The Unassuming Economist

From a paper by Hagen Kruse:

“This study documented for the first-time patterns in export specialization from an activity perspective, and showed how it can generate additional insights beyond those based on the product perspective. First, export incomes from production activities decline and engineering, managerial, and services support activities grow as countries develop. Second, countries initially specialize along the extensive margin (shifting activities across industries) but later along the intensive margin (shifting activities across occupational classes). Third, new activity specialization is strongly related to the proximity of this activity to the initial export basket, in particular for specializations along the extensive margin and in routine intensive occupations. Fourth, countries that defy proximity and diversify quicker appear to grow faster in GDP per capita. This is correlation however and no claim for causation is made.

We see at least two promising avenues for further research. One avenue is in the modelling of structural change and the role of international trade. The canonical macro-structural change framework focuses on the sectoral composition of the economy in terms of employment and value-added. Trade can shape the sectoral composition in various ways (Alessandria, Yi and Johnson 2021). Lower trade barriers facilitate specialization for example through shifting comparative advantage and promoting economies of scale. Sectoral specialization will consequently affect the sectoral composition of the economy. And given a set of trade barriers, policy changes or technology shocks to the economy may also affect specialization patterns and consequently sector composition. Trade barriers are typically related to products whereas technological change such as automation affects particular activities rather than products or sectors. Modelling the composition of the economy in terms of activities in addition to sectors appears therefore to be a promising way forward as for example in Bárány and Siegel (2018) and Duernecker and Herrendorf (2022).”

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From a paper by Feng Wang and Mengdie Qu:

“Income inequality and energy poverty are critical obstacles to the worldwide low-carbon transformation and deeply affect human behavior. Applying a dynamic panel data model, this study investigates the effect of income inequality and energy poverty on global carbon emissions. We determine the effect of the interaction between income inequality and energy poverty on the global low-carbon transformation based on a panel data set of 193 countries from 1990 to 2019. A one standard deviation decrease in the Gini coefficient causes a 2.98 % decrease in carbon emissions per capita, with the median value of energy poverty. However, in poor countries where the proportion of population with access to electricity is less than 86.0 %, reducing income inequality will increase carbon emissions. The role of energy poverty on carbon emissions per capita is also affected by income inequality. When the Gini coefficient is lower than 0.461, increasing access to electricity will reduce carbon emissions. In contrast, when the Gini coefficient is higher than the critical value of 0.461, increased access to electricity will raise carbon emissions. These findings indicate a new strategy for advancing low-carbon transformation based on the interrelationship between income equality and energy poverty eradication.”

From the World Economic Forum:

“Imagine a city in Asia and the Pacific, in 2030, where sustainability flourishes, public services are accessible to all, and green spaces abound amid bustling urban life. In several cities across the region, local governments are moving towards achieving such a vision, but progress is slow.

But time is of the essence, and the cities of tomorrow will be shaped by decisions made today. The building of resilient, equitable and sustainable urban environments requires a new type of city leadership that champions a transformative approach that goes way beyond traditional urban management.

In today’s world, cities account for more than 70% of global carbon dioxide (CO2) emissions, mainly from transportation and buildings. By 2050, rapid urbanization will add 1.2 billion people to cities in Asia and the Pacific, putting immense pressure on already strained infrastructure and services, compounded by the impacts of climate change.

Without rapid transformation, many cities in Asia Pacific will see rising inequalities and be even more vulnerable to climate-induced disasters.

Six of the 10 countries most affected by climate-related events over the past two decades lie in Asia and the Pacific, compounding to the vulnerability of some of the growing cities. This unfolds as many of them already struggle to provide basic services like clean water, affordable housing and reliable energy for their growing populations.”

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From a paper by Ahmed Hefnaoui and Ibnouzahir Youssef:

“This study assesses the effectiveness of Morocco’s monetary policy following the adoption of inflation targeting in 2006. The objective is to evaluate whether this strategy has stabilized inflation and supported economic growth. The methodology is based on a VAR model using quarterly data from 2007 to 2023, with Granger causality tests and impulse response functions to capture the simultaneous effects between monetary variables. The results indicate that inflation in Morocco is driven by shocks to the exchange rate and money supply, while the effect of the policy rate remains limited. Although monetary interventions have short-term effectiveness, their moderate impact suggests the need for structural reforms to enhance inflation targeting efficiency.”

From a paper by Tibor Rutar:

“High or rising economic inequality can exacerbate political inequalities and is plausibly linked with some
social harms, such as health problems and declines in happiness and trust. Within-country income inequality increased sharply across most of the world since the 1980s. One prominent critical sociological account of this occurrence points toward institutions of free-market capitalism, or “neoliberalism,” as a key cause that unleashed inequality during the globalization age. This article empirically operationalizes free-market institutions with the use of Fraser Institute’s index of economic freedom and examines the issue with fixed-effects regressions in a novel dataset of 130 countries between the years 2000 and 2021. It finds a substantial positive correlation between the two variables in the developing, though not the developed, world. This finding is robust to a variety of alternative specifications. Moreover, across specifications, modest size of government and freedom of international trade stand out as the two clear components of economic freedom driving the aggregate relationship. Finally, mediation analysis suggests there also exists an indirect ameliorative relationship between economic freedom and inequality through the conduit of economic development.”