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Drawing upon the labour-augmented K+S Agent-Based Model (ABM), this paper develops a two-country North-South ABM wherein the leader and the laggard country interact through the international trade of machines. The model aims to address sources of asymmetries and possible converge patterns between two economies belonging to a currency union, that are initially differentiated only in terms of the education level they are able to ensure. Education is modeled as a macro-level public policy differently targeting three levels, that is primary, secondary and tertiary. After being educated, when workers enter the labour force, they face a segmented labour market, divided into three types of qualifications and resulting functions deployed inside firms, i.e. basic, medium and advanced occupations. The three markets are heterogeneous in terms of both requested education level and minimum offered wage. We experiment with different education and trade settings. Ultimately, we are interested in understanding the coupling effects of asymmetries in education, which reverberate in segmented labour markets and differentiated growth patterns. Notably, our focus on capital-goods trade, rather than on consumption goods, allows us to investigate a direct link between productive capabilities in complex products and country growth prospects. [ABSTRACT FROM AUTHOR]

Using a refined version of our multi-country AB-SFC model of a Monetary Union the paper aims at providing a tentative assessment of the economic effects of transforming the European Monetary Union into an Intergovernmental Fiscal Transfer Union (IFTU) with its own fiscal capacity. Countries contribute proportionally to their GDP, whereas funds are redistributed according to a mechanism that gives more funds to countries performing worse than the average of the Union in cyclical terms. Our simulations show that an IFTU inspired by such a redistribution principle acts as a stabilizer of international trade, allowing us to stabilize and improve the Union GDP performance without affecting the stability of public finances. When the Union is allowed to borrow on capital markets, i.e. in a Fully Fledged Fiscal Transfer Union (FFFTU), these effects are enhanced and a part of the public debt burden shifts from the national to the Union level, leaving the total burden almost stable. An interesting result to assess the political acceptability of the proposal is that "core" countries eventually benefit the most from the introduction of this mechanism, despite being more frequently net contributors. Finally, we show that an FFFTU with common debt might help to soften the impact of an exogenous demand shock, while, because of the fact that it mainly operates as a stabilizer of aggregate demand, it does not seem to provide beneficial effects when facing a supply shock to production. [ABSTRACT FROM AUTHOR]

This article investigates the relationship between the share of assets held by institutional investors relative to GDP and a synthetic index of union bargaining power in 20 OECD countries from 1980 to 2017. Findings from the use of fixed-effects OLS and instrumental variables regressions show that the share of assets held by institutional investors, especially insurance companies and pension funds, is correlated with a decline in union bargaining power. The authors argue that by contributing to significant changes in corporate strategies and governance through potential effects on jobs and wages, institutional investors in most OECD countries may have weakened the influence of trade unions, thereby leading to a higher decentralization of wage bargaining. Mixed evidence is found, however, when investigating the role of complementarity across institutions to explain cross-country heterogeneity. [ABSTRACT FROM AUTHOR]

This paper studies the effect of euro adoption on the shadow economies of a group of European Union member countries using pooled mean group estimation. Controlling for macroeconomic factors and conducting several robustness checks, our results indicate that euro adoption has a negative association with the size of the shadow economy for this particular group of EU countries. We speculate this relationship may be due to increased transparency in financial markets, more government regulation post-euro adoption, or more legal-sector opportunities post-euro adoption. European countries considering euro adoption may find the results useful in making their final decision regarding currency adoption. [ABSTRACT FROM AUTHOR]

The Scandinavian Monetary Union (SMU) of Denmark, Sweden and Norway has been labelled 'the most successful of the pre-World War I monetary unions'. It functioned smoothly throughout the first era of globalisation but is considered to have disintegrated during the Great War. However, attempts at rebuilding the union in the interwar years, in a spirit of increased intra-Scandinavian central bank cooperation, have been overlooked. In fact, the Scandinavian central banks frequently convened trying to re-establish the SMU. This paper is the first comprehensive account of these efforts. Based on archival material from these three central banks, it will answer questions on three different levels of analysis: How did the central banks consider future cooperation through the union despite interwar economic turmoil? As ending the leading symbol of Scandinavian cooperation would be politically costly, was it the central banks or governments who were the main actors in re-establishing the union? Given both the need to balance between national primacy and to cooperate to counter economic turmoil, and the fact that all Scandinavian countries followed suit as England abandoned gold in 1931, how are we to consider aspects such as isolationism versus cooperation and small state behaviour versus great power policies? [ABSTRACT FROM AUTHOR]

This article develops a continuous time stochastic model for determining the optimal international reserves management policy when the data generating process of international reserves is a geometric Brownian motion. The policy is a two‐parameter control‐limit that consists of an appropriate and a ceiling level on reserves holdings, given an exogenous floor on international reserves. The optimal solution is determined so as to minimize the total costs of international reserves holdings. It is proved that our results extend the framework of Frenkel and Jovanovic when the logarithm of international reserves is an arithmetic Brownian motion. We also explain that Jung paper does not extend Frenkel and Jovanovic model as claimed by the former. The model is calibrated to derive the optimal level and liquidity tranche size upper bound of international reserves of the CEMAC monetary union. [ABSTRACT FROM AUTHOR]

