In this paper, we investigate the use of interactive effect or linear factor models in regional policy evaluation. We contrast treatment effect estimates obtained by Bai (2009)'s least squares method with the popular difference in differences estimates as well as with estimates obtained using...

At the end of June 1999 the intra-EU duty free shopping was abolished among the fifteen member nations. The opponents of this resolution argued that such a tax-free sales sector created jobs EU-wide and hardly reduced the value added and excise tax revenue of individual countries. In their...

Special economic zones (SEZ), one of the most important instruments of industrial policy used in developing countries, often impose export share requirements (ESR). That is, firms located in SEZ are required to export more than a certain share of their output to enjoy a wide array of incentives...

This paper revisits an important analysis of enterprise zones (EZs) by Ham, Swenson, Imrohoroğlu, and Song (2011), who report substantial poverty reductions from state and federal EZs, as well as improvements in other labor market outcomes. In our re-analysis, we find that a data error accounts...

We test whether the proactive use of instruments of direct democracy by voters can help to explain fiscal sustainability of 25 Swiss cantons. Using data of all cantonal popular votes since 1977, our results show that the fiscal reaction of cantonal governments to an increase in the debt to GDP...

The impacts of climate change on developing economies are becoming increasingly severe, creating challenges for risk management and requiring enhanced levels of resilience. This paper explores how to mitigate the effects of such climate shocks on developing economies, placing a particular focus...

This paper quanti.es the future implications of repayment of bailout loans received by Greece from the EU in the previous decade. These debt obligations amount today to 240 billion euros or 70% of the country’s total public debt and have to be repaid by 2070. This is investigated in a dynamic...

The paper analyses the reasons for Japan's persistently low inflation since the bursting of the Japanese bubble economy (low inflation conundrum). It is shown that Japan experienced a structural break from a high-growth period with relatively high inflation to a low-growth period with...

In the Great Recession most OECD countries used short-time work (publicly subsidized working time reductions) to counteract a steep increase in unemployment. We show that short-time work can actually save jobs. However, there is an important distinction to be made: While the rule-based component...

In this note we elaborate on the effect of the modeling choice of the zero lower bound on the size of the fiscal multiplier. To this end we contrast two different ways to implement the ZLB in a New Keynesian model: the ZLB modeled as an endogenous central bank reaction to a contractionary demand...