Unexpected Shocks Research Articles

The Twin Impacts of Income Inequality and Unemployment on Murder Crime in African Emerging Economies: A Mixed Models Approach

This study analyses the dynamic impact of income inequality and unemployment on crime in a panel of 15 African countries during the period 1994–2019 using four models: the panel vector autoregression model, the generalized method of moments model, the fixed-effect model, and machine learning. These models were chosen due to their ability to address the dynamics of several entities. The variables employed for empirical investigation include income inequality, unemployment, and crime. Machine learning was adopted to find which socioeconomic issues contribute to crime between the two issues at hand. The results show that income inequality accounts for 64% of crime, making it the biggest contributor to crime. The findings further show that an unexpected shock in inequality and unemployment has a significant positive impact on crime in these countries. Even when pre-tax income held by the top 10% and male unemployment is adopted, the study yields similar results. Educational entertainment through secondary enrolment was found to increase crime, while it was found to decrease crime through tertiary enrolment at the tertiary level. Finally, economic development was found to decrease crime. From a policy perspective, the current study suggests to the government that some policies are more appropriate for addressing concerns about income inequality and unemployment (income policy or fiscal policy). Therefore, more policies targeting the distribution of income are crucial, as that might decrease income inequality while at the same time decreasing crime. In addition, policymakers should focus on addressing structural challenges through the implementation of sound structural reform policies that aim to attract investment consistent with job creation, human development, and growth in African economies.

Multinational family firms’ internationalization depth and breadth following the global financial crisis

This study examines how large family firms react to a macroeconomic shock in terms of their internationalization depth and breadth. Building on new internalization theory and acknowledging the dysfunctional manifestations of bifurcation bias in large family-owned MNEs, we argue that an unexpected shock induces family firms to recombine their family firm-specific resources with their thus far underutilized or unequally treated nonfamily resources. This recombination allows most family firms to economize on bifurcation bias and leverage their resources as firm-specific advantages (FSAs) resulting in an increased depth and breadth of internationalization post shock (while some of them may continue to suffer from bifurcation bias). Testing our theory on a panel dataset incorporating large family-owned (compared to nonfamily-owned) MNEs headquartered in Germany before and after the global financial crisis lends support to our theory. We discuss how our study contributes to new internalization theory, to the broader IB literature on MNEs’ unexpected shock response, and to family firm internationalization research.

Containership new-building orders and freight rate shocks: A “wait and see” perspective

This paper studies the behaviour of shipping investors following an unexpected shock in the freight rates, while accounting for costs (fuel), and the macro environment (stock prices and trade). The estimates firstly confirm the existence of a long-term relationship between the macroeconomic environment and freight rates, as well as between that and newbuilding orders. Most importantly, we find that when the source of the shock is less clear but still causes an increase in freight rates, shipping investors respond with a delay, which could last almost a year. The thinking behind this “inaction period” is rational, given that the only way to observe whether a shock is permanent or transitory is to wait it out. The above findings have important policy implications not only for shipping investors but also for countries that rely heavily on their ship-building industries.

Shipping Alliances and Market Volatility Under an Unexpected Shock

Shipping Alliances and Market Volatility Under an Unexpected Shock

Access to special COVID-19 relief from distress grant and livelihood outcome of livestock farming households in Eastern Cape Province, South Africa

