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Geopolitical Turning Points and Oil Price Responses: An IV-LP Approach
Get PDFThis paper introduces a novel identification strategy of geopolitical turning points, defined as sharp, unanticipated inflection points in bilateral relations. These shocks are measured using the second difference of the Political Relationship Index (Δ²PRI), an event-based monthly index derived from Chinese sources. Unlike standard geopolitical risk indices, Δ²PRI isolates events that represent exogenous shifts in diplomatic relationships. Using quantile IV-local projections, the paper studies the causal and asymmetric impact of these shocks on global oil prices. An improvement in US–China relations reduces oil prices by 0.2% in the short run and raises them by 0.3% in the medium run, with effects varying across the oil price distribution. The extension to the Japan–China dyad supports external validity. The Δ²PRI instrument offers a reusable framework for analyzing bilateral political shocks across various macroeconomic outcomes, making a methodological contribution to the international economics literature
Dynamic spillovers and portfolio optimization in tourism, Fintech, and cryptocurrency
Get PDFThis paper investigates the spillover dynamics, hedging and portfolio optimisation strategies among tourism, cryptocurrency, and Fintech markets within a time-varying connectedness framework, accounting for spillovers from traditional financial markets. Using daily return indices, we document significant heterogeneity in spillovers over time, with the COVID-19 period exhibiting the highest levels of interconnectedness. Traditional financial markets emerge as the dominant net transmitters of spillovers, followed
by the Fintech sector, while the tourism market is predominantly a net receiver. Cryptocurrency assets, despite offering the least expensive hedge, are ineffective hedging instruments, whereas tourism assets offer the most cost-effective and efficient hedge for cryptocurrencies, albeit at elevated risk levels. While sectoral hedges are generally costlier and less effective due to strong co-movements, cross-sectoral hedges between Fintech and traditional financial markets were also expensive and ineffective. Our analysis further reveals that dynamic bilateral portfolio weight strategies consistently outperform dynamic hedge ratio strategies, with cryptocurrency assets driving superior portfolio returns. The minimum connectedness portfolio strategy, grounded in our framework, outperforms traditional minimum variance and correlation portfolio strategies, underscoring its relevance for optimizing risk-adjusted returns in dynamic markets
Do High Power Prices Slow Electrification? Some Panel Data Evidence
Get PDFElectrifying household and economic activity remain a cornerstone of the transition towards deep decarbonization. This analysis conducts a cross-country evaluation through a pooled mean-group model based upon 33 OECD nations since 1980. Electrification is defined as electricity’s share of the total energy system. The results show that electrification would have decreased by approximately 13 to 31 percent below other countries if the electricity price level had increased above other countries by 100 percent. Additional sensitivities show that symmetry between this response between price increases and price decreases depends upon whether GDP is exogenous. These estimates highlight the critical importance of finding new generation, transmission and distribution technologies that both reduce emissions and remain cost competitive. They also emphasize that any successful transition pathway must price electric power competitively based upon the opportunity costs of providing power. Efforts to bundle costly social programs and other expenses into power prices should be avoided
Nexus between Financial Liberalization and Financial Market Performance: A Testing of Convergence Hypothesis
Get PDFThis paper investigates the impact of financial liberalization, economic growth, and political instability on financial market performance from 1990 to 2021. The dependent variable is financial market performance, while financial liberalization, economic growth, and political instability are treated as independent variables. Monetary and fiscal freedom are included as control variables. The study employs various empirical methods, including descriptive statistics, correlation matrices, panel least squares, and panel autoregressive distributed lag models. Monetary freedom exhibits a statistically insignificant negative effect on financial market performance. In contrast, fiscal freedom shows a strong negative correlation with financial market performance. Financial liberalization has a statistically significant positive effect on financial market performance. Economic growth also exerts a substantial positive impact on financial market performance. Political instability, however, has a statistically significant negative influence on financial market performance. These findings lend support to the convergence hypothesis. Policymakers must strike a balance between regulatory intervention and market autonomy. This can be achieved by implementing policies that promote fiscal freedom, eliminate unnecessary constraints on economic activity (particularly in the financial sector), and encourage greater financial sector openness. Additionally, policies should prioritize economic growth through investment promotion, support for innovation, facilitation of entrepreneurship, and infrastructure development
Data-Driven Welding Quality Assessment: Leveraging IoT and Machine Learning in Industrial Practice
Get PDFThe paper investigates the deployment of data analytics and machine learning to improve welding quality in Tecnomulipast srl, a small-to-medium sized manufacturing firm located in Puglia, Italy.