The COVID‐19 pandemic has highlighted the need of maintaining financial and economic stabilization to mitigate the negative effects of the health crisis. In the context of a currency area, national governments count on national fiscal and macroprudential instruments to stabilize their own economy. Through a DSGE model for a monetary union I assess the welfare implications of different macroprudential‐fiscal policy combinations, that are set with stabilization purposes. The findings confirm that for a supply and a demand shock, as the ones responsible for the economic crisis of 2020, the stabilizing policy mix might deteriorate welfare. By contrast, after a financial shock, similar to that of the Great Recession, the stabilizing policy combination strategies always achieve welfare gains. [ABSTRACT FROM AUTHOR]

Following the end of the coronavirus pandemic, the European Central Bank (ECB) was confronted with an unprecedented increase in energy prices. This led to consumer price inflation in the euro area far beyond the ECB's inflation target of two percent, at times up to 10 percent. At the same time, the euro area economy was threatened by a recession, which resulted in the ECB facing conflicting objectives of stabilizing the economy and combating inflation. Estimates show that while the ECB's policy strategy of maintaining a low level of interest rates did improve the economy, it also exacerbated the rise in energy prices. The empirical analysis demonstrates that an interest rate hike at the beginning of the energy crisis would have stabilized inflation more effectively. Tightening monetary policy would have curbed energy demand and caused the euro to appreciate, which would have led to a more rapid decline in energy prices. In this counterfactual scenario, the euro area would have had to endure a brief recession, but the overall economic situation would have stabilized by the fourth quarter of 2023. The ECB would likely have been better able to follow its price stability mandate if a capital markets and fiscal union existed in the euro area. [ABSTRACT FROM AUTHOR]

We utilise a standard reduced‐form neo‐Keynesian model in a monetary union, in which the monetary authority and the fiscal authorities strategically interact, to explore who, under alternative institutional arrangements (strategic and fiscal regimes) and shocks' configurations, bears the burden of asymmetric shocks' stabilisation. We show that in the core/periphery fiscal regime, described by an asymmetry in the sequence of moves between the core and the peripheral member‐states, asymmetric shocks pass through at the union level to the inflation rate and the output gap when there are strategically significant spill‐over effects and the monetary policy's and fiscal policies' instruments are not perfect substitutes in the stabilisation process. The monetary authority reacts to asymmetric shocks, but does not succeed in fully offsetting them. The first best implies the coordination of fiscal policies. A second best embraces the fiscal leadership strategic regime (as a form of implicit coordination), when there are strong interconnections in the union, or the use of policy instruments by the fiscal authorities that directly decrease inflation when fiscal policy is expansionary, such as taxes, production subsidies or public investment, when there is a strong cost channel of monetary policy. [ABSTRACT FROM AUTHOR]

The given document is the front matter of the American Economic Review journal. It includes a list of articles published in the October 2024 issue, as well as information about the editor and coeditors of the journal. The document also provides details on how to submit a manuscript and the policy of the journal regarding data availability for replication. Additionally, it includes a biography of Maurice Obstfeld, a distinguished fellow of the American Economic Association, highlighting his contributions to the field of international finance. [Extracted from the article]

The article examines the impact of the euro on the political system through contrasting the experiences of eurozone countries with euro outsiders using a historical institutionalist perspective. While following the global financial crisis, many have argued that the homogeneity of rules within the Economic and Monetary Union (EMU) facilitate the rise of populist movements, authoritarian challengers have emerged only outside the eurozone. The parallel application of Rodrik's political economy trilemma and the ordoliberal tradition of the Freiburg school to the EMU provides the theoretical background for explaining this puzzle. A most- similar research design based on the comparative case study of Greece and Hungary is used to uncover the causal processes through which the EMU contributes to the resilience of liberal democracy. It is shown that while the limits on economic policy autonomy strongly hinder authoritarian tendencies within the eurozone even under a populist government, being outside the EMU is a necessary though not sufficient condition for the entrenchment of authoritarian rule. [ABSTRACT FROM AUTHOR]

Europeanisation research (ER) focuses on the domestic effects of European integration. Despite the importance of capital and labour for the political economy of EU Member States, ER has paid little attention to the impact of Europeanisation on social classes. This article addresses this blind spot and asks how European integration affects the power relations between capital and labour. For this purpose, I propose to augment ER with a power resource perspective. The article analyses the effects of 'Europeanisation through law' and 'Europeanisation through monetary integration' on the distribution of power resources between employers and wage earners and their organisations. Four lessons can be drawn from the findings for ER: (1) in the selected integration fields, Europeanisation has asymmetric effects on social classes, weakening wage earners' power resources (2) more attention should be paid to the effects of integration on the relation between state and market; (3) integration through law and monetary integration are more powerful Europeanisation mechanisms than has been acknowledged; (4) the concept of power resources offers a fruitful approach for examining the effects of Europeanisation on social classes. Moreover, adopting a power resource perspective would make it better visible how European integration affects relations of power and domination. [ABSTRACT FROM AUTHOR]

