In contrast to international trade, it is still difficult to find regional trade statistics within a nation. Given that the gravity model continues to be very popular, we test two gravity-RAS approaches used for interregional trade estimation: a standard one and an extended version, which additionally estimates intra-regional flows. We assess the accuracy with the help of two measures and for different sectoral aggregation levels. For that, we use the survey-based 2005 interregional input-output table of Japan as a benchmark. Results show high overall accuracy levels for the standard approach, better than when using international data, albeit with heterogeneous errors for sectors and regions. We further find that the results of a multiregional input-output model are highly sensitive to the trade estimation approach and that errors slightly increase for increasing sectoral disaggregation levels. Results from an experiment based on a random number generator show how RAS influences results.
There is substantial evidence on the effectiveness of short-time work on reducing unemployment. However, no study looks at its role during natural disasters. This article exploits the exogenous nature of the 2013 European floods to assess if the impact depends on the quality of the short-time work mechanism across affected counties. We use regression discontinuity designs to show that unemployment does not increase in regions with robust programs while rising up to seventeen percent in areas with less robust mechanisms. Our results are relevant to the literature on how institutional quality influences recovery and suggests that short-time work programs are useful against unforeseeable productivity shocks besides financial crises.
Achieving climate targets requires more stringent mitigation policies, including the participation of all economic sectors. However, in a fragmented global climate regime, unilateral mitigation policies affecting sectors’ production costs increase carbon leakage risk. Carbon leakage implies reducing the competitiveness of domestic sectors without achieving the full mitigation objectives. Under such circumstances, generating information about sectors’ vulnerability is essential to increase their acceptance of more stringent climate policies and design anti-leakage mechanisms. Our paper calculates and compares potential carbon leakage risk across sectors and OECD countries under varying climate policy scenarios covering GHG emissions along global supply chains. To measure this risk, we use the emission-intensity and trade-exposure metric and emission data including CO2 and non-CO2 gasses. Our results show that agri-food and transport sectors, usually lagging behind in countries’ national climate mitigation policies, could have an even higher carbon leakage risk than energy-intensive industries. Furthermore, we find that this risk can be higher in many downstream sectors compared to directly regulated sectors and is highly heterogenous across OECD countries.
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