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China's Belt and Road Initiative aims to improve connectivity between China and more than 70 countries through infrastructure investment and regional cooperation. The initiative has the potential to accelerate significantly the rate of economic integration and development in the region, as trade costs decline. The goals of this paper are to (i) study the impacts of infrastructure improvements on Belt and Road Initiative and non-Belt and Road Initiative countries' trade flows, growth, and poverty; and (ii) suggest policies that would help maximize gains from the Belt and Road Initiative-induced trade cost declines. The analysis captures the trade costs reductions as a result of infrastructure improvements. The findings indicate that the Belt and Road Initiative would be largely beneficial. First, global income increases by 0.7 percent (in 2030 relative to the baseline). This translates into almost half a trillion dollars in 2014 prices and market exchange rates. The Belt and Road Initiative area captures 82 percent of the gain, with the largest percent gains in East Asia. Second, globally, the Belt and Road Initiative could contribute to lifting 8.7 million people from extreme poverty and 34 million from moderate poverty. Third, the initiative would lead to a modest increase in global carbon dioxide emissions, with a complex set of positive and negative outcomes at the national level for other types of emissions.

Belt And Road Initiative --- Computable General Equilibrium --- Emissions --- Environment And Trade --- Infrastructure --- Infrastructure Economics and Finance --- Poverty --- Transport

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Recent discussions of the extent of decoupling between greenhouse gas (GHG) emissions and real gross domestic product (GDP) provide mixed evidence and have generated much debate. We show that to get a clear picture of decoupling it is important to distinguish cycles from trends: there is an Environmental Okun's Law (a cyclical relationship between emissions and real GDP) that often obscures the trend relationship between emissions and real GDP. We show that, once the cyclical relationship is accounted for, the trends show evidence of decoupling in richer nations—particularly in European countries, but not yet in emerging markets. The picture changes somewhat, however, if we take into consideration the effects of international trade, that is, if we distinguish between production-based and consumption-based emissions. Once we add in their net emission transfers, the evidence for decoupling among the richer countries gets weaker. The good news is that countries with underlying policy frameworks more supportive of renewable energy and supportive of climate change tend to have greater decoupling between trend emissions and trend GDP, and for both production- and consumption-based emissions.

Air --- Air contaminants --- Air pollutants --- Air pollution --- Air pollution control --- Air toxics --- Airborne pollutants --- Atmosphere --- Contaminants, Air --- Control of air pollution --- Pollutants, Air --- Toxics, Air --- Pollution --- Air quality --- Atmospheric deposition --- Pollution. --- Control --- Exports and Imports --- Macroeconomics --- Environmental Conservation and Protection --- Business Fluctuations --- Cycles --- Environment and Growth --- Energy and the Macroeconomy --- Climate --- Natural Disasters and Their Management --- Global Warming --- Environment and Development --- Environment and Trade --- Sustainability --- Environmental Accounts and Accounting --- Environmental Equity --- Population Growth --- Trade: General --- Aggregate Factor Income Distribution --- Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) --- Climate change --- International economics --- Economic growth --- Greenhouse gas emissions --- Income --- Imports --- Exports --- Business cycles --- Environment --- National accounts --- International trade --- Greenhouse gases --- United States

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We provide a comprehensive analysis of the relationship between greenhouse gas (GHG) emissions and GDP in China using both aggregate and provincial data. The Kuznets elasticity is about 0.6 for China, higher than that in advanced countries but below that of major emerging markets. The elasticity is somewhat lower for consumption-based emissions than for production-based emissions, providing mild evidence consistent with the “pollution haven” hypothesis. The Kuznets elasticity is much lower for the last three decades than for the three previous decades, suggesting a longer-term trend toward decoupling as China has become richer. Further evidence of this comes from provincial data: richer provinces tend to have smaller Kuznets elasticities than poorer ones. In addition to the trend relationship, we find that the Environmental Okun's Law holds in China.

