ABSTRACT This note studies the effect of production taxation on entry in a standard Spence‐Dixit model of entry game. Taxation reduces both the sunk cost thresholds that block and deter the potential competitor's entry. However, the interaction between taxation and market structure can have important policy implications: in fact, for appropriate ranges of tax rates, a contested monopoly can generate higher tax revenues and social welfare than a Stackelberg duopoly.

ABSTRACT Environmental sustainability has emerged as a primary policy imperative in the global battle against climate change. Yet, there remains a notable deficiency in efforts to ensure sustainability and formulate effective policies, particularly within developing economies. To address this crucial gap, we investigate the inverted load capacity curve (ILCC) hypothesis, analyzing the influence of life expectancy, environmental policy stringency, and renewable energy consumption on environmental sustainability across BRICS nations from 1998 to 2020. Utilizing annual panel data, we introduce the inverted load capacity factor (ILCF) variable as a more comprehensive measure of load capacity excess, essential for assessing environmental sustainability. Employing heterogeneous panel data techniques, including canonical cointegrating regression and the fully modified least squares estimator, we account for cross‐sectional dependence and slope heterogeneity to yield unbiased and consistent estimates. Our findings underscore several key points: firstly, life expectancy and economic growth positively impact ILCF; secondly, increased renewable energy consumption contributes to enhanced environmental sustainability; thirdly, the effect of environmental policy stringency on ILCF varies; finally, the validity of the ILCC hypothesis is confirmed for BRICS nations, suggesting an inverted U‐shaped relationship between real income and ILCF. These results advocate for prioritized renewable energy investments by decision‐makers and policymakers in BRICS countries.

ABSTRACT This study first examined the function of social security schemes in moderating the adverse effects on child education of unemployment among household members. Using data from the 2019 non‐crisis period and the 2021 crisis period from the Thailand Socio‐Economic Survey, two‐step estimation models were employed due to the presence of a large number of censored observations. In addition, the validity of the results was supported by utilizing an instrumental variable approach to address the possibility of an endogeneity problem. Of greater importance, the negative effects of unemployment were moderated when unemployed household members were covered by social security schemes. The results show that the negative impact of unemployment on educational spending was significantly larger during the 2021 crisis period compared to the 2019 non‐crisis period. To further verify the mitigating role of SSS, the robustness of the results was also checked by including an interaction term between unemployment and SSS in two‐stage decision models, along with additional control variables.

ABSTRACTIn this study, the GARCH–MIDAS model is utilized to evaluate how predictable oil and energy market uncertainties are in relation to gold return volatility. We examine daily gold returns and monthly energy uncertainty measurements such as oil market uncertainty (OMU) and oil price uncertainty (OPU), as well as measurements of energy market uncertainties such as the global equally weighted energy uncertainty index (GEUI‐EQ), GDP‐weighted global energy uncertainty index (GEUI‐GDP), and country‐specific energy uncertainty indexes for 28 countries—spanning the period from January 1969 to October 2022. We calculate the total connectedness index (TCI) for the country‐specific indexes as a measure of the composite energy uncertainty index. We find that higher uncertainties in the oil and energy markets lead to increased gold volatilities, suggesting that gold can serve as a reliable hedge against oil and energy market uncertainties. Enhanced trading in the gold market raises its volatility as oil and energy market uncertainties increase. Our analysis, both within the sample and out‐of‐sample, supports this conclusion, and our findings remain valid even when alternative measures of oil and energy market uncertainties are considered. Further valuable insights, including the practical implications of our findings, extending beyond the hedging prowess of gold against heightened energy uncertainty, are also provided for practitioners, including investors and policymakers.

ABSTRACTInflation perceptions shape inflation expectations. However, little is known about the factors influencing these perceptions. In this study, we address this gap by employing threshold regressions to analyze the associations between changes in petrol and food prices—two of the most conspicuous prices—and inflation perceptions in New Zealand. Findings reveal a positive association between petrol and food price inflation on the one hand and inflation perceptions on the other, with some evidence suggesting closer associations for food price inflation. Furthermore, the relationships do not change when high inflation rates are considered instead of low inflation rates. Finally, inflation perceptions are more closely related to petrol and food price inflation over the previous year than just the most recent quarter.

