Supply-side Policies Research Articles

Predicting the influence of extreme temperatures on grain production in the Middle-Lower Yangtze Plains using a spatially-aware deep learning model.

Grain crops are vulnerable to anthropogenic climate change and extreme temperature events. Despite this, previous studies have often neglected the impact of the spatio-temporal distribution of extreme temperature events on regional grain outputs. This research focuses on the Middle-Lower Yangtze Plains and aims to address this gap as well as to provide a renewed projection of climate-induced grain production variability for the rest of the century. The proposed model performs significantly superior to the benchmark multilinear grain production model. By 2100, grain production in the MLYP is projected to decrease by over 100 tons for the low-radiative-forcing/sustainable development scenario (SSP126) and the medium-radiative-forcing scenario (SSP245), and about 270 tons for the high-radiative-forcing/fossil-fueled development scenario (SSP585). Grain production may experience less decline than previously projected by studies using Representative Concentration Pathways. This difference is likely due to a decrease in coldwave frequency, which can offset the effects of more frequent heatwaves on grain production, combined with alterations in supply-side policies. Notably, the frequency of encoded heatwaves and coldwaves has a stronger impact on grain production compared to precipitation and labor indicators; higher levels of projected heatwaves frequency correspond with increased output variability over time. This study emphasizes the need for developing crop-specific mitigation/adaptation strategies against heat and cold stress amidst global warming.

Cannabis and Alcohol: Will Cannabis Users Use More Alcohol and How Legalization of Cannabis Affect This Trend?

Health and Social risks related to marijuana and alcohol are a serious problem in the United States. This research tried to introduce OLS regression in order to figure out the correlation between use of alcohol and cannabis, and the trend before and after legalization of cannabis, which is a factor that has not been researched in previous literature of alcohol, while a lot of controls were added to the model. It finds out that there is higher likelihood for marijuana users to co-use alcohol, but people tend to consume less alcohol if marijuana is legal. This may be because of the booster effect of cannabis on alcohol. These results might be a sign for future policymakers to implement more demand-side policies to reduce potential cannabis and alcohol addiction risks, as supply-side policies such as legalization might work in the opposite direction. For example, higher taxation on cannabis and alcohol might help.

Global strategies for disruptive technology protection and regulation: evidence from policy textual analysis

ABSTRACT Disruptive technology (DT) has the power to reshape markets and societal structures, necessitating both protection and regulation. This paper aims to examine DT protection and regulation strategies at both micro and macro levels through policy texts. We construct an analysis framework integrating Responsible Research and Innovation (RRI) principles, innovation theory, and DT growth process. Key measures are extracted by content analysis, and dynamic topic model is used to discover evolving policy focuses. The framework is applied to analyze DT policy files of major powers. The results indicate that supply-side policy tools are employed to promote sustainable development in DT innovation, while environmental tools are utilised for early governance to preempt potential risks and innovation damage. The focuses of DT policies exhibit three evolution trends: attenuation, reinforcement, and fluctuation. Protective policies show concentration and coherence, while regulatory policies demonstrate integration and correlation. This study broadens existing perspectives and analytical frameworks, providing valuable insights for DT development and governance.

Multiplier effect on reducing carbon emissions of joint demand and supply side measures in the hydrogen market

Hydrogen energy is critical in replacing fossil fuels and achieving net zero carbon emissions by 2050. Three measures can be implemented to promote hydrogen energy: reduce the cost of low-carbon hydrogen through technological improvements, increase the production capacity of low-carbon hydrogen by stimulating investment, and enhance hydrogen use as an energy carrier and in industrial processes by demand-side policies. This article examines how effective these measures are, if successfully implemented, in boosting the hydrogen market and reducing global economy-wide carbon emissions using a global computable general equilibrium model. The results show that all the measures increase the production and use of low-carbon hydrogen, whether implemented alone or jointly. Notably, the emissions reduced by joint implementation of all the measures in 2050 become 2.5 times the sum of emissions reduced by individual implementation, indicating a considerable multiplier effect. This suggests supply and demand side policies be implemented jointly to maximize their impact on reducing emissions.

