Kiel Institute for the World Economy
Recent publications
The economics of biodiversity is gaining traction and with it the economic valuation of ecosystem services (ESS). Most current developments neglect microbial diversity, although microbial communities provide ecosystem services of great importance. Here we argue that microbial biodiversity (hereafter microbiodiversity) translates into considerable economic value which is usually not explicitly included in quantitative valuation of ecological functions to date. This omission may result in inaccurate values, potentially entailing substantial economic losses, both in private and in public decision-making, due to external effects that arise as microbiodiversity is horizontally and vertically transferred between hosts and natural environments. Microbiodiversity, an important part of biodiversity in general, occupies an irreplaceable position as a natural resource in ecosystems, because of option values derived from the evolutionary potential of microbes, especially if host-associated, and also because of their additional insurance value within changing environments. We illustrate our arguments with specific examples (microbiomes associated with humans, soil, and corals), all of which are jeopardized through anthropogenic pressure. We conclude that the consideration of microbiodiversity in economic valuation will help to find essential assets and guide decision-makers to conserve and protect the economic value of highly diverse microbial communities for future generations.
Under uncertainty about the kind, extent, or time frames of coastal threats, efficient protection requires measures that are effective in time and flexible enough to assure protection even if conditions change over time. Existing protection options are unable to offer both attributes simultaneously, creating a trade-off between short-term and long-term effectiveness in protection choice. This paper investigates the role played by differences in the temporal effectiveness of coastal protection measures in the choice of protection modes. Results from a discrete-choice experiment implemented in Papua New Guinea suggest that respondents have a strong preference for long-term over short-term effectiveness; an urgency to protect cannot be identified. Using incentivized preference measures for patience and risk-aversion as well as sociodemographic controls, we account for taste heterogeneity and validate the robustness of our results.
Definition of the problemUsing the example of the emergence of antibiotic resistance, we show in the first part of our article that there are specific sustainability problems in medicine, which can ultimately lead to an impairment of the ability of future patients to satisfy their basic health needs and realize a flourishing life.Methods After clarification of the concept of sustainability in the second part, we explain why the possibility of satisfying basic health needs, for example, is considered a condition for a good life within the framework of a capability approach. The concept of sustainability, as promoted by the United Nations, requires one to adequately consider the demands for a good life of future patients.Conclusion In the last part of the paper, we show that the orientation towards an idea of sustainability can lead to “sustainability dilemma” and we discuss how this can be dealt with.
With ever-increasing political tensions between China and Russia on one side and the EU and the US on the other, it only seems a matter of time until protectionist policies cause a decoupling of global value chains. This paper uses a computable general equilibrium trade model calibrated with the latest version of the GTAP database to simulate the effect of such a decoupling–implemented by doubling non-tariff barriers–between the two blocks on trade and welfare. Imposing import barriers almost completely eliminates bilateral imports. In addition, changes in price levels lead to higher imports and lower exports of the imposing country group from and to the rest of the world. The targeted country group increases exports to the rest of the world and reduces imports. Welfare falls in all countries involved, suggesting that governments should strive to cooperate rather than turn away from each other. By imposing a trade war on Russia, the political West could inflict severe damage on the Russian economy because of the latter’s smaller relative economic size.
This paper examines whether and how expectations have contributed to the turbulent path of the Turkish lira since 2008. We derive uncertainty measures surrounding GDP growth, inflation, the interest rate, and exchange rates based on survey data from Consensus Economics. Our results illustrate that forecasts have affected realized exchange rates and stock market returns via increased uncertainty. We also show that expectations regarding monetary policy have changed throughout the sample period. In line with a gradual adjustment of expectations professionals have accounted for the violation of the Taylor rule.
Introduction: Central nervous system cancers (CNS cancers) impose a significant burden upon healthcare systems worldwide. Currently, the lack of a comprehensive study to assess various epidemiological indexes of CNS cancers on national and subnational scales in Iran can hamper healthcare planning and resource allocation in this regard. This study aims to fill this gap by providing estimates of CNS cancer epidemiological measures on national and subnational levels in Iran from 1990 to 2019. Materials and methods: This study is a part of Global Burden of Disease (GBD) 2019 that contains epidemiological measures including prevalence, incidence, mortality, Disability-Adjusted Life Years (DALYs), Years Lived with Disability (YLDs), and Years of Life Lost (YLLs) of CNS cancers. Age standardization was utilized for comparing different provinces. Results: In 2019, 5811 (95% Uncertainty Interval: 2942-7046) national new cases and 3494 (1751-4173) deaths due to CNS cancers were reported. National age-standardized incidence (ASIR), deaths (ASDR), and DALYs rates were 7.3 (3.7-8.8), 4.6 (2.3-5.5), and 156.4 (82.0-187.0) per 100,000 in 2019, respectively. Subnational results revealed that ASDR and ASIR have increased in the past 30 years in all provinces. Although incidence rates have increased in all age groups and genders since 1990, death rates have remained the same for most age groups and genders except for young patients aged under 15, where a decrease in mortality and YLLs can be observed. Conclusion: The incidence, deaths, and DALYs of CNS cancers increased at national and subnational levels. These findings should be considered for planning and resource allocation.