After a decade of reforming and stabilising the Economic and Monetary Union (EMU), it has been put to a triple test: the COVID-19 pandemic, the war in Ukraine, and the return of inflation have posed serious challenges to the eurozone that call for policy responses. Against the background of recent advances in European integration theory, we assess whether and how these challenges have led to a change in the EMU policy of the eurozone's most powerful member, Germany. We conceptualise three ideal-typical policy options for Germany to deal with EMU's challenges and we search for traces of policy learning from past eurozone crisis management. On the basis of semi-structured interviews with German political elites, we cannot identify any significant change in Germany's EMU policy. We conclude that the unwavering continuity of Germany's euro policy makes further substantial integration in EMU unlikely. [ABSTRACT FROM AUTHOR]

European fiscal integration is highly controversial and is assumed to lead to a Eurosceptic backlash among the public. Yet, in a historical decision in July 2020, European governments agreed on the ambitious recovery package 'Next Generation EU', establishing an unprecedented fiscal stabilisation capacity to address the economic and healthcare challenges of the COVID-19 pandemic. We study the mass politics of European fiscal integration in a survey experiment on public support for a European Pandemic Recovery Fund (PRF) in five European countries in 2020. We find remarkably high support for a joint European fiscal instrument, which, however, is sensitive to policy design. While cross-country differences reflect collective self-interest, citizens' left-right orientations, their EU positions, and perceived economic risk from COVID-19 structure differences within countries. [ABSTRACT FROM AUTHOR]

This paper analyses the effects of political instability on financial development in the West African Economic and Monetary Union region (WAEMU) countries. The results are obtained using the autoregressive staggered lag model (ARDL) over an analysis period from 2002 to 2021. The main reason for this analysis period is the availability of data. The results show that political instability reduces financial development by lowering financial efficiency. Moreover, inflation tends to increase the negative effects of political instability on financial development. On the other hand, the interest rate manages to mitigate the negative effects of political instability on financial development. The results therefore suggest that measures should be taken to mitigate the risks of political instability. Consequently, the results suggest the development of policies against rising inflation and for the revision of interest rates in order to influence the level of political instability and financial development. [ABSTRACT FROM AUTHOR]

The banking sector is vital to economic activity when it develops. Its development depends on the ability of banks to generate sufficient profits to meet their commitments. In this context, we set ourselves the objective of analyzing the effect of bank profitability on economic growth. The study covers the period from 1996 to 2023, and covers 7 WAEMU countries except Guinea-Bissau, for lack of data. Methodologically, we apply Bruno's (2005) Least Square Dummy Variable (LSDVC) bias correction approach to the dynamic unbalanced panel data model. The results indicate that bank profitability has a positive influence on economic growth in the WAEMU region, whatever the profitability index used. Inflation,Political stability and investment are not unrelated to economic growth in the union. It follows from these results that the union's authorities need to strengthen supervision of the banking sector to ensure that it remains profitable. [ABSTRACT FROM AUTHOR]

The release of biological control agents has been an important means of controlling invasive species for over 150 years. While these releases have led to the sustainable control of over 250 invasive pest and weed species worldwide, a minority have caused environmental harm. A growing recognition of the risks of biological control led to a focus on risk assessment beginning in the 1990s along with a precipitous decline in releases. While this new focus greatly improved the safety of biological control, it came at the cost of lost opportunities to solve environmental problems associated with invasive species. A framework that incorporates benefits and risks of biological control is thus needed to understand the net environmental effects of biological control releases. We introduce such a framework, using native biodiversity as the common currency for both benefits and risks. The model is based on interactions among four categories of organisms: (1) the biological control agent, (2) the invasive species (pest or weed) targeted by the agent, (3) one or more native species that stand to benefit from the control of the target species, and (4) one or more native species that are at risk of being harmed by the released biological control agent. Conservation values of the potentially benefited and harmed native species are incorporated as well, and they are weighted according to three axes: vulnerability to extinction, the ecosystem services provided, and cultural significance. Further, we incorporate the potential for indirect risks to native species, which we consider will result mainly from the ecological process of agent enrichment that may occur if the agent exploits but does not control the target pest or weed. We illustrate the use of this framework by retrospectively analyzing the release of the vedalia beetle, Novius (= Rodolia) cardinalis, to control the cottony cushion scale, Icerya purchasi, in the Galapagos Islands. While the framework is particularly adaptable to biological control releases in natural areas, it can also be used in managed settings, where biological control protects native species through the reduction of pesticide use. [ABSTRACT FROM AUTHOR]

The European Union (EU) and the United States (US) have not responded with sufficient urgency to the democratic backsliding in Tunisia as a result of President Kaïs Saïed's reforms since July 2021. Promoting democracy and good governance abroad, once a cornerstone of the liberal order championed by both the US and the EU, appears to have diminished as a priority. The US's and EU's emphasis on security interests in their foreign policy has significantly hindered efforts to promote democratisation. The perceived crisis surrounding terrorism and migration has influenced the US's and EU's approach, potentially neglecting the importance of human rights and democratic principles in the process. This underscores the tension between addressing immediate security challenges and upholding broader democratic values, and calls for a broader reflection on the balance between security and democracy in shaping foreign policy responses to complex challenges, such as terrorism and migration. [ABSTRACT FROM AUTHOR]

