By increasing the cost of using fossil fuels, carbon taxes should incentivise substitution toward cleaner energy. In practice, firms may shift production and emissions across borders, a problem known as carbon leakage. This column studies carbon leakage in the context of the EU Emissions Trading System using firm-level import data. Following the introduction of the […]
Financial crises usually inflict the most damage when banks suddenly shift from pursuing profits to survival. This column argues that such drastic behavioral changes render statistical analyses based on normal times ineffective. That is why we cannot predict the likelihood of crises, or what banks will do during those crises. Since this behavior arises from […]
Energy intensity and efficiency are at the core of the green transition. Using a new firm-level complexity index, this column shows that product upgrading and access to trade with advanced trading partners drive firms to adopt energy-efficient technologies. This is especially the case for small firms, which experience significant energy intensity reductions. Though large firms […]