This paper examines the determinants of COVID-19 lockdown severity across nations. How significant were health, economic, political, institutional, and social factors in determining the severity of government responses to the pandemic? Using data on 162 nations from March 2020 to July 2022, results show that it was mainly controlling the spread of the pandemic that led nations to more serve measures against the pandemic. These efforts were tempered in nations that had larger governments and in those with better enforcement and the ones with more elderly. On the other hand, economic prosperity, political structures, macro-level uncertainties, trade openness, and corruption did not appreciably matter.
Overall, decoupling from certain countries may be both politically necessary and economically feasible, at least in the long run. However, a general shift of production back to Europe would be accompanied by significant losses in real income.
This paper studies the influence of different aspects of gender equality or female empowerment on income inequality. A key question addressed is: Are there positive spillovers from gender equality to income equality? Using data drawn from 162 nations over the years 1985–2019, results show that nations with a long history of women's suffrage, greater representation of women in the government, lower fertility rates and better overall gender equality experienced lower income inequality, ceteris paribus. These results are largely supported in several robustness checks, including different model estimation strategies to address potential reverse‐causality issues, considering alternative measures of income inequality, and considerations of persistence and nonlinearities in the gender inequality measures. The spillovers from some dimensions of gender equality are found to be sensitive to existing income inequality. Policymakers ignoring the payoffs from gender empowerment on income distribution might be underinvesting in initiatives to empower women.
Background: This study presents estimates of central nervous system (CNS) cancers' prevalence, incidence and its contributors, death, years-of-life-lost (YLLs), years-lived-with-disability (YLDs), and disability-adjusted-life years (DALYs) from 1990 to 2019 in North Africa and the Middle East. Methods: Primary measures were retrieved from Global Burden of Disease 2019. The contribution of various factors to the observed incidence and mortality changes was investigated with decomposition and age-period-cohort analyses. Results: There were 27529 (95% uncertainty interval: 18554 - 32579; percent change compared to 1990: +152.5%) new cases of CNS cancers and 17773 (12096 - 20936; +111.5%) deaths in 2019. Meanwhile, 71.0% increase led to 716271 (493932 - 848226) DALYs in 2019 with a halved YLL/YLD ratio of 66.3% (proxy of worse care quality). Altogether, 97195 (64216 - 115621; +280.5%) prevalent cases lived in 2019. All decomposed indices, including aging, cause-specific incidence, and population growth participated substantially in the growth of CNS cancers' incidence. Moreover, age brackets, period of study (1990-2019), and 5-year cohorts, all revealed positive effects while age had a mixed influence in different age groups. Palestine harbored the highest age-standardized DALYs rate in 2019 (232.0 [175.6 - 279.5]), while Tunisia had the lowest (41.8 [27.6 - 57.1] per 100 000). The greatest burden increase was found in Saudi Arabia (32.3%). Conclusion: The burden of CNS cancers is rising in the region and there have been major heterogeneities among the countries. Enforced early detection and healthcare access across countries of the region are required to bridge inequality and the rising burden of CNS malignancies.
The recent move towards decoupling from China, prompted by the 2018 trade conflict, has implications for the innovativeness of Chinese firms. Using patent data from the Chinese State Intellectual Property Office, together with comprehensive firm‐level data, and applying an inverse propensity score reweighting methodology to deal with selection bias, we estimated changes in the patenting activity of firms following ownership transition to Chinese owners, linking these changes to the differential taxation incentives offered to foreign investors. Far from crippling innovation, divestment has sparked an increase in patent applications – including higher end invention patents – and other innovation measures. Together with robustness checks, our estimations suggest a real improvement in innovation rather than just a window‐dressing exercise. We suggest that one possible explanation may be an effort by the new Chinese owners to reduce their tax burden. Our supplementary findings on tax payments and subsidy receipts following divestment appear in line with this interpretation.
The EU Taxonomy stands in sharp contrast to the principles of a market economy. It requires regulatory knowledge that cannot be expected to exist and hampers rather than stimulates entrepreneurial initiatives for coping with socially relevant scarcities. For all objectives addressed with his approach, more efficient policy instruments exist that play with and not against market forces. Apart from allocative inefficiencies, the Taxonomy-approach opens the door for all kinds of particularistic maneuvers and hidden political agendas. The Taxonomy absorbs high-skilled labor that is in high demand elsewhere in the economy and creates a massive extra bureaucratic burden without any expectable benefit for the total economy. Given the fundamental flaws in the overall concept, policy makers should stop it rather sooner than later.
