Air Pollution and Manufacturing Firm Productivity: Nationwide Estimates for China

We provide nationwide causal estimates of air pollution's effect on short-run labour productivity for China's manufacturing sector from 1998 to 2007. Using thermal inversions as an instrument, we estimate a one $\mu $g/m3 decrease in PM2.5 increases productivity by 0.82% (elasticity of −0.44). Increased hiring attenuates the elasticity to −0.17. Using the differential effect of China's WTO accession on coastal versus inner regions, we estimate a pollution elasticity of 1.43 with respect to output. Simulating a dynamic general-equilibrium model yields an output elasticity of −0.28 with respect to PM2.5. An exogenous 1% decrease in PM2.5 nationwide increases GDP by 0.039%.

The Macro Effects of Climate Policy Uncertainty

Uncertainty surrounding if and when the U.S. government will implement a federal climate policy introduces risk into the decision to invest in capital used in conjunction with fossil fuels. To quantify the macroeconomic impacts of this climate policy risk, we develop a dynamic, general equilibrium model that incorporates beliefs about future climate policy. We find that climate policy risk reduces carbon emissions by causing the capital stock to shrink and become relatively cleaner. Our results reveal, however, that a carbon tax could achieve the same reduction in emissions at less than half the cost.

The Macro Effects of Climate Policy Uncertainty

Uncertainty surrounding if and when the U.S. government will implement a federal climate policy introduces risk into the decision to invest in capital used in conjunction with fossil fuels. To quantify the macroeconomic impacts of this climate policy risk, we develop a dynamic, general equilibrium model that incorporates beliefs about future climate policy. We find that climate policy risk reduces carbon emissions by causing the capital stock to shrink and become relatively cleaner. Our results reveal, however, that a carbon tax could achieve the same reduction in emissions at less than half the cost.

Economic fluctuations in a model with an overlapping structure of employment

This study presents a dynamic general equilibrium model with an explicit employment period and investigates economic fluctuations to a temporary productivity shock. Numerical experiments indicate oscillatory responses of new hiring and employment to the shock which are not observed in a standard flexible price model. The explicit employment period constructs an overlapping structure of employment which results in the oscillatory response. This study also examines the effects of change in employment period to economic fluctuations and shows that the variations in new hiring are higher when the employment period is long.

Do Immigrants Bring Fiscal Dividends?: The Case of Venezuelan Immigration in Colombia

This paper analyzes the effects of recent Venezuelan immigration to Colombia on the fiscal balance, the labor market, and economic growth. For this purpose, we built a dynamic general equilibrium model with a search and matching structure in the labor market. The higher fiscal spending to address immigration negatively impacts the government's budget in the short term, which is offset by higher output, consumption, and employment level, increasing the government's revenues mainly through indirect tax collection. The effect on the labor market is different for unskilled workers--whose higher supply generates a negative effect on wages and an increase in the unemployment rate--and skilled workers, who benefit from higher wages and lower unemployment. These changes in the labor market affect the government's revenue, resulting, in the long term, in positive fiscal dividends of migration.