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While unemployment benefits constitute a significant share of welfare transfers in developed countries, the computable general equilibrium (CGE) literature ignores the impact of unemployment rate changes on these transfers. This paper investigates the impacts of alternative welfare transfer determination rules by using a dynamic CGE model for Ireland. We find that indexing the nominal welfare transfer budget to the consumer price index (CPI) and the aggregate unemployment rate is superior to the CPI alone. Although both specifications generate similar macroeconomic outcomes, our novel specification improves household welfare as well as income distribution across households. We argue that it is more in line with the behaviour of governments and that the literature ignores the progressivity elements embedded in the welfare system, which will reduce the welfare cost of carbon taxation. The results can be generalised in analysing the impacts of tax reform in countries where unemployment benefits are essential elements of welfare transfers. • We developed a multi-sectoral, multi-household intertemporal CGE model. • We analysed the Irish carbon tax with different welfare transfer budget (WTB) rules. • CGE literature updates the fixed WTB in real terms by the consumer price index (CPI). • We argue that the WTB should be responsive both to the CPI and the unemployment rate. • Considering unemployment benefits in the WTB lowers the carbon tax's regressivity. [ABSTRACT FROM AUTHOR]

Empirical research assessing the effects of International Investment Agreements (IIAs) on Foreign Direct Investment (FDI) flows proliferated since the late 1990s, largely coinciding with an acceleration in the signing of such investment treaties between the developed countries and emerging market and developing economies (EMDEs). This paper offers a comprehensive survey of the literature on the impact of IIAs on FDI flows, with a specific focus on EMDEs. The main goal of the review is to highlight the important themes that emerge from the literature and how each of those themes have been addressed by the existing studies. Despite the proliferation of studies on this topic, the literature remains highly inconclusive as to whether IIAs matter when it comes to attracting FDI flows. A substantive part of the empirical ambiguity arises for two broad reasons. First, there have been methodological constraints in disentangling co-movements from causal effects when it comes to estimating the impact of IIAs on FDI flows. Second, studies have suffered from the general paucity of granular data on IIAs which allow for a systematic unpacking of various IIA provisions on FDI inflows. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of global value chains (GVCs) participation on economic complexity for a sample of underdeveloped, moderately developed, and developed countries which includes 42 economies from 2000 to 2018. Our empirical analysis finds that the influence of GVC participation on economic complexity varies across quantiles as it has adverse and significant effects on economic complexity in the first five lower quantiles (5th - 25th). It indicates that GVC participation has adverse impacts on economic complexity except for the economy with higher economic complexity. Moreover, forward participation is negatively associated with economic complexity in all the quantiles except for the 90th quantile. In countries with lower and moderate economic complexity, forward participation has a negative impact on how complex the economy is. Alongside, backward participation has positive and significant impacts on economic complexity in the 85th, 90th, and 95th quantiles implying that in a more complex economy, backward participation is positively correlated with economic complexity. [ABSTRACT FROM AUTHOR]

By utilizing listed firms in mainland China during 2008 to 2017, this paper investigates how air pollution affects corporate tax avoidance. The results show that higher levels of air pollution promote tax avoidance by firms subject to the pollution. To investigate this linkage, we conduct a series cross-section analyses which confirm the incentivizing effect of air pollution on corporate tax avoidance behavior. The results indicate that the association between air pollution and corporate tax avoidance is more pronounced for firms in high-polluting and monopolistic industries, state-owned enterprises and in districts where the government exerts less tax and economic influence. We apply robust checks, including the random discontinuity design regression, instrumental variable regression in order to confirm the casual effect of air pollution on corporate tax avoidance behaviors. Our results show that air pollution shapes corporate tax avoidance through employees' mood and operating efficiency. This study not only enriches the studies about how the external natural environment can reshape firm's corporate tax avoidance behaviors, but also provides strong evidence that the government needs to improve environmental law enforcement. More generally, there are policy implications for developing and developed countries alike: they need to attach much greater importance to environmental regulation and financial governance. [ABSTRACT FROM AUTHOR]

Compared with most other developed nations, Australian local government policymakers have traditionally relied heavily on structural reform based on compulsory council consolidation as their chief instrument of municipal reform. Western Australia (WA) launched its most recent attempt at local government reform in November 2017 with the appointment of a Local Government Review Panel to make recommendations on improving its Local Government Act 1995. The WA Government released the Final Report: Recommendations for a New Local Government Act for Western Australia prepared by the Panel in August 2020. The Final Report offers a host of recommendations for improving the Local Government Act 1995, the great majority of which represent uncontroversial improvements to the Act. However, Recommendation 8 calls for the establishment of a Local Government Commission empowered to make recommendations on municipal mergers and Recommendation 10 proposes the formation of community boards to facilitate municipal representation in large councils. This practice insight paper critically examines these two contentious recommendations in the light of extant empirical evidence. This serves to highlight the contrast between the weight of empirical evidence in the literature with the 'evidence-free' nature of Recommendations 8 and 10. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of artificial intelligence on unemployment in the most high-tech and developed countries, using a theoretical model that is also supported empirically. The empirical methodology follows a nonlinear approach by using panel threshold and GMM-system estimations. The dataset covers the period 1998–2016, and includes 23 countries. The main results show that artificial intelligence has a nonlinear impact on unemployment, with the acceleration of the use of artificial intelligence reducing unemployment, but only occurring at low levels of inflation. In this case, no "switch effect" between "displacement effect" and "replacement effect" is registered Otherwise, the contribution of artificial intelligence to unemployment is rather neutral. [ABSTRACT FROM AUTHOR]

