Search Results (1,996)

This paper examines whether monetary policy shocks affect CO₂ emissions over time in Brazil. We show that CO₂ emissions decline persistently following contractionary monetary policy shocks. The relationship between monetary policy and CO₂ emissions in Brazil is assessed through two channels: trade openness and exchange rates. The theoretical model illustrates how monetary policy affects the domestic economy through the real exchange rate. An application of a Global VAR (GVAR) to the Brazilian economy from 1996 to 2018 investigates the effects of monetary policy in Brazil (or in the U.S.) on real GDP and, subsequently, on CO₂ emissions. A contractionary monetary policy shock in Brazil causes a short-run appreciation of the currency, lower output in the long run, and lower CO₂ emissions (−0.02% after 24 months). A contractionary U.S. monetary policy shock also causes a decline in the stock market and a short-run depreciation of the currency. This shock leads to lower output in the long run, reducing CO₂ emissions by −0.01% after 20 months. Full article

The debate over CEO compensation persists despite extensive efforts by academics and technocrats to understand its determinants. Most research has focused on how firm-specific characteristics and CEO-specific traits influence CEO compensation. However, the results have been contradictory, indicating that other factors may also play a role. This study examines the impact of macroeconomic factors on the compensation of CEOs. It examines how price variables such as interest rates, inflation, and exchange rates affect the fixed salaries and total compensation of CEOs at six South African banks listed on the Johannesburg Stock Exchange. Conducted over a 15-year period, this quantitative longitudinal study utilized secondary data from annual reports and the IRESS database. Panel data regression analysis was employed to interpret the data. The findings reveal a positive relationship between interest rates and fixed salaries, as well as between exchange rates and fixed salaries. Additionally, interest rates and total compensation are positively related, and exchange rates also have a positive relationship with fixed salaries. Understanding how macroeconomic conditions influence CEO pay helps Compensation Committees contextualize performance. It allows them to differentiate between achievement driven by a CEO’s abilities and that resulting from external factors, ensuring fair compensation and minimizing excessive rewards for “luck”. This knowledge supports the adjustment of incentive plans based on relative performance and economic-adjusted metrics, reducing the cyclical influence of macroeconomic variables on firm performance and, ultimately, CEO compensation. Full article

This paper examines how logistics performance conditions the relationship between trade openness, economic growth and per capita CO₂ emissions in Mediterranean economies. Using an unbalanced panel of 20 countries over the period 2007–2022, we combine static fixed-effects, dynamic panel generalized method of moments (GMM) estimators and Method-of-Moments Quantile Regression (MM-QR). CO₂ emissions per capita, the World Bank Logistics Performance Index (LPI), trade openness and GDP per capita are drawn from World Bank databases, and interaction terms between LPI and both income and trade openness are constructed to capture conditional effects. The results from fixed-effects and system GMM estimations show that logistics performance exerts a robust and statistically significant negative effect on emissions, whereas GDP per capita is a positive driver and trade openness tends to reduce emissions when logistics capacity is sufficiently strong. Negative and significant interaction terms between LPI and both income and openness indicate that logistics efficiency amplifies the environmental benefits of trade and growth. Quantile regressions reveal that these patterns are most pronounced in high-emission countries, where improvements in logistics performance and its interaction with trade and income generate larger marginal reductions in CO₂ emissions. Overall, the findings highlight the central role of logistics modernization and green trade facilitation in reconciling trade-led growth with decarbonization in the Mediterranean Basin. From a policy perspective, the evidence suggests that prioritizing green logistics and trade facilitation—particularly in high-emission Mediterranean economies—can yield the largest marginal reductions in CO₂ emissions. Full article

Globally, human capital is recognized as a structural determinant of economic growth, with evidence of a positive, bidirectional, and significant relationship between both variables. However, in Colombia, few studies have directly measured the influence of human capital on national economic growth. To date, there is no academic review that integrates and analyzes the available evidence on this link, even though such studies are fundamental for understanding the drivers of development, reducing structural inequalities, and guiding policies that promote productivity and social inclusion. This study conducted a literature review across major international and Colombian academic databases, with a specific focus on Colombia and a minimum 25-year observation window, to identify research gaps and establish conceptual foundations for future research. In total, 140 articles were reviewed. In general terms, the findings show that, although human capital is an essential driver of Colombia’s economic growth, its full impact is constrained by structural and regional inequalities, corruption, violence, labor informality, institutional fragmentation, and mismatches between education and labor market demands. These results underscore the need to expand empirical research to better measure its effects and to inform more inclusive and sustainable development policies. Full article

