Research
Publications
(with May Aye Thiri)
The Fukushima Nuclear Accident triggered an energy predicament in Japan, necessitating initiatives to decarbonise and denuclearise its energy landscape. This shift has intensified reliance on fossil fuels, notably coal, inciting widespread anti-coal disputes throughout the nation. This research scrutinises the dynamics of carbon emissions and their interrelation with climate activism narratives, emphasising the mobilisation of communities to confront issues of inequality and justice. Employing a club convergence methodology, this study analyses the patterns of carbon emissions from fossil fuels across 47 administrative divisions in Japan from 1990 to 2020. This quantitative analysis is enriched with a qualitative content analysis of anti-coal movements, utilising the comprehensive Global Atlas of Environmental Justice (EJAtlas) as a primary resource. The findings disclose pronounced sub-national disparities in energy transitions and carbon emissions. Narratives within anti-coal activism predominantly encompass themes of global warming, air and water pollution, social and cultural impacts, and health repercussions. We find that regions with historically high emissions predominantly embrace narratives of climate and environmental justice, whereas rural regions experiencing escalating emissions integrate these with narratives of peripheralisation. The opposition to technocratic resolutions and the endorsement for transitions to low carbon society are salient within these movements, resonating with the degrowth paradigm advocating for equitable and sustainable alternatives. This research underscores the pivotal role of social movements in mitigating regional emissions disparities and illustrates the evolution of grassroots movements towards embracing sustainable alternatives.
Keywords: Carbon Emissions, Climate Activism, Energy Transition, Japan, Environmental Justice, Social Movements
Disentangling Aporophobia from Xenophobia in the EU-15 (Regional Studies, 2024)
(with Octasiano Miguel Valerio Mendoza and Flavio Comim)
This paper analyzes whether the human capital levels embodied in immigrants can explain xenophobic trends for 126 regions in 14 EU15 countries from 1998 to 2018. It tests if xenophobic regions may be rejecting immigrants because they are poor, a phenomenon recently defined as “aporophobia”. The results indicate that larger inflows of low-educated immigrants working in low-skilled occupations are significantly correlated with a higher rejection of migrants, thus confirming the aporophobia hypothesis. The findings in this paper bring light into the discussion of a powerful concept which underpins the need for a more just society.
J.E.L. Classification: I3; J15; R1
Keywords: Aporophobia; Xenophobia; Human capital; Immigration; European regions
(with Octasiano Miguel Valerio Mendoza and Flavio Comim)
This paper investigates the evolution of human capital in China for 31 provinces over the period of 1985–2016 from a club convergence perspective. Per capita human capital stocks, estimated using the Jorgenson–Fraumeni lifetime income approach, are for the first time examined within a non-linear latent factor framework that allows to model a wide range of transition dynamics for each province along the path to convergence. The study finds no overall convergence between provinces in China, however, the results strongly support the existence of multiple convergence clubs. While a small group of provinces are converging toward the highest levels of human capital, most of the other provinces are failing to catch up and form separate clusters that converge to lower equilibria. These regional patterns provide new evidence on the increasing human capital gap between Chinese provinces, posing a significant challenge to a more inclusive and harmonious human and economic development.
J.E.L. Classification: C33; I25; O15; O53; R11
Keywords: Human capital; Club convergence; Dynamic factor model; Asia; China
(with Octasiano Miguel Valerio Mendoza and Flavio Comim)
This paper proposes and estimates three novel higher education indices for 31 Chinese provinces: i) the Chinese Higher Education Density Index (CHEDI) to analyze the evolution of the quantitative distribution of higher education institutions (HEIs) in each province from 2001 to 2017, which is further decomposed into subgroups based on the type of college, i.e., four-year undergraduate colleges, two-year vocational colleges, and private institutions; ii) the Chinese Higher Education Quality Index (CHEQI) to examine the supply of higher education in terms of quality using a university ranking system; and iii) the Chinese Higher Education Index (CHEI), a composite indicator that incorporates both the quantity and quality dimensions of higher education institutions for each province, providing a weighted measure of the supply of higher education in China. The empirical findings indicate a significant and persistent heterogeneity in the supply of higher education between provinces. The indices identify which regions have been substantially rewarded by the higher education expansion of recent decades, going from an undersupply to a proportionate supply of higher education institutions. On the other hand, a significant share of regions still has a low supply in terms of either the quantity or quality of HEIs, or both.
