rafmacalaba/datause-encoder-data huggingface dataset:
were far from their quota limits in the QFII/RQFII or the Stock Connect program. Those limits were removed in 2020 and 2016, respectively.

Domestic investors seemed to have provided bridge financing for domestic firms before international investors increased their participation. Foreign equity inflows were substantially smaller than domestic equity issuances during 2014-17. This suggests that domestic rather than international investors bought most of the new shares issued during those years. Foreign equity inflows surpassed domestic equity issuances during 2018-20.<sup>37</sup> Next, we analyze the evolution in firms’ foreign ownership structure. We compute the percentage of foreign ownership, the value of shares held by investors outside mainland China over the total value of shares outstanding per firm. We plot the average foreign ownership ratio across domestic listed firms over time (Figure 8, Panel B). The figure shows how the foreign ownership ratio substantially increased during 2018-20 relative to previous years. By 2020, the average percentage of foreign owned shares per firm had almost tripled compared to 2016, from 1.3 percent to 3.8 percent.

Overall, the evidence suggests that most of the increase in foreign equity investment in China occurred with the addition of domestic listed stocks to the MSCI Emerging Markets Index.<sup>38</sup> China’s weights in foreign equity holdings (from CPIS data) and in the MSCI Emerging Markets Index followed a similar trend (Figure 10, Panel A). However, the CPIS weight lagged behind the

> 37 Some minimum degree of bridge financing had to occur because, by regulation, firms could sell the shares of the primary issuance activity (IPOs or SEOs) only to domestic investors. However, after purchasing them from firms, domestic investors could have immediately sold those shares to international investors. Thus, this regulation does not explain the years of bridge financing domestic investors provided.

> 38 Comparing portfolio equity inflows with foreign direct investments (FDI) into China shows that the former grew relative to the latter during the internationalization process. Specifically, portfolio equity flows were about 15 percent of FDI inflows during 2010-13. They grew relative to FDI, especially during the 2018-20 MSCI incorporation, reaching 32 percent of FDI in 2020. This pattern supports the idea that the shock occurred in the financial sector and was related to specific equity market internationalization events. It runs against the notion that it was part of a broader trend in foreign financing to China.

26
<!-- Start of picture text --> FTAAP Output, billion $ Output, %<br>Wearing apparel and leather Mla en ieee<br>Textiles [bees es<br>Food, beverages, tobacco [UNNI css ee<br>Other agriculture (ilies Ea<br>Machinery and equipment nec II a<br>Electronic equipment [ills 7.<br>Transport equipment RRIIIIIIIIID css: , eT<br>Metals SII 7.<br>Natural resources / mining [RNIN cccsssssssss Hee<br>Chemical, rubber, plastic products [UUUUIUUIUIIUIIIIIT es<br>Other manufacturing [ilies a FE—<br>Social services (UNNI :: ——<br>Communication and business services nec RUNNIN ss [PaO<br>Finance and other business services (UNNI OE<br>Trade and transport RRS eee<br>Utilities MiB OS<br>Construction Si 2<br>0 200 400 600 800 1000 1200 oO 2 4 6 8 10 12 14 16 18 20<br>Standard TM Productivity kick Standard TM Productivity kick<br><!-- End of picture text --> <!-- Start of picture text --> FTAAP exports, billion $ Exports, %<br>Wearing apparel andleather SE... aes<br>Teties DI. De]<br>Food, beverages, tobacco [IIS De]<br>Other agriculture SL PS<br>Machinery and equipment nec INSIST se PS<br>Electronic equipment [SUNT Hille<br>Transport equipment NNN Dn]<br>Metals [RUSS ss Oe<br>Natural resources/ mining [NUUNNccss A<br>Chemical, rubber, plastic products [IIINNUUIUININNNNINIINII<br>Other manufacturing [Us EE<br>Social services ow hes<br>Communication and business servicesnec [Nn EE<br>Finance and other business services [, Pe<br>Trade and transport SL. po<br>Utilities | a]<br>Construction » hes<br>-50 0 50 100 150 200 250 300 350. -5 0 5 10 15 20 25 30 35 40 45<br>mStandard mTM Productivity kick mStandard TM Productivity kick<br><!-- End of picture text -->

