposing the limitations of such designs. I show that Tanaka's approach may not yield an unbiased causal estimate under the intended conditional parallel trends assumption but find that his results are robust to reanalysis with updated estimators. I then explore the implications of substantial treatment effect heterogeneity across subgroups within Tanaka's sample for the external validity of his results, arguing that this heterogeneity severely undermines the case that his results generalize. I thereby recontextualize the debate over the effects of eliminating user fees in South Africa in terms of new thinking about TWFE and treatment effect heterogeneity, illustrating the practical implications of those advances in the process. [ABSTRACT FROM AUTHOR]

Since its publication in 1971, George J. Stigler's "Theory of Economic Regulation" (1971), secured its place as the dominant theory of the causes and consequences of regulation in economics. The article was cited by the economic Nobel prize committee as one of the reasons Stigler received the prize in 1982. In his article, Stigler (1971) frames the conversation regarding the "Theory of Economic Regulation" around an analysis of the political demand for and supply of regulation. Following the 50th anniversary of the 1971 paper, the contributors to this special issue evaluate the impact of his "Theory of Economic Regulation", apply it to other policy questions, and summarize the literature produced in response to his original insight. [ABSTRACT FROM AUTHOR]

Both the EU and China agree on the importance of their bilateral economic relationship, but there are differences in how the relationship is perceived. The gap is reflected in statements from officials, policymakers, business leaders and in the media as well as in policy documents from both the EU and China. While trade and investment flows that are central to the economic relationship generally occur through exchanges between economic actors, the state or polities such as the EU remain an important element in the relationship. This paper analyses the perceptions by the EU of China, the EU itself, the relationship between them, and also its wider global context, and the changes which occur in all of these. The analysis of the development of perceptions in the EU is based on official policy documents. In trade and investment policy, such documents may be considered to represent the positions of the EU based on its domestic policy process and its perceptions of the relationship based on an aggregation of interests. The paper argues that these perceptions have changed in significant ways reflecting developments in the EU and China, the relationship between them and its global context, as well as the interests and goals of the EU. [ABSTRACT FROM AUTHOR]

This paper examines the causal relationship between the economic growth and research output of the BRICS countries (i.e., Brazil, Russia, India, China, and South Africa) for the period 1981-2011. Essentially this study looks at the human quality demonstrated by the production of knowledge (published papers) and how it gets affected and influences the economic growth of these countries. BRICS are among the fastest growing emerging economies that are grouped together in this study. Using panel causality analysis techniques, we account for cross-section dependency and heterogeneity among them. Our empirical results support no causality in any direction between research papers as a percentage share to the world and economic growth for all the BRICS, with the exception of India, for which the feedback hypothesis is confirmed. Our findings provide important policy implications for research policies and strategies for BRICS countries. [ABSTRACT FROM AUTHOR]

This study aims to analyze the time-varying effects of global economic policy uncertainty (GEPU) shocks on macroeconomic activity in Turkey over the quarterly period of 1999q1 to 2020q4. To this end, the study uses the GEPU index developed by Davis (Working paper 22740, National Bureau of Economic Research, 2016) and employs the time-varying parameter vector autoregression (TVP-VAR) model. Empirical evidence shows that the GEPU shocks have adverse effects on the macroeconomic activity as they result in declines in share prices, investment, employment, consumption, and GDP growth. It is also evident that these effects vary over time, with the highest impact observed following the crises periods such as the 9/11 attacks, the Iraq invasion, the global financial crisis (GFC), and the Covid-19 pandemic. The time-varying impacts typically reach the maximum in the first and second lag periods, and the most severe impacts of uncertainty are observed on share prices and investment. The study also examines three substantial events (the 9/11 attacks, the GFC, and the Brexit referendum) and finds that the responses of the underlying variables to GEPU shocks vary both in magnitude and signs over the sample period. The responses of the variables are mainly more severe during the periods when geopolitical and economic concerns are high compared to periods of political crises. Overall, the findings from the analyses indicate that the Turkish economy still maintains its fragile structure and suggest that the adverse macroeconomic effects of foreign uncertainty shocks do not remain the same over time. [ABSTRACT FROM AUTHOR]

