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Challenges for Investors in Afghanistan: Documented History from the Ministry of Commerce and Industries
Get PDFAfghanistan urgently requires substantial investment to generate employment, stimulate economic growth, and achieve economic self-reliance. However, persistent structural and political challenges have created a hostile environment for investors. Since 2015, the country has faced significant capital flight as existing investors withdraw and potential investors remain hesitant due to insecurity, widespread corruption, fragile economic infrastructure, and weak regulatory frameworks (Safi & Sharma, 2019). These barriers have undermined economic confidence and hindered the inflow of both domestic and foreign capital. This study examines the primary challenges encountered by domestic investors in Afghanistan. It provides actionable recommendations to strengthen economic governance, enhance institutional capacity, and promote an investment climate conducive to sustainable development
Knowledge economy and innovation
Get PDFThis paper presents an examination of the knowledge economy, its nature, evolution, and defining features. Such an economy relies on increasing specialization, research, innovation, and continuous learning. Innovation constitutes a fundamental dimension of the knowledge economy; hence, it emerges as the second central theme of this analysis. The findings indicate that the capacity of companies to innovate depends on several factors, including the availability of sufficient human capital with appropriate levels of education and advanced skills, the presence of robust infrastructure, and the role of institutions. In particular, the innovation ecosystem—where stakeholders interact and collaborate—together with the regulatory and legislative framework, serves to foster and sustain innovation
بررسی تطبیقی مکتب های ساختارگرایی اقتصادی
Get PDFThis article conducts a comparative examination of the main schools of economic structuralism: old structuralism, ECLAC neo-structuralism, and New Structural Economics. Methodologically, old structuralism is grounded in the analysis of macroeconomic structures and the internal constraints of accumulation processes in peripheral economies, recommending active state intervention to reform production and trade structures as the basis of development policy. In contrast, ECLAC neo-structuralism, by critiquing the static and dogmatic tendencies of old structuralism, adopts a dynamic and hybrid approach that highlights the interaction between domestic structures and the global economic order, while emphasizing the institutional and technological dimensions of competitiveness in the world economy. At the policy level, this approach stresses the alignment of development strategies with external constraints and internal capacities of each country. New Structural Economics, drawing on modern development economics and integrating the structuralists’ tradition with neoclassical insights, underscores the connection between dynamic comparative advantage, smart industrial policies, and the establishment of institutional and infrastructural foundations for structural transformation. Through a comparative-analytical perspective, this study elucidates the methodological bases of all three structuralist schools in relation to their policy implications and shows that the evolution of structuralism can be understood as a transition from a static and interventionist paradigm toward a dynamic, institution-based, and context-sensitive framework in development policy. The findings indicate that understanding the trajectory of structuralism is not only crucial for theoretical rethinking in development economics but also constitutes a methodological and practical necessity for designing effective policies in developing economies—particularly in addressing the challenges of globalization, structural dependency, and industrial transition
Can Green Transition Only Thrive with Price Stability?
Get PDFWe investigate how the European Central Bank (ECB) and the US Federal Reserve (Fed) re-spond to climate-related shocks, assessing whether the green transition can advance without compromising price stability. Using data from 2000 to 2025 and employing time-varying local projection (TVP-LP) models, we examine the monetary policy reactions to both physical and transition climate risks. Our results show that physical shocks, such as extreme weather events and natural disasters, exert stronger and more inflationary effects on monetary policy than tran-sition shocks related to decarbonization and climate policy. The ECB systematically tightens policy in response to physical shocks, viewing them as supply-side disturbances that threaten price stability, while the Fed’s response is more state-dependent and event-driven, loosening policy during crises like Hurricane Katrina but tightening in the post-COVID inflationary peri-od. For transition risks, both central banks show subdued reactions until 2015, after which the ECB increasingly interprets them as inflationary, whereas the Fed remains more cautious and output oriented. A one standard deviation physical risk shock raises the shadow rate by about 30 bps in the EA and 20 bps in the US after 20 months. These findings reveal that climate shocks have become an integral part of monetary transmission, shaped by mandates and macro-economic context, underscoring the need for price stability to enable the green transition
Institutionalization and Institutional Evolution: A Model of Selecting Government Officials in Ancient China
Get PDFEvolution of institutions in selecting government officials in ancient China reflected efficiency considerations and increased power concentration in the hands of the ruler. Selecting government officials in ancient China became more rule-based over time, and standardization and centralization were some key features of this process. In this dynamic model, a higher volume of transactions shown as the number of candidates needed to be evaluated leads to institutionalization which has a higher fixed cost but a lower marginal cost in processing each transaction. In the steady state, a ruler with a more encompassing interest chooses a higher level of institutionalization. The impact of a change in the level of elite power on the level of institutionalization is sensitive to the relative power of state versus society
A Note on Tanneries in Kanpur, Water Pollution in the Ganges, Taxation, and Tax Shifting
Get PDFIn this note, we provide the first game-theoretic analysis of taxation and tax shifting when tanneries in Kanpur, India, that produce leather and pollute the Ganges River are taxed. We model the n≥2 tanneries as a Cournot oligopoly and a specific tax τ>0 is imposed on each unit of leather produced by the polluting tanneries. We first determine the symmetric Nash equilibrium output of leather and its price with the tax. Second, we show that the rate of tax shifting by the polluting tanneries is constant. Third, we discuss how increasing either the number of tanneries or the price elasticity of demand affects the tax shifting that takes place. Finally, we comment on the policy implications of constant tax shifting such as the predictability of the incidence of the tax burden
The Knapsack Sequencing Problem: Computational Complexity and Mechanism Design