Do income tax incentives for job creation targeting young workers in SMEs stimulate employment? Evidence from South Korea

Faced with high unemployment and labor mismatches, many countries have mainly focused on stimulating labor demand through job creation policies. However, empirical evidence regarding their effectiveness is mixed, while the impact of labor supply-side policies remains underexplored. This study fills the gap by assessing the effectiveness of a labor supply-side policy—the Job Creation Income Tax Credit in Korea—which provides tax incentives for workers under 35 employed in small and medium-sized enterprises (SMEs). Using event-study and difference-in-differences models with national survey data from 2016 to 2019, we find insignificant effects on overall SME employment among individuals aged 32–34. While no significant effects are observed on regular workers, only low-educated male SME workers ineligible for the credit transition to eligible temporary SME jobs. These findings highlight that modest tax credits are ineffective in promoting employment for highly educated young individuals due to their high reservation wages and inelastic labor supply.

Escaping poverty: changing characteristics of China’s rural poverty reduction policy and future trends

Eliminating poverty is a shared aspiration of people worldwide. This article analyzes 762 rural poverty-related texts promulgated and implemented by the Chinese Government since 1984 using content analysis based on a three-dimensional framework encompassing the time of policy issuance, policy goals, and types of policy instruments. The study outlines the overall landscape and evolutionary context of the policy system. The results show that, during absolute poverty governance, China’s rural poverty governance can be broadly divided into three stages: regional development-oriented poverty alleviation, comprehensive poverty alleviation, and targeted poverty alleviation. Based on the production-oriented welfare model, economic development became the primary goal of poverty alleviation policies, while insufficient attention was given to service support and capacity-building goals. The alleviation of poverty mainly relied on the propulsive force generated by supply-side policy instruments led by the Government and the external driving force generated by environmental policy instruments, with a significant deficiency in the propulsive force produced by demand-side policy instruments. Entering the phase of relative poverty governance, optimizing poverty governance policy instruments requires breaking free from path dependence, following the evolutionary pattern of poverty governance. It involves ensuring that policy instruments support economic development while emphasizing addressing service support and capacity-building goals. It is crucial to increase the frequency of using demand-side policy instruments, stimulate their pulling force on poverty alleviation, and achieve a trend of evolutionary innovation and the collaborative governance of policy instruments.

Does a GP service package matter in addressing the absence of health management by the occupational population? A modelling study.

To assess the influence of supply and demand factors on the contract behavior of occupational populations with general practitioner (GP) teams. We employed a system dynamics approach to assess and predict the effect of the general practitioner service package (GPSP) and complementary incentive policies on the contract rate for 2015-2030. First, the GPSP is designed to address the unique needs of occupational populations, enhancing the attractiveness of GP contracting services, including three personalized service contents tailored to demand-side considerations: work-related disease prevention (WDP), health education & counseling (HEC), and health-care service (HCS). Second, the complementary incentive policies on the supply-side included income incentives (II), job title promotion (JTP), and education & training (ET). Considering the team collaboration, the income distribution ratio (IDR) was also incorporated into supply-side factors. The contract rate is predicted to increase to 57.8% by 2030 after the GPSP intervention, representing a 15.4% increase on the non-intervention scenario. WDP and HEC have a slightly higher (by 2%) impact on the contract rate than that from HCS. Regarding the supply-side policies, II have a more significant impact on the contract rate than JTP and ET by 3-5%. The maximum predicted contract rate of 75.2% is expected by 2030 when the IDR is 0.5, i.e., the GP receives 50% of the contract income and other members share 50%. The GP service package favorably increased the contract rate among occupational population, particularly after integrating the incentive policies. Specifically, for a given demand level, the targeted content of the package enhanced the attractiveness of contract services. On the supply side, the incentive policies boost GPs' motivation, and the income distribution motivated other team members.

Monetary policy implications of the new fiscal regime in Nigeria: A simulation study

In this policy research, we examine the effects of the new fiscal regime [the signing of the new Finance Act 2023, the setup of a tax reform committee, and the removal of fuel subsidy] on the Nigerian economy and its implication for fiscal and monetary policy coordination in Nigeria. We explore these by estimating a macro-econometric model, which comprises a fiscal rule, monetary policy rule, and a Phillips curve relation to simulate the impacts of the regime on fiscal, macro and monetary fundamentals in Nigeria. We find in the model estimation that (a) lower public debts can be achieved faster through a reduction in expenditure than by an increase in revenue, (b) inflation in Nigeria is driven by demand and supply-side factors, (c) the monetary policy instrument does not possess stabilizing power over the economy. The forecasting analyses show that the contractionary fiscal regime that raises the revenue by about 75 per cent will instantaneously clear out the fiscal deficit and lead to significant reductions in public debts but at the cost of higher inflation. We suggest sufficiently reducing the monetary policy rate to the optimal value obtained from the structural model, and coordination of demand management and supply-side policies by both the monetary and fiscal policy authorities in Nigeria.