Macroeconomics --- Environmental Economics --- Environmental Conservation and Protection --- Natural Resources --- Business Fluctuations --- Cycles --- Environment and Growth --- Energy and the Macroeconomy --- Climate --- Natural Disasters and Their Management --- Global Warming --- Environment and Development --- Environment and Trade --- Sustainability --- Environmental Accounts and Accounting --- Environmental Equity --- Population Growth --- Personal Income, Wealth, and Their Distributions --- Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) --- Nonrenewable Resources and Conservation: General --- Climate change --- Economic growth --- Environmental management --- Greenhouse gas emissions --- Personal income --- Business cycles --- Non-renewable resources --- Environment --- National accounts --- Greenhouse gases --- Income --- Natural resources --- Climatic changes --- China, People's Republic of

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For the world's 20 largest emitters, we use a simple trend/cycle decomposition to provide evidence of decoupling between greenhouse gas emissions and output in richer nations, particularly in European countries, but not yet in emerging markets. If consumption-based emissions—measures that account for countries' net emissions embodied in cross-border trade—are used, the evidence for decoupling in the richer economies gets weaker. Countries with underlying policy frameworks more supportive of renewable energy and climate change mitigation efforts tend to show greater decoupling between trend emissions and trend GDP, and for both production- and consumption-based emissions. The relationship between trend emissions and trend GDP has also become much weaker in the last two decades than in preceding decades.

Finance: General --- Environmental Economics --- Environmental Conservation and Protection --- Environmental Policy --- Environment and Growth --- Energy and the Macroeconomy --- Climate --- Natural Disasters and Their Management --- Global Warming --- Environment and Development --- Environment and Trade --- Sustainability --- Environmental Accounts and Accounting --- Environmental Equity --- Population Growth --- Business Fluctuations --- Cycles --- General Financial Markets: General (includes Measurement and Data) --- Environmental Economics: Government Policy --- Climate change --- Finance --- Environmental policy & protocols --- Greenhouse gas emissions --- Emerging and frontier financial markets --- Environmental policy --- Climate policy --- Environment --- Financial markets --- Greenhouse gases --- Financial services industry --- Climatic changes --- Germany

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This paper assesses the stabilization properties of fixed versus flexible exchange rate regimes and aims to answer this research question: Does greater exchange rate flexibility help an economy’s adjustment to weather shocks? To address this question, the impact of weather shocks on real per capita GDP growth is quantified under the two alternative exchange rate regimes. We find that although weather shocks are generally detrimental to per capita income growth, the impact is less severe under flexible exchange rate regimes. Moreover, the medium-term adverse growth impact of a 1 degree Celsius increase in temperature under a pegged regime is about –1.4 percentage points on average, while under a flexible regime, the impact is less than one half that amount (–0.6 percentage point). This finding bolsters the idea that exchange rate flexibility not only helps mitigate the initial impact of the shock but also promotes a faster recovery. In terms of mechanisms, our findings suggest that the depreciation of the nominal exchange rate under a flexible regime supports real export growth. In contrast to standard theoretical predictions, we find that countercyclical fiscal policy may not be effective under pegged regimes amid high debt, highlighting the importance of the policy mix and precautionary (fiscal) buffers.

Macroeconomics --- Economics: General --- Foreign Exchange --- Finance: General --- Macroeconomic Aspects of International Trade and Finance: General --- Economic Growth and Aggregate Productivity: General --- Environment and Growth --- Climate --- Natural Disasters and Their Management --- Global Warming --- Environment and Development --- Environment and Trade --- Sustainability --- Environmental Accounts and Accounting --- Environmental Equity --- Population Growth --- General Financial Markets: General (includes Measurement and Data) --- Economic & financial crises & disasters --- Economics of specific sectors --- Currency --- Foreign exchange --- Finance --- Exchange rate arrangements --- Exchange rate flexibility --- Conventional peg --- Exchange rate adjustments --- Emerging and frontier financial markets --- Financial markets --- Currency crises --- Informal sector --- Economics --- Financial services industry --- Colombia