Get PDFThis paper introduces a combinatorial optimisation problem that we call the knapsack sequencing problem (KSP). KSP arises when the server in a sequencing problem is constrained to work in fixed-duration shifts. Each shift can be viewed as a knapsack, but unlike standard knapsack or bin-packing problems, KSP incorporates a temporal structure that distinguishes early and late shifts. The main challenge lies not in incentivising truth-telling but in algorithmically identifying the optimal partition of agents into shifts; a challenge compounded by the fact that KSP is strongly NP-hard, with the decision version being strongly NP-complete. We propose necessary conditions that efficient sequencing rules must satisfy, which help reduce the search space for feasible partitions. We show that the Vickrey–Clarke–Groves (VCG) mechanism, using the efficient sequencing rule and VCG transfers, is strategy-proof for KSP. We establish the existence of first-best mechanisms—mechanisms that are efficient, strategy-proof, and budget balanced—for a subclass (unit-capacity) of KSP requiring n shifts to serve n agents. We also show, via a three-agent example, that when budget balance is imposed together with efficiency, strategy-proofness may fail. This research highlights the difficulties in extending classical sequencing results to settings with shift constraints and contributes both theoretical insights and algorithmic considerations relevant to resource allocation mechanisms
Integrating sustainability information through value chain disclosures: insights from the wood-based industries
Get PDFAs sustainability increasingly shapes business strategy and stakeholder expectations, integrating sustainability information across the value chain has become essential. This paper examines the role of sustainability disclosures as a mechanism for integrating environmental, social, and governance (ESG) information within the wood-based industries in light of new reporting requirements. We analyze how value chain disclosures contribute to transparency, accountability, risk management, and sustainability performance. Companies that adopt a comprehensive approach to sustainability disclosure tend to demonstrate higher levels of stakeholder engagement and long-term strategic alignment with sustainability goals. However, challenges persist, including data fragmentation, limited supplier collaboration, and a lack of standardization in reporting formats. The paper also highlights the challenges faced by wood-based industries in maintaining effective supply chain collaborations and the need for innovative solutions to overcome barriers to sustainability. It advocates for a holistic approach that encompasses product design, recycling technologies, and waste management strategies to maximize resource utilization and minimize waste. Overall, the paper provides valuable insights into how wood-based industries can integrate sustainability information through value chain disclosures to achieve long-term sustainability and competitive advantage
Culture & social capital: creation of human capital and economic growth
Get PDFCulture and social capital may be variables of particular interest when explaining economic growth. In recent years, policymakers and economists have increasingly considered their role in economic growth, yet cultural capital and social capital are analyzed separately. Despite being different concepts of capital, in this paper we argue that there is a link between cultural and social capital, and both need to be accounted for when analyzing economic growth and welfare. We develop a theoretical dynamic general-equilibrium model using a mainstream endogenous economic growth set-up (namely with human capital accumulation), incorporating cultural and social capital. We use the model to devise long-run and transitional-dynamics effects from the perspective of both economic growth and welfare, explicitly considering the interplay between cultural and social capital and other forms of capital. A detailed calibration of the model allows for the derivation of quantitative results, with an emphasis on policy implications
Beyond Borders: How Economic Shocks Propagate Through Space and Networks
Get PDFThis paper develops a unified theoretical and empirical framework for analyzing treatment effects that propagate through both spatial proximity and network connections. Building on the continuous functional approach in \citet{kikuchi2024dynamical} and the Navier-Stokes foundation in \citet{kikuchi2024navier}, I introduce network channels as continuous internal degrees of freedom, deriving both spatial diffusion and network contagion from common first principles rooted in conservation laws and stochastic processes. The framework resolves three fundamental challenges in modern econometrics: how spatial and network effects interact (the mixed effect), how treatment effects evolve in general equilibrium, and how network structure affects system fragility.
I show that the mixed spatial-network effect emerges naturally at second order in perturbation theory, creating synergistic amplification when geographic proximity and network similarity align. The theoretical analysis yields three main contributions. First, I derive explicit expressions for the mixed effect functional, showing it equals the mutual information between spatial and network coordinates—a purely information-theoretic measure with no free parameters. Second, I extend the analysis to general equilibrium, proving that endogenous price and employment adjustments amplify partial equilibrium estimates by factors between 1.8 and 2.5 depending on market structure. Third, I connect network structure to system fragility through entropy production rates, providing operational measures of how consolidation affects shock dissipation speeds and cascade probabilities.
The empirical application uses county-level wage data (2018-2023) to analyze minimum wage spillovers across 3,142 U.S. counties and 274 industry classifications. Four main findings emerge. First, the mixed spatial-network effect accounts for 40 percent of total treatment propagation, with point estimate 0.043 (s.e. 0.008), statistically significant and economically large. This implies retail workers in Nevada counties near the California border experience wage increases 43 percent larger than the sum of pure spatial spillover (from proximity alone) and pure network effect (from industry connections) would predict. Second, spatial decay parameters increase from 0.01 per mile for pure geographic spillovers to 0.02 when network effects are included, demonstrating that networks concentrate rather than disperse spatial impacts. Third, general equilibrium amplification factors range from 1.8 (dispersed markets) to 2.5 (concentrated markets), implying substantial bias in partial equilibrium policy evaluation. Fourth, entropy-based fragility measures predict out-of-sample shock propagation with , outperforming standard network centrality metrics ().
These findings have direct policy implications. Minimum wage policies should account for network amplification: optimal state-level minimum wages are 15-20 percent lower when accounting for general equilibrium feedbacks through supply chains and labor mobility networks. Financial regulation should monitor entropy production rates as early warning indicators: systems approaching critical fragility thresholds (entropy production declining by more than 30 percent) require preemptive intervention before cascades materialize. Regional development policies should leverage spatial-network synergies: infrastructure investments yield highest returns in regions with strong geographic clustering and dense economic networks