The Unassuming Economist

From a paper by Raúl Ramos Lobo, Esteve Sanromà, and Runhan Ye:

“Reducing unemployment is still a priority for many governments. The objective of this paper is to analyse whether labour market reforms have succeeded in lowering the level of output growth required to reduce unemployment. With this aim, we estimate time-varying thresholds based on a first-difference version of Okun’s law for 25 countries and, then we analyse whether 32 labour reforms have contributed to reducing thresholds. The results show a high heterogeneity of thresholds among countries, but also that thresholds have shown a clear decreasing trend, mainly due to the evolution of the labour force and productivity in these countries. We also find that in 21 of the 32 considered labour market reforms, they have been effective in reducing the value of the threshold. Both results are clearly relevant from a policy perspective.”

From a paper by Loek Groot and Chintani Sooriyamudali:

“This paper estimates the global Kuznets curve (2005-2020) by plotting global mean income against global inequality, while exploring COVID-19’s impact on inequality. Using PPP adjusted GDP per capita and Gini index data from 122 countries (94% global GDP, 88% population), global income is simulated assuming lognormality. The paper finds that, at the pandemic outbreak, the world was on the downward part of the Kuznets curve. Compared to within-country inequality, between country inequality contributes significantly to global inequality. While the pandemic may temporarily decelerate the decline of global inequality, the long-term impact will be determined by the level of international cooperation in the global response to the pandemic.”

From a paper by Jingye Liu, Fengqi Guo, Ying Shi, Rijia Ding, and Zhen Chen:

“The recurrence of international geopolitical events has intensified tensions in global energy supply chains. As a major crude oil consumer, China urgently needs to identify vulnerabilities within its crude oil supply chain (COSC) and implement targeted measures to safeguard national energy security. In this study, a risk evaluation index system was constructed based on the entire life cycle in COSC. Then, the phased and overall prominent risks in the China’s COSC from 2012 to 2022 were identified through a two-phase DEA-like model. Furthermore, the evolution of the comprehensive security level of COSC was assessed throughout the study period. Specifically, the phased risks of China’s COSC mainly focused on strategic petroleum reserves (SPR) in the midstream application stage and refined oil trade in the downstream consumption stage. Additionally, China’s COSC primarily confronted overall risks involving domestic crude oil supply potential, geopolitical imports, maritime transportation, and domestic oil consumption. Although the security level of China’s COSC showed an upward trend from 2012 to 2022, the security of the upstream still lagged behind that of the midstream and downstream. Hence, policy recommendations to enhance China’s COSC security include advancing the exploration and development of unconventional oil, strengthening international energy cooperation and the autonomy of maritime transportation, expanding the SPR, increasing the proportion of renewable energy, and establishing a risk early warning platform.”

From a paper by Daniel Halvarsson, and Martin Korpi:

“This study investigates the relationship between the urban wage premium and employer concentration using Swedish full population employer-employee data. Departing from an AKM modeling framework to distinguish worker from firm specific heterogeneity – a measure of rent-sharing – we then measure the urban wage premium using differences in the estimated firm fixed effects at the level of local industries, nested within local labor markets. Our results suggest that labor market employer concentration, as calculated using the Hirschman-Herfindahl index and a leave-one-out instrumental variable design, can account for a significant share of the estimated urban wage premium (UWP). Addressing city-level wage income inequality by applying our model to different segments of the local labor market income distribution, we find that while the UWP pertains to all income segments, it is largest for top-income levels (above the 90th percentile), and within this segment employer concentration also has the largest explanatory power. Thus, while being an important explanatory factor for all percentiles of the local income distribution, a relatively lower employer concentration within larger cities, and vice versa, higher concentration within smaller cities, primarily help explain the variance of top wages within these cities/labor markets.”

From a paper by by Luis I. Jácome, Nicolás E. Magud, Samuel Pienknagura, Martin Uribe:

“As inflation targeting (IT) turns 35, it has become a key institutional monetary framework by central banks. Yet, this paper shows that stark differences exist among inflation targeting countries in the conduct of monetary policy. Behind such heterogeneity, the legacy of a high inflation history appears as a preponderant factor. We propose a model that diverges from existing IT workhorse models by adding path-dependence (to a forward-looking model) and potentially imperfect central bank credibility. We show that achieving low inflation (hitting the target) requires more aggressive monetary policy, and is costlier from an output point of view, when individuals’ past inflationary experiences shape their inflation expectation formation. In turn, we provide empirical evidence of the need for these two theoretical additions. Countries that experienced a high level of inflation before adopting the IT regime tend to respond more aggressively to deviations of inflation expectations from the central bank’s target. We also point to the existence of a credibility puzzle, whereby the strength of a central bank’s monetary policy response to deviations from the inflation target remains broadly unchanged even as central banks gain credibility over time. Put differently, a country’s inflationary past casts a long and persistent shadow on central banks.”