J.E.L. Classification: C43; I23; I26; O15
Keywords: Higher education; Human development; Index; Rankings; China
Credit contractions and unemployment (International Review of Economics & Finance, 2018)
This paper investigates the impact of private credit contractions on labor market performance. Impulse responses for total, youth, and long-term unemployment are estimated using local projections for a panel of 20 OECD countries over the period 1980-2013. The empirical findings suggest that a decline in private credit can generate sizable and statistically significant increases in all three unemployment measures. On average, credit contractions in the sample increase total unemployment rates by nearly 1 percentage point at the peak. This effect is even stronger for youth unemployment. The persistent impact on long-term unemployment emphasizes the sluggish recovery of labor markets following a credit downturn. The results also reveal that increases in joblessness depend heavily on the scale of the build-up in financial leverage prior to the onset of a contraction. Specifically, excessive credit booms tend to be followed by a significantly larger rise in unemployment in the subsequent bust phase. Moreover, credit contractions associated with rigid labor market institutions lead to disproportionately greater increases in unemployment. These findings underline the important relationship between disruptions in the credit market and unemployment fluctuations.
J.E.L. Classification: E24; E44; G10; J01
Keywords: Financial leverage; Private credit; Labor market; Unemployment; Local projections
Fiscal multipliers across the credit cycle (Journal of Macroeconomics, 2018)
This paper studies the differences between fiscal multipliers in OECD economies across the credit cycle. Impulse responses are obtained using a state-dependent model with direct projections, in which multipliers depend on the state of credit markets. Identification of the effects of fiscal stimulus and austerity measures is achieved by distinguishing between unanticipated increases and decreases in government spending. The empirical results imply that the financial environment matters. Expansionary fiscal policies are associated with large multipliers during credit crunch episodes, and spending increases likewise foster economic growth in periods of rapid credit expansion, albeit to a lesser extent. In contrast, the output effect of contractionary fiscal policies is never statistically different from zero. Regime-specific multipliers of the individual components of GDP and the unemployment rate suggest that reductions in public expenditure should help constrain the economy during unsustainable credit booms, whereas spending increases in financial recessions should facilitate the repair of private sector balance sheets in order to revive market confidence and boost economic recovery.
J.E.L. Classification:: E20; E44; E62; G10
Keywords: Credit cycle; Fiscal multiplier; Fiscal policy; Government spending; State dependence
The evolution of economic convergence in the European Union (Empirical Economics, 2015)
(with Norbert Metiu)
This paper investigates per capita real income convergence in the European Union (EU) within a non-linear latent factor framework. We establish a set of novel stylized facts on economic convergence between 1970 and 2010 in light of the institutional changes and macroeconomic adjustment processes undertaken over the last 40 years. Our findings suggest no overall income convergence in the EU, however, we identify convergence clubs using an iterative testing procedure. The clubs are formed mainly on the basis of geographic region, and clustering is not necessarily related to EMU membership. The empirical evidence suggests a clear separation between the new and old EU member states in the long run, and we observe a division along the South-East vs. North-West dimension since the 1990s.
J.E.L. Classification: C33; O47
Keywords: Club convergence; Dynamic factor model; Economic integration; Growth; New member states
Working Papers
Credit cycles and labor market slacks: predictive evidence from Markov-switching models (MPRA Paper 100362, 2020)
(with German Lopez Buenache and Alfonso Rosa-García)
We model unemployment and credit cycle dynamics as a Markov-switching process with two states to identify labor market slacks i.e., periods of unemployment above its natural rate. Our results for the US economy between 1955 and 2015 show that credit contractions improve the identification of high unemployment states. Moreover, we find that credit cycles have a sizable out- of-sample predictive power on labor market slacks. This implies that the evolution of credit can be used as a leading indicator for economic policies.
