Energy-efficient biomass cookstoves and small solar systems play an important role in the transition to clean energy. Despite their affordability and scalability, uptake remains low among households in sub-Saharan Africa. This paper examines whether household-level behavioural factors help explain this under-adoption. Drawing on data from real-purchase offers in rural Rwanda and Senegal, we analyse how willingness to pay for the technologies varies with risk aversion, innovation resistance, time preferences and beliefs. These traits explain part of the variation in purchase decisions, though effects are generally moderate. The findings improve our understanding of consumer behaviour with regard to innovative consumer goods at the base of the pyramid and inform policy and market strategies of suppliers entering these markets. We conclude by recommending that behavioural approaches be applied conservatively and only in conjunction with efforts to improve affordability and access.

Specialised AI hardware becomes economically obsolete much faster than conventional capital, so maintaining a given stock of compute requires high replacement investment. This paper studies the implications for growth, adjustment dynamics, and policy in a two-asset growth model in which AI capacity both raises productivity and produces digital services at low marginal cost. Calibrated to advanced economies, the model delivers two distinct adjustment speeds. AI capacity reverts relatively quickly, with a half-life of about seven quarters, while conventional capital adjusts over roughly a decade. When hardware is short-lived, even modest changes in gross spending can produce large swings in measured AI investment, despite only limited movements in the underlying stock. This helps explain the volatility often seen in specialised AI hardware investment cycles. Hardware durability also has first-order welfare effects. In the baseline calibration, a two-percentage-point fall in quarterly depreciation raises welfare by 0.36% in consumption-equivalent terms, while an equal-sized compute tax reduces the steady-state AI stock by around one-fifth.

Large Language Models (LLMs) have the potential to profoundly transform and enrich experimental economic research. We propose a new software framework, “alter_ego”, which makes it easy to design experiments between LLMs and to integrate LLMs into oTree-based experiments with human subjects. Our toolkit is freely available at github.com/mrpg/ego. To illustrate, we run differently framed prisoner’s dilemmas with interacting machines as well as with human-machine interaction. Framing effects in machine-only treatments are strong and similar to those expected from previous human-only experiments, yet less pronounced and qualitatively different if machines interact with human participants.

The consensus view in the growth literature is that R&D scale effects are absent in mature industrialized economies but may be present in emerging economies undergoing transition. Scale effects imply a proportional relationship between a stationary $I(0)$ regressand (growth rates of real per capita GDP and/or TFP) and a non-stationary $I(1)$ regressor (the scale of R&D), which gives rise to the problem of unbalanced regression and spurious parameter estimates. This issue has not been adequately addressed in the existing literature. Furthermore, emerging economies have received relatively little attention in this context. We address these issues by (i) accurately measuring R&D scale and (ii) adopting an appropriate econometric specification and estimator. We find significant scale effects in a panel of emerging countries, but not in developed countries. We propose an endogenous growth model that captures these properties—presence of scale effects during growth transitions, but not at the long-run equilibrium—thereby reconciling our results. Our model predicts that the long-run growth rates of per capita real GDP and TFP are driven by the growth rates of technological innovation and aggregate employment—although, in the case of emerging economies, only technological innovation significantly contributes to TFP growth.

Irrigation can enhance yields and serve as a climate adaptation strategy. In the Southeastern U.S., where water resources are relatively abundant, irrigation has experienced significant growth. However, despite the region’s capacity for further expansion, irrigation adoption rates remain low. This study estimates the influence of peer effects on farmers’ decisions to adopt irrigation in South Carolina, using a unique parcel-level dataset on irrigation withdrawals. We find that adoption increases as farmers observe more peer adopting irrigation – social interactions – and as peers’ pumping increases, such as during drought periods, when the benefits of irrigation become more visible, facilitating social learning.

The pandemic crisis introduced an unprecedented supply-side shock that was global in scope. Despite historically high levels of prior sovereign debt and low bond yields, macroeconomic policy responses included monetised fiscal expansions of extraordinary magnitude. Conventional theory suggests that the combination of supply contractions with such expansions is inflationary, yet central bank discourse during the pandemic expressed little concern about inflation. Our theoretical analysis suggests the presence of strong inflation forces at the time, likely offset by continuing pessimism shocks, consumption constraints and expectations management. In prominent advanced countries over more than a century, monetised fiscal expansions are shown to have preceded inflation surges, most strongly following signature episodes like WWII.

Medieval lex mercatoria refers to the customary commercial law developed by merchants to govern cross-border trade, operating alongside and sometimes independently of territorial legal systems. This paper compares that historical form of autonomous ordering with contemporary blockchain governance. Both create institutional frameworks that facilitate exchange among diverse actors and provide mechanisms that function, to varying degrees, outside traditional state authority. The key difference lies in how rules are generated and enforced: medieval merchant law relied on flexible norms interpreted by merchant courts and other human adjudicators, whereas blockchain systems seek to reduce ambiguity by encoding rules ex ante in smart contracts and automating enforcement. Decentralized decision-making and emerging forms of on-chain adjudication further reimagine dispute resolution without centralized judicial power. The central claim is that both represent polycentric legal orders whose significance ultimately depends on how they interact with, complement, or challenge formal governmental institutions.

