Trade,tropical deforestation and policy interventions

Trade interventions are increasingly advocated as a means for controlling timber-related tropical deforestation. This paper analyzes the impact on deforestation of such policy instruments in a dynamic framework. The forest is modelled as a potentially renewable resource, and timber is extracted for purposes of export and domestic consumption. Optimality conditions for a variety of model specifications are derived, and the impacts of changes in the terms of trade and market structure on long-run deforestation are analyzed. The results of this analysis suggest that trade interventions that seek to affect the terms of trade against the export of tropical timber products are in the long run a second-best policy option for influencing the deforestation process.We would like to thank Joanne Burgess for contributing to discussions that resulted in this paper, which were held at the Beijer Institute of Ecological Economics of the Royal Swedish Academy of Sciences. We acknowledge the financial support given by the Beijer Institute and the hospitality of its staff, and in particular we are grateful to Prof. Karl-Göran Mäler for inviting us to use the facilities at Beijer and to Charles Perrings, Director of the Biodiversity Programme. Additional support for Edward Barbier's participation in the research was also provided by the International Tropical Timber Organization, under contract no. PCM(XI)/4, Economic Linkages Between the International Trade in Tropical Timber and the Sustainable Management of Tropical Forests. We are grateful to comments provided by two anonymous referees; however, the usual disclaimer applies.     

The Impact of Personal Resources and Job Crafting Interventions on Work Engagement and Performance

This study examined the impact of organizational interventions on work engagement and performance. Based on the job demands–resources model, we hypothesized that a personal resources intervention and a job crafting intervention would have a positive impact on work engagement and performance. We used a quasi‐experimental design with a control group. Primary school teachers participated in the study at two time points with six weeks between the measurements ( N = 102). The results showed that the personal resources intervention had a positive causal effect on work engagement. Additionally, the joint personal resources and job crafting intervention had a positive impact on self‐ratings of job performance. We discuss the implications of these findings for theory and practice. © 2015 Wiley Periodicals, Inc.     

COVID-19, government interventions and emerging capital markets performance

In this study, we explore the impact of government intervention to contain the spread of COVID-19 in emerging countries on the performance of their leading stock indices. We retrieved data on the performance of 25 international capital market indices included in the MSCI Emerging Markets Index and data about the closures, economic, and health measures imposed in each country examined. Overall, our findings show that government restrictions are associated with negative market returns, possibly due to the anticipated adverse effect to the economy. The adverse effect is more evident when closures are imposed. The market response to economic stimulus is mild but varies depending on the type of intervention imposed, much as with the health measures. Public campaigns may raise public awareness about COVID-19, but they can also increase the public’s fear of the pandemic, reflected in the negative response in capital markets. The results are essential for understanding the trends and fluctuations in emerging markets during this current crisis and for preparing for crises in the future.     

ICoRSI’s comments on WHO’s draft global targets for road safety risk factors

Abstract

A recent United Nations General Assembly resolution has asked the World Health Organization (WHO) to develop voluntary global performance targets on key road safety risk factors. These targets will be used to track how well countries are doing in reducing deaths and injuries from traffic crashes. WHO has produced a draft set of country-level targets and invited feedback from state and nonstate actors. This document provides feedback from ICoRSI about the targets proposed by WHO.     

BARRIERS TO FORMAL SAVING: MICRO‐ AND MACROECONOMIC EFFECTS

This paper examines different barriers to formal saving, considering various interventions and their possible effects at microeconomic and macroeconomic levels. It presents a comprehensive review of the literature, based on a detailed classification of the barriers associated with supply‐side factors, related to access to financial products, and demand‐side barriers, related to the use and frequency of use of those products. The paper concludes that this classification and analysis contributes to a fuller understanding of the question of financial inclusion, and how to achieve it.     

