Abstract:

The aim of this paper is to determine a capital ratio for retail banks that can reduce the likelihood of bank runs in the WAEMU area. The study also compares the impact of imposing capital requirements on retail banks versus wholesale banks. The key finding are as follows: A capital ratio of 10 percent for retail banks is found to be sufficient to eliminate the probability of bank runs and mitigate interbank market frictions in the WAEMU area. Similarly, applying the same requirements to wholesale banks also eliminates the likelihood of bank runs. Implementing capital requirements on retail banks does not significantly affect interbank lending costs, whereas imposing the same requirements on wholesale banks leads to an increase in these costs. Consequently, regulating retail banks tends to shift assets towards wholesale banks, while regulating wholesale banks reallocates assets towards retail banks. The calculated capital ratio of 10 percent for retail banks maximizes welfare, surpassing the welfare achieved when the same requirements are imposed on wholesale banks.

Abstract: Using daily data ranging from January 2020 to June 2023 we aim to investigate the interconnectedness between the crude oil price and the exchange rate price. As first step we use the impulse response function to measure the interaction between both variables within a shock occurred on one of the studied variables. The findings justify that a shock occurred within the price of the crude oil has a direct effect to exchange rate variability. At the second step we use the VAR-DCC-GARCH to employ the time frequency correlation between both variables. Our funding proof dependency of the Japanese yen , the mexico pesos , the Canadian dollar as well as the indian rupee to the volatility of the price of crude oil. The Russian rubble show great resistance to twards the volatility of the price of crude oil. Our findings suggest that the dollarization of world economy tend to influence significantly the volatility of foreign exchange market on the crude oil price.

Abstract: Global progress towards the 2030 Sustainable Development Goals (SDGs) remains critically off-track, with current trends suggesting that only 17% of targets will be met by the 2030 deadline. This study investigates whether observed divergence reflects temporary setbacks or persistent structural regimes characterised by distinct configurations. Using panel data from over 160 countries (2019–2024), we employ annual latent class analysis to identify hidden structures in SDG performance across 15 goals, introducing intertemporal volatility as a dimension of development dynamics. We complement this with ordered logistic regression to examine structural determinants of regime membership, including governance quality, digital infrastructure, health investment, and macroeconomic indicators. Our analysis identifies three temporally stable development regimes —lagging, transitional, and leading — with fewer than 15% of countries transitioning between classes over the observation period. ANOVA results reveal that internet access and government effectiveness exhibit the most considerable between-regime differences. Ordered logit models indicate that governance quality and digital connectivity are the primary predictors of regime membership, with marginal effects of 18–19 percentage points in regime probability. In contrast, short-term GDP growth exerts a negligible influence. These findings challenge linear convergence assumptions and suggest that achieving the SDGs requires addressing deep structural constraints, particularly digital divides and institutional quality, rather than relying solely on incremental policy adjustments or economic growth.

Abstract: The transition towards circular economy represents now a key strategy to address the environmental issues we are facing. Within this framework, biochar, a carbon reach material [1] derived from the residual agricultural pyrolysis can represent a sustainable and circular solution. This paper aims at evaluating the possibility of implementing a local biochar production system as part of an economic and social strategy of redevel-opment of an abandoned rural site, Borgo Perolla, in Tuscany, Italy. A cost-benefits analysis (CBA) was conducted to evaluate the economic feasibility of three different scenarios of production and strategies. For each scenario, three indicators were calculated: Net-Present Value (NPV), Internal Rate of Return (IRR) and Breakeven point (BEP). The most evident result that emerged is that the sale of biochar and its by-products alone is not sufficient to ensure the project’s economic sustainability, mainly due to high production costs. Only through carbon credit trading markets bio-char becomes not only an environmentally strategic tool but also an economically re-warding one. In this sense, market infrastructures such as the ETS are essential for the dissemination of circular models, like the biochar, that generate both environmental and economic benefits.