<!-- Start of picture text --> FTAAP Imports, billion $ Imports, %<br>Wearing apparel andleather Ir eccclrclrlrlrlrC( SS<br>Textiles DI. ars<br>Food, beverages, tobacco es<br>Other agriculture SI a]<br>Machinery and equipment nec RT es<br>Electronic equipment [QRNNINNNNNIIITcss ES<br>Transport equipment ST pollllcltrttLCULDWN<br>Metals Ts es<br>Natural resources / mining SSSI Le<br>Chemical, rubber, plastic products SST —...<br>Other manufacturing ST. a]<br>Social services IN Ss...<br>Communication and business services nec ET... es<br>Finance and other business services [AL es<br>Trade and transport SE. ....<br>Utilities cl<br>Construction FF<br>0 50 100 150 200 250 300 ie) 5 10 15 20 25 30 35 40<br>mStandard m Productivity kick @Standard mTM Productivity kick<br><!-- End of picture text -->
of capital and labor inputs (VA) in the KLE-nest, as well as non-energy material inputs (P(1) to P(N)) in the M-nest; the third level captures the substitution possibilities between capital (PK) and labor (PL) in the VA-nest, and the trade-off between electricity and a CES composite of fossil fuels (coal, refined oil, gas) (P(FE)) with their associated CO2 emissions (PCARB) in the FE-nest.<sup>10</sup> The production of fossil fuels combines sector-specific fossil-fuel resources with an aggregate of all other inputs which enter in fixed proportions.

The representation of international trade follows Armington's (1969) approach of differentiating goods by country of origin: goods that satisfy domestic demand are represented as a CES aggregate of domestically produced goods and imported goods. A balance-of-payment constraint incorporates the base-year trade deficit or surplus for each region.

Final consumption in each region is determined by a representative agent who maximizes consumption subject to its budget constraint. Consumption is represented as a CES aggregate of nonenergy goods and energy inputs. The budget constraint is determined by factor and tax incomes with fixed investment and public expenditure.

# **4.2. Parameterization**

As is customary in applied general-equilibrium analysis, base-year data together with exogenous elasticities determine the free parameters of the functional forms which characterize technologies and preferences. For this calibration we make use of data provided by the Global Trade Analysis Project (GTAP). The GTAP database (version 7,1) describes production, consumption, trade and CO2 emissions from fossil-fuel combustion for up to 113 countries/regions, 57 commodities and 5 primary factors for the benchmark year 2004 (Narayanan and Walmsley, 2008). The GTAP database contains Armington trade elasticities and value-added elasticities. The elasticities of substitution in fossil-fuel sectors are calibrated to match exogenous estimates of fossil-fuel supply elasticities (Graham et al., 1999; Krichene, 2002).

For our illustrative economic impact assessment of the CDM, we aggregate the GTAP regions into two blocks: Annex I (AN1) countries which can invest in CDM projects and non-Annex I (NA1) countries which can implement CDM projects. With respect to commodities, the aggregation includes five energy goods (coal, natural gas, crude oil, refined oil, and electricity), an energy-intensive composite (including non-ferrous metals, non-metallic minerals, iron and steel, and chemical products), an aggregate transport good, and a composite of all other remaining goods and services.

> 10 CO2 emissions are linked in fixed proportions to the use of fossil fuels, with CO2 coefficients differentiated by the specific fuels carbon content.

8
7 market participants are potentially covered by severance pay regulations, the analysis concentrates on those government and private sector employees who experienced a job separation. For the IFLS (2007) survey, the job separation refers to the previous five years of employment; to the previous two years in the Sakernas (2008) survey.

The specific reason for the job separation is important because it affects both the entitlement to compensation and the size of the prospective payment. For instance, if a job separation is due to an economic cause beyond the control of the employee, the compensation package (both severance pay and long-service leave) is significantly larger and the cost to the firm is greater.

In the IFLS (2007) survey, involuntary separations (lay-off and business closure) accounted for 21.8 percent of all job separations; voluntary separations were 56.3 percent and “other” accounted for 21.9 percent. The responses identifying the reason for a separation are similar in the Sakernas (2008) survey. Involuntary separations (lay-off and business failure) accounted for 27.9 percent of all job separations. But 39.4 percent of all responses were due to “other” reasons where the initiative for the separation cannot be identified. Not knowing the reason for the separation makes it difficult to determine the potential severance payment.

As stated above, most of the job separations in both of the surveys are voluntary. Table 1 compares job separators with all government and private sector employees using the Sakernas (2008) survey. Employees who experienced a job separation in the previous two years are disproportionately younger, female, and well-educated. Job separations are concentrated in industries where entry and exit is relatively easy and mainly in the private domestic sector. Job separators have a relatively short employment relationship with the firm and tend to earn lower monthly wages.

The turnover rate is higher for younger age groups and steadily decreases with age (except for the oldest group aged 55 years and older). While there are about twice as many men employed in the formal wage-and-salary sector, the turnover rate for women is about two-thirds higher. Job separators are relatively well-educated and the turnover rate is highest for those who graduated from high school.

