EU membership offers significant benefits, including access to the world’s largest market and access to EU funding programs. A core objective of these funding initiatives is to promote social inclusion and alleviate poverty (Barca 2009). This paper investigates long-term poverty dynamics in seven new EU member states—Poland, Hungary, the Czech Republic, Romania, Bulgaria, Estonia, and Slovenia—while also providing estimates for France, Italy, and Greece to contextualize these findings. The analysis is based on the European Union Statistics on Income and Living Conditions (EU-SILC), the primary dataset for examining income mobility across the EU. However, due to the dataset’s short longitudinal span (tracking households for a maximum of three years), this study employs a refined version of the synthetic panel approach proposed by H.-A. Dang et al. (2014) to assess long-term mobility. The findings reveal substantial heterogeneity in poverty dynamics across countries and regions. Countries with similar poverty incidence often exhibit markedly different poverty dynamics, indicating that static poverty measures conceal important differences in underlying income transitions. At the national level, Romania shows persistently weaker poverty dynamics and lower mobility compared to Poland, despite similar income growth. Regional results further highlight pronounced intra-country variation, with persistent low-mobility clusters in several Southern and Eastern European regions.
Conformity with Benford’s law is widely used in accounting and finance to identify data irregularities, detect potential fraud, and evaluate the reliability of reported numerical information. However, the statistical tests commonly used for this purpose suffer from three well-known limitations: excessive sensitivity to sample size, limited interpretability, and the absence of a unified metric that enables consistent comparisons across tests and empirical contexts. This paper introduces the equivalent contamination proportion (ECP), an interpretative, benchmark-calibrated measure designed to complement, rather than replace, traditional Benford conformity tests. The ECP is defined as the proportion of benchmark contamination in a hypothetical Benford-conforming sample that would generate the same expected divergence as that observed in the empirical data. It is a continuous and easily interpretable measure ranging from 0 to 100
This paper investigates the dynamic pass-through of tariff changes to 115 item-level retail prices in the USA using a monthly dataset spanning three decades (1995–2025). We address the econometric challenge of Nickell bias in long-horizon impulse response estimation by employing a bias-corrected split-panel jackknife estimator within a local projection framework. The identification strategy leverages item-specific tariff variation within a two-way fixed effects structure that absorbs common time-varying macroeconomic shocks, such as aggregate inflation and business cycles, while strictly controlling for unobserved time-invariant item heterogeneity. The results reveal a distinct reversal: tariff shocks are highly inflationary initially, but exhibit a statistically significant reversal in the long run, consistent with general equilibrium adjustments. While pass-through was negligible prior to 2010, the post-2010 era, characterized by broad-based protectionism, exhibits a high-magnitude initial transmission of tariffs to consumer prices, though long-run persistence remains statistically uncertain. We also uncover critical state-dependent asymmetries, as large tariff shocks induce more sustained price adjustments than small fluctuations. These findings suggest that the inflationary costs of modern trade wars are more structurally embedded than previously understood and that standard fixed-effects estimators significantly underestimate the long-run persistence of trade policy shocks.
This paper investigates the role of oil import diversification in shaping the macroeconomic transmission of oil supply shocks in Eurozone countries between 2001 and 2023. Using a proxy structural vector autoregressive (SVAR) model with high-frequency identification of oil supply news shocks and a nonlinear local projections estimator, we examine the impact of shocks on inflation, industrial production, and unemployment. Our results show that the inflationary effects of oil supply shocks are significantly stronger in countries with low import diversification, both for headline and core inflation, while the unemployment response is also more pronounced. In contrast, industrial production exhibits no clear heterogeneity across diversification regimes. These findings highlight that oil import diversification serves as an important buffer against the adverse macroeconomic consequences of energy supply disruptions. The results are robust to alternative specifications and identification strategies, including controls for country-specific transmission channels, alternative measures of the oil supply news shock, different lag structures for the diversification index, alternative summary statistics, and leave-one-out exercises. Policy implications suggest that Eurozone economies can enhance their resilience to global energy shocks by broadening the range of oil suppliers and increasing their transition toward alternative energy sources.
Recent geopolitical and economic tensions have renewed attention to how bargaining asymmetries shape the distribution of gains from foreign direct investment (FDI). We examine whether international bargaining power conditions the relationship between FDI and bilateral GDP disparities. We develop a neoclassical growth model with a recursive investment game and derive a threshold beyond which FDI no longer narrows the relative income gap. Using declassified General Agreement on Tariffs and Trade (GATT) data, we construct bargaining-power indicators and find that FDI is associated with smaller bilateral GDP disparities, measured by the absolute log aggregate GDP gap, when the host country has relatively stronger bargaining power. This negative association is attenuated as host-country bargaining power weakens. These findings are robust across alternative cutoffs, continuous interactions, search-adjusted threshold tests, and instrumental-variable sensitivity analyses. The GDP-per-capita and 5-year forward-average growth-gap results are weaker, indicating that the bargaining channel is most visible in disparities in aggregate output.
