scholarly journals Inflation Expectations and Risk Premia in Emerging Bond Markets: Evidence from Mexico

2021 ◽  
pp. 1.000-74.000
Author(s):  
Stephie Fried ◽  
Keyword(s):  
Climate Change ◽  
Moral Hazard ◽  
Damage Function ◽  
Inflation Expectations ◽  
Heterogeneous Agent ◽  
Disaster Policy ◽  
Us Economy ◽  
The Us ◽  
Federal Subsidies ◽  
Disaster Aid

Can we reduce the damage from climate change by investing in seawalls, stilts, or other forms of adaptation? Focusing on the case of severe storms in the US, I develop a macro heterogeneous-agent model to quantify the interactions between adaptation, federal disaster policy, and climate change. The model departs from the standard climate damage function and incorporates the damage from storms as the realization of idiosyncratic shocks. I find that while the moral hazard effects from disaster aid reduce adaptation in the US economy, federal subsidies for investment in adaptation more than correct for the moral hazard. I introduce climate change into the model as a permanent increase in either or both the severity or probability of storms. Adaptation reduces the damage from this climate change by approximately one third. Finally, I show that modeling the idiosyncratic risk component of climate damage has quantitatively important implications for adaptation and for the welfare cost of climate change.

Rethinking U.S. National Security after Covid19

2020 ◽  
Vol 26 (3) ◽  
Author(s):  
Linda J. Bilmes
Keyword(s):  
Climate Change ◽  
United States ◽  
National Security ◽  
The United States ◽  
Emerging Diseases ◽  
Defense Spending ◽  
Federal Spending ◽  
Us Economy ◽  
The Us ◽  
The Military

AbstractThe United States has traditionally defined national security in the context of military threats and addressed them through military spending. This article considers whether the United States will rethink this mindset following the disruption of the Covid19 pandemic, during which a non-military actor has inflicted widespread harm. The author argues that the US will not redefine national security explicitly due to the importance of the military in the US economy and the bipartisan trend toward growing the military budget since 2001. However, the pandemic has opened the floodgates with respect to federal spending. This shift will enable the next administration to allocate greater resources to non-military threats such as climate change and emerging diseases, even as it continues to increase defense spending to address traditionally defined military threats such as hypersonics and cyberterrorism.

scholarly journals Fiscal Foundations of Inflation: Imperfect Knowledge

2018 ◽  
Vol 108 (9) ◽  
pp. 2551-2589 ◽  
Author(s):  
Stefano Eusepi ◽  
Bruce Preston
Keyword(s):  
Monetary Policy ◽  
Public Debt ◽  
Wealth Effects ◽  
Inflation Expectations ◽  
Ricardian Equivalence ◽  
The Public ◽  
Us Economy ◽  
The Us ◽  
Imperfect Knowledge ◽  
Consumption Demand

This paper proposes a theory of the fiscal foundations of inflation based on imperfect knowledge and learning. Because imperfect knowledge breaks Ricardian equivalence, the scale and composition of the public debt matter for inflation. High and moderate duration debt generates wealth effects on consumption demand that impairs the intertemporal substitution channel of monetary policy: aggressive monetary policy is required to anchor inflation expectations. Counterfactual experiments conducted in an estimated model reveal that the US economy would have been substantially more volatile over the Great Inflation and Great Moderation periods if US debt levels had been those observed in Italy or Japan. (JEL D84, E31, E32, E52, E62, H63)

Biden will wield expert US foreign policy team

2020 ◽  
Keyword(s):  
Climate Change ◽  
African American ◽  
National Security ◽  
Minority Rights ◽  
Us Foreign Policy ◽  
Security Threats ◽  
Content Type ◽  
Military Career ◽  
Us Economy ◽  
The Us

Significance If confirmed by the Senate, Austin will be the first African-American in that post. His selection is strongly supported by minority rights groups, partly because his military career immunises him from any claims of tokenism. This comes as Biden is announcing his wider national security team. Impacts It will be far easier to confirm Biden nominees if the Democrats hold the Senate. Biden’s attention will be arrested by COVID-19 and the US economy. Biden will increase the focus on non-traditional security threats including climate change and disease.

scholarly journals The Macroeconomic Effects of Oil Supply News: Evidence from OPEC Announcements

2021 ◽  
Vol 111 (4) ◽  
pp. 1092-1125
Author(s):  
Diego R. Känzig
Keyword(s):  
High Frequency ◽  
High Frequency Data ◽  
Inflation Expectations ◽  
Frequency Data ◽  
Oil Supply ◽  
Us Economy ◽  
News Shock ◽  
The Us ◽  
Negative News ◽  
Macroeconomic Effects

This paper studies how changes in oil supply expectations affect the oil price and the macroeconomy. Using a novel identification design, exploiting institutional features of OPEC and high-frequency data, I identify an oil supply news shock. These shocks have statistically and economically significant effects. Negative news leads to an immediate increase in oil prices, a gradual fall in oil production, and an increase in inventories. This has consequences for the US economy: activity falls, prices and inflation expectations rise, and the dollar depreciates, providing evidence for a strong channel operating through supply expectations. (JEL E31, E32, F31, Q35, Q38, Q43)

scholarly journals WHAT TO EXPECT FROM SECTORAL TRADING: A US-CHINA EXAMPLE

2011 ◽  
Vol 02 (01) ◽  
pp. 9-26 ◽  
Author(s):  
CLAIRE GAVARD ◽  
NIVEN WINCHESTER ◽  
HENRY JACOBY ◽  
SERGEY PALTSEV
Keyword(s):  
Climate Change ◽  
Electricity Generation ◽  
Electricity Sector ◽  
Low Carbon ◽  
Cap And Trade ◽  
Us Economy ◽  
Early Action ◽  
The Us ◽  
The Cost ◽  
Low Carbon Technologies