This paper focuses on an empirical analysis of the relationship between investing and saving, taking into account various economic regions. The economic aggregates are selected following the International Monetary Fund (IMF) standard classification. The investigation is developed within the theoretical frameworks proposed by the debate between the mainstream neoclassical school of thought and the post-Keynesian school. Our approach differs from other empirical works on the subject in that we apply innovative Granger non-causality panel tests to four datasets covering a wide range of countries over the period 1980 to 2024. This is the very first time these advanced panel tests have been applied to such data. The information is valuable for defining macroeconomic policy and supporting potential credibility of one theory over another in the debate. Our empirical results are coherent with the post-Keynesian interpretation of the relationship between the variables when applied to an international context in which trade and capital movements are liberalized. Full article

In a worldwide context marked by increasing attention to financial literacy as a factor of financial inclusion, Morocco take part of this dynamic, seeking to improve the financial skills of its population. This article does not measure financial literacy directly but aims to explore the structural conditions that enable its diffusion in Morocco, using macroeconomic indicators such as income, employability, and education, along with financial infrastructure. Adopting a mixed methodology, this study combines both qualitative and quantitative analysis of the national context, including an overview of public policies, socioeconomic characteristics, and financial literacy initiatives, with a quantitative analysis based on an Autoregressive Distributed Lag (ARDL) econometric model. Bank branch density is employed as an indirect proxy for financial infrastructure, reflecting access to formal financial services in the absence of time-series literacy data. The results show that gross national income (GNI) per capita, the labor forces, and elementary school enrolment rates influence banking density, though without producing statistically significant effects in the long term. In the short term, only GNI has a temporary but not very robust impact. These results highlight the limitations of macroeconomic indicators alone in explaining financial literacy diffusion and underscore the potential role of structural factors such as digital innovation, governance, or inclusion of youth and female indicators. Full article

This paper examines, through a modified aggregate demand curve, the reduction in equilibrium income caused by the presence of precautionary demand in the money demand function. Specifically, this paper rigorously analyses the transformation of the well-known fiscal and monetary policy multipliers, β and γ, commonly found in macroeconomic theory textbooks. Ceteris paribus, an increase (decrease) in precautionary money demand reduces (increases) equilibrium income, as can be seen through the modified multipliers β and γ. Multiple contingencies that emerged suddenly between 2008 and 2023 may have altered agents’ perceptions regarding precautionary money demand. This work contributes to the adaptation of some well-established tools of macroeconomic theory to address events of this nature. Full article

This paper develops a dynamic real-options model of tariff deterrence in which the exporting country, though subject to the importing country’s market power, assumes the role of leader in a Stackelberg framework under uncertainty by acting preventively to dissuade the importer from imposing a tariff. The follower holds an option to impose a tariff subject to irreversible enforcement costs, while the leader can undertake costly deterrence, through signaling and capacity building, to delay or prevent action. The interaction generates a preventive equilibrium in which the importing country(thefollower) optimally remains inactive, and the exporting country (the leader) sustains continuous deterrence expenditures, which nevertheless may be preferable to submit to tariffs. Uncertainty and irreversibility, which can both be manipulated, enlarge the inaction zone, and increase resilience and adaptability of both contenders. Both conditions tend to stabilize the system but transfer costs asymmetrically: the powerful waits costlessly, the weaker pays to maintain stability. In equilibrium, deterrence requires continuous spending by the leader to keep the follower indifferent between acting and waiting, implying that power operates through potentiality rather than action. The paper extends the Stackelberg framework to international trade, revealing that although the theoretical first-mover advantage rests with the larger, importing country, the smaller, exporting country becomes the de facto leader by acting preemptively to discourage the threat of tariff. Full article

