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Geopolitical Shocks, Fiscal Dominance, and the TPI Conditionality: A Structural Conflict in the Euro Area
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This paper argues that the dominant risk to Euro Area stability has structurally shifted from cyclical inflation to a direct conflict between geopolitically-driven fiscal policy and central bank independence. We construct a novel quarterly dataset of exogenous geopolitical fiscal shocks (GEO_SHOCK) using a narrative approach (Ramey, 2011). A Structural Vector Autoregression (SVAR) for the EA aggregate finds these shocks are persistently inflationary, with a peak impact of +0.08% on the HICP. A Panel SVAR, robust to local projections, finds the shocks drive significant fragmentation: a 1-std-dev shock widens spreads in high-debt (90th percentile) member states by 22 basis points, an effect absent in pandemic-related fiscal shocks. The shock accounts for 34% of medium-term spread variance. A high-frequency event study confirms this, showing an immediate +11.2 bps impact on Italian spreads post-announcement. A counterfactual simulation shows that a TPI "spread cap" would stabilize debt but amplify inflation, quantifying the fiscal dominance trade-off
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
Analyzing Nigeria’s unemployment problem: evidence from the quantile regression approach
Get PDFMost studies on Okun’s Law focus on mean effects using ordinary least squares or dynamic models, with limited use of quantile regression. This leaves unexplored how output growth impacts unemployment across different points of the unemployment distribution. By applying a static quantile regression framework, this study fills this gap in analyzing the unemployment problem and its key determinants in Nigeria from 1991 to 2024. The findings showed that aggregate GDP growth reduces unemployment, with stronger effects at higher quantiles. However, results showed a weaker-than-expected Okun’s Law coefficient, reflecting the non-inclusive nature of Nigeria's economic growth. Sectoral analysis reveals that while Agriculture and Industry exert limited effects, the Construction and Services sectors significantly reduce unemployment, particularly through key activities such as Professional & Scientific Services, Trade, Real Estate, and Health. Government consumption largely worsens unemployment, whereas net FDI inflows foster job creation. The results highlight the need for structural transformation and policy realignment towards productive investments that strengthen the employment intensity of growth
A Brief Analysis of the Correlation Between Budget and Performance in Romanian Soccer
Get PDFStarting from the widely held idea in Romanian football (and not only) that a higher budget is almost the only requirement for better performance for a club, our study investigates the existence and intensity of such a correlation. At the same time, we sought to deepen the correlations within club expenditures, through those related to the player roster as an expression of its value, where we expect a to see a higher intensity in relation to sports results. Due to data availability considerations, the analysis is limited to the latest seasons of the domestic championship. The approach is based on rank correlation, and the tools used are Kendall’s coefficient and Spearman’s coefficient. The results obtained con�irm expectations regarding the existence of a direct relationship between the amounts spent by a club and its position in the rankings, but the intensity of this correlation is signi�icantly lower than expected, at least at the level of total expenditures
On the Non-Divergence Condition of the Debt-GDP Ratio Considering Consumption from Assets and Impossibility of Fiscal Collapse with Arguments about Important Misconceptions in Macroeconomics
Get PDFThis short note presents a non-divergence condition of the debt-GDP ratio considering consumption from assets,
and shows that fiscal collapse is impossible. Also in the supplement (Appendix 3) I present arguments on important
misconceptions in macroeconomics about relationship between investment and savings. I will show that
investment entities and savings entities are identical and that investment and savings are the same acts
اولویت بندی واگذاری بنگاه¬های اقتصادی زیر مجموعه صندوق¬های بازنشستگی با تاکید بر مدیریت سرمایه¬گذاری: شواهدی جدید از رویکرد DCC-GARCH R2 decomposed connectedness
Get PDFIn recent years, due to the resource deficits and financial imbalances of pension funds, the issue of structural reform and optimization of their investment portfolios has gained greater importance. Among the key solutions proposed is the divestment of underperforming enterprises to the private sector in line with Article 44 of the Constitution and within the framework of implementing the Seventh National Development Plan. The main challenge in this context lies in establishing a scientifically sound and efficient prioritization for such divestments. Accordingly, adopting modern portfolio management approaches—such as the DCC GARCH R² decomposed connectedness model recently introduced by Cocca et al. (2024)—can offer a more comprehensive perspective for decision making regarding whether to retain or divest these enterprises. Based on this approach, the optimal weight of each enterprise in the investment portfolio, the efficiency of risk hedging, the beta coefficient, and the Sharpe ratio should be evaluated under various portfolio management frameworks, including MVP, MCP, MCOP, MRP, and MPG. Ultimately, the model yielding the highest Sharpe ratio is selected as the optimal approach.