Abstract: This article examines the growing inadequacy of Gross Domestic Product (GDP) as a measure of human progress in a world shaped by ecological fragility, socio-technical transformations, and civilizational transitions. While GDP served as a convenient post-war metric for national accounting, it now obscures critical dimensions of wellbeing, including ecological sustainability, relational capabilities, and systemic resilience. Drawing from complexity economics, relational sociology, and post-growth political economy, the article proposes a renewed understanding of value as emergent, interconnected, and ecologically embedded.Complexity economics demonstrates that economies are not linear production machines but adaptive systems shaped by feedback loops, cooperation, and innovation. Relational perspectives from Sen, Nussbaum, and Appadurai highlight capabilities, agency, and aspiration as fundamental components of wellbeing beyond monetary aggregates. Post-growth scholarship—including recent contributions from Hickel, Raworth, and Stiglitz—calls for civilizational metrics aligned with planetary boundaries and distributive justice.The article synthesizes these paradigms to propose a multidimensional framework integrating ecological boundaries, relational wellbeing, and systemic capabilities. Special attention is given to Africa and the Global South, where informal economies, urban complexity, and community resilience constitute fertile ground for post-GDP experimentation.Overall, the analysis argues that moving beyond GDP is not merely a technical adjustment but a civilizational shift toward a regenerative, capability-enhancing, and complexity-aware understanding of prosperity fit for the twenty-first century.

Abstract: This research studied the role of the fisheries sector, in particular pond-based grouper aquaculture in the coastal area of Lamongan, Indonesia, which is crucial for coastal food security and economy. Despite relatively high productivity, technical efficiency was not optimal because of its limited livelihood assets, which include human, natural, social, financial, and physical capital. The gap in ownership of these assets has resulted in technical efficiency variations across farmers and has affected both their livelihoods and environmental sustainability. Previous research has mostly focused on capture fisheries or non-grouper species, leaving a critical gap regarding the linkage between livelihood assets and technical efficiency in pond-based grouper aquaculture. This research measured livelihood asset levels, technical efficiency, and the effect of assets on efficiency, using quantitative data from 83 respondents. Livelihood assets were assessed through scoring and index analysis, technical efficiency was estimated using Stochastic Frontier Analysis (SFA), and the determinants of inefficiency were examined through Tobit regression with robust standard errors. The results found that the average livelihood asset index was 0.47 (moderate), with financial capital being the weakest component. Technical efficiency averaged 0.83, indicating efficient use of inputs while still allowing room for improvement. Natural capital (land area and water resources) and financial capital (income and savings) significantly affected technical inefficiency, whereas human, social, and physical capital did not. These findings emphasize the important to strengthen the financial capital and the management of natural resources optimally to promote the efficiency and sustainability of grouper aquaculture in the coastal area of Lamongan, Indonesia.

Abstract: Background: Soaring drug prices threaten affordability and equity in high-income health systems. This study examines how two families of reform tools, international reference pricing (including the U.S. Most Favored Nation–type proposals and Canada’s PMPRB comparators) and value-based payment approaches, perform across four core policy goals: cost containment, innovation, equity, and implementation feasibility.Methods: Guided by institutional and governance theories, we conducted a structured comparative policy analysis of the United States, Canada, and the United Kingdom using a four-dimensional trade-off matrix. We coded 37 documents (2007–2025), including policy guidance, legislation, and empirical evaluations, to rate each country–instrument pair (1–5) on cost, innovation incentives, equity of access, and feasibility, based on design features rather than realized outcomes.Results: The U.K.’s integrated model, combining NICE’s cost-effectiveness appraisals with the voluntary scheme for branded medicines (VPAG), shows the most consistent alignment across all four dimensions. Canada’s PMPRB-based system achieves strong cost control and broad baseline access but provides weaker, indirect innovation incentives and limited outcome-linked pricing. In the U.S., MFN-type proposals and pharmaceutical value-based contracts face legal challenges, fragmented payers, and limited infrastructure, resulting in low scores on equity and feasibility despite some innovation-supportive features.Conclusions: Neither international reference pricing nor value-based payment alone is sufficient to advance Universal Health Coverage goals. A hybrid approach, anchoring negotiations in international benchmarks while linking reimbursement to therapeutic value, appears more realistic for fragmented systems such as the U.S., but only if accompanied by investments in data, governance, and federal negotiating capacity. The trade-off matrix offers a repeatable framework for assessing pricing reforms and illustrates how institutional “fit,” rather than technical design alone, shapes policy success.

Abstract: Two main perspectives exist regarding the interaction between fiscal deficits and expansionary monetary policy. The first perspective argues that fiscal deficits raise interest rates, thereby increasing interest payments and complicating monetary stabilization efforts. The second posits that expansionary monetary policy enhances nominal GDP growth, which in turn reduces the government debt-to-GDP ratio and strengthens the fiscal position. Using panel data from the IMF World Economic Outlook covering advanced economies between 1980 and 2025, this study empirically evaluates which perspective is more consistent with observed data, while accounting for the dynamics of tax revenues, government expenditures, interest rates, and nominal GDP growth. Empirical evidence indicates that moderate monetary expansion—raising nominal GDP—tends to stabilize budget deficits, as government revenues generally outpace expenditures and interest rates do not increase proportionally with nominal growth. These results are further illustrated through case studies of Greece, Italy, Portugal, Spain, Japan, the United Kingdom, and the United States.