J.E.L. Classification: C32; 24; E32; E51
Keywords: Credit cycle; Unemployment; Forecast; Markov-switching
Fiscal multipliers across the credit cycle (Banco de España Working Paper No. 1618, 2018)
This paper studies the differences between fiscal multipliers in OECD economies across the credit cycle. Impulse responses are obtained using a state-dependent model with direct projections, in which multipliers depend on the state of credit markets. Identification of the effects of fiscal stimulus and austerity measures is achieved by distinguishing between unanticipated increases and decreases in government spending. The empirical results imply that the financial environment matters. Expansionary fiscal policies are associated with large multipliers during episodes of credit crunches, and spending increases likewise foster economic growth in periods of rapid credit expansions, albeit to a lesser extent. In contrast, the output effect of contractionary fiscal policies is never statistically different from zero. Regime-specific multipliers of the individual components of GDP and the unemployment rate suggest that reductions in public expenditure should help constrain the economy during unsustainable credit booms, whereas spending increases in financial recessions should facilitate the repair of private balance sheets in order to revive market confidence and boost economic recovery.
J.E.L. Classification:: E20; E44; E62; G10
Keywords: Credit cycle; Fiscal multiplier; Fiscal policy; Government spending; State dependence
Credit contractions and unemployment (Banco de España Working Paper No. 1617, (2018)
This paper investigates the impact of private credit contractions on labor market performance. Impulse responses for total, youth, and long-term unemployment are estimated using local projections for a panel of 20 OECD countries over the period 1980-2013. The empirical findings suggest that a decline in private credit can generate sizable and statistically significant increases in all three unemployment measures. On average, credit contractions in the sample increase total unemployment rates by nearly 1 percentage point at the peak. This effect is even stronger for youth unemployment. The persistent impact on long-term unemployment emphasizes the sluggish recovery of labor markets following a credit downturn. The results also reveal that increases in joblessness depend heavily on the run-up in financial leverage prior to the onset of a contraction. Specifically, excessive credit booms tend to be followed by a significantly larger rise in unemployment in the subsequent bust phase. Moreover, credit contractions associated with rigid labor market institutions lead to disproportionately greater increases in unemployment. These findings underline the important relationship between disruptions in the credit market and unemployment fluctuations.
J.E.L. Classification: E24; E44; G10; J01
Keywords: Financial leverage; Private credit; Labor market; Unemployment; Local projections
Real estate cycles: Evidence from Spain (Mimeo, 2011)
This study investigates the determinants of the cyclicality in real estate markets by presenting a specific example. Focusing on the Spanish real estate bubble is motivated by the controversy concerning its existence. In particular, I demonstrate that the upward spiral of property prices was, on one hand elicited by unique economic and demographical factors in Spain and, on the other, that it was also the consequence of speculative behavior in the market. I show that a mathematical model based on the stock-flow theory of highly durable goods is a perfect instrument to study the dynamic operation of housing markets by analyzing the reaction and adjustment of supply and prices to exogenous shocks. Within the framework of the model, I perform a qualitative analysis of the peculiarities of the Spanish housing market that generated the bubble. The main findings suggest that the speculative behavior, further aggravated by massive population growth combined with exceptionally low mortgage rates, altogether contributed to an asset price bubble in the Spanish housing market.
J.E.L. Classification: R11; R21; R23; R31
Keywords: Real estate cycles; Housing market; Housing bubble; Stock-flow; Spain
Other Publications
This paper discusses the hotly disputed and unique case of Transnistria, a region that has unilaterally declared independence within the sovereign country of Moldova. The article, originally published in the monthly newsletter of the Budapest-based ICEG European Research Center, focuses on the status and economy of the unrecognised but de facto independent region, putting it also into the perspective of international political attention.