<abstract> <p>Unexpected events and shocks constitute greater threats to the attainment of zero hunger targets in Africa and the world over, and in the extreme case, lead to total collapse of the global food system and food supply chain. Consequently, this causes significant loss of critical income sources, renders individuals vulnerable, and further deteriorates households' livelihood outcome and welfare state. Therefore, the need for social protection programs to mitigate the impact of distress and unexpected events, as well as extreme occurrences cannot be over emphasized. This research used dataset from the 1499 households captured in the 2021 South African General Household Survey to investigate whether access to a special relief from distress grant has effect on the livestock farming households' food security status in Eastern Cape Province of South Africa. Descriptive statistics, cross-tabulation, a two-sample t-test, a food insecurity experience-based scale technique, and a fractional outcome model were used to analyze the datasets. Based on access to the grant, households in the non-beneficiary group are significantly distinguishable from the beneficiary counterparts, such that the beneficiary households out-performed the non-beneficiary households in the food break-even and food surplus categories. The findings further indicated the possibility of transition of the beneficiary households' population under the transitory food insecurity category to either the chronic food insecurity status or food break-even status, subject to the effectiveness of the food security policy to which they are exposed. The fractional outcome model also indicated that non-metropolitan resident households (<italic>p</italic> < 0.05), access to the special grant (<italic>p</italic> < 0.01), access to health facilities (<italic>p</italic> < 0.01), age of households' heads (<italic>p</italic> < 0.01), colored, indian and white population groups (both at <italic>p</italic> < 0.01), as well as access to remittance (<italic>p</italic> < 0.01) made significant contributions to the households' food security status. The Wald test indicated that access to the special relief grant had a significant effect on the households' food security status in the study area. The study therefore recommends accelerated investments in various social investment programs as sustained responses to expected and unexpected shocks and occurrences to be able to induce progress and realize more resilient food systems.</p> </abstract>

All Roads Lead to Rome, One from Heaven and One from Hell: Unexpected Shocks and Chinese Households' Stock Investments

All Roads Lead to Rome, One from Heaven and One from Hell: Unexpected Shocks and Chinese Households' Stock Investments

The new EU regional policy: implementation features in the context of modern challenges and risks

The development of EU countries in the conditions of Ukraine’s war with Russia, the threat of challenges associated with new waves of the pandemic create new development imbalances, which are important to take into account when building EU regional policy. The purpose of the article is to research new approaches to EU regional policy and clarify current challenges and risks. The article highlights the paradigmatic changes in the regional policy of the countries of the European Union and explains the shift of the regional development model from resource-distributing to innovation-stimulating. An analysis of the financing of EU countries from structural funds was carried out and it was found that the impact of globalization, migration, climate change, and environmental pollution are inherent in all countries, not only less developed ones, which requires financial support from highly developed countries. New approaches to EU regional policy have been systematized and the main principles, financial instruments, key investment priorities, innovations for the 2021-2027 period and differences from previous periods have been clarified. The main challenges and risks of the EU’s regional policy in today’s conditions are identified: the «migration» crisis associated with the influx of migrants and refugees from Ukraine and countries with unfavorable living conditions into the EU; new twists of the «coronacrisis»; uneven load of refugees and different dependence of countries on Russian energy resources; the deterioration of the demographic situation due to the aging of the population, the emergence of a shortage of qualified workers due to digital transformations. The answer to the new challenges of EU regional policy should be sought in three directions: increasing stability and the ability to respond to unexpected shocks; adaptation to the strengthening of the demographic crisis, the fair distribution of the transition to a climate-neutral, circular economy.

Global food stability and its socio‐economic determinants towards sustainable development goal 2 (Zero Hunger)

AbstractFood security is guaranteed only when unexpected shocks, e.g., epidemics, economic crises, and extreme climates can be well responded to the stable food supply. Food stability, which is not exclusive of the status that we have enough food stock to satisfy a population's food demand to avoid people from hunger for a certain period until the regular food supply recovers, has never been quantified. Here, we propose a new metric, the ratio of stock to demand, to quantify how domestic food consumption need of a population can be satisfied by the domestic food stock. This study collects the data available for 117 economies from 1991 to 2018 to analyze the grain stock‐demand ratio (GSDR) and its determinants of the world. In terms of GSDR, global food stability has increased. In particular, the increased stability found expression in Asia and Africa. The increased stability was mainly driven by the growth of grain stock‐production ratio (GSPR) and grain cropping yield (GCY) most significantly from 2000 to 2010 and the decrease of average labor input in unit agricultural land (ALI) majorly from 1991 to 2000. Meanwhile, GSDR was pulled down significantly by the sharp fall of grain crop land (% of total agricultural land) (GCL) from the year 1991 to 2000 and continuous decrease of employment in agriculture (% of total employment) (EIA) particularly from 2000 to 2018. Based on the results, policy suggestions are proposed towards sustainable development goal 2 (Zero Hunger).