Abstract: Smart specialization (RIS3) requires evidence-based priority setting, but there is still a lack of empirical evidence on whether regions are guided by their capability endowments or policy mimicry. We analyze 236 EU regions, 178,314 publications, 116,336 projects, and 470 RIS3 ener-gy priorities (2021–2027) across 112 energy themes to see if the choices align with capability. We create two dimensions of potential: inside strength potential and adjacent frontier potential. The Portfolio Opportunity Index (POI) measures the portfolio's tilt towards strengths vs. adjacencies. Selection behavior is characterized using the SCZBI (Selection Comfort-Zone Bias Index), exploi-tation/exploration rates, stretch rate, and alignment metrics. The results of the study show that surface rationality masking deep mimicry. Capability influ-ences the direction of selection, but not its scale—regions select less than 10% of available strengths or adjacencies. Instead, 40.3% of priorities go beyond IS and AF potential, focusing on aspirational domains (hydrogen, offshore wind energy). The alignment of portfolio priorities is minimal (0.10, well below the 0.5 threshold), and wishful gaps approach maximum (1.85/2.0). Importantly, stretching substitutes for capability-based selection, indicating a "priority budget" constraint.” Regions leave 93% of capacity potential untapped. We find that RIS3 energy priorities reflect aspirations and policy mimicry rather than capability mobilization. Regions “follow their peers” and “follow role models” (institutional isomorphism) to attract EU funds and align with the Green Deal narrative, rather than capability endowments. Without mechanisms to anchor priorities in absorption capacity, smart specialization risks be-coming wishful thinking. Future research should examine whether capacity-based priorities out-perform mimicry-driven selections.

Abstract:

We provide a short explanation of the concept of carbon pricing for a general audience and from an economic perspective. A general introduction describes how economists approach societal issues and how they think about markets, whether these markets are aligned with social welfare or not. This conceptual framework is then applied to climate change. Taking economic incentives into account we show why putting a price on carbon may be seen, in theory, as a highly efficient way to reduce greenhouse gas emissions. We then explain why, in practice, the implementation of carbon prices is fraught with difficulties.

Abstract: The Mercosur countries (also known as the Southern Common Market countries) and the European Union (EU) Member States are among the most important players in global agri-food trade. Both blocs are significant net exporters of agri-food products, but their production structure and patterns of specialisation differ significantly. The agri-food sector is an important part of the economies of both country blocs, but the Mercosur countries have advantages in the production of agricultural raw materials, while the EU has comparative advantages in highly processed products. The two groupings also differ in their approach to the sustainability of agricultural production, including international trade. The negotiated EU–Mercosur Partnership Agreement (EMPA) has the potential to alter the conditions of competition in the EU agri-food market. The most important element of this agreement — the EU–Mercosur Interim Trade Agreement — provides for extensive measures facilitating access to the markets of both sides, including the liberalisation of tariffs on imports of most agri-food products from Mercosur countries into the EU. Hence, the aim of this article is to compare the agricultural production potential of Mercosur and the EU countries at the threshold of the entry into force of the EMPA. In particular, the authors seek to answer questions such as whether the EU should fear competition from Mercosur countries in the agri-food sector and whether differences in production potential could pose a threat to EU agriculture. An assessment of the agricultural production potential of Mercosur and the EU countries was made using comparative statistical methods, analysis of structural change and dynamics based on selected indicators commonly used in the literature. The analysis carried out showed that the production potential of Mercosur agriculture – due to large land resources, low labour costs, export specialisation and less restrictive regulation – poses a risk of increased competition and price pressure on the EU agri-food market after the entry into force of the EMPA. This is particularly true for certain sensitive products such as beef, poultry, ethanol and sugar. As a result, this could lead to a widening of the structural disparities between European and South American agriculture.