This paper explores the nonlinear relationship between workers' remittances and real effective exchange rates for West African Economic and Monetary Union (WAEMU) member countries using the panel smooth transition regression (PSTR). The PSTR was estimated with one transition function and one location parameter as dictated by the diagnostic tests. The diagnostic tests reveal that the relationship between workers' remittances and real effective rates is nonlinear. The estimated threshold value is 3.07%. The results reveal that increases in workers' remittances have a depreciating effect on real effective exchange rates in regime one, associated with threshold value of less than 3.07%. However, in the second regime when the threshold value is greater than or equal to 3.07%, increases in workers remittances have an appreciating impact on real effective exchange rates. These results substantiate that the relationship between workers' remittances and real effective exchange rates is asymmetric and as such should be modeled accordingly. Above all, the results confirm the presence of Dutch disease effect in the second regime where the estimated coefficient on workers' remittances is negative and statistically significant. However, there is no evidence of Dutch disease effect in the first regime where the regression coefficient on workers remittances is positive and also statistically significant. Policy implications are discussed. [ABSTRACT FROM AUTHOR]

Beginning in 2012, several states enacted right-to-work laws, which hamper the ability of labor unions to collect agency fees to finance union services and activities. Because the processes by which these adoptions took place are arguably exogenous, identification of the causal effect of right-to-work on unionization within a state becomes possible. The author uses a set of semi-independent cross-sections drawn from the Current Population Survey for years 2000 to 2018 to investigate the impact of right-to-work on the probability of unionization in the five states that adopted it after 2011. The empirical analysis reveals an economically meaningful and statistically significant adverse effect from right-to-work adoption on union density that is distinct from other factors influencing unionization during that time period. [ABSTRACT FROM AUTHOR]

In the West African Monetary and Economic Union (UEMOA), information on the characteristics of the users and patterns of electricity end-uses remains hard to find. This study aims to contribute to reducing the gap in research on domestic electricity consumption in the region by unveiling the ownership rates, patterns of use and electricity consumption of domestic appliances in urban households through a city-wide survey. Three categories of urban users were investigated including high, medium and low consumers. Findings demonstrated various ownership rates for appliances, ranging from 100% for lighting fixtures to 0% for washing machines depending on user category. Domestic electricity demonstrated patterns consisting of three peak demand periods, with the main ones occurring in the evening (19:00 to 20:00) and the night (22:00). Other demand characteristics include an average daily electricity use ranging from 0.50 to 6.42 kWh per household, a maximum power demand of between 0.19 and 0.70 kW and a daily load factor between 35 and 58%. Finally, the appliances contributing the most to domestic electricity use include air-conditioners, fans, fridges and freezers, televisions and lighting fixtures, with contributions differing from one category of user to another. Policy implications including review of the appliances' importations framework and policies, and incentives for purchasing efficient appliances, design of more tailored policies, considering the different backgrounds of the users, education enhancement on energy behaviours for increasing energy efficiency/conservation, and implementation of DSM programs including load levelling, load shifting and load reducing depending on the type of appliance for energy conservation in the domestic buildings were derived. Overall, a large range of stakeholders of the electricity sector, not only in the West African Economic and Monetary Union (UEMOA), but also in other regions and countries sharing common characteristics should be interested in the results of this study. [ABSTRACT FROM AUTHOR]

The Comprehensive Monetary Policy Framework (CMPF) project, which considers de jure and de facto, domestic (money, inflation) and external (exchange rate), monetary policy targets, has now classified 186 countries/currency areas from 1974 to 2017. This means that it is now possible to track the evolution of monetary policy frameworks across the world and its regions. This paper outlines the methodology of the classification and analyses the trends at global, regional and sub-regional levels. [ABSTRACT FROM AUTHOR]

The recent so-called 'data revolution' offers unprecedented opportunities to innovate regional policies. New data sources are being widely used by the scientific community, however their uptake is far from being systematic in the policy cycle, where data innovation can improve territorial impact assessment. This paper presents a survey on the use of non-traditional data in the context of regional policy, together with a case study on real estate markets of three European countries, highlighting the perspectives and limitations of computational social science in regional analysis in terms of data quality and availability. [ABSTRACT FROM AUTHOR]

The institutional developments in Economic and Monetary Union (EMU) during the sovereign debt crisis were mostly studied with reference to intergovernmentalist theories. However, they can hardly explain the dominant role of the Eurogroup and Eurogroup working group (EWG) compared to the EU-27 formats in the Council, the ECOFIN and the Economic and Financial Committee. This article seeks to address this puzzle. Based on sociological-institutionalist theories, I argue that the distinction between euro area member states (EAMS) and non-EAMS structured how member state representatives organised EMU governance processes during the sovereign debt crisis. The reinforcement of the Eurogroup and EWG is interpreted as an explicit manifestation of this institutionalisation of differentiated integration (DI) in EMU. The empirical findings suggest that the two informal formats were transformed into viable euro area bodies providing the EAMS with the political authority, normative environment and administrative resources to design and implement policies independently. In this reinforced shape, the Eurogroup and EWG enabled a distinction between EU and euro area matters and provided EAMS with suitable instruments to manage their issues. The institutionalisation of DI has long-term implications for EMU reform processes and governance practices. [ABSTRACT FROM AUTHOR]