This paper attempts to provide empirical evidence on whether two variables potentially affecting firms' liquidity needs have an impact on inflation. Before doing that, since we are interested in the portion of inflation that can be linked to firms' willingness to produce goods, we identify supply inflation: the part of aggregate GDP-inflation that can be explained by shifts in aggregate supply. Specifically, we test the impacts of corporate bond financing and depreciation on supply inflation and markups for several Latin American countries. Results show that domestic currency depreciation robustly increases supply inflation and aggregate markups, but corporate bond financing does not affect supply inflation. Presumably, when a depreciation occurs, financial constraints for the economy's supply-side become binding and lead to increasing domestic prices. These results provide an alternative description to the exchange rate pass-through narrative. In several countries, since a sizable part of depreciation can be explained by the global financial cycle, there is also a potential transmission mechanism from advanced countries' monetary policy actions to supply inflation – through depreciation – in Latin American countries. • We separate supply from demand inflation in GDP-inflation. • The impacts of corporate bond financing and depreciation on supply inflation are estimated. • Results show that a depreciation increases supply inflation and markups in Latam countries. • Price increases with depreciation presumably reflect suppliers' greater financing needs. [ABSTRACT FROM AUTHOR]

In this paper, we attempt to identify the reasons behind the differences in environmental policy between Japan and other developed countries, particularly the US. Japan's environmental policy is unique in that voluntary approaches have been taken to reduce total emissions. This strategy is quite different from the traditional approach of heavy-handed regulation. In Japan, voluntary approaches are conducted through negotiations with polluters. The idea behind this type of voluntary approaches is that the government can induce polluters to abate emissions voluntarily by using light-handed regulations and the threat of heavy-handed regulations. The light-handed regulation is quite effective especially when it is costly to introduce heavy-handed regulations, although the negotiations are difficult to conduct when the number of stakeholders is large. To strengthen our analysis, we provide some examples of Japanese environmental policies which are successful and the ones that are not. [ABSTRACT FROM AUTHOR]

Labor productivity growth in major advanced countries has been experiencing a slowdown in recent years. This paper examines the background of recent low labor productivity growth in Japan. There are two reasons behind the productivity slowdown in Japan. First, technology and ideas accumulated by research and development (R&D) as well as management resources such as capital and labor are not utilized efficiently. Second, these resources are not efficiently reallocated across corporations. In order to improve Japan's productivity in the medium to long-term, it is desirable to encourage the flexible reallocation of management resources such as capital and labor by changing working process at the corporate level in accordance with changes in the socio-economic environment and the advent of new technologies, as well as by improving efficiency in the labor and capital markets. [ABSTRACT FROM AUTHOR]

This paper provides a game model for examining the host overseas investment policy and MNEs equity strategy in international joint ventures. This paper refines previous Chen and Chung's (2008) results and considers the host policy about MNEs' joint-venture. This paper shows foreign firms increase their technology transfer incentive because less competition from the joint-venture partner when a foreign firm holds lower shares. And the holding shares of foreign firms must be not smaller than 50 percent. The host welfare increases with foreign firms' minority equity. The equity conflict exists in the higher technology spillover and transfer cost cases. Hence, the host governments always impose investment restrictions on MNEs in the Developing countries. Otherwise, it has more loose policy in the Developed countries. [ABSTRACT FROM AUTHOR]

During the past three decades the global oil market has seen significant price volatility. Literature to date has not analysed the cross-country effect of the recent episode of price instability. Previous studies have either not considered this period or have not utilised panel data techniques and therefore have not provided a comparative analysis of developed and developing countries. This paper explores the income and price elasticities between these two country groups and discusses the economic implication of the results. We use a panel data analysis accounting for income and price asymmetry and apply the dynamic fixed-effects methodology to separate panels for developed and developing countries for the period 1980–2012. Sixteen countries are included in this analysis which account for over 65% of total global oil consumption. A particular focus is on the income and substitution effects. The results indicate heterogeneous response to oil price shocks. Developing countries have an income effect 6.3 times stronger than developed countries. The substitution effect in developed countries is 2.1 times stronger than in developing countries. Policy recommendations include the pursuing of oil-efficiency improving technology, and ensuring that regional consumption pattern variations are considered in policy formation. [ABSTRACT FROM AUTHOR]

This paper investigates the non-linear effect of population growth and linear effects of age structure on per capita income, using the threshold dynamic structural panel (TDSP) and non-linear generalized method of moments (NGMM) Models. A data set from 81 countries (both developing and developed) covering a 50-year period is used. The results indicate that there is a non-linear relationship between population growth and per capita income. Population growth rate before the zero percent threshold has a significant and positive impact on per capita income, while no significant impact is found after the threshold. Therefore, the optimistic view can be adopted for developed countries where population growth rate is low. In contrast, the neutralist view is applicable in countries where population growth is relatively high. The model’s results also indicate that changes in population age structure affect per capita income—changes which describe a linear relationship. The ‘young dependency’ ratio has a consistently significant and negative effect on per capita income while the participation rate has a significant and positive effect on per capita income. However the ‘old dependency’ ratio has a fragile and contradictory effect on per capita income. Therefore, the view of proponents of age structure is generally acceptable. [ABSTRACT FROM AUTHOR]

Policymakers in less developed countries (LDCs) usually support competitive devaluations to improve the trade balance (TB). In this paper, we estimate the effects of appreciated and depreciated real exchange rates (RER) in the TB of Argentina and Brazil during the period, 1990-2010 using co-integration tests for non-stationary data and vector error correction models (VECM). The estimations confirmed the existence of a long-term relationship among the TB and the RER and foreign and domestic incomes for the countries during opposite RER policies. Based on our estimations, the Marshall-Lerner condition held during periods of more flexible and depreciated RER, and the estimation of the general impulse response functions demonstrated that devaluations in both countries did not follow a J-curve pattern in the short-term. [ABSTRACT FROM AUTHOR]