The Lived Experience of Workplace Violence Among Emergency Nurses

IntroductionWorkplace violence remains a significant threat to the United States health care workforce. With increasingly aggressive patients, emergency nurses reported that the increased prevalence of workplace violence impacted their professional and personal lives. MethodsThis study employed a qualitative, descriptive phenomenological approach with purposive sampling. Participants were asked to describe their lived experience with workplace violence while working as emergency nurses and how this affected them personally and professionally. ResultsEleven experienced emergency registered nurses from 3 mid-Atlantic hospitals participated in the study. After reviewing, clustering, and validating significant statements, 4 major themes were identified: walking wounded to wounded healer, unexpected shock, betrayal, and resilient but changed. DiscussionOur findings were consistent with other studies exploring the effects of workplace violence in emergency departments. We validated that trauma has long-lasting effects. Organizations should ensure that programs and processes are in place to support the nurse or health care worker when workplace violence events occur.

Modeling the Inflation of Türkiye Considering the Impact of Maritime Transport Costs

We modeled Turkish inflation using causality analysis by considering the impact of maritime transport costs. We also supported the results with impulse and response, and variance decomposition analyses. The results show that the exchange rate, commodity price, dry bulk freight rate and container freight rate have significant effects on inflation, and their shocks cannot be eliminated from the system for a long time. The most important factor affecting inflation is its historical value and the effect of exchange rates is also quite high. The container freight rate has a greater impact on inflation than the dry bulk freight rate. The forecast made using the vector autoregressive (VAR) model showed that inflation will continue to increase, but the rate of increase will slow down. It is important to implement appropriate policies to break the effect of expectations on inflation due to the new economic policies. Additionally, it is important to develop stabilizing tools to protect freight rates from the permanent effects of unexpected shocks.

The dynamics of uncertainty, macroeconomic variables, and capital market performance: A case study of Nigeria

Economic uncertainty is gradually spreading across the globe due to government intervention and global development. Though it has been extensively shown in the literature that uncertainty impacts every economic sector, various economic agents also respond to uncertainty differently, particularly when faced with an unexpected shock. Thus, this study explores the interrelationship between uncertainty, macroeconomic variables, and capital market performance in Nigeria. Findings show that uncertainty has no impact on the macroeconomic performance of Nigeria. However, the prices of crude oil impact macroeconomic performance in the country as it has a positive and significant impact on the gross domestic product, all-share index, and money supply of the Nigerian economy. The economy is exposed to external uncertainty from crude oil exports which trigger domestic uncertainty leading to macroeconomic instability in Nigeria. The study thereby recommended that a framework be developed in the Nigerian economy to reduce the domestic economy from external shock because the internal shock was found to be insignificant.

Sustainable management of lithium and green hydrogen and long-run perspectives of electromobility

The present paper assesses the prospective role of lithium in the long-run development of electromobility. Based on the existing data, the study shows that the geographical concentration of global lithium riches and rather an oligopolistic market structure of the worldwide primary supply makes the global lithium supply vulnerable to unexpected shocks. Furthermore, the work finds that the current transition to lithium-based electromobility does not exhibit traits of strong or long-term sustainability. This is attributed to the limits of lithium endowments, the negligible recycling capabilities of lithium-ion batteries, and environmental degradation induced by the transition to lithium-ion battery-based electromobility. We conclude that lithium-ion battery-based electromobility is a meaningful bridging technology until the time when lithium-ion batteries could be reliably replaced by the strong sustainability paradigm of road mobility, epitomized by the green hydrogen fuel cells-based electromobility.

