4,959 research outputs found

    Religion and growth

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    We use the elements of a macroeconomic production function—physical capital, human capital, labor, and technology—together with standard growth models to frame the role of religion in economic growth. Unifying a growing literature, we argue that religion can enhance or impinge upon economic growth through all four elements because it shapes individual preferences, societal norms, and institutions. Religion affects physical capital accumulation by influencing thrift and financial development. It affects human capital through both religious and secular education. It affects population and labor by influencing work effort, fertility, and the demographic transition. And it affects total factor productivity by constraining or unleashing technological change and through rituals, legal institutions, political economy, and conflict. Synthesizing a disjoint literature in this way opens many interesting directions for future research

    Economic Policy Council Report 2023

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    The 2023 Report of the Economic Policy Council was published on 24.1.2024. The council's tenth report evaluates the government's economic policy. Talouspolitiikan arviointineuvoston vuoden 2023 raportti julkistettiin 24.1.2024. Arviointineuvoston kymmenes raportti käsittelee hallituksen talouspolitiikkaa. Raportti on kirjoitettu englanniksi.nonPeerReviewe

    Methods to estimate the circular economy rebound effect: a review

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    The transition to a circular economy can be undermined by rebound effects, which could mean secondary production does not fully displace virgin raw materials. So called ‘circular economy rebound’ is under examined in the academic literature and thus requires greater attention if it is to be successfully estimated and mitigated by decision and policy makers. Accordingly, this paper undertakes a systematic review of the methods that have been deployed to measure rebound effects of all types and identifies those quantitative tools that have yet to be utilised in the nascent area of circular economy rebound but which could have application in this context. In so doing, the paper also reflects on the data needs of different methods, as well as the magnitude of the different rebounds identified and potential mitigating strategies. Findings suggest clear research gaps within the rebound literature and identify areas in which estimation of the circular economy rebound specifically could benefit from this wider body of work on rebound assessment

    Clean innovation and heterogeneous financing costs

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    Access to finance is a major barrier to clean innovation. We incorporate heterogeneous and endogenous financing costs in a directed technical change model and identify optimal climate mitigation policies. The presence of a financing experienceeffect pushes the policy- maker to strengthen policies in the short-term, both to shift innovation and production towards clean sectors and to reduce the financing cost differential across technologies, which further facilitates the transition. The optimal climate policy mix between carbon taxes and clean research subsidies depends on the drivers of the experience effect. In our benchmark scenario, where clean financing costs decline as cumulative clean output increases, we find an optimal carbon price premium of 47% in 2025, relative to a case with no financing costs

    Towards a General Complex Systems Model of Economic Sanctions with Some Results Outlining Consequences of Sanctions on the Russian Economy and the World

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    The main purpose of this paper is to present a complex nonlinear modelling approach to analyzing mixed capitalist economic systems. An application of a more elaborate version of this model is to explore the consequences of sanctions on the Russian economy and evaluate the model’s predictive successes or failures. Furthermore, the formal expanded nonlinear model presented in the appendix may be seen as an initial step to put the analysis of economic sanctions within a formal complex socio-economic systems framework. The results obtained from this structural complex multisectoral model so far seem fairly accurate in terms of agreement with measured values of observable economic variables. The political consequences are uncertain and are to be explored separately in a companion paper and ultimately in a book length treatment. Methodologically, the paper also presents the case for using Social Accounting Matrix (SAM)-based models for understanding problems of analyzing sanctions in an economywide context. Linear as well as Nonlinear models are presented in the appendix. The nonlinear modelling approach might prove to be especially relevant for studying the properties of multiple equilibria and complex dynamics

    Annual Report 2022

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    Automation, Human Task Innovation, and Labor Share: Unveiling the Role of Elasticity of Substitution

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    This paper investigates the elements contributing to the decline in labor share, with a particular focus on the roles of 'automation' and 'innovation in human-exclusive tasks.' We construct a general equilibrium model that separately incorporates both robot and non-robot capital to derive a regression equation. The regression results reveal four major findings. First, we identify two distinct channels through which robots influence labor share: automation and the reduction in robot prices. We find that both channels negatively impact labor share. Our general equilibrium model predicts that the effect of decreasing robot prices will intensify as robots become more prevalent. Second, we are the first to empirically assess the impact of innovation in human-exclusive tasks on labor share. Our findings suggest that the positive influence of human-exclusive innovation outweighs the adverse effect of automation. Third, we estimate that the elasticity of substitution between labor and non-robot capital is less than one, while the elasticity of substitution between tasks is greater than, but close to, one. Lastly, based on these estimates, we clarify the mechanisms by which the prices of factors —labor, robots, and non-robot capital— influence labor share. Specifically, we observe that both the negative effect of automation and the positive effect of human-exclusive task innovation are amplified through the aggregated task price channel

    Consumption and time use responses to unemployment: Implications for the lifecycle model

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    In this study, we analyse the effects of unemployment on consumption and time use. To do so, we employ a micro panel dataset for the Netherlands containing a large set of expenditure and time use categories. Our results show a small negative effect of unemployment on expenditures, and large positive effects on time spent on home production and leisure activities. We do not find evidence for complementarity between leisure and consumption or for substitution between home production and expenditures. We use our results to estimate a ratio of relevant lifecycle parameters, and show that the point estimates and their precision depend strongly on the expenditure and time use categories considered

    Redistributive effects of pension reforms: who are the winners and losers?

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    As the heterogeneity in life expectancy by socioeconomic status increases, many pension systems imply a wealth transfer from short- to long-lived individuals. Various pension reforms aim to reduce inequalities that are caused by ex-ante differences in life expectancy. However, these pension reforms may induce redistribution effects. We introduce a dynamic general equilibrium-overlapping generations model with heterogeneous individuals that differ in their education, labor supply, lifetime income, and life expectancy. Within this framework we study six different pension reforms that foster the sustainability of the pension system and aim to account for heterogeneous life expectancy. Our results highlight that pension reforms have to be evaluated at various dimensions. Reforms that may increase the sustainability of the pension system are not necessarily conducive to reduce the redistributive wealth transfers from short- to long-lived individuals. Our paper emphasizes the need for studying pension reforms in models with behavioral feedback and heterogeneous socioeconomic groups
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