Abstract: This study investigates the effect of digital financial inclusion on both inclusive growth and poverty in Emerging and Developing Economies (EMDEs). While previous research has explored the relationship between digital financial inclusion and either inclusive growth or poverty, there is a notable gap in the literature regarding the indirect effect of digital financial inclusion on poverty through the mediation of inclusive growth. Additionally, many existing studies have focused on specific countries, leaving a need for a cross-sectional analysis across various EMDEs, particularly in under-researched regions like Central Africa, Southern Africa, West Africa, Oceania, and South-Eastern Europe. To address these gaps, this research employs panel data and the System-Generalized Method of Moments (GMM) as the main estimation technique, which helps to provide robust and efficient estimates while addressing potential endogeneity. The study constructs a new digital financial inclusion index using the Principal Component Analysis (PCA) approach to enable consistent cross-country comparisons. The findings reveal that digital financial inclusion has a positive and significant effect on inclusive growth, indicating that as digital financial inclusion increases, so does inclusive growth. The results also demonstrate that inclusive growth has a negative and significant effect on poverty, suggesting that equitable economic expansion is a key driver of poverty reduction. These findings provide valuable insights for policymakers and governments in EMDEs, helping them to prioritize investments and strategies that leverage digital financial inclusion to foster inclusive growth and alleviate poverty.

Abstract: This study investigates the structural evolution and projected trajectory of greenhouse gas (GHG) emissions across the EU27 from 1990 to 2030. Drawing on official sectoral data and employing a multi-method framework, we combine time series modelling (ARIMA), machine learning (Random Forest), regime-switching analysis, and segmented linear regression to assess past dynamics, detect structural shifts, and forecast future trends. Empirical findings indicate a statistically significant regime change around 2014, marking a transition into a new emissions pattern characterised by decelerated reductions. While the energy sector experienced the most significant decline, agriculture and industry have gained relative prominence, underscoring their growing strategic importance. Hybrid ARIMA–ML forecasts suggest that, under current trajectories, the EU is unlikely to meet its 2030 climate targets without adaptive and sector-specific interventions. The results underscore the limitations of legacy mitigation strategies and reveal a clear need for systemic innovation. Without accelerated action and recalibrated governance, the post-2014 regime risks entrenching a plateau in emissions reductions, jeopardising long-term climate objectives.

Abstract: This research note develops an analytical framework for solving Equilibrium Problems with Equilibrium Constraints (EPECs) in stylized zonal electricity markets. We build upon the competitive benchmark established in \citep{Williams}, which analyzed how network topology dictates market efficiency. Here, we extend this analysis to investigate how strategic actors exploit these same topological constraints.We formulate a two-sided EPEC that accommodates market power on both sides of the market: generators competing in oligopoly and large consumers exercising oligopsony power. This framework captures the increasing relevance of strategic demand flexibility in modern power systems.As a methodological proof of concept, we apply this framework to the canonical two-zone network. We demonstrate that the Nash equilibrium for each congestion regime can be systematically derived in closed form using symbolic computation. This analytical approach provides a foundation for interpreting numerical simulations and establishes a tractable path toward solving the more complex 3-zone line and loop topologies.

Abstract:

Agriculture in Bulgaria faces increasing pressure to balance profitability with environmental sustainability under the evolving framework of the Common Agricultural Policy (CAP) and the European Green Deal. This study investigates how sustainability-oriented investments influence the economic performance of Bulgarian farms using Farm Accountancy Data Network (FADN) data. The analysis integrates investment, cost, and productivity indicators into an econometric model assessing the relationship between subsidies, input intensity, structural characteristics, and farm profitability. Results show that environmental payments, when aligned with efficient management, enhance profitability, whereas conventional investment and rural development support display limited or delayed effects. High expenditure on fertilisers and crop protection products reduces profitability, confirming cost inefficiency in input-intensive systems, while energy-related spending contributes positively, suggesting gains from mechanisation and precision technologies. Structural factors - particularly farm size and land productivity - remain key for balancing economic and environmental goals. The findings underline that sustainable profitability is achievable but unevenly distributed, shaped by access to capital, managerial capacity, and policy design. The study offers empirical evidence for aligning sustainable investments incentives with farm-level competitiveness and contributes to the ongoing transition toward integrated economic-environmental monitoring within the Farm Sustainability Data Network (FSDN).

Abstract: Drawing on evidence from China's land market, this study systematically investigates the impact of land misallocation on economic resilience and reveals the underlying mechanism that operates by suppressing technological advancement. A theoretical model of economic resilience is developed, incorporating technology and factor allocation. Empirical analysis is conducted using a panel dataset of 95 Chinese cities (2011-2024) through spatial econometric and mediation models. The findings indicate that land misallocation significantly reduces local economic resilience and exhibits negative spatial spillover effects. The core mechanism is identified as follows: subsidies via low-priced industrial land delay the market exit of low-efficiency firms, hindering the reallocation of production factors to more productive sectors. This suppression of technological progress ultimately weakens a region's capacity to withstand external shocks. Based on the findings, policy implications include optimizing land supply structure, accelerating fiscal system reform, and strengthening policy coordination.

