This paper studies the long-run economic and institutional consequences of Iran's confrontation with the West, treating the 2006-2007 strategic shift as the onset of a sustained confrontation regime rather than a discrete sanctions episode. Using synthetic control and generalized synthetic control methods, I construct transparent counterfactuals for Iran's post-confrontation trajectory from a donor pool of countries with continuously normalized relations with the West. I find large, persistent losses in real GDP and GDP per capita, accompanied by sharp declines in foreign direct investment, trade integration, and non-oil exports. These economic effects coincide with substantial and durable deterioration in political stability, rule of law, and control of corruption. Magnitude calculations imply cumulative output losses comparable to civil-war settings, despite the absence of internal armed conflict. The results highlight confrontation as a deep and persistent economic and institutional shock, extending the literature beyond short-run sanctions effects to sustained geopolitical isolation.
We study the associations between everyday economic decision-making quality and people's emotional states. Using high-frequency, highly disaggregated consumer "scanner" data, we show that the cost of poor decision-making is substantial, on average equal to around half of day-to-day consumption budgets. While material circumstances help explain decision-making quality, how people feel about those circumstances is equally important. Contrary to evidence that stress and worry impair performance in settings where distraction is costly, we find these same feelings are associated with improved decision-making for frequently made consumption choices. This is consistent with worry increasing attentiveness to decisions within households' locus of control.
Erwin J. Sacoto-Cabrera, Luis Guijarro, Jose R. Vidal
et al.
The provision of services by more than one operator over a common network infrastructure, as enabled by 5G network slicing, is analyzed. Two business models to be implemented by a network operator, who owns the network, and a virtual operator, who does not, are proposed. In one business model, named \emph{strategic}, the network operator provides service to its user base and the virtual operator provides service to its user base and pays a per-subscriber fee to the network operator. In the other business model, named \emph{monopolistic}, the network operator provides service to both user bases. The two proposals are analyzed by means of a model that captures both system and economic features. As regards the systems features, the slicing of the network is modeled by means of a Discriminatory Processor Sharing queue. As regards the economic features, the incentives are modeled by means of the user utilities and the operators' revenues; and game theory is used to model the strategic interaction between the users' subscription decision and the operators' pricing decision. In both business models, it is shown that the network operator can be provided with the appropriate economic incentives so that it acquiesces in serving the virtual operator's user base (monopolistic model) and in allowing the virtual operator to provide service over the network operator's infrastructure (strategic model). From the point of view of the users, the strategic model results in a higher subscription rate than the monopolistic model.
Environmental degradation and climate change permeate our society and have unforeseen regional impacts. The literature on green transitions highlights preexisting structures that hinder or facilitate change and, more recently, micro-level actions in creating change. However, little is known about peripheral regions struggling to overcome systemic decline and ‘left-behindness’ in this context. In this paper, we adopt the approach of path tracing following a bioeconomy initiative aiming for circularity. We create a timeline of critical junctures to demonstrate the dialectic relationship between agency and structures influencing the prevailing change. Our findings highlight that local actors in the periphery are embedded in temporal and spatial relations (top-down causation), and that these processes hinder local agency (bottom-up causation), due to critical events that resonate with international, national and regional (i.e., multi-level) macro-political and economic conditions.
Regional economics. Space in economics, Regional planning
Osegbue Ifeanyi Francis, Abobaker Mohmed, Obiora Fabian
et al.
This study investigates the interplay between financial policy and real interest rates and their impact on economic performance in MENA and SSA countries. It aims to determine whether financial policy supports economic performance and how its interaction with real interest rates amplifies or moderates its effect.
Regional economics. Space in economics, Economics as a science
One in three women globally experiences intimate partner violence (IPV), yet little is known about how such trauma affects economic decision-making. We provide causal evidence that IPV influences women's time preferences - a key parameter in models of savings, investment, and labor supply. We combine two empirical strategies using four distinct datasets. First, in two randomized recall experiments in Ethiopia, we randomly assigned women to recall specific acts of abuse before eliciting their intertemporal choices. Women with IPV experiences prompted to recall IPV display significantly greater impatience than otherwise similar women who are not prompted. Second, we exploit exogenous reductions in IPV generated by two randomized interventions - one involving cash transfers, the other psychotherapy - and use treatment assignment as an instrument for IPV exposure. Women who experience reduced IPV as a result of treatment exhibit more patient time preferences. Together, these results provide consistent, novel causal evidence that exposure to IPV induces individuals to discount the future more heavily. This evidence suggests a psychological channel through which violence can perpetuate economic disadvantage and constrain women's ability to take actions - such as saving, investing, or exiting abusive relationships - that require planning over time.