Three small Baltic economies of Estonia, Latvia and Lithuania have undergone extreme economical system change from the planned economy to the market one. The institutional infrastructure have been reorganized and all three countries joined the EU and Euro area. We aim to answer which channels of economic integration are of the largest importance for the small open European economies. We showed that all three countries could be treated as one region due to development, institutional and economic similarities. Secondly, we explore whether the trade or common currency is the main channel for the business cycle synchronization across the region of three small Baltic economies. The business cycle synchronization and trade intensity (TI) between the Baltic States and their main trading partners before and after joining the EU have been investigated as an example of an ex-post case for the small economies. We have observed a large increase in TI with the trading partners from EMU and EU countries, irrespective of the TI calculation method. The analysis of business cycle synchronization of the Baltic States with their main trading partners is captured by the correlations of the cyclical component of GDP series, using the quarterly real and de-trended GDP growth data from 1995 Q1 to 2019 Q4. The panel model has indicated an important empirical feature that the common currency strongly and significantly impacted the business cycle synchronization whilst the bilateral trade intensity between the Baltic States and their main trading partners have a significant negative effect on the business cycle synchronization when controlling for time effects. The Granger causality test confirmed that the most robust impulses to the Baltic States are coming from EU trading partners. [ABSTRACT FROM AUTHOR]

Jacques Delors (1925–2023) was the most influential Europeanist of our time. The close relationship between ideas and pragmatism characterized his social, cultural, and political commitment from his years of militancy in the Confédération Française des Travailleurs Chrétiens and La Vie Nouvelle to his leadership of the European Commission (1985–1995). He pragmatically relaunched the European integration process, especially in the period between the Single European Act (1986) and the Maastricht Treaty (1992), without failing to uphold the values of solidarity, equality, and social justice. He demonstrated a pragmatic approach as soon as he took office at the European Commission and the completion of the Single Market ‘by 1992’ became a concrete goal. He applied Jean Monnet’s theory of the spillover effect to create a virtuous mechanism in the progress of the European design, as demonstrated by the realization of the Economic and Monetary Union– real prelude of the single currency. However, after the birth of the European Union, he called for a federating mechanism to make up for the impotence of intergovernmental cooperation; the ‘new European concert’ was to merge into a ‘Federation of nation-states’ that could be realized through the advantages of the ‘federal approach’ and the preservation of nation-states. [ABSTRACT FROM AUTHOR]

Georg Northoff presents a comprehensive and meticulous elucidation of the emerging field of space-time neuroscience, which can be regarded not only as an advancement of Sigmund Freud's psychoanalysis but also as a fusion and complement to Mark Solms and other psychoanalysts' recent ventures in scientific psychology. It can be understood that Northoff's development of neuropsychoanalysis aligns with the "neuroconstructionist approach" that he has pioneered. Ultimately, there is a bidirectional construction process between the brain and ego or self, intending to establish and refine a "common currency". [ABSTRACT FROM AUTHOR]

Greece's entry into the Eurozone was regarded as a unique opportunity to reform the country's inefficient growth model. These hopes were dashed as the decade-long crisis of the 2010s wiped out a substantial part of the wealth accumulated during the previous decades and threatened the stability of Greece's political system. The crisis highlighted the weaknesses of the Economic and Monetary Union (EMU); the economic governance agreed upon at Maastricht was inadequate to support a monetary union comprising many, widely diverse economies. On the other hand, given the EMU's economic and institutional architecture, Greece was ill-prepared and unwilling to undertake the necessary adjustments to survive in the Eurozone. Understanding the economic and political aspects of this dual and mutually reinforcing failure is crucial for analyzing the challenges facing the Greek economy. In this article, we take a long-term view of the evolution of Greece's political economy, adopting a framework inspired by the recent literature on comparative political economy. The aim is to determine whether Greece's EMU membership affected its growth model and, if so, in what ways. The analysis shows that EMU membership has been crucial for the performance of the Greek economy during different periods but less so for the transformation of its demand-led growth model, which exhibits remarkable stability. This is because neither the ex ante nor the ex post conditionality imposed on Greece in the run-up to EMU entry and during the 2010s crisis, respectively, focused on the structural features of the Greek growth model. [ABSTRACT FROM AUTHOR]

We examine the nexus between financial inclusion and inflation targeting monetary policy effectiveness in West African Economic and Monetary Union countries by employing a heterogenous panel approach that enables us to delineate the responses to policy innovations related to idiosyncratic country‐specific shocks, common shocks, and composite shocks. We find that these shocks significantly affect inflation and financial inclusion but with varying magnitudes, signs, time of responses, and persistence. We further demonstrate that inflation targeting monetary policy is differently associated with the various dimensions and indicators of financial inclusion. Overall financial inclusion shocks temporarily increase inflation; deposit shocks reduce inflation; and credit shocks increase inflation. Central bank policy rate differently responds across time horizon to overall financial inclusion shocks; and it increases due to credit shocks highlighting that the monetary authority responds to credit shocks by implementing contractionary monetary policy. Our results highlight that monetary policy aimed at promoting inclusive financial services and responses of monetary policy to financial inclusion should be specific to the dimensions of financial inclusion. [ABSTRACT FROM AUTHOR]