Recent studies have focused on the detrimental effects of global economic policy uncertainty (EPU) on firm profitability. Nevertheless, none of these studies has focused on a developing economy like Nigeria. To understand this, the study conducted a host of regression analyses using the Driscoll and Kraay fixed-effect estimator and the two-step system generalised method of moments to examine the effects of global crude oil prices and domestic and global economic policy uncertainty on firm profitability in Nigeria from 2005 to 2024. The findings indicate that while global EPU had a minimal impact on firm profitability, domestic EPU had a substantial negative impact. The findings remain consistent even across the sub-samples, sensitivity, and robustness analyses. Furthermore, the findings showed that firm size and capital are significant determinants of profitability for Nigerian firms. At the same time, oil prices and their interactions do not affect firm profitability in Nigeria. The study suggests that regulators in the Nigerian business environment can contribute to building a more resilient environment by implementing systems to monitor critical economic indicators and ensure timely responses to emerging challenges. Systematic evaluations of economic uncertainties, including business sentiment, inflation rates, exchange rates, interest rates, and economic growth, can provide valuable insights for policy formulation and interventions aimed at enhancing the profitability of Nigerian firms. Full article

In this article, we examine the dynamic interdependencies among components of Japan’s consumer price index (CPI) using a two-lag time-varying loading factor (TLTVLF) model. Whereas previous studies have typically decomposed CPI series into long-term trends, seasonal patterns, and cyclical fluctuations, such approaches mainly describe structural features without fully uncovering the latent mechanisms that drive price dynamics. The proposed TLTVFL modeling framework addresses this limitation by allowing both factor loadings and their lagged effects to evolve over time, thereby capturing gradual structural changes and the time-varying propagation of shocks across CPI categories. Using monthly data for ten major CPI categories from January 1970 to December 2024, we identify evolving common factors, category-specific sensitivities, and dynamic transmission patterns associated with major macroeconomic events. The findings reveal substantial temporal variation in inter-category linkages, offering fresh insights into sectoral contributions to inflationary pressures and providing policy-relevant implications for more effective monetary and fiscal interventions. Methodologically, this study extends the frontier of dynamic factor modeling, while empirically, it deepens the understanding of the mechanisms underlying price fluctuations over a long historical horizon. Full article

This study examines global econo-environmental capability for 118 countries over 1995 to 2024 using a five-lens framework covering productive capacity (PC), developmental momentum (DM), resource efficiency (RE), degradation and depletion ratio (DDR), and remaining development potential (RDP). Using pooled k-means, a stable four archetype typology is identified and shown to persist over time. The analysis assesses how archetypes characterize country–year outcomes (RQ1), whether cross-sectional fairness is changing and relates to frontier slowdown (RQ2), and how archetypes, distance, and regional context shape transition probabilities and club convergence (RQ3). Inequality in five-dimensional capability declines slightly over the period (Gini from 0.109 to 0.092 and Palma from 1.563 to 1.464), implying modest convergence rather than increasing polarization. Average capability also improves, with larger gains for initially distant countries and smaller gains near the frontier, which is consistent with mild club convergence. Regionally, high capability cases are concentrated in Western Europe and North America, while sustained upgrading is observed in parts of Eastern Europe, mixed stability is observed in East and Central Asia, and selective advances are observed in ASEAN. Policy implications should be based on a country’s archetype and its distance to the capability ideal. Lagging countries should prioritize diffusion of proven high efficiency options and basic capability building, while frontier countries should priorities innovation, structural change, and deeper decarbonization. Policy emphasis should be updated as countries move within the capability space over time. Full article

This paper extends the gravity model to financial markets by examining how distance and bilateral linkages influence stock market correlations between the United States and selected emerging economies. To this end, the Poisson Pseudo Maximum Likelihood (PPML) estimator is used to account for heteroskedasticity and zero-value observations. Results show that greater economic distance weakens equity market correlations, while larger combined economic mass strengthens them, suggesting that bigger economies foster deeper financial linkages. Moreover, the results show that higher trade intensity between the U.S. and emerging markets results in negative correlations, which are explained by portfolio diversification motives—investors view these markets as substitutes, reallocating funds in opposite directions under varying conditions. The findings highlight how structural factors, distance measures, and trade intensity influence international equity market correlations, providing key insights for portfolio allocation and diversification strategies. Full article