Economic decision-making depends not only on structured signals such as prices and taxes, but also on unstructured language, including peer dialogue and media narratives. While multi-agent reinforcement learning (MARL) has shown promise in optimizing economic decisions, it struggles with the semantic ambiguity and contextual richness of language. We propose LAMP (Language-Augmented Multi-Agent Policy), a framework that integrates language into economic decision-making and narrows the gap to real-world settings. LAMP follows a Think-Speak-Decide pipeline: (1) Think interprets numerical observations to extract short-term shocks and long-term trends, caching high-value reasoning trajectories; (2) Speak crafts and exchanges strategic messages based on reasoning, updating beliefs by parsing peer communications; and (3) Decide fuses numerical data, reasoning, and reflections into a MARL policy to optimize language-augmented decision-making. Experiments in economic simulation show that LAMP outperforms both MARL and LLM-only baselines in cumulative return (+63.5%, +34.0%), robustness (+18.8%, +59.4%), and interpretability. These results demonstrate the potential of language-augmented policies to deliver more effective and robust economic strategies.
We investigate whether the hidden states of large language models (LLMs) can be used to estimate and impute economic and financial statistics. Focusing on county-level (e.g. unemployment) and firm-level (e.g. total assets) variables, we show that a simple linear model trained on the hidden states of open-source LLMs outperforms the models' text outputs. This suggests that hidden states capture richer economic information than the responses of the LLMs reveal directly. A learning curve analysis indicates that only a few dozen labelled examples are sufficient for training. We also propose a transfer learning method that improves estimation accuracy without requiring any labelled data for the target variable. Finally, we demonstrate the practical utility of hidden-state representations in super-resolution and data imputation tasks.
Concerns about declining or ageing populations often centre on the fear that fewer people will translate to a weaker economy and lower living standards. But these fears are frequently based on oversimplified or misapplied interpretations of economic models, and appear to be driven more by political agendas rather than evidence. In reality, long-term prosperity depends more on how societies invest in education, skills, and technology, not just how many people they have. We examine national data at the global scale to test whether slower population growth or ageing populations are linked to worse economic or social outcomes. Using nine different indices of socio-economic performance (domestic comprehensive wealth, income equality, research and development expenditure, patent applications, human capital, corruption perception index, freedom, planetary pressure-adjusted Human Development Index, healthy life expectancy at birth), we find no evidence that they are. In fact, we find that countries with low or negative population growth perform better on average for all indicators, and that even within-country time series show that most older and slower-growing populations fare better on average. These findings challenge common assumptions and highlight the need to move beyond fear-based and politically motivated narratives toward a more informed understanding of what truly supports thriving societies.
There is increasing interest in using LLMs as decision-making "agents." Doing so includes many degrees of freedom: which model should be used; how should it be prompted; should it be asked to introspect, conduct chain-of-thought reasoning, etc? Settling these questions -- and more broadly, determining whether an LLM agent is reliable enough to be trusted -- requires a methodology for assessing such an agent's economic rationality. In this paper, we provide one. We begin by surveying the economic literature on rational decision making, taxonomizing a large set of fine-grained "elements" that an agent should exhibit, along with dependencies between them. We then propose a benchmark distribution that quantitatively scores an LLMs performance on these elements and, combined with a user-provided rubric, produces a "STEER report card." Finally, we describe the results of a large-scale empirical experiment with 14 different LLMs, characterizing the both current state of the art and the impact of different model sizes on models' ability to exhibit rational behavior.
Packing peanuts, as defined by Wikipedia, is a common loose-fill packaging and cushioning material that helps prevent damage to fragile items. In this paper, I propose that synthetic data, akin to packing peanuts, can serve as a valuable asset for economic prediction models, enhancing their performance and robustness when integrated with real data. This hybrid approach proves particularly beneficial in scenarios where data is either missing or limited in availability. Through the utilization of Affinity credit card spending and Womply small business datasets, this study demonstrates the substantial performance improvements achieved by employing a hybrid data approach, surpassing the capabilities of traditional economic modeling techniques.