Off-balance-sheet policies are an important but understudied phenomenon that emerged from a technical subtlety in the calculation of public debt statistics. Taking the case of an exemplary European off-balance-sheet policy, public–private partnerships (PPPs), this paper analyzes the technocratic processes that allow the emergence of such debt-neutral instruments. In the aftermath of the sovereign debt crisis, off-balance-sheet policies have become an important policy tool for Member States in the European Economic and Monetary Union, enabling them to strike a balance between the perceived 'public investment gap' and the mantra of fiscal consolidation. The case study shows how the lack of political solutions to Europe's investment-consolidation conundrum leaves it to technical experts to find workable solutions within the existing rules. The off-balance-sheet status of PPPs came under threat in 2014 but was reaffirmed through a coordinated effort by two strange bedfellows: the European Investment Bank (EIB), a promoter of PPPs, and Eurostat, the European authority responsible for public debt and deficit indicators. I argue that Eurostat and the EIB have entered into strategic cooperation to increase each other's room for manoeuvre, diffuse political pressure and avoid bureaucratic overload. This paper contributes to a better understanding of the role of technocrats and their expertise, which shape the mutual relations between fiscal constraints and financialized investment policies in the European investor states. [ABSTRACT FROM AUTHOR]

This study examines the effects of joining the European Monetary Union (EMU) using propensity score matching to address self‐selection bias. Findings indicate that EMU membership leads to reduced volatility in inflation, output growth, and bond yields. However, it also reveals fiscal deterioration in member states during the pre‐financial crisis period, even excluding Greece, Ireland, Portugal, and Spain. These countries experienced favorable bond market conditions pre‐crisis. The study underscores varying EMU effectiveness across different periods and countries, emphasizing the importance for policymakers to consider these variations when adopting EMU strategies. [ABSTRACT FROM AUTHOR]

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Cross-border payments, especially between different currency areas, are still more expensive, slower and less transparent than domestic transactions. In addition to attempts to facilitate interoperability by harmonising message standards or legal frameworks, there is also the vision of using multilateral platforms to reduce existing inefficiencies. A particular focus here is on distributed ledger technology (DLT), which could create additional benefits beyond payment transactions, for example by facilitating broader economic activity by means of tokenised assets. Some private sector players, as well as international organisations such as the International Monetary Fund and the Bank for International Settlements, have already developed concepts for DLT-based multilateral platforms. However, their realisation faces broader policy challenges that are unlikely to be solved per se with the help of new technologies. Although a global multilateral platform does indeed harbour great potential for efficiency gains, regional solutions are more likely to emerge that could be linked together to achieve efficiency gains at a global level. [ABSTRACT FROM AUTHOR]

This paper applies optimum currency area (OCA) theory to Southeast Asia to assess the potential for a monetary union in that region. We construct a panel of 10 Southeast Asian countries over the period 1990–2018 and apply the dynamic OLS estimator to quantify the costs and benefits of a potential OCA. A possible monetary union in Southeast Asia is vulnerable to asymmetric shocks, although the degree of specialisation has decreased and the openness index increased. Estimates confirm that both OCA criteria favour an increase in the region's income and FDI inflows and a reduction of its unemployment rate. However, inadequate labour mobility and stagnating intra‐trade shares are major obstacles in this regard, but if addressed they could benefit economic development and GDP per capita in the ASEAN region. We conclude that Southeast Asia is far from being an optimum currency area, but if it were to form a common currency area, the loss of economic sovereignty and its costs would be more than offset by the resulting monetary efficiency gain. [ABSTRACT FROM AUTHOR]

This paper shows that job polarisation—i.e. the disappearance of routine jobs—is changing the characteristics of the labour market. This has structural implications for the relationship between inflation and unemployment, the price Phillips curve. Using data from the European Monetary Union and exploiting the fact that job polarisation accelerates during recessions, we obtain two empirical results. First, countries experiencing a bigger shift in the occupational structure during a downturn exhibit a flatter Phillips curve afterwards. Second, the occupational shifts experienced during the Great Recession and the Sovereign Debt Crisis explain more than a fourth of the flattening of the curve in the 2002–18 period. Then, using a New Keynesian model with unemployment and search and matching frictions, we highlight a channel through which labour market characteristics operate on the slope of the Phillips curve. Increasing labour market fluidity —i.e. a higher separation and hiring rate—decreases the slope of the Phillips curve. Using micro-data, we find that in the European Monetary Union non-routine jobs are more fluid. We conclude that job polarisation flattened the Phillips curve. [ABSTRACT FROM AUTHOR]