Transition to renewable energy leads to assumed economic diversification; however, the institutional risks for hydrocarbon-dependent economies remain high. This paper identifies the conditions under which transitioning economies enter a novel dependency during the renewable transition. Our analysis combines the Multi-Level Perspective with Historical Institutionalism to explore Azerbaijan’s 30-year trajectory across the oil, gas, and emerging renewable phases, serving as an illustrative case. Evidence from the literature and expert interviews illustrates that renewable investments are channelled through hydrocarbon-era institutional practices, enclave-style contracting, centralised decision-making, and reliance on foreign technology providers. These conditions constrain domestic niche formation and limit opportunities for local capability development. As a result, renewables become embedded within the existing institutional architecture rather than displacing it, serving primarily to substitute hydrocarbons as an export commodity rather than to catalyse diversification. The paper conceptualises this trajectory as a possible renewable dependence: a pathway in which renewable energy is integrated into an export-oriented, state-dominated political economy without altering its core institutional logic. The identified configurations are common across hydrocarbon economies in Central Asia and MENA, offering transferable insights into when and why renewable transitions risk reproducing, rather than transforming, established development models. Full article

This article examines labor market dynamics in Bulgaria, Italy, and the United Kingdom by integrating demographic pressures, wage and labor cost adjustment, redistribution mechanisms, inequality outcomes, and digital readiness into a single comparative framework. This study first applies hierarchical clustering to a harmonized EU country panel for 2017–2024, using GDP per capita in PPS, average annual wage, and unemployment rate to position the three countries within the European convergence space and income–labor cost groupings. The results show that Bulgaria belongs to a low-income, fast-converging group, with nominal wages and hourly labor costs more than doubling, strong real-wage growth from a low base, and an improving price level index. At the same time, unemployment fell to below the EU average, yet income inequality remains persistently high. Italy represents a high-income but slow-growing labor market, in which real wages have declined, and labor costs per hour remain above the EU mean with a significant non-wage component. Unemployment remains relatively elevated, indicating divergence in workers’ purchasing power despite high income levels. The UK has labor costs in the mature high-income range, low unemployment, and the lowest tax wedge for low-wage workers, but with relatively high and volatile inequality. This study shows that wage dynamics, labor cost composition, and tax–benefit structures jointly mediate the translation of macroeconomic performance into household outcomes, generating distinct policy trade-offs across the three labor market configurations. Digital indicators further suggest that income level is not a sufficient predictor of digital engagement and that the observed aggregate labor market trends do not indicate a sharp employment contraction contemporaneous with the diffusion of technical innovations, such as generative AI. Full article

Since the Industrial Revolution, the increase in greenhouse gas emissions has led to a significant rise in global temperatures compared to the pre-industrial period. This development has heightened the importance of carbon pricing policies in combating climate change. This study aims to examine the effects of carbon pricing instruments, carbon taxes and emissions trading systems (ETS) on carbon dioxide (CO₂) emissions in OECD countries. A panel data analysis covering the period 2002–2023 was conducted, taking into account structural differences across countries as well as shared economic dynamics. The findings indicate that both carbon taxes and ETS mechanisms are effective in reducing CO₂ emissions in the long run. Moreover, while increased industrial activity contributes to higher emissions, a greater share of renewable and nuclear sources in the energy mix is found to support emission reduction. The study demonstrates that carbon pricing policies exert limited short-term effects but generate structural and lasting impacts in the long term. The findings are consistent with the existing literature and theoretical framework. Achieving permanent reductions in emissions requires a comprehensive policy approach that not only implements carbon pricing, but also strengthens energy efficiency and fuel substitution in the industrial sector while continuously increasing the share of clean sources in the energy supply. The analysis shows that carbon taxes and emissions trading systems (ETS) are effective in reducing emissions over the long run in OECD countries, and that their success varies depending on countries’ energy profiles and policy designs. These results underline that a well-designed and complementary carbon pricing framework is critical for achieving a sustainable transition. Full article