Accurate forecasts of the impact of spatial weather and pan-European socio-economic and political risks on hourly electricity demand for the mid-term horizon are crucial for strategic decision-making amidst the inherent uncertainty. Most importantly, these forecasts are essential for the operational management of power plants, ensuring supply security and grid stability, and in guiding energy trading and investment decisions. The primary challenge for this forecasting task lies in disentangling the multifaceted drivers of load, which include national deterministic (daily, weekly, annual, and holiday patterns) and national stochastic weather and autoregressive effects. Additionally, transnational stochastic socio-economic and political effects add further complexity, in particular, due to their non-stationarity. To address this challenge, we present an interpretable probabilistic mid-term forecasting model for the hourly load that captures, besides all deterministic effects, the various uncertainties in load. This model recognizes transnational dependencies across 24 European countries, with multivariate modeled socio-economic and political states and cross-country dependent forecasting. Built from interpretable Generalized Additive Models (GAMs), the model enables an analysis of the transmission of each incorporated effect to the hour-specific load. Our findings highlight the vulnerability of countries reliant on electric heating under extreme weather scenarios. This emphasizes the need for high-resolution forecasting of weather effects on pan-European electricity consumption especially in anticipation of widespread electric heating adoption.
In the global pursuit of sustainable energy solutions, mitigating carbon dioxide (CO2) emissions stands as a pivotal challenge. With escalating atmospheric CO2 levels, the imperative of direct air capture (DAC) systems becomes evident. Simultaneously, green hydrogen (GH) emerges as a pivotal medium for renewable energy. Nevertheless, the substantial expenses associated with these technologies impede widespread adoption, primarily due to significant installation costs and underutilized operational advantages when deployed independently. Integration through sector coupling enhances system efficiency and sustainability, while shared power sources and energy storage devices offer additional economic benefits. In this study, we assess the economic viability of polymer electrolyte membrane electrolyzers versus alkaline electrolyzers within the context of sector coupling. Our findings indicate that combining GH production with solid DAC systems yields significant economic advantages, with approximately a 10% improvement for PEM electrolyzers and a 20% enhancement for alkaline electrolyzers. These results highlight a substantial opportunity to improve the efficiency and economic viability of renewable energy and green hydrogen initiatives, thereby facilitating the broader adoption of cleaner technologies.
Diogo Barbosa Leite, Carlos Marcelo Faustino da Silva, Ricardo Tomaz Caires
et al.
Os parques de ciência e tecnologia são estruturas para promoção do desenvolvimento regional a partir da interação entre atores da inovação. Por meio do estabelecimento de fluxos de conhecimento, que subsidiam a criação de inovações, atuam como núcleo da quádrupla hélice entre universidade, empresa, governo e sociedade nos ecossistemas de inovação. Este estudo teve como objetivo propor ações para o desenvolvimento do Parque Tecnológico Mato Grosso a partir do modelo de quádrupla hélice. Empregou-se uma estratégia de estudo de caso, que contou com pesquisa documental, realização de entrevistas em profundidade e um grupo focal. Os dados foram interpretados a partir de análise de conteúdo. Os resultados apontaram a ausência de um “jogador forte” para o estabelecimento de um ecossistema de inovação no território. Para isso, algumas ações foram sugeridas considerando os aspectos da região, de modo a permitir ao parque consolidar uma ação mais integrada entre os membros da quádrupla hélice.
Laura Cavalli, Mia Alibegovic, Edward Cruickshank
et al.
ABSTRACTBetween 2019 and 2021, the Autonomous Region of Sardinia and the Eni Enrico Mattei Foundation (FEEM) developed and applied a sustainability assessment model of the investments within the regional operational programmes (ROPs), with specific reference to the United Nations’ 2030 Agenda and its 17 Sustainable Development Goals (SDGs). That same methodology is used here for the assessment of the sustainability of the ROPs co-financed by the European Union with specific reference to Italy’s National Sustainable Development Strategy (NSDS). In particular, the analysis is done by looking at the contribution of the 182 intervention fields to the NSDS’ strategic goals. Throughout the paper the importance of defining implementation strategies of the NSDS’ National strategic goals through the integration of the indicators, goals and choices of the national strategy into local or regional development plans is emphasized. Finally, the work suggests this methodology as a reference point to ensure careful monitoring of the sustainability of the investments of various European Union policies, in consideration of the importance that the strategy assumes for both Italy and the Italian regions.