The present paper simulates several financing schemes for scaling-up public investment while stabilizing debt in WAEMU countries experiencing fiscal fatigue. We construct a DSGE model of a small open economy that incorporates the behaviour of four types of agents: firms, households, government, and the Central Bank. The analysis assumes that when the government faces fiscal fatigue, it can turn to debt to finance the scaling-up of public investment. To ensure long-term debt sustainability, fiscal adjustments are consistently implemented through transfers and/or taxes, subject to respective caps and floors. Simulations indicate that, in the presence of natural resource revenues, scaling up public investment is feasible using concessional borrowing only or by incorporating additional external commercial or domestic borrowing while maintaining debt sustainability. Otherwise, external commercial debt appears to carry more risk. [ABSTRACT FROM AUTHOR]

Summary: This paper introduces a novel panel approach to structural vector autoregressive analysis. For identification, we impose independence of structural innovations at the pooled level. We demonstrate robustness of the method under cross‐sectional correlation and heterogeneity through simulation experiments. In an empirical application on monetary policy transmission in the Euro area, we find that bond spreads rise significantly after an unexpected monetary tightening. Furthermore, the central bank responds to offset effects of adverse financial shocks. Additionally, we document sizable heterogeneity in country‐specific output responses. [ABSTRACT FROM AUTHOR]

In this study, we construct an optimal currency portfolio using the implied return distribution in the mean-variance approach and examine the performance through a backtest. We estimate the implied expected spot return, implied volatility, and implied correlation from currency option price data, and propose a method of constructing a fully forward-looking optimal currency portfolio without historical data. We implement the backtest from January 2006 to October 2020 on a currency portfolio comprising seven currencies (the Japanese yen, the Swiss franc, the euro, the British pound, the Australian dollar, the New Zealand dollar, and the Canadian dollar) against the US dollar and US-dollar interest rate, and examine the usefulness of the proposed method. We find that the proposed method yields a higher performance than the conventional method in previous studies that use historical data. Furthermore, it is evidenced that the main factor in the performance gap between the proposed and the conventional methods is the high predictive power of the spot return. [ABSTRACT FROM AUTHOR]

This study investigates the impact of central bank digital currencies (CBDCs) on monetary policy flexibility, the effective lower bound (ELB), and negative interest rate policies (NIRPs), specifically in the case of the digital euro (DE). Through a combination of theoretical modeling and empirical analysis, including two extensive surveys among EU participants, we explore whether CBDCs can change the ELB and affect consumer preferences in favor of the digital euro over physical cash. Our findings indicate that the introduction of the DE could potentially move the ELB from its current value of around −1.30% by approximately 0.25%. If agents had the possibility to move their deposits into both cash and DE, they would convert approximately 52% of the converted amount into cash and the rest into CBDCs. However, over a 10 year period, the situation would shift in favor of the DE, with a share of 63%. Both findings show that NIRPs will be more limited in the case of the introduction of CBDCs (DE). These facts must be considered both when deciding whether to introduce a CBDC (DE) and after its eventual introduction in the case of NIRP application. [ABSTRACT FROM AUTHOR]

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This research demonstrates that the union wage premium is higher for Black and women workers in the US public sector, what we refer to as "an intersectional union premium." Union mechanisms reinforce and expand the more equitable practices of the public sector, resulting in this additional boost. Using Current Population Survey data, 1983–2018, this research models intersectional effects on earnings by examining interactions between union membership and race–gender. Relative to White men, union membership boosts average earnings an additional 3% for Black men and Black women, and 2% for White women on top of the direct union premium. Corollary analyses reaffirm these effects in multiple state contexts, including by union density and union coverage. Intersectional union premiums are weaker in states that prohibit collective bargaining. These premiums are present across most types of public work, with the exception of police and fire employees. To conclude, the authors discuss how changing labor policies may impact race and gender equity in the public sector. [ABSTRACT FROM AUTHOR]

Traditional theories frame curiosity as an intrinsic motivation to obtain information to resolve uncertainty. Recent empirical breakthroughs challenge this perspective and reframe curiosity in terms of the learning process itself: curiosity is sustained when individuals perceive improvements in their performance and actively engage in the process of learning. Unlike previous research, which remained agnostic about the change of curiosity over time, the learning progress framework provides insights into the temporal dynamics of curiosity, shedding light on its fluctuations based on the extent of learning progress individuals make. By integrating the desire to obtain information with the drive to make learning progress, we offer a unified account of curiosity. What drives our curiosity remains an elusive and hotly debated issue, with multiple hypotheses proposed but a cohesive account yet to be established. This review discusses traditional and emergent theories that frame curiosity as a desire to know and a drive to learn, respectively. We adopt a model-based approach that maps the temporal dynamics of various factors underlying curiosity-based exploration, such as uncertainty, information gain, and learning progress. In so doing, we identify the limitations of past theories and posit an integrated account that harnesses their strengths in describing curiosity as a tool for optimal environmental exploration. In our unified account, curiosity serves as a 'common currency' for exploration, which must be balanced with other drives such as safety and hunger to achieve efficient action. [ABSTRACT FROM AUTHOR]