In the recent United Nations Framework Convention on Climate Change (UNFCCC) negotiations, sectoral trading was proposed to encourage early action and spur investment in low carbon technologies in developing countries. This mechanism involves including a sector from one or more nations in an international cap-and-trade system. We analyze trade in carbon permits between the Chinese electricity sector and a US economy-wide cap-and-trade program using the MIT Emissions Prediction and Policy Analysis (EPPA) model. In 2030, the US purchases permits valued at $42 billion from China, which represents 46% of its capped emissions. In China, sectoral trading increases the price of electricity and reduces aggregate electricity generation, especially from coal. However, sectoral trading induces only moderate increases in generation from nuclear and renewables. We also observe increases in emission from other sectors. In the US, the availability of cheap emissions permits reduces the cost of climate policy and increases electricity generation.

scholarly journals A Tale of Two Bases: Progressive Taxation of Capital and Labor Income

2021 ◽  
Vol 49 (3) ◽  
pp. 335-391
Author(s):  
Rachel Moore ◽  
Brandon Pecoraro
Keyword(s):  
Labor Income ◽  
Tax Rates ◽  
Capital Income ◽  
Heterogeneous Agent ◽  
Us Economy ◽  
The Us ◽  
Marginal Tax Rates ◽  
Saving Decisions ◽  
Jobs Act ◽  
Modeling Feature

Macroeconomic models routinely abstract simultaneously from two features of the US federal tax code: the joint taxation of ordinary capital and labor income and the special taxation of preferential capital income. In this article, we argue that this abstraction omits a “portfolio-effect” mechanism where endogenous changes to the ordinary-preferential composition of households’ capital income influence individuals’ optimal labor and saving decisions through its impact on their effective marginal tax rates. We demonstrate the quantitative importance of this tax detail by simulating provisions from the recently enacted “Tax Cuts and Jobs Act” using a heterogeneous-agent overlapping generations framework calibrated to the US economy. Our findings imply that accounting for the detailed taxation of labor and capital income should be considered an important modeling feature for tax policy analysis.

scholarly journals The Green New Deal, Financial Statements and the Accounting Profession

2021 ◽  
Vol 9 (1) ◽  
pp. 88-92
Author(s):  
Dr. Sunita Rao
Keyword(s):  
Climate Change ◽  
New Deal ◽  
Financial Reporting ◽  
Systemic Change ◽  
Financial Statements ◽  
Accounting Profession ◽  
Us Economy ◽  
The Us

Climate change is real and immediate. The Green New deal (GND) is a set of policies, measures, events and actions designed to bring about systemic change to counter the effects of the catastrophic effects of climate change. These policies, measures, events and actions will deeply impact the accounting profession and the financial statements, since it aims to transform the US economy in a sustainable way by focusing on the long term. This article discusses the effects of GND on financial reporting and disclosure.

scholarly journals The Efforts of Indonesian Companies in Improving The Global Economy by Using GCG

2021 ◽  
Author(s):  
Andrean Cristian Andreas
Keyword(s):  
World Trade ◽  
Global Economy ◽  
Economic Conditions ◽  
Inflation Expectations ◽  
Trade Volume ◽  
Business People ◽  
Trade Relations ◽  
Us Economy ◽  
Financial Uncertainty ◽  
The Us

Global economic conditions in 2018 tended to be sluggish and unbalanced, followed by high global financial uncertainty. The US economy appears to be growing strongly, but inflation expectations remain high, so the Fed tends to choose to raise its benchmark interest rate. The economies of Europe and China are also expected to grow slowly. In addition, world trade volume is also predicted to be low due to worsening trade relations between countries. In an era of economic disruption that is expected to occur until 2020, business people in Indonesia are required to constantly update, innovate, and create diversification in order to survive in the market.

scholarly journals The Efforts of Indonesian Companies in Improving The Global Economy by Using GCG

2021 ◽  
Author(s):  
Andrean Cristian Andreas
Keyword(s):  
World Trade ◽  
Global Economy ◽  
Economic Conditions ◽  
Inflation Expectations ◽  
Trade Volume ◽  
Business People ◽  
Trade Relations ◽  
Us Economy ◽  
Financial Uncertainty ◽  
The Us

Global economic conditions in 2018 tended to be sluggish and unbalanced, followed by high global financial uncertainty. The US economy appears to be growing strongly, but inflation expectations remain high, so the Fed tends to choose to raise its benchmark interest rate. The economies of Europe and China are also expected to grow slowly. In addition, world trade volume is also predicted to be low due to worsening trade relations between countries. In an era of economic disruption that is expected to occur until 2020, business people in Indonesia are required to constantly update, innovate, and create diversification in order to survive in the market.

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