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Department of Economics

Lund University School of Economics and Management

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In the spotlight:

Shadow banks and climate change

In a recent research paper, Talina Sondershaus and her co-authors investigate how shadow banks, which are bank-like institutions that are only lightly regulated, behave in the context of climate change. They find that when society pays high attention to climate change, shadow banks start buying “brown loans”, i.e. loans from borrowers that have a large carbon footprint, while prices for these loans drop. They investigate whether shadow banks that are part of groups that signed declarations for responsible investments refrain from these purchases. However, this is not the case. Those that are committed to taking sustainability goals into consideration in their investment decisions also purchase brown loans when attention to climate change is high. By Talina Sondershaus


 

Insurance and risk aversion interactions in shaping rural development

In a recent research paper Davide Pietrobon investigates the relationship between insurance and the use of agricultural inputs, focusing on the use of fertilizer in rural India. Insurance plays a vital role in developing rural regions where households encounter significant income fluctuations due to unpredictable factors like weather conditions. However, existing insurance systems are not perfect, often due to the challenge of monitoring effort and the choices made by farmers. By Davide Pietrobon


 

How well you do at school depends on how much your teachers know: insights from 14 French-speaking countries in Africa

Countries in sub-Saharan Africa have made remarkable progress towards reaching universal school enrolment in the past 25 years. Across the region, 8 in 10 children of primary school age are now enrolled in school, and in countries such as Benin and Madagascar this figure stands at almost 10 in 10 children.

However, it is becoming increasingly clear that many children in the region are learning very little in school. This “learning crisis” means that it will be difficult to reach the United Nations’ Sustainable Development Goal of quality education for all by 2030. By Jan Bietenbeck


 

How does violent conflict affect the spread of Covid-19?

A few days after the start of the Russian invasion of Ukraine in February 2022, the former Dutch Ambassador to Ukraine told BBC that his parents-in-law did not dare to go to a refugee shelter because they were afraid to contract Covid-19. This vivid example links violence and forced displacement with the Covid-19 pandemic. Sepahvand and Verwimp study this link using unique detailed panel data from Burkina Faso, a very poor, conflict-affected country in the Sahel. They find a lower adoption of preventive measures, and a higher infection rate in areas affected by violence. By Mohammad H. Sepahvand


 

Put a bet on it: Self-funded commitment contracts get people to the gym 

Exercise is important, yet many people struggle to achieve their goals. Part of this struggle is due to a gap between intentions and goals. Commitment contracts can help people, particularly those with low self-control, close this gap. They involve making a pledge with oneself to meet a goal and imposing penalties on oneself for not reaching it. Commitment contracts have been used successfully in several settings, but little is known about the importance of the size and type of penalty. For instance, does a soft penalty like experiencing disappointment when not meeting one’s goal have the same effect as a hard penalty like losing money? The findings from an experiment in a new PhD thesis at Lund University suggest that, while both types of contracts can increase gym visits, hard penalties are important and are associated with a higher probability of commitment contract success. By Devon Spika


 

Closures of primary care practices lead to reduction in doctor visits

Continuity in healthcare can improve health outcomes of patients by ensuring that patient-specific information is not lost in translation between providers, and by improving the appropriate follow-up care. Yet, little is known about how patients cope with the sudden and permanent loss of a main provider in healthcare, such as a primary care practice. The findings in a new PhD thesis from Lund University show that when primary care practices close their patients see a doctor less, at any primary care practice. Patients continue to visit doctors at the new, lower level for at least two years with no indication of returning to pre-closure levels. Findings in the study also show that these individuals go to neighbouring practices after the closures, which temporarily lowers the access to physician visits for patients previously established there. By Linn Mattisson


 

The short- and long-term effect of a nuclear disaster on voting outcomes

What are the political effects of a nuclear disaster? In this paper (Mehic 2023a), I use data from the 1986 Chernobyl accident to evaluate the voting outcomes of the Swedish Green Party (MP), which was founded in 1982, and elected to the national parliament in 1988, two years after the disaster. By Adrian Mehic


 

Central bank communication and asset correlations

The utilization of communication as a monetary policy instrument has increased since the global financial crisis in 2008. It is an efficient method to convey information to a large number of people and can influence the expectations of financial markets. Consequently, it is projected to impact various asset prices. The findings in a new PhD thesis from Lund University suggest that central banks' communications with a negative tone leads to a more negative correlation between stocks and bonds, supporting the "flight-to-quality" phenomenon in both the U.S. and Euro areas. However, the tone has mixed impacts on the correlation between stock prices and foreign exchange rates (FX). In the case of the Fed's negative sentiment, U.S. stock prices and the U.S. dollar move in opposite directions, while the ECB's negative sentiment causes Euro-area stock prices and the euro to move in the same direction. By Duc Hong Hoang


Working papers

The Working Paper Series at the Department of Economics are published on the S-WoPEc page. S-WoPEc (Scandinavian Working Papers in Economics) acts as a clearing house and central repository for bibliographic data about Nordic working papers in Economics.