The aim of this paper is to examine the impact of a country's entry into the monetary union on its economic variables growth rate of real GDP as well as on GDP per capita growth for the period from 2010 to 2020. The clustering method and the ANFIS method were used in the data analysis. A total of two cluster analyses were performed. The first cluster includes countries that joined the EU in 2004 and became EZ members by 2010. The second cluster refers to those countries that joined the EU in 2004 but are not yet members of the EZ. For the first individual cluster analysis two models were analysed and for the second individual cluster three models were analysed using the ANFIS method. As expected, the results showed that GDP growth is connected with trade, inflation and gross investments in fixed capital in the observed countries, while GDP per capita is connected with unemployment, interest rates and public debt. With regard to GDP growth, the difference between countries that are in the eurozone and those that are not is not significant, which is in line with other studies. [ABSTRACT FROM AUTHOR]

The article examines three legal opinions recently issued by the ECB on national laws concerning cash acceptance and payments in the euro area. It analyses how the ECB ensures the Eurosystem Cash Strategy and the legal tender status of cash are respected and applied across the Member States in a uniform manner. It also discusses the implications of the opinions for consumers, merchants and financial services firms in the context of the EU's Single Currency Package and other developments. [ABSTRACT FROM AUTHOR]

Purpose: The paper investigates if the process that led to the birth of the Euro Area had a significant impact in homogenizing the capital structure decisions of European firms since the first introduction of the common currency. Design/methodology/approach: A large sample of firms was constructed, and a Tobit-censored regression model was utilized to investigate the determinants of firms' observed capital structures. The Black–Scholes–Merton model was used to infer market values of assets, as well as the volatility of those values, from the observed market values of equity and the corresponding volatility. The existing differences in national tax rules were considered for estimating firm-specific marginal tax rates. Findings: It was found that, despite the currency union and the institutional harmonization process, certain factors still play a different role. In particular, the impact of profitability is consistent with the pecking order view in some countries, and with the trade-off theory in others. Assets risk, measured as the annualized volatility of the market enterprise value, is the best predictor of observed leverage ratios. The sector of activity is significant in determining leverage decisions even when assets' risk is taken into account. Despite the monetary union and the increased financial and institutional integration in the Euro Area, the country of origin still plays a significant role in capital structure decisions, suggesting that other country-level factors may affect firms' financing behaviour. Practical implications: The paper indicates that, despite the long harmonization process of institutions, regulations and public budget required to join the Euro, firms' financing decisions are still affected by country-specific factors once the common currency is introduced. Therefore, new entrant countries in the Euro area should not expect their companies to immediately conform with those located in other countries within the common currency area. Originality/value: This article investigated the impact of the currency change from national currencies to the Euro on the determinants of capital structure choices. It was shown that, despite the long harmonization process that led to the birth of the Euro Area, national factors still affect firms' financing decisions. This provides guidance for policymakers in countries that are planning to join the Euro about the impact this will have on firms' financing decisions in the entrant country. [ABSTRACT FROM AUTHOR]

This study deals with the evolution of fuels' prices over time in the EU. The central research inquiry revolves around whether there exists any correlation among the trajectories followed by national prices in the gasoline and diesel markets. The EU, and more specifically the Euro-Area, by its construction, is treated as an OCA (Optimum Currency Area). In an OCA, certain conditions are met to ensure the smooth functioning of a common currency. The fuel price synchronization is essential because it contributes to the effective implementation of policies and promotes stability across the entire macroeconomy. The study covers the period of 2017–2022. For each type of fuel and year, we construct an individual network where network nodes represent the EU member states while the edges connecting these nodes represent strong temporal fuel price correlations among the member states. The properties of the resulting networks are analyzed within a Complex Network framework. Our goal is twofold: first, to detect any potential convergence or divergence in the trajectories of the prices, and second, to investigate the impact of tax and duty implementation on the co-movements of the prices. The empirical findings show that diesel markets have a more pronounced pattern of price co-movements compared to the gasoline markets. Moreover, the application of fuel taxation policies seems to adversely affect the co-movements of prices. [ABSTRACT FROM AUTHOR]

Several authors, especially those who share a Classical–Keynesian point of view, argue that the interest rate determines the rate of profit in the long run. Considering the eleven founding economies of the euro area, I find that, adjusted for the rate of growth of gross national income, there is a positive long-term relationship between the real interest rate and the net rate of profit. The results are confirmed even when I estimate a model with nominal interest rates, inflation, and a yield curve. These results imply that the European Central Bank (ECB), when deciding monetary policy, is not neutral in determining income distribution. [ABSTRACT FROM AUTHOR]

This study investigates the possibility of forming a monetary union across West Africa. This was achieved by employing the structural VAR framework. Data on real GDP, inflation, and exchange rate were used to represent supply, monetary, and demand shocks from the period 1986 to 2020. The impulse response and variance decomposition results showed that shocks affecting the West African region are idiosyncratic, while the residuals of the structural VAR were used to compute the correlation coefficient. The correlation coefficient revealed that the demand and monetary shocks were symmetric across WAEMU countries and asymmetric for the rest of the region. The study suggests that theWest African region is not ripe for a monetary union. However, the study opined that the WAEMU countries are the closest to forming a West African monetary union and a piecemeal approach may be adopted such that the WAEMU countries are the first to form the union, while the rest may join when they meet the convergence criteria. In essence, West African countries' central banks need to focus on harmonizing their monetary policies and remove all barriers to factor mobility for the synchronization of shocks and for all countries to meet the convergence criteria. [ABSTRACT FROM AUTHOR]