China is the world’s largest official creditor, but we lack basic facts about the terms and conditions of its lending. Very few contracts between Chinese lenders and their government borrowers have ever been published or studied. This paper is the first systematic analysis of the legal terms of China’s foreign lending. We collect and analyze 100 contracts between Chinese state-owned entities and government borrowers in 24 developing countries in Africa, Asia, Eastern Europe, Latin America, and Oceania, and compare them with those of other bilateral, multilateral, and commercial creditors. Three main insights emerge. First, the Chinese contracts contain unusual confidentiality clauses that bar borrowers from revealing the terms or even the existence of the debt. Second, Chinese lenders seek advantage over other creditors, using collateral arrangements such as lender-controlled revenue accounts and promises to keep the debt out of collective restructuring (“no Paris Club” clauses). Third, cancellation, acceleration, and stabilization clauses in Chinese contracts potentially allow the lenders to influence debtors’ domestic and foreign policies. Even if these terms were unenforceable in court, the mix of confidentiality, seniority, and policy influence could limit the sovereign debtor’s crisis management options and complicate debt renegotiation. Overall, the contracts use creative design to manage credit risks and overcome enforcement hurdles, presenting China as a muscular and commercially-savvy lender to the developing world.
The decarbonization of India’s economy will affect economic actors differently. Here we study the distributional effects of climate policy in India, taking the specific role of structural economic change into account. We contrast distributional effects from climate policy with distributional effects from structural change and quantify how far carbon pricing supports structural change and economic development. We develop and apply a comprehensive model framework that combines long-term growth and medium-term trade dynamics related to structural change with detailed household income and expenditure data for India. Our results emphasize that distributional effects from structural change are stronger than from carbon pricing. Consequently, governments should not focus solely on the distributional effects of climate policy, but also consider the larger context of economic transformation processes when designing and implementing social policies.
The European Union cap-and-trade emissions trading system (EU ETS) faces two challenges in the context of the European Green Deal. First, to meet the Paris temperature target, emissions in the energy and industrial sectors must fall to net-zero and then even become net-negative. Second, there is a concern that excessive CO2 price spikes and volatility on this path will jeopardize the political acceptance and support for emissions trading as a climate policy instrument. Conditional supply of carbon removal credits (CRCs) to support dynamic carbon price caps would make it possible to stabilize the market in the transition from positive to net-negative emissions trading while keeping the net-emissions path unchanged. CRCs would be assigned for carbon removal achieved for example with methods like Direct Air Carbon Capture and Storage or Bioenergy with Carbon Capture and Storage and would be used by companies under the EU ETS to compensate for their emissions. However, we suggest that there would be no direct exchange between emitting companies under the EU ETS and carbon removal companies, i.e., the demand and supply side of CRCs, during an initial phase. Instead, we suggest assigning an institutional mandate to for example a carbon central bank (CCB) to organize the supply of CRCs. Under this mandate, carbon removal would be procured, would be translated into a corresponding number of CRCs, and a fraction of it could be auctioned to the market at a later point in time, provided that market prices exceed a certain (dynamic) price cap.
What preferences do people have for cross‐country cooperation on irregular migration and refugee protection? While existing research improves our understanding of how voters react to large‐scale inflows of asylum seekers, like those experienced by European countries in 2015–2016, and the type of asylum seekers and policies preferred by European citizens, we know less about people's views concerning a particular EU response to the so‐called ‘refugee crisis’, namely the cooperation it agreed with Turkey in March 2016 to stem inflows of asylum seekers and other migrants. To study such views, we build on several strands of the international relations literature exploring key determinants of public preferences for international cooperation on cross‐national issues, namely (a) sociotropic concerns, (b) humanitarian considerations, and (c) perceptions of fairness and reciprocity. Our research design leverages conjoint experiments conducted simultaneously in Germany, Greece, and Turkey. We find that the three factors play indeed a role in explaining preferences in the three countries. Moreover, while respondents are favorable to several core features of the current EU‐Turkey migration deal (regarding the return of irregular migrants, financial aid to refugees, and border controls), we also find evidence of public support for increased cooperation on resettlement and EU support to Greece to deal with migration, which goes beyond the status quo. In certain aspects of cooperation, public preferences seem to respond to interactions between policy dimensions that capture reciprocity. These findings have important implications for research on public preferences for asylum and migration policies and public support for international cooperation more generally. This article is protected by copyright. All rights reserved
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59 members
Wilfried Rickels
  • Environment and Natural Resources
Gianluca Grimalda
  • Social and behavioral approaches to global problems
Ulrich Schmidt
  • Social and Behavioral Approaches to Global Problems
Jens Boysen-Hogrefe
  • Forecasting Centre
Kiel, Germany