ABSTRACTThe Australian Greens have recently proposed the establishment of a new federal government agency to build 360,000 extra homes over five years. These homes would be sold or rented at below‐market rates. The appraisal of this plan has so far been confined to a fiscal balance perspective, where completed homes are sold, rental income is received, and government administration and borrowing costs are serviced. This ignores the flow‐on effects on the broader economy from expanded residential building construction activity. This paper starts to fill this gap by using a simple Leontief input–output model to analyse a counterfactual in which the Greens' plan is partially implemented into the structure of the Australian economy in 2021–2022. In light of the $84.14 billion static change in the level of total national product that, other things equal, must have occurred to satisfy an augmented final use bill corresponding to the Greens' plan, the simulation finds that projected imposts on the federal budget are rendered relatively modest. Potential extensions and applications of the model for policymakers are considered. JEL Classification: D5, E1, P5

Abstract In the course of its steady development, China's financial landscape confronts an array of risks and challenges. Against the backdrop of China's sustained commitment to regional coordinated development strategies, the imperative of achieving coordinated financial stability across regions becomes paramount for fostering macro‐financial stability. This study addresses this imperative by formulating a regional financial stability index grounded in the provincial financial stability index. The ensuing analyses encompass the delineation of regional financial stability status, the quantification of disparities, and the scrutiny of temporal and spatial dynamics. Our findings reveal a relatively high level of regional financial stability in China, with a modest overall variance between national and regional financial stability. Notably, the financial stability of the eastern region assumes a pivotal role in influencing the nationwide financial stability landscape. The regional financial stability index demonstrates dynamic evolutionary features characterised by temporal fluctuations and discernible spatial differentiation patterns. Drawing upon these insights, the article proffers a set of targeted policy recommendations, with practical implications for fortifying macro‐financial stability not only in China but also in other nations.

Abstract Since its emergence in 2020, COVID‐19 has profoundly influenced the Taiwan economy and employment landscape, leading to differential impacts across sectors. In response to this unprecedented crisis, the Taiwanese government promptly enacted the “Special Regulations on the Prevention and Rescue of Severe Specific Infectious Pneumonia” on February 25, 2020, which came into force on March 13. This study examines the pandemic's effects through various stages, with a particular focus on the service industry, the sector most affected owing to diminished domestic demand. Using a computable general equilibrium model by integrating monthly changes, the study assess the effectiveness of the Taiwan government's interventions in mitigating job losses and stabilising the economy. Our findings indicate that without the government's relief and revitalisation measures, unemployment rates would have surged significantly. The study underscores the critical role of policy interventions in mitigating the economic impacts of the pandemic.

Abstract A proper government‐market relationship (GMR) serves as an important institutional environment for investors to make rational economic decisions. Theoretically, by embedding the GMR into the signalling model, this study finds that (a) the improvement in the GMR can enable high‐return firms to obtain more debt financing and (b) the mechanism is that a higher GMR, as a signal, increases the accuracy of investors' inference on firms' returns. Using data of Chinese A‐share listed firms (2009–2019) and the two‐step system GMM, this study empirically demonstrates that the GMR does help investors infer firms' returns more accurately, thus enlarging the debt financing scales of high‐return firms. Moreover, the positive impact of the GMR on high‐return firms is significant within privately owned firms and more substantial in markets characterised by lower industry concentration.

Abstract This paper leverages a rich dataset of 1.24 billion traffic flow observations across 36,666 vehicle detectors to estimate the price elasticity of traffic flow with respect to fuel prices in Melbourne, Australia. I find that a 1% increase in fuel prices leads to a 0.0556% decrease in traffic flow across Melbourne, where traffic flow is defined as the number of vehicles passing a vehicle counter per hour. I find significant regional heterogeneity across Melbourne, with evidence of positive own‐price elasticities in regions in the centre of the city, and in peak commute times on both weekdays and weekends, which I argue is evidence of a congestion‐speed effect. Moreover, regions near the CBD with high incomes tend to be less elastic than regions further away with reduced access to public transport. These findings can be used to determine the optimal tax or charge to internalise the externalities produced by motor vehicles.