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So viel kostet FremdenfeindlichkeitReint GroppSüddeutsche Zeitung, 1. September 2026
Exploiting the heteroskedasticity of the changes in short-term and long-term interest rates and exchange rates around the FOMC announcement, we identify three structural monetary policy shocks. We eliminate the predictable part of the shocks and study their effects on financial variables and macro variables. The first shock resembles a conventional monetary policy shock, and the second resembles an unconventional monetary shock. The third shock leads to an increase in interest rates, stock prices, industrial production, consumer prices, and commodity prices. At the same time, the excess bond premium and uncertainty decrease, and the U.S. dollar depreciates. Therefore, this third shock combines all the characteristics of a central bank information shock.
We show an equivalence result in the representative-agent New-Keynesian model after demand, wage-markup and correlated price-markup and TFP shocks: assuming sticky prices and flexible wages yields identical allocations for GDP, consumption, labor, inflation and interest rates to the opposite case—flexible prices and sticky wages. This equivalence arises with identical price and wage Phillips-curve slopes and generalizes to any slopes' pair whose sum and product are identical. Equilibrium profits and wages are, however, substantially different; equivalence breaks when these factor-distributional implications matter for aggregate allocations, e.g. in New-Keynesian models with heterogeneous agents, endogenous firm entry, and non-constant returns to scale.
Vietnam, a low middle-income economy, grapples with considerable climate impacts, primarily driven by heat waves, sea level rise, and tropical cyclones. Under ongoing global warming, these extreme weather events are projected to further intensify. We use a dynamic general equilibrium model to study economic transition dynamics from 2015 to 2100, accounting for heat-induced labor productivity losses, agricultural land loss from sea level rise, and residential property damage from tropical cyclones. We compare a Paris-compatible strong mitigation scenario where global warming is limited to well below 2 °C above preindustrial levels to a strong emission scenario where warming reaches 4–5 °C. We find that the impacts of climate change on output and investment are highly uncertain, with differences between the two emission scenarios remaining statistically insignificant until the end of the century, despite substantially higher climate forcing in the latter. By contrast, consumption losses are significantly larger under the high emission scenario. These negative impacts are primarily driven by heat-induced labor productivity losses, while TCs are the main source of uncertainty. Our findings highlight the need for analytical frameworks to capture the different channels through which climate and climate change affect economic development, rather than focusing mainly on output-related damage, as done in many existing studies.
This study employs synthetic control methods to estimate the effect of the Iberian exception mechanism on wholesale electricity prices and consumer inflation, for both Spain and Portugal. We find that the intervention led to an average reduction of approximately 40% in the spot price of electricity between July 2022 and June 2023 in both Spain and Portugal. Regarding overall inflation, we observe notable differences between the two countries. In Spain, the intervention has an immediate effect, and results in an average decrease of 3.5 percentage points over the twelve months under consideration. In Portugal, however, the impact is small and generally close to zero. Different electricity market structures in each country are a plausible explanation.
This study investigates the impact of inaccurate assumptions on economic forecast precision. We construct a new dataset comprising an unbalanced panel of annual German GDP forecasts from various institutions, taking into account their underlying assumptions. We explicitly control for different forecast horizons to reflect the information available at the time of release. Our analysis reveals that approximately 75% of the variation in squared forecast errors can be attributed to the variation in squared errors of the initial assumptions. This finding emphasizes the importance of accurate assumptions in economic forecasting and suggests that forecasters should transparently disclose their assumptions to enhance the usefulness of their forecasts in shaping effective policy recommendations.
This study employs bilateral data on external assets to examine the impact of climate policies on the reallocation of international capital. We find that the stringency of climate policy in the destination country is significantly and positively associated with an increase in the allocation of portfolio equity and banking investment to that country. However, it does not show significant effects on the allocation of foreign direct investment and portfolio debt. Our findings are not driven by valuation effects, and we present evidence that suggests diversification, suasion, and uncertainty mitigation as possible underlying mechanisms.
Using brand-level sales data from Chinese e-commerce platforms, this study examines how geopolitical tensions affect multinational brands operating in China. Merging these sales data with a U.S.–China tension index, we use panel regressions and local projections to show that rising tensions significantly reduce the market share of U.S. brands in China relative to brands from other countries, with the effects persisting for up to 12 months. An event study employing a difference-in-differences framework, centered on brand-specific incidents of political tension with China, reveals similar market share declines among affected brands, highlighting consumer sentiment as a key transmission channel.
Climate policy design must balance emissions mitigation with concerns for fairness, particularly as climate change disproportionately affects the poorest households within and across countries. Integrated Assessment Models used for global climate policy evaluation have so far typically not considered inequality effects within countries. To fill this gap, we develop a global Integrated Assessment Model representing national economies and subnational income, mitigation cost, and climate damage distribution and assess a range of climate policy schemes with varying levels of effort sharing across countries and households. The schemes are consistent with limiting temperature increases to 2 °C and account for the possibility to use carbon tax revenues to address distributional effects within and between countries. We find that carbon taxation with redistribution improves global welfare and reduces inequality, with the most substantial gains achieved under uniform taxation paired with global per capita transfers. A Loss and Damage mechanism offers significant welfare improvements in vulnerable countries while requiring only a modest share of global carbon revenues in the medium term. The poorest households within all countries may benefit from the transfer scheme, in particular when some redistribution is made at the country level. Our findings underscore the potential for climate policy to advance both environmental and social goals, provided revenue recycling mechanisms are effectively implemented. In particular, they demonstrate the feasibility of a welfare improving global climate policy involving limited international redistribution.
The European Commission’s growth forecasts play a crucial role in shaping policies and provide a benchmark for many (national) forecasters. The annual forecasts are built on quarterly estimates, which do not receive much attention and are hardly known. Therefore, this paper provides a comprehensive analysis of multi-period ahead quarterly GDP growth forecasts for the European Union (EU), euro area, and several EU member states with respect to first-release and current-release data. Forecast revisions and forecast errors are analyzed, and the results show that the forecasts are not systematically biased. However, GDP forecasts for several member states tend to be overestimated at short-time horizons. Furthermore, the final forecast revision in the current quarter is generally downward biased for almost all countries. Overall, the differences in mean forecast errors are minor when using real-time data or pseudo-real-time data and these differences do not significantly impact the overall assessment of the forecasts’ quality. Additionally, the forecast performance varies across countries, with smaller countries and Central and Eastern European countries (CEECs) experiencing larger forecast errors. The paper provides evidence that there is still potential for improvement in forecasting techniques both for nowcasts but also forecasts up to eight quarters ahead. In the latter case, the performance of the mean forecast tends to be superior for many countries.
Climate change and inequality are critical and interrelated issues. Despite growing empirical evidence on the distributional implications of climate policies and climate risks, mainstream model-based assessments are often silent on the interplay between climate change and economic inequality. Here we fill this gap through an ensemble of eight large-scale integrated assessment models that belong to different economic paradigms and feature income heterogeneity. We quantify the distributional implications of climate impacts and of the varying compensation schemes of climate policies compatible with the goals of the Paris Agreement. By 2100, climate impacts will increase inequality by 1.4 points of the Gini index on average. Maintaining global mean temperature below 1.5 °C reduces long-term inequality increase by two-thirds but increases it slightly in the short term. However, equal per-capita redistribution can offset the short-term effect, lowering the Gini index by almost two points. We quantify model uncertainty and find robust evidence that well-designed policies can help stabilize climate and promote economic inclusion.