Transition Dynamics in Equilibrium Search

We study a dynamic equilibrium search model where sellers differ in their urgency to liquidate an asset. Buyers strategically make price offers without knowing a given seller’s urgency. We study liquidity and price dynamics on the transition path after an unexpected shock. Generically, the transition includes a phase where all buyers offer the same price, causing a market collapse; however, price dispersion resumes in finite time, leading to a recovery where both types make sales. We show that prices and liquidity can overshoot before converging to the steady state. When relaxed sellers randomly become desperate, dampening oscillations can occur. (JEL C73, D11, D83)

Conceptualizing and measuring “industry resilience”: Composite indicators for postshock industrial policy decision-making

Can resilience be a relevant concept for industrial policy? Resilience is usually described as the ability of a socioeconomic system to recover from unexpected shocks. While this concept has caught the attention of regional economics researchers seeking to understand the different patterns behind regional recovery after a disruption, it is increasingly recognized that resilience can have policy-relevant conceptual applications in many other regards. In this paper, we apply it to industries and define the “industry resilience” concept and measurements. Our contribution is twofold. Theoretically, we frame industry resilience as a useful conceptual framework for policy-making to support the selection of industrial policy targets that are more capable of recovering after unexpected shocks. In addition, industry resilience can mitigate government failures by supporting decision-makers in promoting both economically and socially sustainable structural change. Methodologically, building on post-2008 U.S. data, we develop two composite indicators (CIs) to separately analyze quantitative and qualitative postshock variations in sectoral employment. Such CIs support policy-makers in visualizing sectoral performances dynamically and multidimensionally and can be used to compare each sector both to other sectors and to its counterfactual. Our results highlight that sectors react heterogeneously to shocks. This points to the relevance of tailoring vertical industrial policies according to sector features and the aims of industrial policy initiatives.

The role of electricity flows and renewable electricity production in the behaviour of electricity prices in Spain

Electricity markets are becoming increasingly interconnected, in part, to deal with unpredictability and imbalances in electricity prices. This paper assesses how electricity flows and generation from wind and solar photovoltaic (PV) power impact the volatility and mean of day-ahead electricity prices in Spain. It finds there is a merit order effect from wind and solar PV power at most times of the day, which varies in magnitude for each of the 24 h. Electricity production from wind power is also found to play a clear role in increasing price volatility at all hours. Electricity inflow is shown to decrease both the mean and volatility of the electricity prices. The volatility of electricity prices is revealed to be highly persistent, and thus prone to large transmission shocks. This volatility is also susceptible to new shocks, which may indicate a tendency by market participants to overreact to unexpected shocks in electricity prices, possibly due to the relatively small size of the Iberian electricity market.

How online food delivery platforms contributed to the resilience of the urban food system in China during the COVID-19 pandemic

We use high-frequency data to quantify the nature and performance of online food delivery platforms during the COVID-19 pandemic in urban China, and to estimate the short- and long-term effects of lockdown and reopening measures. A staggered difference-in-differences (DID) estimation strategy and event study approach are used to identify the effects of lockdown and reopening measures on the performance of online food delivery platforms and restaurants. The results indicate that some restaurants continued to operate and offer online food delivery while lockdowns were in effect. Both the number of operating restaurants and their online food delivery services rebounded and experienced further growth after lockdowns were lifted. The adjustment path of the online food delivery business following the implementation of lockdowns differed from the adjustment path following the lifting of lockdowns. The lockdown and reopening measures did not affect all types of restaurant/cuisine equally. We also examine possible impact mechanisms of lockdown measures on online food delivery and restaurants, and conduct robustness checks to confirm the stability of the main findings. This study contributes to the existing literature by confirming the positive contribution of online food delivery to the resilience of urban food systems in response to unexpected external shocks. Our results have implications for the design of policies to guarantee food supply and help urban food systems adapt to unexpected shocks.

Monetary policy responses to supply shocks and demand shocks

Economic shocks, mainly COVID-19, have had a large impact on the global economy, such as the recent extremely high inflation rate in the United States. The monetary policy of the central bank plays a great role in stabilizing the economy. This paper mainly discusses the specific monetary policies implemented by the central bank when the macro economy meets the unexpected shocks and because one of the most important assumptions in this paper is that when the central bank makes decisions , the economy along the “balanced growth path”, the economy discussed in this paper is a smoothly developing developed country, such as the United States, rather than China.