In this paper, we study the relationship between Economic Policy Uncertainty (EPU) and carbon dioxide (CO2) emissions. Using an extensive dataset from 23 countries consisting of 6800 firm-year observations, we provide strong evidence that EPU increases firms' CO2 emissions. Our main inference is robust when using alternative measures of CO2 emissions and EPU, alternative econometric specifications and samples, and several approaches to control for possible endogeneity. In a set of additional analyses, we first show that a board's characteristics (i.e., board gender diversity and board independence) significantly moderate the studied relationship. Second, cross-country characteristics (i.e., government effectiveness, control of corruption, and democracy) seem important in the relationship between EPU and CO2 emissions. Our findings significantly contribute to the debate on firms' ethical responsibility in managing climate change and CO2 emissions. [ABSTRACT FROM AUTHOR]

This paper provides insights on the potential macroeconomic impact of the governance of the European innovation policy called Smart Specialisation. We use original empirical data on the implementation of the policy, which is funded through a dedicated financial envelope of the 2014–2020 EU cohesion policy, in a spatial macroeconomic modelling framework capable of gauging the general equilibrium effects of varying degrees of governance quality. Our contribution aims at narrowing the gap between the abstraction of ex-ante impact assessment exercises based on macroeconomic simulations and the reality of how policy interventions may take place. By using data for all Italian NUTS 2 regions, we find that the measured quality of Smart Specialisation governance could increase the pure investment-related impact of the policy by up to 40 percent. At the same time, we estimate that further potential GDP gains—in the order of an additional 40–50 percent over what was achieved with the observed levels of governance—would not materialise because of the comparatively low quality of governance in some regions. [ABSTRACT FROM AUTHOR]

Baker et al. (Quart J Econ 131:1593–1636, 2016) introduced a news-based measure of uncertainty known as Economic Policy Uncertainty using country level data. The Policy Uncertainty Group now constructs a similar uncertainty measure known as Global Policy Uncertainty (GPU). In this paper, we assess the symmetric and asymmetric effects of GPU on trade flows of each of the G7 countries. While we find significant short-run effects on trade flows of all countries, short-run effects last into the long run, not in all seven countries. In the long run, we found that while exports of Canada, Italy, and Japan will be hurt by increased global uncertainty, those of France will be boosted. As for G7 imports, we found that imports of Canada, France, Germany, Italy, and the U.S. will be hurt by increased global uncertainty. [ABSTRACT FROM AUTHOR]

This paper analyses the temporal, spatial and structural linkages between the informal economic enterprises (IEEs) that have grown and spread in Bulawayo, the second largest city in Zimbabwe, and their formal economic counterparts, as well as the impact of the IEEs on the shaping and restructuring of the urban economy. To achieve this, the paper deployed a mixed methods approach which utilised survey and phenomenological case studies on the formal and informal economic enterprises in Bulawayo. The results of this study highlight the linkages between the informal and formal economic enterprises and the impact of political and economic ideology on such linkages, illustrating the spatial layering and patterning of both formal economic enterprises and IEEs in Bulawayo. The main contribution of this paper is its exposition of the impact of political and economic policies of the Zimbabwean nation-state on urban economic enterprises. [ABSTRACT FROM AUTHOR]

The COVID-19 has impacted the social economy of various provinces in China to varying degrees. How to quickly restore the social economy has become the most concerned issue of the Party, the country and all sectors of society. This paper combines the entropy weight method and TOPSIS method-technique for order performance by similarity to ideal solution, taking the financial policy transmission mechanism as the theoretical basis, and selects the data of 29 provinces in China to obtain the contribution of finance in the socio-economic resilience under the pandemic situation. The empirical analysis results show that the weights of financial policy, pandemic situation and financial basis are different. It can be clearly seen from the weight data that the financial basis is crucial to the socio-economic resilience. Although the COVID-19 pandemic will cause huge losses to the whole society and will also seriously hinder the socio-economic recovery, the effective implementation of financial policies and the good trend of the pandemic situation have a significant promoting effect on the socio-economic recovery. [ABSTRACT FROM AUTHOR]