ABSTRACT This paper examines endogenous corporate social responsibility (CSR) in a monopolistic network industry in which participation generates both network benefits and congestion. We develop a fulfilled‐expectations model and compare the firm's CSR, pricing and output decisions under passive and responsive consumer expectations. Under passive expectations, positive network externalities always sustain CSR, whereas sufficiently strong congestion may eliminate commitment when consumers' sensitivity to CSR is limited. Under responsive expectations, CSR is always strictly positive. Whenever the passive solution is interior, responsive expectations induce stronger CSR under congestion but weaker CSR when positive network benefits dominate. The profit and welfare rankings across expectation regimes similarly depend on the nature of network interactions. Nevertheless, within each regime, endogenous CSR raises monopoly profit, consumer surplus and social surplus relative to the corresponding no‐CSR benchmark whenever it is adopted. These findings remain robust when production involves increasing marginal costs. Allowing for heterogeneous expectations further shows that, under congestion, a sufficiently large share of responsive consumers can eliminate the no‐CSR outcome.
ABSTRACT This study evaluates whether the adoption of inflation targeting (IT) causally enhances real income growth and reduces inflation volatility in 16 middle‐income nations (MINs). The analysis employs Bayesian frameworks and dynamic difference‐in‐differences (DiD) to identify both short‐run and long‐run policy effects. The research contributes to the literature by reconciling mixed findings on IT through joint modeling of parameter instability and staggered treatment timing, and by providing extensive robustness checks. The principal contribution is an examination of whether IT frameworks serve as effective monetary policy instruments for both per capita GDP growth and price stability in emerging economies. The results indicate that only five countries exhibit transient post −IT improvements in GDP per capita, while pre −IT effects remain negligible. Dynamic DiD estimations corroborate these findings, showing statistically insignificant long‐term treatment effects across cohorts, with short‐term impacts dissipating within 5 years. The analysis concludes that IT frameworks in MINs fail to generate sustained income growth trajectories, although they effectively mitigate price volatility. These findings align with the theoretical predictions of monetary super‐neutrality in the long run, namely, that sustained changes in the rate of inflation, as governed by IT regimes, do not permanently alter real output trajectories.
ABSTRACT We determine the optimal tariff in the presence of immigration and public health provision in a factor‐abundance‐driven trade model, and we prove two results. First, ceteris paribus , a higher value of immigrant output, a more efficient or cheaper public health service, or a lower level of immigration (which occurs if the wage in the recipient country is not significantly higher than that in the sourcing country) may lead to more restrictive trade policies compared to the benchmark of no immigration and no public healthcare provision. Second, contrary to conventional wisdom, all else being equal, trade in goods and factors may be complements under a lower value of output creation by immigrants, a more inefficient or expensive public healthcare system, or a higher level of immigration.
We revisit the inverted-U relationship between finance and growth using data for 40 countries from 1969 to 2019. Our estimates of the tipping point-the level of credit-to-GDP above which additional credit becomes a drag on growth-are substantially lower than those we reported in the aftermath of the global financial crisis. Why is this? Our analysis points to global factors as the most important determinant of the turning point. That is, we show that common movements in GDP and credit across countries significantly lower the estimated turning point. We go on to investigate the impact of banking-system concentration, which raises the turning point but steepens the costs of exceeding it; bank credit-to-deposit ratios, which tend to lower it; and, most strikingly, the stock market capitalisation, where a high level can cause the inverted-U to disappear entirely, so that additional bank credit is associated with lower growth at all levels.
ABSTRACT The “too much finance” literature has shown that financial sector expansion can detract from economic growth and productivity when resources are misallocated toward privately profitable but socially unproductive activities. This paper applies this framework to cryptocurrencies, a rapidly growing segment of finance whose production structure consumes large quantities of energy. We present the first systematic application of Input‐Output methodology to the U.S. cryptocurrency sector, constructing estimates of gross output and intermediate consumption for mining and centralized exchange operations over 2022–2024, and benchmarking these against 173 industries in the Bureau of Economic Analysis (BEA) Input‐Output Use Table. We find that the cryptocurrency sector generates gross output comparable in scale to niche sectors of the U.S. economy, while consuming energy at a rate that is strikingly disproportionate to its economic contribution – the largest deviation among all U.S. industries. Its input structure is dominated by a single commodity – energy – leaving little room for inputs that generate productivity gains, and its outputs serve as productive inputs in virtually no other sector of the economy. Together these findings are consistent with a “too much crypto” hypothesis: the sector draws heavily on scarce resources while generating minimal economic output and productive spillovers.
