The Unassuming Economist

From a paper by Richard Rigo, Adriana Grencikova, Karol Krajco, Valentinas Navickas, and Vytautas Snieska:

“This study estimates the economic impacts of demographic changes driven by generational changes on the labour market and business environment in the Slovak Republic and selected European countries (Hungary, Poland, Czech Republic, Germany, France, Italy). It examines how demographic changes influence sectoral labour demand and the number of business entities. The main research questions are: RQ1: How do generational disparities affect sectoral demand? RQ2: How do generational disparities affect the number of entrepreneurs in the labour market? A comparative analysis of statistical data from 2013 to 2023 shows that sectors such as wholesale, retail, industry, and information and communication technology (ICT) face a shortage of skilled labour. To address RQ2, a regression analysis covering the long-term period from 1995 to 2020 is applied. The evaluation of RQ2 is supported by two hypotheses (H). H1: Changes in population development affect the number of enterprises at a statistically significant level. H2: Changes in population development affect the size of companies in a statistically significant variable. The results indicate that demographic trends associated with generational changes are reshaping the labour market structure, with the most significant impact observed in industries with high skill requirements and the segment of small and medium-sized enterprises. These businesses are flexible yet particularly vulnerable to shortages of skilled labour.”

From a paper by Giorgio Liotti, Marco Musella, and Ferdinando Ofria:

“Mainstream economic theory posits that high public debt levels create fragile conditions within the Eurozone by undermining economic growth, forcing countries to borrow on financial markets through the issuance of government bonds, and compromising the smooth functioning of the economic system. The Washington Consensus advocates fiscal austerity as a strategy to reduce public debt. This paper assesses whether the implementation of such austerity policies indeed reduces public debt. Using data on the change in cyclically adjusted primary balance in twelve Eurozone countries between 1999 and 2019 as a proxy for austerity measures, the empirical results, obtained using a Panel Dynamic OLS (PDOLS), reject the hypothesis of an inverse relationship between changes in the cyclically adjusted primary balance and the level of public debt. Conversely, we find that the adoption of fiscal austerity measures is associated with an increase in the level of public debt.”

From a paper by João Tovar Jalles, Carola Pessino, and Ana Cristina CalderonInter:

“Widening income disparities, higher corruption, and increased informality in many emerging market and developing economies (EMDEs)—all with pressing and mounting fiscal problems—have rekindled interest in the empirical analysis of the key factors determining the occurrence of fiscal consolidations. Using discrete choice models, this paper examines the drivers of fiscal consolidation episodes in a sample of 148 EMDEs between 1980 and 2019, with a focus on Latin American and Caribbean countries. Inequality does not seem to drive consolidations—which are more likely during good economic times—while more informality increases the probability of their occurrence and corruption decreases it. In turn, when examining the drivers of successful consolidations, larger income inequality acts as a boost, while informality is a hinderance. In fact, while the size of the public investment multiplier in Latin America and the Caribbean is larger than in other regions, when informality is high, the multiplier effect is reduced to a much lower and insignificant magnitude. Results are robust to several sensitivity and robustness tests.”

From a paper by Óscar Peláez-Herreros:

“The paper develops a decomposition of the Okun coefficient that allows us to know what part of its value is due to the direct effect of real GDP growth on the unemployment rate and what other part is due to the indirect effects through variations in: production per hour, hours worked per employed person, participation rate, and population. The procedure applies to the 38 OECD states with annual data from 1995 to 2019. The results show large differences between states in the Okun coefficients and in their component factors. However, there are also groups of countries that share dynamics. The advantage of the proposed technique is that it identifies the factors that cause differences and helps to adopt macroeconomic policies more appropriate to each case.”

From a paper by Magdalena Cornejo, Michelle Hallack, and David Matias:

“This paper examines the role of renewable electricity adoption in mitigating the impact of international fossil fuel price shocks on inflation in Latin America and the Caribbean (LAC), the region with the highest proportion of renewables in its energy mix. Utilizing data from 18 LAC countries spanning 2005 to 2021, we show that renewable electricity significantly reduces the transmission of fossil fuel price shocks to both energy-specific and overall inflation. Our findings indicate that countries with larger shares of renewable electricity generation experience notably smaller inflationary impacts in response to fluctuations in global oil prices. These results underscore the positive externalities of renewable energy investment, particularly its potential to reduce the transmission of global energy price volatility to local inflation.”