The economic impact of lockdowns: A theoretical assessment

The sudden appearance of the SARS-CoV-2 virus and the onset of the COVID-19 pandemic triggered extreme and open-ended “lockdowns” to manage the disease. Should these drastic interventions be the blueprint for future epidemics? We construct an analytical framework, based on the theory of random matching, which makes explicit how epidemics spread through economic activity. Imposing lockdowns by assumption not only prevents contagion and reduces healthcare costs, but also disrupts income-generation processes. We characterize how lockdowns impact the contagion process and social welfare. Numerical analysis suggests that protracted, open-ended lockdowns are generally suboptimal, bringing into question the policy responses seen in many countries.     

The COVID-19 Pandemic and Sovereign Bond Risk

Governments around the world are tackling the COVID-19 pandemic with a mix of public health, fiscal, macroprudential, monetary, and/or market-based policies. We assess the impact of the pandemic in Europe on sovereign CDS spreads using an event study methodology. We find that a higher number of cases and deaths and public health containment responses significantly increase the uncertainty among investors in European government bonds. Other governmental policies magnify the effect in the short run as supply chains are disrupted. Moreover, an increased debt-to-GDP ratio significantly boosts the cumulative abnormal change of CDS spreads, which indicates that investors are concerned about countries that are too indebted and thus have a limited capacity to intervene and provide fiscal stimuli and emergency fiscal packages to businesses and households.     

The immediate and subsequent effects of public health interventions for COVID-19 on the leisure and recreation industry

Public health interventions to combat COVID-19 can be viewed as an exogenous shock to the economy, especially for industries—such as leisure, recreation, and tourism—that rely heavily on human mobility. This study investigates whether and how exactly the economic impact of government public health policies varies over time. Focusing on the leisure and recreation industry, we use data for 131 countries/regions from February to May 2020 and employ generalized difference-in-differences models to investigate the short- and longer-term effects of public health policies. We find that stricter policies lead, on average, to an immediate 9.2–percentage-point drop in leisure and recreation participation. Even so, that industry recovers in about seven weeks after a COVID-19 outbreak in countries/regions that undertake active interventions. After thirteen weeks, leisure and recreation involvement recovers to 70% of pre-pandemic levels in a place that actively intervened but stagnates at about 40% in one that did not.     

Energy efficiency and heating technology investments: Manipulating financial information in a discrete choice experiment

We elicit homeowners’ willingness to pay (WTP) for energy efficiency and low-carbon technologies in the context of heating appliance replacement. We employ a within-between subject design that involves manipulating information in a two-stage discrete choice experiment (DCE) and use WTP space estimation to identify the role of financial information in reducing fossil fuel use. We find that homeowners’ average valuation of energy efficiency exceeds associated heating cost savings, suggesting that they also consider non-monetary benefits when evaluating this type of investment, whereas information about private and pro-social benefits of investments only has a limited impact on WTP. Evidence also suggests that homeowners have a strong preference for the existing technology. Consequently, fossil fuel users’ WTP for switching to low-carbon technologies does not cover respective investment cost differentials, and we derive evidence on how combined subsidies and information can induce these users to opt out of fossil technologies.     

Does wage-inflation targeting complement foreign exchange intervention? An evaluation of a multi-target,two-instrument monetary policy framework

We assess the inclusion of wage inflation as an intermediate target of an emerging central bank using a dynamic stochastic general equilibrium model with sticky wages and prices calibrated for the South Korean economy. The model includes wage inflation as an additional target jointly with domestic price inflation and the output gap in a Taylor- type interest rate rule operating with a sterilized foreign exchange (FX) intervention rule. Our results show a complementary relationship between wage inflation targeting and price inflation targeting. That is, by supplementing price inflation targeting with wage inflation targeting, welfare improves for cases with and without sterilized FX intervention. When intervention is in place, wage inflation targeting has the added advantage of reducing the volatilities of nominal exchange rate and foreign exchange reserves thereby promoting a more sustainable conduct of FX intervention.