Unleashing potential: Model-based reform benchmarking for EU Member States

Supply-side policies take centre stage in the EU's post-pandemic recovery plans. This paper employs a benchmarking approach to quantify the potential impact of structural reforms in the EU Member States. Based on a comprehensive collection of structural indicators and a rich endogenous growth model, we evaluate reforms in five policy areas: (i) market competition and regulation; (ii) taxation; (iii) skills and education; (iv) labour markets; and (v) research and development. For each indicator and Member State, we simulate the closing of half of the gap with the EU's best performers, implying ambitious reforms for countries with significant distance to the frontier. For these stylised reforms, we find significant potential gains in employment and output, raising EU GDP by around 2% and 8% after five and twenty years, respectively. In the long run, the policies can increase EU GDP by over 20%. The policies also reduce economic disparities between countries, given different scope for reform. For countries with a sizable distance to the best performers, increases in potential GDP could exceed 40% when halving the gap across all indicators. Among the reforms considered here, human capital investment emerges as central for enhancing growth potential. In addition, we find synergies across reforms and countries and assess the sensitivity to alternative assumptions on technology dynamics in our model.

Mitigating environmental impacts of food consumption in the European Union: Is the power truly on our plates?

In the context of the sustainable use of our planet's resources, there is a pressing need for environmentally friendly diets. Moreover, health issues linked to inadequate nutrition are rising, further emphasising the need for more balanced diets. The aim of the planetary health diet developed by the EAT-Lancet commission is to sustainably feed 10 billion people in 2050 while not exceeding planetary limits. According to these guidelines, the EU should reduce red meat intake by 80 % and multiply legume intake by 15. This significant shift from animal to plant-based proteins could modify trade partnerships and EU dependency on plant-based proteins for animal feed, currently discussed within the EU protein strategy. This study evaluates land use changes and environmental consequences of this change in dietary patterns by applying a consequential life cycle assessment approach combined with an agri-economic model, additionally assessing if this diet shift could help to achieve EU Green Deal targets. For this simulation, the partial equilibrium model CAPRI was used, which is a global agricultural market model focusing on Europe, including bilateral trade worldwide. We found that the diet shift results in gaps between domestic demand and supply which are compensated by increased imports of legumes and additional exports of red meat from the EU due to an increased demand for red meat in non-EU countries, as a consequence of decreased red meat prices. Land use changes within NUTS-2 regions indicate broad disparities depending on regional specialisation and profitability. The results from our life cycle assessment show limited benefits for most environmental impact categories within the EU given the considerable change in diets. GHG emissions from the agricultural sector would be reduced by 9 %, representing 4 % of the change needed to achieve overall EU GHG emission targets i.e., a reduction of 55 % by 2030 compared to 1990 levels. Yet, the mitigation potential allocated to EU production of shifting diets could be greater if international trade were not offsetting expected local environmental benefits. Indeed, if EU red meat and animal feed production were reduced proportionally to the demand shift, domestic legume production could hypothetically be extended in the available agricultural areas coming along with improvements in all environmental impact categories. Scientific contribution and media regularly point out the significant influence of individual consumer behaviour as an impulse for change: “the power is on our plates”, while the results of our simulations show that this holds only to a limited extent. To minimise environmental pollution, strong supply-side policies are needed to complement the power on the consumers' plates.

Impacts of demand and supply-side interventions on South Korea’s housing markets: a dynamic housing-CGE analysis

This paper examines the impacts of housing market policies in Korea by developing a dynamic computable general equilibrium model integrating regional housing markets and multiregional mobility. We compare simulation outcomes of demand- and/or supply-side approaches in housing market interventions and address how these various policy instruments affect housing prices, demand, and household welfare. Policy simulation results suggest that supply-based interventions would be more effective than housing tax policies for cooling down overheated housing markets without decreasing consumer welfare. Tax-based demand-side approaches result in a 1.8–2.2% housing price drop and a 1.1–1.2% welfare decline annually between 2021 and 2024. In the supply-side policy, investing in housing construction leads to 3.4–4.1% lower housing prices and 1.5–1.8% enhanced welfare.

