We investigate the impact of air quality regulations targeting fine particulate matter (PM2.5) on farmland values in corn and soybean producing counties in the United States over the period 1997-2022. Using self-reported farmland value data from the Agricultural Census and county-level pollution classifications provided by the Environmental Protection Agency, we employ a difference-in-differences event-study design-incorporating inverse probability weighting and doubly robust estimators-to estimate the causal effect of regulatory interventions. Our primary analysis contrasts 'non-attainment' counties, which failed to meet the National Ambient Air Quality Standards for PM2.5, with those that consistently maintained compliance. We further assess heterogeneous treatment effects by extending our analysis with a triple-difference specification comparing counties with high versus low fertiliser use. Additionally, we employ the recentered influence function to conduct an unconditional quantile analysis across the entire distribution of farmland values. Our estimates indicate an 8.80%-8.94% decline in farmland values in 'non-attainment' counties in response to the enforcement of PM2.5 standards, suggesting that the economic costs of the prescribed standards were capitalised into farmland values, particularly in regions with higher fertiliser use. However, this impact was not uniform, with more pronounced effects observed among counties at the lower end of the farmland value distribution.

This paper provides an in-depth analysis of the link between exchange rate misalignments and economic growth for a large sample of 170 countries over the 1973-2019 period. Although any significant departures from the equilibrium exchange rate levels are found undesirable, we show that undervaluations are more likely to stimulate economic growth in developing countries. However, this positive impact is observed only up to certain thresholds of development level and currency undervaluation. Consequently, strategies in developing countries that systematically undervalue currencies in real terms to foster growth should be carefully tailored, as they raise the risk for these economies of switching from a positive to a less favorable growth regime, depending on both their specific wealth level and the extent of their currency undervaluation.

We investigate the impact of air quality regulations targeting fine particulate matter (PM 2.5 ) on farmland values in corn and soybean producing counties in the United States over the period 1997–2022. Using self-reported farmland value data from the Agricultural Census and county-level pollution classifications provided by the Environmental Protection Agency, we employ a difference-in-differences event-study design—incorporating inverse probability weighting and doubly robust estimators—to estimate the causal effect of regulatory interventions. Our primary analysis contrasts ‘non-attainment’ counties, which failed to meet the National Ambient Air Quality Standards for PM 2.5 , with those that consistently maintained compliance. We further assess heterogeneous treatment effects by extending our analysis with a triple-difference specification comparing counties with high versus low fertiliser use. Additionally, we employ the recentered influence function to conduct an unconditional quantile analysis across the entire distribution of farmland values. Our estimates indicate an 8.80%–8.94% decline in farmland values in ‘non-attainment’ counties in response to the enforcement of PM 2.5 standards, suggesting that the economic costs of the prescribed standards were capitalised into farmland values, particularly in regions with higher fertiliser use. However, this impact was not uniform, with more pronounced effects observed among counties at the lower end of the farmland value distribution.

This paper proposes a new de facto classification of exchange rate regimes, the synthesis classification. This framework offers several advantages over existing de facto classifications. First, it provides a unified framework that integrates the most divergent classifications, the RR and LYS classifications, not only achieving broader coverage but also encompassing a wide spectrum of exchange regimes. Second, it fits better with the historical developments of exchange rate regimes in the post-Bretton Woods era. Among others, it brings a nuanced perspective on the so-called hollowing-out hypothesis by showing that the evolution of de facto regimes —especially in emerging economies since the late 1990s— has essentially involved a shift toward more tightly “managed” intermediate regimes, rather than a move away from them. As an illustration of the insightfulness of our classification, we empirically revisit the relationship between currency crises and exchange rate regimes. Our classification not only associates a higher probability of currency crisis with both intermediate and floating regimes, but also shows better statistical performances in predicting currency crises compared to other classifications.

This article examines whether the IMF sentiment conveyed by the Regional Economic Outlook (REO) provides new information capable of influencing government bond markets. To measure IMF sentiment, we use text mining techniques on an original dataset based on the qualitative content of the REO reports for 16 countries across three regions covered by the REO, Asia and Pacific , Europe , and Western Hemisphere , from 2005 to 2018. Our results suggest that the qualitative content of the REO reports has significant repercussions on bond yields, particularly in the Asia and Pacific region, and provides a positive signal in bond markets of countries participating in an IMF program in the Europe and Western Hemisphere regions. IMF sentiment towards the leading trade partner can also be an essential source of bond markets’ reactions. These findings are robust when controlling for IMF quantitative forecasts in the empirical procedure, accounting for an alternative sentiment measure and controlling for other potential determinants of bond yields. They thus shed new light on the importance of IMF communication for guiding and managing markets’ expectations.

