New Working Paper by K. Klieber & P. Goulet Coulombe: “Opening the black box of local projections”

Carbon policy should therefore compensate households based on location as well as income to cut emissions effectively, without triggering another Yellow Vest movement. 5/5

Authors' simulations show that these differences imply a carbon tax burden 20% higher for rural households than for urban ones. Migration across regions is key to these results, and the impact differs depending on whether the tax is levied on households or firms. 4/5

French microdata reveal that rural households consume 3x more fossil fuels than urban households. They are also employed in firms that emit 3x more greenhouse gases. 3/5

The distributive effects of carbon taxation are critical for its political acceptability. While much of the literature focuses on the “rich vs poor” dimension of the energy transition, authors show that “urban vs rural” is even more important. 2/5

🧵New Working Paper by @CharlesLabrous & @YPerdereau: “Geography versus income: the heterogeneous effects of carbon taxation” https://t.co/RFVY12yebl 1/5

It demonstrates that ECB communication contributes to the anchoring of inflation expectations of non-experts by enhancing their monetary knowledge and employing trust-building strategies such as speaking in their national language. 3/3

Can ECB Communication Shape Public Inflation Expectations? This study reports the findings from a field experiment conducted between 2022 and 2025. 2/3

🧵New Working Paper by A. Jung & F. P. Mongelli: “Central bank communication with non-experts: insights from a randomized field experiment” https://t.co/BgtJJRyzj3 1/3

In an extension, they explore how using President Trump’s tweets instead of official statements affects the results. They find that Trump's tweets had weaker effects given that they were usually vague and did not mention concrete trade policy changes 5/5

Key findings: 1. Trade liberalisation & protectionism have symmetric macroeconomic effects 2. Foreign-initiated shocks have a larger US impact 3. Implementations matter more than announcements 4/5

They build a daily dataset of US & foreign trade policy statements (2007-2019) and use stock price reactions to identify unanticipated shocks. They can distinguish protectionist vs. liberalising shocks, announcements vs. implementations, & US vs. foreign shocks 3/5

Authors present a novel identification strategy to estimate how trade policy shocks affect the US economy. The approach combines narrative data with differential stock market reactions of trade-exposed and non-trade-exposed firms 2/5

🧵New Working Paper by A. I. Bonk & @chloelarkou: “The macroeconomic impact of trade policy: a new identification approach” https://t.co/fRRq1B4nuT 1/5

New Working Paper by F. Holm-Hadulla & M. Leombroni: “Heterogeneous intermediaries in the transmission of central bank corporate bond purchases”

New Working Paper by A. Yambolov: “How to conduct joint Bayesian inference in VAR models?”

New @ecb Research Bulletin by S. Anyfantaki et al. “Details matter – how loan pricing affects monetary policy transmission in the euro area”

🔍EU funds drive sustained growth & productivity in SMEs & financially constrained ones, in line with the EU Cohesion Policy objectives. Designing funding strategies that support SMEs investment could enhance the effectiveness of EU investments! 5/5

🌍 Targeted Investments Matter! Projects supporting SMEs investment deliver largest gains 📈 Even green transition projects—which aren’t productivity-focused—bring positive improvements🌱 #Productivity #Sustainability #EUfunds 4/5

💡EU funding delivers the strongest impact for SMEs - funded small firms see greater productivity & capital growth compared to larger firms. 🌱 👉 Financially constrained firms also benefit most, with higher capital investment & leverage. 💸#CohesionPolicy #Economy 3/5