Introduction: What next for supply-side policy?

Introduction: What next for supply-side policy?

Understanding supply-side climate policies: towards an interdisciplinary framework

Once marginal in climate governance, supply-side policies which seek to restrict the production of climate warming fossil fuels are now gaining greater prominence. From national level bans and phase out policies to divestment campaigns and the creation of ‘climate clubs’ such as the Beyond Oil and Gas Alliance, an increasing number of such policies are being adopted by governments, cities and financial actors around the world. But why would states voluntarily relinquish potentially profitable reserves of fossil fuels? How can we account for the rise of supply-side policies, the form they take and the sites in which they are being adopted? What conditions and contexts are most conducive to the adoption and sustainability of ‘first mover’ bans and phase out policies? This paper seeks to build an interdisciplinary account fusing insights from diverse theoretical traditions from international political economy, political science, sociology and the literature on socio-technical transitions in order to capture the interaction of political, economic and socio-cultural drivers in national and international settings which can provide the basis of a more integrated and multi-dimensional understanding of supply-side policies. Such an account, we suggest, helps to understand the origins and evolution of supply-side policies and, more critically, the conditions which might enable the expansion of supply-side climate policies to new sites.

Applying earth system justice to phase out fossil fuels: learning from the injustice of adopting 1.5 °C over 1 °C

The Paris Agreement has seen the adoption of a 1.5° to 2 °C climate target, based on the belief that climate change becomes ‘dangerous’ above this level. Since then, the scientific community and the countries most affected by global warming have reiterated that the maximum limit to be reached should be 1.5 °C. This paper goes one step further by questioning the reasoning behind the adoption of these targets, arguing that the fossil fuel-dependent political context in which they were adopted has undermined justice concerns. We highlight the political influence of the fossil fuels industry within target-setting negotiations, analyzing the evolution of climate targets and fossil fuel lobbying. We then harness published scientific evidence and the Earth System Justice framework to analyze the impacts of the 1.5 °C target, and the injustices that have so far been implicitly deemed acceptable. We argue that 1 °C would have been a far more just target and was undermined by vested interests and status quo maintenance. Finally, we propose just supply-side policies to ensure an adequate placement of responsibility on the fossil fuel industry. This way we (a) identify political influences and scientific blind spots that have and could continue to hinder climate action, (b) reveal how these influences delayed more ambitious climate objectives, contributing to the adoption of an unjust climate target, and (c) promote a focus on supply-side measures and polluting industries in order to break free from the impasse in the energy transition and foster more just outcomes.

What next for supply-side policy in the south: emerging lessons from Ecuador’s Yasuní initiative

What next for supply-side policy in the south: emerging lessons from Ecuador’s Yasuní initiative

The environmental and economic effects of international cooperation on restricting fossil fuel supply

Achieving the Paris Agreement’s global temperature goal of keeping warming well below 2 °C and ideally 1.5 °C requires limiting fossil fuel production. In the United Nations climate change negotiations, this need is only beginning to be acknowledged. Nevertheless, as some countries have already adopted supply-side climate policies, initial cooperative activities have started, and calls grow for a fossil fuel treaty, questions arise about the prospects and possible effects of international cooperation on limiting fossil fuel supply. Combining qualitative insights on possible participants in a supply-side coalition with a quantitative analysis based on integrated assessment general equilibrium modelling, this article addresses these questions. Through k-means clustering based on fossil reserves per capita, fossil fuel rents and existing supply-side policies, we first identify which (groups of) countries are most likely to lead the formation of an international supply-side coalition, and which (groups of) countries are likely to follow. Drawing on these insights, we develop several scenarios for the evolution of international supply-side coalitions and compare these to a business-as-usual scenario. By doing so, we demonstrate the global and regional environmental, trade and macroeconomic effects of international cooperation on limiting fossil fuel supply and combining fossil supply restrictions with carbon pricing to meet the Paris goals. Our findings underscore the importance of pursuing supply-side and ambitious demand-side climate policies in parallel, and identify the scope and coverage, size of the coalition, and incentives for participation as key design elements for an international supply-side coalition.