In such a setting, it becomes feasible to prioritize enterprises for earlier or later divestment based on two key dimensions—return and risk. This priority setting aligns with the mandates of the Seventh National Development Plan; however, to date, this has not been examined using the aforementioned approaches, which could be of significant value to policymakers
Fertility responses to tropical cyclones: Causal evidence and mechanisms
Get PDFIn light of growing concerns over escalating natural disaster risks and persistently low fertility rates, this paper quantifies the causal impacts of tropical cyclones and identifies the pathways through which they influence childbearing decisions among Australians of reproductive age. Using an individual fixed effects model and exogenous variation in cyclone exposure, we find a robust and substantial decline in fertility, occurring only after the most severe category 5 cyclones, with the effect weakening as distance from the cyclone’s eye increases. We find no evidence of delayed cyclone effects, indicating that the fertility loss attributable to these most severe cyclones is permanent. Our findings are robust to extensive validity checks, including a falsification test and various randomization tests. The fertility decline is most pronounced among younger adults, individuals with lower educational attainment, those childless at baseline, and those lacking prior private health or residential insurance. While physical health, financial constraints, and migration appear unlikely to drive the effect, the evidence points to reduced family formation, increased marital breakdown, child mortality, cyclone-induced home damage, elevated psychological stress, and heightened risk perceptions as plausible mechanisms
Existence and Smoothness of Three-Dimensional Navier-Stokes Solutions via Hodge Theory and Weighted Sobolev Decay
Get PDFWe prove the existence and smoothness of solutions to the three-dimensional Navier-Stokes equations. Specifically, we establish that for viscosity greater than zero and dimension equal to three, given any smooth, divergence-free vector field with spatial decay satisfying appropriate decay conditions with decay parameter greater than five, and taking the forcing term identically zero, there exist smooth
pressure and velocity functions on three-dimensional Euclidean space times the nonnegative time interval satisfying the Navier-Stokes equations with smooth solutions and bounded energy for all nonnegative time.
Our approach reformulates the problem geometrically using differential forms and Hodge theory on Riemannian manifolds. We demonstrate that the Navier-Stokes equations are equivalent to geometric consistency conditions on a velocity field section of a bundle over spacetime, governed by the Hodge-Laplace operator. The existence of smooth, globally defined solutions follows from the Hodge decomposition theorem, elliptic regularity theory for the Laplace-de Rham operator, and weighted Sobolev transport estimates along Lagrangian trajectories.
A key contribution is establishing that spatial decay of initial data implies temporal integrability of the velocity gradient through geometric necessity: the vanishing energy flux at spatial infinity, acting as a boundary condition, prevents gradient accumulation. This closes the gap in the Beale-Kato-Majda conditional regularity criterion, demonstrating that decay structure of initial data governs global regularity via geometric constraints rather than dynamical evolution mechanisms. The method provides a pathway to global smoothness that complements existing approaches based on smallness or critical Sobolev regularity
Георги Петров и моделът на пазарното социалистическо стопанство в България
Get PDFIn the paper we provide brief information about the context of the 1963 reform. This is followed by a presentation of the main themes and ideas in Georgi Petrov's life research project, which systematically and logically derives the need for decentralisation of the economy, a transition from directive planning to economic levers, granting full autonomy to enterprises included in market mechanisms and profit incentive
The cost of delay: Quantifying Uganda’s petroleum revenue investment reserve opportunity loss, 2026-2030
Get PDFUganda's first commercial oil production, scheduled for July 2026, presents a narrow window to establish a generational wealth foundation through its Petroleum Revenue Investment Reserve (PRIR). Using compound growth modeling and conservative fiscal parameters, this paper quantifies the opportunity cost of delaying systematic PRIR capitalizations between 2026 and 2030. A baseline scenario committing 10.0 billion by 2050; deferring contributions until 2030 reduces this to 3.0 billion irrevocable loss, equivalent to 10 referral hospitals, 5,000 kilometers of paved roads, or perpetual university tuition for 100,000 students. The analysis contextualizes this loss within Uganda's current fiscal stress, where interest payments consume 23 percent of government revenues and external reserves cover only 3.6 months of imports. We argue that the PRIR's existing legal framework (2015) is necessary but insufficient. Without immediate political commitment to frontload savings, Uganda risks replicating the consumption-path dependency patterns of Nigeria and Angola rather than the intergenerational equity models of Norway or the UAE. The paper concludes with institutionally feasible mechanisms to balance current development pressures against future wealth compounding