This paper investigates whether the West African nations will benefit from forming the ECO currency union. Using data from 15 countries over the 1999–2018 period, we assess heterogeneity between economies in terms of equilibrium exchange rates —i.e., the level of exchange rates consistent with the absence of macroeconomic disequilibria. Then, we address the sustainable exchange rate regime issue by evaluating whether the ECO should be pegged, freely floating, or something in between. We identify two homogenous groups of economies and find that neither a single currency peg nor a freely floating exchange rate regime would be preferable for any country or group of economies. Overall, our findings argue in favor of two ECOs, one for each of the two identified zones. Each ECO would serve as a virtual anchor for the considered group and would be determined by a basket of currencies mainly composed of euro and US dollar.

Cet article évalue le degré d’hétérogénéité des pays au sein de la zone euro et son évolution au cours du temps en mesurant les écarts entre les trajectoires des taux de change d’équilibre des États membres. Ces trajectoires découlent de la minimisation des écarts entre les taux de change réels et leurs fondamentaux économiques, appelés mésalignements de change. À l’aide d’analyses par grappes et factorielles, nous identifions deux groupes de pays distincts dans la période pré-Union économique et monétaire européenne, la Grèce étant très atypique par rapport aux autres États membres à cette époque. En comparant les résultats à ceux obtenus sur des périodes plus récentes, nous constatons des disparités croissantes entre ces deux groupes de pays, ainsi qu’au sein des groupes eux-mêmes. Globalement, nos conclusions illustrent les déséquilibres macroéconomiques croissants au sein de la zone euro avant la crise de 2008 et la fragmentation économique qui a suivi entre ses pays membres. Classification JEL : C38, E5, F33, F45

We introduce an original dataset based on the qualitative content of the Regional Economic Outlook (REO) reports published by the International Monetary Fund (IMF). Exploiting this rich database, we gauge several measures of IMF sentiment based on the REO reports towards 16 countries in three regions, Asia and Pacific, Europe and Western Hemisphere, from 2007 to 2018 and examine their impact on financial markets. We find that the qualitative content of the REO reports has significant repercussions on stock market returns in Europe and bond yields in Asia and Pacific over short time horizons, these impacts disappearing over time. We also demonstrate that the impact of IMF sentiment is robust to the use of analternative sentiment measure that focuses exclusively on negative words.

This paper describes the new CEPII-MULTIPRIL database on Multilateral Price Levels (MPL) introduced in 2020. The MULTIPRIL database covers a wide sample of 178 countries over the 1990–2018 period, and includes relative price level series computed vis-à-vis two sets of trading partners (177 and the top 30) according to three different trade-weighting schemes. It also contains MPL-based currency misalignments series for 156 countries over the 1991–2018 period. MULTIPRIL offers the potential to improve the coverage and quality of worldwide price-competitiveness comparisons. By focusing on price level data, it usefully complements the EQCHANGE database on equilibrium exchange rates and currency misalignments derived from series in indices. Its multilateral setting provides a more comprehensive picture of relative price levels and currency misalignments compared to existing bilateral measures.

The past two decades have witnessed widespread attempts to reform fossil fuel subsidies in developing countries. If the reforms are likely to improve economic efficiency, the expected effects on income distribution and poverty are more controversial. This paper reviews the recent literature that examines the impacts of fossil fuel subsidies and their reforms on income inequality and poverty in developing countries. It identifies the different channels that have been explored in the literature and surveys the empirical evidence on the importance of these channels in practice. Drawing on diverse country experiences, it also discusses why fossil fuel subsidies are particularly challenging to reform and highlights several ways in which efforts to reform may be feasible and successful.

While it is often alleged that oil endowment might influence the destination of foreign aid, there is a lack of empirical evidence of how and why such an effect may come into play, and even less so of the channels through which it works. This paper aims to bring evidence that contributes to addressing those points. Specifically, we investigate the role of oil in aid allocation of the G7 donors. Results show that, unsurprisingly, aid allocated by these donors increases significantly with oil endowment of recipient countries. Looking more deeply, we interestingly show that their strategic interests in terms of oil security play a role in their provision of aid. More importantly, we provide evidence on the existence of competition for access to oil supplies among this group of donors.