Aggregate demand and inflation response to monetary policy shocks in Tunisia

We investigate the response of aggregate demand (AD) components and inflation to monetary policy (MP) shocks in the Tunisian context where studies on this issue are rare. By estimating SVAR models on historical data ending in 2021, we found that: i) The Tunisian Central Bank’s (TCB) efforts to control inflation through interest rate tightening end up significantly slowing down private investment and consumption, while inflation response is not enough to mitigate the recently exacerbated inflationary trend; ii) Such efforts are hampered, if not outweighed, by the “pass-through” effect associated with exchange-rate continued depreciation; iii) The interest rate is Granger-caused by the exchange rate rather than the inflation rate, suggesting that de jure and de facto objectives of the TCB are divergent; and iv) The continued exchange rate depreciation alone is not enough to address the structural trade deficit. In light of these findings, we suggest that i) The transition from a discretionary MP to a rule-based inflation-targeting MP and with a well-defined role for the exchange rate, would help TCB gain credibility and improve efficiency of its MP; and ii) Tunisian policymakers should also consider consolidating MP in achieving its price stabilization objective particularly through implementing “supply-side policy” actions aiming at promoting economic growth and addressing unsustainable fiscal and external imbalances.

How should governments respond to energy price crises? A horse-race between fiscal policies

This paper compares the welfare and distributional implications of fiscal policies aimed at reducing a sudden and significant increase in the price of energy. A dynamic computable general equilibrium model with households disaggregated by income groups is used to compare the effectiveness of five energy price-reducing fiscal policies. The policies are assessed under two financing options, pure government debt and a mix of debt and windfall taxation on energy companies. Results from simulations demonstrate that targeted demand-side policies are more effective at reducing overall energy-driven inflation and increasing welfare. Supply-side policies and mixed demand and supply policies achieve a smaller reduction in the consumer price index but are more expansionary. Financing the policies partly through windfall taxation does not impact the ranking of policies but it delivers better distributional outcomes and higher welfare. The results motivate the use of windfall taxation if governments face high interest rates on debt financing and/ or if households care sufficiently about the provision of public goods. The optimal policy is likely a mix of supply-side measures such as production tax reductions or general price subsidies and either targeted energy price subsidies or targeted income subsidies financed where possible through windfall taxation.

Monetary Policy and Inflation Dynamics in Nigeria: A Bayesian DSGE Approach

This study examines monetary policy shock and inflation dynamics in Nigeria within an open economy Bayesian DSGE model framework, employing data from 2000Q1 to 2023Q1. It applies different price measures across the pre-COVID/Russia-Ukraine war era and the entire sample. Findings reveal a significant impact of monetary policy shock on inflation, irrespective of the price measure adopted. Remarkably, the results also reveal a marginal decline in the potency of monetary policy in the COVID/Russisa-Ukraine War era, compared to the pre- COVID/Russisa-Ukraine War era. The study recommends the adoption of GDP deflator as the measure of inflation that anchors inflation expectations as it is most responsive to monetary policy innovations. It also recommends complementing monetary policy with supply-side policies when faced with inflationary pressures occasioned by supply chain disruptions.

Cultural context index: A geospatial measure of social determinants of health in the United States

Minority populations will continue to grow in the United States. Such pluralism necessitates iterative, geospatial measurements of cultural contexts. Our objective in this study was to create a measure of social determinants of health in geographic areas with varying ethnic, linguistic, and religious diversity in the United States. We extracted geographic information systems data based on community characteristics that have known associations with population health disparities from 2015 to 2019. We used principal component analysis to construct a Cultural Context Index (CCI). We created the CCI for 73,682 census tracts across 50 states and five inhabited territories. We identified hot and cold spots that are the highest and lowest CCI quintile, respectively. Hot spots census tracts were mostly located in metropolitan areas (84.8%), in the Southern census region (41.5%), and also had larger Black and Hispanic populations. The census tracts with the greatest need for culturally competent health care also had the sickest populations. Census tracts with a CCI rank of 5 (‘greatest need’) had higher prevalences of self-reported poor physical health (17.2%) and poor mental health (17.4%), compared to either the general population (13.9% and 14.5%) or to CCI rank of 1 (‘lowest need’) (11.9% and 10.8%). The CCI can pinpoint census tracts with a need for culturally competent health care and inform supply-side policy planning as healthcare and social service providers will inevitably come in contact with consumers from different backgrounds.