The firm produces food machine components and more recently mechanized its laser welding process with the introduction of an IoT-enabled system integrating photographic control. The investment,
underwritten by the Apulia Region under PIA (Programmi Integrati di Agevolazione) allowed Tecnomulipast to not only mechanize its production line but also embark upon wider digital
transformation. This involved the creation of internal data analytics infrastructures that have the capability to underpin machine learning and artificial intelligence applications. This paper addresses
a prediction of weld bead width (LC) with a dataset of 1,000 observations. Input variables are laser power (PL), pulse time (DI), frequency (FI), beam diameter (DF), focal position (PF), travel speed (VE), trajectory accuracy (TR), laser angle (AN), gas flow (FG), gas purity (PG), ambient temperature (TE), and penetration depth (PE). The parameters were exploited to build and validate some supervised machine learning algorithms like Decision Trees, Random Forest, K-Nearest Neighbors, Support Vector Machines, Neural Networks, and Linear Regression. The performance of the models was measured by MSE, RMSE, MAE, MAPE, and R². Ensemble methods like Random Forest and Boosting performed the highest. Feature importance analysis determined that laser power, gas flow, and trajectory accuracy are the key variables. This project showcases the manner in which Tecnomulipast has benefited from public investment to introduce digital transformation and adopt
data-driven strategies within Industry 4.0
Did Slavery Impede the Growth of American Capitalism? Two Natural Experiments Using Farm Values per Acre
Get PDFTwo natural experiments challenge the view that slavery impeded the growth of American capitalism. An event study shows that farm values fell relative to the national average in slave states following abolition. A spatial regression discontinuity design (RDD) then suggests that any negative effects of slavery’s legality on farm values on the free-slave state border were counteracted by the institution’s practical utility. An explanation of these results can also be advanced: slavery provided a relatively cheap agricultural labor force in parts of the South where white Americans preferred not to settle. From this perspective, the growth of American capitalism was promoted rather than impeded by slavery
The Sicilian economy: its competitiveness, structural composition, and evolution
Get PDFThis article aims to analyze the competitive capacity of the Sicilian production system in a region that has historically experienced delayed development. The essay also examines the structure of the Sicilian economy and its evolution over time, highlighting key factors that shed light on its current dynamics. In particular, it focuses
on the recent boost in entrepreneurial activity, with start-ups emerging across various sectors—signaling positive trends in production, innovation, and development opportunities. It also addresses the growth of the tourism sector, despite its limitations. Furthermore, the article focuses on the experience of productive systems that have influenced regional policy towards small and medium-sized enterprises across various economic sectors,
promoting the creation of business networks. Finally, it discusses the policies needed to enhance competitiveness and foster growth in Sicily.
The essay first argues that innovation is the most critical driver of competitiveness, as it enhances total factor productivity. Second, it identifies investment in knowledge as the optimal strategy for
improving the efficiency of production factors and as a cornerstone for long-term growth and development. Furthermore, the essay contends that institutions must foster competitiveness and growth through a regulatory framework that is simple, clear, and less bureaucratic. This is especially important in regions that have historically allocated substantial public resources yet achieved only modest outcomes in income and employment growth. The paper specifically emphasizes the need for significant public investment in infrastructure, education and training, and research. Equally important are private investments—not only to expand the production base but, more importantly, to improve it qualitatively through the adoption of new digital technologies
Social Identity, Redistribution, and Development
Get PDFEmpirical studies suggest that income redistribution promotes economic growth and development by reducing inequality and increasing educational investment among the poor. However, the scale of redistribution is limited in many developing countries. Why is the scale of redistribution small? This paper examines the role of social identity, whose importance in redistribution and development is supported in existing empirical research. Under what conditions does national identity emerge, and how does it influence the economic outcomes?
To answer the questions, this paper develops a dynamic model of income redistribution and educational investment augmented with social identification and explores the interaction among identity, redistribution, and development theoretically. Specifically, it examines how two key drivers of development---endogenous human capital accumulation and exogenous, increasingly skill-biased technological change---shape identity, redistribution, and development
Productive Public Spending, Knowledge Spillovers and Convergence: A Multi-Country Analysis
Get PDFThis paper develops a multi-country AK model of endogenous growth with international knowledge transmission to analyze the impact of productive public expenditure on growth and convergence. A leader economy drives knowledge advancement, while follower countries benefit from spillovers if their knowledge exceeds a threshold. The findings suggest that public expenditure helps laggard followers acquire foreign technology but does not enhance long-term growth. Empirical analysis using a dynamic panel model confirms the threshold effect: public investment boosts growth only in countries far from the technological frontier, while it is ineffective for those at or beyond the threshold
La Economía de la Narrativa: Impacto en los Ciclos Macroeconómicos y su Incorporación en Modelos IS-LM y DSGE.
Get PDFThis article examines how economic narratives, such as those emerging from business communication, the media, and economic authorities, affect economic behavior and agents' decisions. Based on Keynes' theory of "animal spirits" and Robert Shiller's work on the influence of narratives, a model is proposed in which narratives can directly influence macroeconomic
variables such as consumption, investment, and income. Through an applied approach, it suggests how to integrate narrative variables into IS-LM and DSGE models to better understand their effects on the economic cycle. The article also discusses how "confidence" and other narrative expectations affect economic activity and how authorities could incorporate this concept into their analysis and policy formulation