The Unassuming Economist

From a paper by Thomas Bourany , and Jordan Rosenthal-Kay:

“To combat global warming, climate policies like carbon taxes, renewable subsidies, and carbon tariffs must be implemented to phase out fossil fuel consumption and lower emissions. Who are the winners and losers of such policies? Through a simple Integrated Assessment Model with heterogeneous countries and international trade in goods and energy, we study both the costs of implementing these policies unilaterally, and the local costs and global gains of international policy cooperation. To do so, we express and decompose welfare changes under different policy regimes to the first order as a function of sufficient statistics that depend on observables and identifiable elasticities like nations’ energy mix, energy rents, trade shares, energy supply and demand elasticities, and damage parameters. We show that climate change has non-trivial reallocation effects through international trade in goods and energy. Pursuing unilateral policies generates strong leakage effects, primarily through energy trade. Global climate policy cooperation mitigates leakage, but not all countries have an incentive to participate. Regional climate clubs operate differently: an EU-wide club reduces global emissions but creates internal winners and losers, while an ASEAN climate club achieves smaller global gains but delivers welfare increases for member nations.”

From a paper by Md Qamruzzaman, Md. Adnan Hoque, and Md. Ratib Khan:

“This study examines the impact of renewable energy consumption, financial globalisation, digitisation, trade freedom, and financial development on income inequality across the G7, E7, and N11 economies from 1990 to 2022. Using CS-ARDL as the baseline estimator to account for cross-sectional dependence and long-run dynamics, the analysis is reinforced with the AMG, CCEMG, and Driscoll–Kraay estimators for robustness, while the dynamic panel GMM addresses potential endogeneity. Nonlinear and distributional heterogeneity were explored using Panel Threshold Regression, Quantile Regression (QR-MM), and Markov Switching models. The results consistently indicate that renewable energy, digitisation, financial globalisation, and trade freedom contribute to reducing income inequality, whereas financial development exacerbates disparities, with the effects being more pronounced in emerging economies (E7 and N11) than in advanced economies (G7). Threshold and quantile analyses reveal that renewable energy and digitisation exert more substantial equalising effects once institutional quality and digital penetration surpass critical levels under conditions of higher inequality. Regime-switching estimations showed a stabilising role during economic stress. These findings suggest that expanding renewable energy and digital infrastructure, and maintaining open trade policies, can help mitigate inequality, particularly in emerging economies, though the benefits of financial development require inclusive frameworks and regulatory safeguards. By integrating multiple advanced econometric techniques, this study provides new evidence on the interconnected roles of globalisation, the energy transition, and digital transformation in shaping income distribution across different economic contexts.”

From a paper by Li Xie, and Zhisheng Huang:

“We incorporate the characteristics of energy price management systems in developed countries and China into a dynamic stochastic general equilibrium model (DSGE) respectively, examine the differences in the impact of international energy price shocks on the countries’ inflation under the two types of energy price management systems, and then analyze the role of developed countries’ energy price management system (DC-EPMS) and China’s energy price management system (CN-EPMS) in the process of international energy price shocks affecting inflation. The results indicate that CN-EPMS is more effective in mitigating the negative impact of international energy price shocks on inflation compared to DC-EPMS in developed countries. Under the DC-EPMS, non-state-owned enterprises in a dominant position in the energy market, faced with international energy price shocks, will be driven by profit-maximizing behaviors to transfer the fluctuations in international energy prices to domestic energy prices and their expectations, thereby triggering inflation in developed countries; under the CN-EPMS, state-owned energy enterprises as policy implementation tools, faced with international energy price shocks, have played a functional role in safeguarding energy supply and maintaining energy price stability through energy price control and policy-oriented financial support, thereby stabilizing the energy price expectations of domestic energy consumers and effectively blocking the transmission of international energy price shocks to the inflation.”

From a paper by Ali Moridian, Hassan Heidari, Seyed Mehdi Hosseini, and Heshmatolah Asgari:

“This study investigates the asymmetric effects of Economic Policy Uncertainty (EPU) and Oil Price Uncertainty (OPU) on inflation in Iran, using the Quantile-on-Quantile (QQ) regression method. Given Iran’s oil-dependent economy, the research aims to understand how global and domestic uncertainties impact inflation dynamics, particularly during economic turbulence. Traditional models often neglect the non-linear and heterogeneous effects of uncertainty on inflation, prompting the use of the QQ approach to capture the varying impacts across different quantiles.”

From a paper by Deepak Kushawaha, Abhishek Gorsi, Ankit Singh Kharwar & Abhishek Singh:

“This paper explores the impact of renewable energy (RE) generation on energy inflation in India using an ARDL model with data from 1974 to 2023. The findings show that RE generation has a significant long-term positive effect on energy inflation, probably due to the high initial infrastructure costs. These results challenge the divine coincidence hypothesis, suggesting that while RE helps cut emissions, it might also drive-up inflation. This analysis does not critique RE development but highlights the need for a nuanced understanding of its economic impacts. To counteract these inflationary pressures, policies should focus on increasing investments in RE research and development, implementing effective energy storage solutions, and upgrading grid infrastructure to balance economic growth, inflation control, and environmental sustainability.”