Abstract Early modern humans interbred with archaic humans. We explore this phenomenon through an economic lens to reveal what shaped the origins of our species. In a Malthusian growth model with initial non-hybrid humans, we derive population dynamics and the conditions for hybrid humans to emerge and survive, which explains why modern humans still carry DNA from archaic humans. It is possible for a higher hybridization rate to reduce long-run population size and raise long-run output per capita. A sufficiently high hybridization rate causes only hybrid humans to survive. This result captures the probable scenario that all modern humans are hybrid descendants of archaic and early modern humans and provides the following novel insight: modern humans, which emerged from interbreeding, caused the extinction of archaic and early modern humans. Finally, our analysis also shows that the low proportion of Neanderthal-derived DNA in modern humans is due to their relatively early extinction.

Abstract Decarbonization can affect growth and cause structural change because some energy-related inputs have been easier to decarbonize than others, and energy use is more significant in certain sectors. This article examines these effects through a two-sector growth model with two energy-related inputs and two final goods. These inputs are produced using fossil and low-carbon capital stocks, which vary in their substitutability and use in producing final goods. A decarbonization policy encourages low-carbon inputs and directs R&D towards technology fields that are easier to decarbonize through innovation. Model calibration to the UK economy illustrates its dynamics. While much of the economy can be readily decarbonized through innovation and innovation policy, some sectors such as heavy industry face greater technological and policy challenges. These sectors would benefit from more targeted R&D support to overcome path dependencies in low-carbon innovation, enabling their decarbonization and growth to progress hand in hand.

Abstract Previous research shows that individuals’ educational level is associated with skill mismatch, but knowledge about the influence of horizontal dimensions of education and education’s variation throughout the career is limited. This study analyses the link between education and skill mismatch by considering the influence of educational levels, vocational specificity, and occupational specificity from a career perspective. Using the survey wave 2016 of the German NEPS Adult Cohort, I find that individuals with a higher educational level are less likely to be underskilled, but more likely to be overskilled. Conversely, higher vocational specificity is associated with a higher likelihood of underskilling but a lower likelihood of overskilling, whereas occupational specificity is not significantly related to skill mismatches. The findings also highlight that the link between education and skill mismatch varies with time since graduation, and that the role of vocational and occupational specificity differs across educational levels.

Abstract Nontariff barriers (NTBs) are a central yet understudied dimension of trade policy, particularly in their influence on customs duty compliance. Using detailed administrative import records and a Brazilian tariff reform, this article shows that NTBs significantly reduce customs duty evasion by curbing value underreporting and virtually eliminating quantity misreporting. These effects vary substantially across firms, products, and trade partners: final consumption goods, nonmanufacturing importers, and transactions with MERCOSUR countries exhibit weaker responsiveness to NTB enforcement. NTBs operate as an additional layer of regulatory enforcement, strengthening compliance incentives and shaping strategic trade reporting behavior.

Abstract We contribute to the literature on business cycles by undertaking a comprehensive comparative assessment of the relative importance of supply, demand, and monetary policy shocks in driving macroeconomic fluctuations in the USA, Canada, Japan, the UK, and the euro area. Using structural Bayesian VAR models with sign, magnitude, and zero restrictions, we identify supply, demand, and monetary policy disturbances. We conduct both country-specific and cross-country comparisons, focusing on the post-1990s period when most countries adopted inflation targeting. We find that supply and demand shocks dominate monetary policy shocks in explaining output and inflation dynamics. While output fluctuations are primarily driven by either supply or demand shocks, depending on the country, inflation variation consistently stemmed from demand shocks, with monetary policy shocks typically contributing less than 10 per cent. The findings shed light on the recent drivers of output and inflation across major economies.

Abstract This study investigates discrimination against tenants with moving disabilities in the rental housing market using a correspondence test and fake application letters. A field experiment with two scenarios was conducted in the Finnish market, and five fictitious household tenants were compared. The findings reveal a clear association between the presence of disabilities in the household and increased discrimination. This discriminatory behaviour persists irrespective of whether the necessary refurbishments to accommodate the disabled tenant’s needs would be covered by the tenant or the landlord. Male landlords are the primary contributors to this discriminatory behaviour, especially regarding direct discrimination. The results obtained from our study are clear, indicating a pressing need to address and mitigate discrimination against tenants with moving disabilities in the rental housing market.

Abstract This paper develops a theoretical framework to explain observed trends in the labor share, income inequality, and their nexus. Our model, incorporating capital-skill complementarity and capital-biased technological progress, accounts for the evolution of factor and personal income distributions in the U.S. along two dimensions of decomposition: by skill level (high-skilled and low-skilled) and income source (labor and capital income). Our findings reveal that between-skill inequality is the primary channel linking labor share dynamics to income inequality. Beyond the overall decline in labor share, rising between-skill inequality contributes to the divergence in labor income shares between high-skilled and low-skilled workers, while also driving labor income inequality to increase in parallel with aggregate inequality. The share of labor is therefore negatively correlated with income inequality. The model shows empirical consistency, indicating that our theory captures key structural forces driving the dynamics of the factor and personal income distributions.

Abstract How do macroeconomic conditions shape people’s trust in political institutions? This paper addresses this question by analysing the association between inflation, unemployment, and political trust using repeated cross-sectional data from over 2 million individuals across 148 countries between 2006 and 2023. We find that high unemployment is strongly and consistently linked to lower confidence in national governments and reduced approval of national leaders. In contrast, the influence of inflation is substantially smaller—typically four to eight times weaker—and less robust across specifications. Perceptions of national economic performance, personal financial insecurity, and corruption appear to be key channels underlying these relationships. While inflation is linked to lower political trust mostly in upper-middle- and high-income countries, the negative association between unemployment and trust is widespread across all income levels. These findings suggest that unemployment remains a global and salient challenge that governments should prioritize.

Abstract This article introduces a dynamic modelling approach to tackling North-South protection of intellectual property rights (IPRs) in a global general-equilibrium environment, where bidirectional R&D, region-specific needs, and creative destruction interact to give rise to an analytical challenge. A complicated dynamical system is solved numerically for policy experiments with the South strengthening IPRs to match the Northern standard. Surprisingly, the South can reap a net gain, but the North cannot, if the welfare metric takes into account each region’s dynamic transition to steady state. Yet, if the transition dynamics are ignored, such a North-South welfare scenario could be reversed. More surprisingly, the no-winner scenario may even emerge if innovation can cause creative destruction significantly. The article thus cautions against previous studies that neglect the general-equilibrium dynamics driven by the elements of bidirectional R&D, region-specific needs, and creative destruction.

Abstract We design and conduct an experiment to determine whether participants’ physical handling of money affects their choices as a dictator to take from or give to charity. We run separate treatments for house money and earned endowments. We report three results. First, tangible endowments reduce, but do not eliminate, charitable giving. Second, participants are more likely to take in the tangible treatments than to the intangible treatments. Finally, we do not observe a consistent earned money effect. With tangible endowments, earned money significantly reduces giving; with intangible endowments, we find that earned money has no significant effect on giving. This contrasts with prior studies that found that earning one’s endowment reduced giving in standard Dictator Games (i.e. those with anonymous other subjects as recipients). Our results suggest that the nature of the recipient and the action set are important factors for making decisions in the laboratory.