Regional economics. Space in economics, Regional planning
Introduction. The separate existence of East Germany over the years has led to the formation of unique electoral preferences of citizens. In eastern federal states the Left as the heir to the Socialist Unity Party of Germany remained one of the leaders for a long time. However, in recent years its traditional electorate has increasingly begun to choose the Alternative for Germany. The aim of this article is to identify the main reasons for this shift in preferences in East Germany.
Materials and Methods. The main materials were the results of the elections to the Bundestag and Landtags. The statistics illustrating the performance of the Left on the national average and separately in East Germany in the national elections since 2009 was processed with the help of comparative analysis, the same was done with regard to the subnational elections since 2009 and 2011. The results of the Alternative for Germany were evaluated from its inception in 2013. Additionally, the data was used on preferences among voters of various age groups, the rating of the National Democratic Party of Germany before and after the advent of the Alternative for Germany, as well as GDP per capita indicators.
Results. It is confirmed that it was the Alternative for Germany that mainly occupied the former niche of the Left. The main reasons that comprehensively influenced electoral preferences include the generational change, the unsuccessful adaptation of the left forces to Western values, the unpopularity of anti-capitalist rhetoric, the presence of more influential opponents on key left-wing topics, the demand for conservative and opposition ideology (e.g. in migration policy), as well as the ability of right-wing populists to work with protest voters.
Discussion and Conclusion. The decline in the ratings of the left has become a rather stable phenomenon in recent years, while the performance of the right-wing populists strongly depended on the reaction of the party to a particular political crisis. However, this was more about the general popularity of the Alternative for Germany, which did not imply real prerequisites for the return of the electorate to the Left. The results of this paper can be applied in expert-analytical and research activities aimed at explaining electoral processes.
Venezuela has suffered three economic catastrophes since independence: one each in the nineteenth, twentieth, and twenty-first centuries. Prominent explanations for this trilogy point to the interaction of class conflict and resource dependence. We turn attention to intra-class conflict, arguing that the most destructive policy choices stemmed not from the rich defending themselves against the masses but rather from pitched battles among elites. Others posit that Venezuelan political institutions failed to sustain growth because they were insufficiently inclusive; we suggest in addition that they inadequately mediated intra-elite conflict.
Macroeconomic data on the Spanish economy during the Second Republic is not accurate, the interpretation of historical events from the figures obtained is divergent and misleading. Hasty laws were enacted in attempts to resolve social problems arising mainly from deep economic inequalities, but they were often nothing more than declarations of good intentions. Spain suffered in the aftermath of the international economic downturn as it began to be felt at the end of the dictatorship of General Primo de Rivera. Economic policy was developed under the Constitution,but, despite the differences between the first and second biennium, there was a tendency to maintain the guidelines from the previous stage and in general, sometimes unfairly, it aimed at least to avoid the destabilization of the financial system. Nonetheless, it ultimately failed to achieve its goals, mainly because of the frequent changes of government mediated by a social crisis of greater significance that had relegated economic issues into the background.
Zhaojun Wang, Amanda M. Countryman, James J. Corbett
et al.
The Ballast Water Management Convention can decrease the introduction risk of harmful aquatic organisms and pathogens, yet the Convention increases shipping costs and causes subsequent economic impacts. This paper examines whether the Convention generates disproportionate invasion risk reduction results and economic impacts on Small Island Developing States (SIDS) and Least Developed Countries (LDCs). Risk reduction is estimated with an invasion risk assessment model based on a higher-order network, and the effects of the regulation on national economies and trade are estimated with an integrated shipping cost and computable general equilibrium modeling framework. Then we use the Lorenz curve to examine if the regulation generates risk or economic inequality among regions. Risk reduction ratios of all regions (except Singapore) are above 99%, which proves the effectiveness of the Convention. The Gini coefficient of 0.66 shows the inequality in risk changes relative to income levels among regions, but risk reductions across all nations vary without particularly high risks for SIDS and LDCs than for large economies. Similarly, we reveal inequality in economic impacts relative to income levels (the Gini coefficient is 0.58), but there is no evidence that SIDS and LDCs are disproportionately impacted compared to more developed regions. Most changes in GDP, real exports, and real imports of studied regions are minor (smaller than 0.1%). However, there are more noteworthy changes for select sectors and trade partners including Togo, Bangladesh, and Dominican Republic, whose exports may decrease for textiles and metal and chemicals. We conclude the Convention decreases biological invasion risk and does not generate disproportionate negative impacts on SIDS and LDCs.