A methodology for equipment condition simulation and maintenance threshold optimization oriented to the influence of multiple events

The core of condition-based maintenance is the accurate evaluation of equipment state. For various equipment, performance degradation or regression caused by factors, such as unexpected shock, failure, and work stress withdrawal, is typical. Accordingly, the law on incorporating impulse, failure, maintenance, and regression events based on natural condition evolution is analyzed. Moreover, a mathematical model and simulation algorithm of equipment condition evolution are devised. Then, considering safety, availability, and economy, the optimal maintenance threshold is determined based on the condition evolution process, providing new technical support to the field of maintenance decision-making. Finally, the effectiveness of the proposed model and algorithm is proved. The improved conformance of the stochastic process to actual situations considering the influence of multiple events is thus demonstrated. Further, a new concept for equipment maintenance management is presented.

Adaptation to expected and unexpected weather fluctuations: Evidence from Bangladeshi smallholder farmers

Whether and how quickly farmers adapt to a changing climate is of paramount importance to understanding the potential impacts of climate change on agriculture. Yet the literature on adaptation has paid less attention to the distinction between ex-ante adjustments to expected weather and ex-post responses to unexpected shocks. Using a three-wave, nationally representative Bangladesh Integrated Household Survey, this paper exploits large variation in precipitation and temperature to estimate the weather impacts on Bangladesh agriculture and to identify the associated productive adaptations to expected and unexpected weather changes. It presents evidence that Bangladeshi farmers are resilient to exposure of crops to temperatures below 32°C through various adaptive activities such as reallocation of land and irrigation water between rice and non-rice crops, the adoption of non-rice improved seed varieties, and the adjustment of the input cost composition. But increased exposure to extreme heat above 32°C causes significant declines in agricultural productivity in wet seasons. Although farmers increase irrigation water inputs to aus and aman rice against unexpected extreme heat, the adaptation effect remains limited. The total cash cost associated with cultivation does not respond to weather changes, plausibly due to the presence of financial liquidity constraints. This study’s finding adds to evidence of smallholder farmers’ short- and medium-run productive responses to adverse climate change in the developing world.

An ensemble recruited by α2a-adrenergic receptors is engaged in a stressor-specific manner in mice.

α2a-adrenergic receptor (α2a-AR) agonists are candidate substance use disorder therapeutics due to their ability to recruit noradrenergic autoreceptors to dampen stress system engagement. However, we recently found that postsynaptic α2a-ARs are required for stress-induced reinstatement of cocaine-conditioned behavior. Understanding the ensembles recruited by these postsynaptic receptors (heteroceptors) is necessary to understand noradrenergic circuit control. We utilized a variety of approaches in FosTRAP (Targeted Recombination in Active Populations) mice to define an ensemble of cells activated by the α2a-AR partial agonist guanfacine ("Guansembles") in the bed nucleus of the stria terminalis (BST/BNST), a region key to stress-induced reinstatement of drug seeking. We define BNST "Guansembles" and show they differ from restraint stress-activated cells. Guanfacine produced inhibition of cAMP-dependent signaling in Guansembles, while chronic restraint stress increased cAMP-dependent signaling. Guanfacine both excited and inhibited aspects of Guansemble neuronal activity. Further, while some stressors produced overall reductions in Guansemble activity, active coping events during restraint stress and exposure to unexpected shocks were both associated with Guansemble recruitment. Using viral tracing, we define a BNST Guansemble afferent network that includes regions involved in the interplay of stress and homeostatic functions. Finally, we show that activation of Guansembles produces alterations in behavior on the elevated plus maze consistent with task-specific anxiety-like behavior. Overall, we define a population of BNST neurons recruited by α2a-AR signaling that opposes the behavioral action of canonical autoreceptor α2a-AR populations and which are differentially recruited by distinct stressors. Moreover, we demonstrate stressor-specific physiological responses in a specific neuronal population.