Integrated Soil Fertility Management (ISFM) refers to a holistic approach to managing soil fertility that combines a variety of techniques and practices to improve soil health and enhance agricultural productivity, particularly in smallholder farming systems. Despite the associated higher labor and other input demands associated with ISFM adoption, there is limited empirical evidence regarding the positive outcomes of these investments at the household level. Using data from 380 tomato farmers in three regions of Ghana, we explore the relationship between ISFM adoption and household welfare. The methodology employed relies on inverse probability weighting regression adjustment (IPWRA). The findings reveal that ISFM adoption positively impacts household welfare by increasing net income by GH₵436.88 ($60.43)/ha, improving household assets by GH₵518.17 ($71.67)/ha, enhancing food security by 1.23 points, and reducing household expenditure by GH₵57.39 ($7.94)/ha. The results highlight ISFM’s potential to enhance smallholder welfare through increased income, improved household assets, and better food security, contributing to poverty reduction and sustainable agricultural development. Policies should focus on improving access to fertilizers, seeds, and pesticides, coupled with extension services and farmer education programs to promote ISFM adoption. Tailored interventions targeting older and more experienced farmers, as well as household heads, are essential to overcome barriers to adoption and maximize the economic and welfare benefits of ISFM practices.

Rapid population ageing and the digitalization of daily life have created a dual challenge: ensuring cognitive health while preventing digital exclusion among older adults. While the ‘use it or lose it’ hypothesis suggests that environmental stimulation protects against cognitive decline, international evidence regarding the causal impact of internet use on cognition remains mixed, particularly in developing contexts where digital adoption is uneven. This study addresses this gap by investigating the causal impact of internet use on cognitive abilities among middle-aged and older adults in China, while also exploring the heterogeneity of effects and potential underlying mechanisms. Utilizing three waves of panel data from the China Health and Retirement Longitudinal Study (CHARLS) with 40,438 observations, we employ instrumental variable (IV) estimation to address endogeneity and generalized random forests (GRFs) to estimate heterogeneous treatment effects. The results demonstrate that internet use significantly enhances cognitive abilities, with the IV estimates confirming a strong causal link. Notably, the GRF analysis reveals that these cognitive benefits are larger for rural residents, individuals with lower education levels and those who adopt the internet in middle age. Mechanism analyses indicate that these benefits are primarily driven by increased social interaction and reduced stress levels rather than changes in health behaviours. We conclude that digital inclusion serves as a critical non-medical intervention for healthy ageing, particularly in developing countries where it can help bridge cognitive disparities caused by socio-economic inequalities.

Artisanal-and-small-scale gold mining supports millions of livelihoods in the Global South but is the largest anthropogenic source of mercury emissions. Many initiatives promote mercury-free technologies that small miners could employ. Few document mercury impacts. We study an alternative: instead of processing themselves, small miners sell their ore to plants employing larger-scale, mercury-free technologies that also raise gold yields. Some ore-selling occurs without policy intervention, yet impacts on incomes and mercury use remain unclear. We assess ore-selling preferences of female waste-rock collectors (jancheras) in Ecuador, using a discrete-choice experiment. Results demonstrate that jancheras generally are open to ore-selling, yet often reject options similar to a recent pilot intervention. Offers that address formalization hurdles (invoicing), inabilities to meet quantity minima (given limits upon association, storage, and credit), and constraints on trust (including in plants’ ore testing) could increase adoption by tailoring related interventions to the preferences of and challenges for defined populations.

This study addresses the urgent need for low-carbon energy transition (LCET) in the Global South, where vulnerability to climate change is high and most countries have ratified the Paris Agreement and Nationally Determined Contributions. It emphasizes the importance of research in supporting this transition, particularly through the lens of digital technologies. Despite its relevance, existing studies on the topic remain limited and fragmented. This study reviews the literature on digital infrastructure in LCET, identifies key gaps and ambiguities and offers insights to inform future research and policymaking in the Global South.

In this paper, we adopt an evolutionary model to describe the coevolution of technological transition and pollution in a country, where the choice of technology does not only give firms access to cleaner (but more expensive) or dirtier (cheaper and illegal) forms of production, but also access to social groups and information. Firms’ activity may be harmful to the environment and, due to the existence of ambient pollution charges, economic activity is affected by the level of pollution in the country. Our analysis describes how the evolution of the transition to clean technology and pollution generates a rich set of possible equilibria, which include stable pure strategies (where all firms choose the same technology) and inner equilibria (where both technologies could be adopted in the long run). We also observe more complex behavior and coexistence of different attractors as well as highlight the importance of initial conditions and uncover how the regulator may face possible pollution traps.