This guidance note outlines the construction and contents of RPROD. This new database developed by CEPII complements the EQCHANGE database, by providing additional measures of the Balassa-Samuelson effect. RPROD delivers the following indicators computed for each country included in the database, and relative to its main trading partners: (i) GDP per capita, (ii) labor productivity, (iii) consumer-price-to-producer-price ratio, (iv) three-sectors' value-added deflator, and (v) six-sectors' value-added deflator. These different measures are publicly available (http://www.cepii.fr/CEPII/fr/bdd_modele/presentation.asp?id=34), with the aim to contribute to the investigation of the Balassa-Samuelson hypothesis, and to the comparison of estimated equilibrium real exchange rates and currency misalignments across alternative proxies of this effect.

This paper provides a comprehensive analysis of the disagreements between the two most popular but also discordant de facto exchange rate regime classifications: the Reinhart and Rogoff and the Levy-Yeyati and Sturzenegger classifications. We estimate probabilities of disagreement between the two classifications for the different exchange rate regime categories, and derive a de facto synthesis classification, using the Receiver Operating Characteristic analysis. We show that more than a third of the observations are not directly comparable, and relatively few disagreements are directly attributable to the classifications’ key variables. Most of the disagreements originate from the different thresholds used by the classifications in the definition of the ERR categories and the interactions between several variables. Given these complexities, the synthesis classification provides a useful framework in terms of greater comparability.

This paper assesses the effect of monetary integration on correlations between the Belgian, French and US stock market returns during the interwar period (1919-1939) using high quality value-weighted stock price indices on monthly basis. Contrary to the common wisdom, we find that cross-correlations increased before the beginning of the international financial crisis of the 1930s.Financial linkages between stock markets tightened during the Gold Exchange Standard period, showing that monetary integration has strongly affected the co-movement of stock returns especially between the Belgian-US and the French-US stock markets.

This paper examines the growth effects of ENSO events through their interactions with local weather conditions using the Standardized Precipitation and Evapotranspiration Index (SPEI) from 1975 to 2014 and over a sample of 74 countries. The inclusion of SPEI in panel estimation makes it possible to control for time-varying country-specific effects of ENSO events, therefore outlining their heterogeneous effects on growth and eliminating a potential source of omitted variable bias. By better identifying the persistence of ENSO effects on local weather conditions, we evidence that ENSO events generate heterogeneous and local effects depending not only on countries' climate regime but also on their weather patterns. Our results suggest that examining the growth effects of ENSO events should thus explicitly account for their interaction with weather patterns to capture more precisely the heterogeneity across countries.

This paper contributes to the climate-economy literature by analysing the role of weather patterns in influencing the transmission of global climate cycles to economic growth. More specifically, we focus on El Niño Southern Oscillation (ENSO) events and their interactions with local weather conditions, taking into account the heterogeneous and cumulative effects of weather patterns on economic growth and the asymmetry and nonlinearity in the global influence of ENSO on economic activity. Using data on 75 countries over the period 1975-2014, we provide evidence for the negative growth effects of ENSO events and show that there are substantial differences between its warm (El Niño) and cold (La Niña) phases and between climate zones. These differences are due to the heterogeneity in weather responses to ENSO events, known as teleconnections, which has so far not been taken into account by economists, and which will become more important in the climate-economy relationship given that climate change may substantially strengthen long-distance relationships between weather patterns around the world. We also show that the negative growth effects associated with these teleconnections are robust to the definition of ENSO events and more important over shorter meteorological onsets.

We assess cross-country heterogeneity within the eurozone and its evolution over time by measuring the distances between the equilibrium exchange rates' paths of member countries. These equilibrium paths are derived from the minimization of currency misalignments, by matching real exchange rates with their economic fundamentals. Using cluster and factor analyses, we identify two distinct groups of countries in the run-up to the European Monetary Union (EMU), Greece being clearly an outlier at that time. Comparing the results with more recent periods, we find evidence of rising dissimilarities between these two sets of countries, as well as within the groups themselves. Overall, our findings illustrate the building-up of macroeconomic imbalances within the eurozone before the 2008 crisis and the fragmentation between its member countries that followed.