Abstract: This study quantifies the decarbonisation potential of enhanced material circularity in the EU27 by integrating material flow data with elasticity-based emissions modelling. Using panel regression and logarithmic mean Divisia index (LMDI) decomposition, we evaluate the influence of recycling rate acceleration and material intensity decline on material-embedded emissions over the 2015–2022 period. The findings indicate that although recycling rates increased by 42% during this time, virgin materials remain re-sponsible for over 97% of emissions. Decomposition results reveal that intensity im-provements (−0.867 ln units) offset most of the upward pressure from growing materi-al demand and shifting composition. Scenario projections to 2050, based on empirically derived elasticities, show that aggressive circular economy pathways can reduce emis-sions by over 90%, while baseline policies fall short of net-zero targets. Sensitivity analysis confirms that policy ambition dominates parameter uncertainty in shaping future emissions trajectories. The study highlights the critical role of combined de-mand-side and supply-side measures in aligning material consumption with climate goals.

Abstract: This paper reexamines the Parity Index framework—the ratio of inventory pressure to information incorporation in dealer markets—using strategic equilibrium rather than adaptive heuristics. We constructed a dynamic stochastic game in which dealers simultaneously choose spreads and depths to maximize profits while managing inventory risk, solved via continuous-state dynamic programming and Quantal Response Equilibrium. Despite fundamentally different behavioural foundations, the Parity Index's structural relationships proved robust: fragmentation decouples inventory from prices, non-linear costs decrease the index; and the interaction of fragmentation and non-linear costs determines the market regime boundaries. Although, the strategic behavioural model amplified the effects observed in the adaptive model. This convergence demonstrates that the index captures universal economic forces whose qualitative effects transcend model architecture. Policy implications become contingent on market characteristics: strategic depth management makes moderate competition welfare-improving in liquid markets while preserving consolidation's benefits in thin markets. The findings establish the Parity Index as a behaviourally robust framework and demonstrate that adaptive models provide reliable structural guidance when strategic analysis is computationally prohibitive.

Abstract: Canonical market microstructure theories, validated in liquid financial markets, are often misapplied to illiquid power futures. This study introduces the Impact-Inventory Parity (IIP) parameter Ψ, bridging the Kyle (information-based) and Ho-Stoll (inventory-based) models, and uses agent-based simulations to test its validity in thin markets. We uncover a critical asymmetry: while competition consistently pushes markets towards inventory dominance, the countervailing effect of non-linear inventory costs systematically weakens as markets thin due to lower inventory variance. This creates a structural bias toward inventory dominance Ψ=1 that persists despite strong convex penalties. Adaptive behaviour revealed a stability paradox, causing severe parity breakdown that was amplified by liquidity, not thinness. Parameter space analysis showed market stability rests equally on three structural pillars: participation, liquidity, and information quality. Among stable markets, information quality dominates regime outcomes, while adaptative behaviour acts as a critical threshold where small changes can trigger immediate market collapse. Across the physically plausible parameter space, inventory-dominated regimes comprise the vast majority (73%) of configurations, while the balanced-risk conditions predicted by classical theory are rare (8%), confirming parity as a narrow, fragile equilibrium. The framework proves robust in thin, fragmented markets—precisely where canonical models fail, while becoming unreliable in the liquid, centralized venues where those models were validated.

Abstract: This study addresses two critical gaps in international energy cost competitiveness. The first is a frequency gap: conventional indicators such as the Real Unit Energy Cost (RUEC) are typically published with delays of 2–5 years, limiting their usefulness for timely policy evaluation. Here, both RUEC and the Real Price Level Index for energy (Real PLI)—the ratio of the Purchasing Power Parity (PPP) for energy to that for GDP—are measured with only a 2–3 month lag for nine countries—four in Asia, four in Europe, and the U.S. The second is a competitiveness gap that calls for policy re-sponses. Real PLIs indicate that the energy price disadvantages of Japan, Korea, France, Germany, Italy, and the UK have widened from about 1.8–2.9 times the U.S. level before the pandemic to 2.2–3.3 times by Q2 2025, with gaps also increasing rela-tive to China and India. Once country-specific thresholds are exceeded, output in en-ergy-intensive and trade-exposed (EITE) industries tends to contract disproportion-ately. These findings highlight that sustainable transitions require not only interna-tionally differentiated burden-sharing but also structural reforms to avoid persistent widening of energy price gaps. The Real PLI framework offers a timely competitiveness indicator and early-warning tool, signaling when growing asymmetries may under-mine policy feasibility.