Based on recent evidence from Europe, the paper shows that polarisation and upgrading are not mutually exclusive trends, but rather, simultaneously defined recent structural changes in employment. The results show that (a) the occupational structure shows a general shift towards high-skill jobs, (b) the prevailing upgrading patterns are often accompanied by job polarisation, as the share of middle-skill jobs declines in most cases, and (c) while low-skill employment often outperforms middle-skill jobs, it has tended to decline. In addition to analysing trends for EU-27 countries with different levels of development for the latest available time periods, the article also shows that occupational upgrading patterns are rather intertwined with job polarisation and are compatible with both the Skill-Biased Technical Change (SBTC) and Routine-Biased Technical Change (RBTC) hypotheses. The employment dynamics of low-skill workers are uncertain, as they are not fully compatible with any theoretical model, thus pointing to the need for a finer understanding of changes in occupational structure, and the extent to which both polarisation and upgrading are shaping the evolution of the labour force structure under the impact of (ongoing) technological change.

The emergence of large language models (LLMs) has made it increasingly difficult to protect and enforce intellectual property (IP) rights in a digital landscape where content can be easily accessed and utilized without clear authorization. First, we explain why LLMs make it uniquely difficult to protect and enforce IP, creating a ‘tragedy of the commons.’ Second, drawing on theories of polycentric governance, we argue that non-fungible tokens (NFTs) could be effective tools for addressing the complexities of digital IP rights. Third, we provide an illustrative case study that shows how NFTs can facilitate dispute resolution of IP on the blockchain.

Technical progress is considered a key element in the fight against climate change. It may take the form of technological breakthroughs, that is, shocks that induce significant leaps in the stock of knowledge. We use an endogenous growth framework with directed technical change to analyze the climate impact of such shocks. Two production subsectors coexist: one subsector is fossil-based, using a non-renewable resource, and yields carbon emissions; the other subsector uses a clean, renewable resource. At a given date, the economy benefits from an exogenous technology shock. We fully characterize the general equilibrium and analyze how the shock modifies the economy’s trajectory. The overall effect on carbon emissions basically depends on the substitutability between the production subsectors, the initial state of the economy, and the nature and size of the shock. We notably show that green technology shocks induce higher short-term carbon emissions when the two subsectors are gross complements, but also in numerous cases when they are gross substitutes.

This paper develops a theoretical framework to examine the technology adoption decisions of insurers and their impact on market share, considering heterogeneous customers and two representative insurers. Intuitively, when technology accessibility is observable, an insurer’s access to a new technology increases its market share, no matter whether it adopts the technology or not. However, when technology accessibility is unobservable, the insurer’s access to the new technology has additional side effects on its market share. First, the insurer may apply the available technology even if it increases costs and premiums, thereby decreasing market share. Second, the unobservable technology accessibility leads customers to expect that all insurers might have access to the new technology and underestimate the premium of those without access. This also decreases the market share of an insurer with access to the new technology. Our findings help explain the unclear relationship between technology adoption and the market share of insurance companies in practice.

We investigate whether the diseases for which there was more biomedical innovation had larger 1999–2019 reductions in premature mortality. Biomedical innovation related to a disease is measured by the change in the mean vintage of descriptors of PubMed articles about the disease. We analyze data on 286 million descriptors of 27 million articles about over 800 diseases. Premature mortality from a disease is significantly inversely related to the lagged vintage of descriptors of articles about the disease. In the absence of biomedical innovation, age-adjusted mortality rates would not have declined. Some factors other than biomedical innovation (e.g., a decline in smoking and an increase in educational attainment) contributed to the decline in mortality. But other factors (e.g., a rise in obesity and the prevalence of chronic conditions) contributed to an increase in mortality. Biomedical innovation reduced the mortality of white people sooner than it reduced the mortality of black people.

This paper examines the impact of financially constrained intermediate inputs on within-industry total factor productivity loss. Utilizing exogenous tax reforms in China as a natural experiment, our difference-in-difference analysis reveals that reduced tax burdens lead to increased firm-level intermediate inputs, particularly among financially constrained firms. We incorporate financially constrained intermediate inputs into a partial equilibrium model of firm dynamics. Our calibration suggests that financially constrained intermediate inputs play a quantitatively more important role in accounting for misallocation than financially constrained capital. The presence of financially constrained intermediate inputs introduces a downward bias in the measurement of value-added productivity, especially for firms in the top decile of gross-output productivity. As a result, the average “efficient” levels of capital and labor for the top decile firms in the standard Hsieh and Klenow (2009) exercise are lower than what is truly efficient.

Increasing electricity access remains a challenge, particularly in rural areas of sub-Saharan Africa. This study examines the case of Tanzania, where connection rates remain low even among rural households residing ‘under the grid’, and this despite substantial government subsidies for household connections. Using data from 1,774 rural households living within reach of the electricity grid, we investigate correlates of the low grid electricity uptake. We find that proxies for wealth are positively associated with connection status, while social network variables are less so. Capacity to pay thus appears to remain a major barrier, and in-house wiring costs emerge as a significant expense unaddressed by the existing subsidy scheme, exceeding grid connection costs sevenfold. Similar mechanisms influence the choice between grid electricity and traditional or solar energy sources. These findings inform the ongoing policy debate on subsidy design and the role of alternative energy sources in expanding access.