There is a disproportionate concentration of job separations in industries where entry and exit is relatively easy, such as manufacturing **,** trade, and especially public
**Figure 7: Drought return periods and losses for Uruguay under different warming scenarios (based on 2023 sector values)**

<!-- Start of picture text --> Crops Livestock<br>1,200 1,800<br>1,600<br>1,000<br>1,400<br>800 1,200<br>1,000<br>600<br>Historical / Baseline Historical / Baseline<br>800<br>RCP 2.6 RCP 2.6<br>400 600<br>RCP 4.5 RCP 4.5<br>400<br>200<br>RCP 8.5 RCP 8.5<br>200<br>0 0<br>0 50 100 150 200 0 50 100 150 200<br>Return period (years) Return period (years)<br>Source: World Bank estimates based on IDB (2019), MEF (2023), and INUMET (2023).<br>Losses (US$mil) Losses (US$mil)<br><!-- End of picture text --> Source: World Bank estimates based on IDB (2019), MEF (2023), and INUMET (2023).

**Figure 8: Expected annual losses under different warming scenarios (based on 2023 sector values)**

<!-- Start of picture text --> Crops Annual Expected Losses ($mil) Livestock Annual Expected Losses<br>($mil)<br>120<br>120<br>100<br>100<br>80<br>80<br>60<br>60<br>40<br>40<br>20 20<br>0 0<br>Baseline RCP 2.6 RCP 4.5 RCP 8.5 Baseline RCP 2.6 RCP 4.5 RCP 8.5<br><!-- End of picture text --> Source: World Bank estimates based on IADB (2019), MEF (2023), and INUMET (2023).

# 5.2 Flooding

**Data on damages from flooding and flooding frequency are taken from UNDRR 2015** (the GAR15 dataset). Capital stock in Uruguay that is exposed to flooding has a value of US$116 billion (2015 prices), or roughly twice the value of GDP. Uruguay has historically experienced moderate floods, with a 1 in 50year flood destroying US$642 million worth of assets (2015 prices). This is the equivalent of 0.34 percent of capital stock exposed to flooding, or 0.68 percent of GDP. Every year, with no further climate change, there is a 2 percent chance that a 1 in 50-year flood will occur. As suggested in Myhre et al. 2019, it is assumed that the frequency or probability of floods of any given size doubles with every degree increase

15
# **How do governments respond to food price spikes? Lessons from the past**

Kym Anderson University of Adelaide and CEPR <u>kym.anderson@delaide.edu.au</u> and Signe Nelgen University of Adelaide <u>signe.nelgen@googlemail.com</u>

**Keywords:** Commodity price stabilization policies, Domestic market insulation, Distorted incentives, Agricultural and trade policies, Trade restrictiveness indexes

## **JEL codes:** F14, Q17, Q18

This is a product of a World Bank research project on Distortions to Agricultural Incentives. The authors are grateful for helpful comments from workshop participants, and for funding from World Bank Trust Funds provided by the governments of the Netherlands (BNPP) and the United Kingdom (DfID) and from the Australian Research Council. The views expressed are the authors’ alone and not necessarily those of the World Bank and its Executive Directors, nor the countries they represent, nor of the institutions funding this research. Forthcoming in the _Journal of International Commerce, Economics and Policy_ ,1(2), Fall 2010.

**Corresponding author** : Kym Anderson, School of Economics, University of Adelaide, Adelaide, SA 5005, Australia; Phone +61 8 8303 4712, Fax +61 8 8223 1460, email: <u>kym.anderson@adelaide.edu.au</u>
- 30 -

Table **8** The Distribution of Sales Tax Revenues. 1985-92 (As Z of IVA collection)

|Recipient|19 8<sup>5a</sup>|1 98 6<sup>b</sup>|1987|1988|1989|1990|1991|1992|
|---|---|---|---|---|---|---|---|---|
|All municipalitiesC|25.0|25.8|25.9|26.4|27.0|27.5|28.0|28.5|
|Small municipalitiesd||0.4|1.8|3.8|6.0|9.0|12.5|16.8|
|National territoriese|1.5|0.7|0.6|0.6|0.5|0.5|0.5|0.5|
|Social Securityf|3.5|3.5|3.5|3.5|3.8|3.8|3.8|4.0|
|IGAC8<br>||0.1|0.1<br>|0.1<br>|0.1<br>|0.1<br>|0.1<br>|0.1|
|ESAPh|||0.1|0.1|0.1|0.1|0.1|0.1|
|Total:|30.0|30.5|32.0|34.5|37.5|41.0|45.k,|<br>50.0|

Notes:

- a. As set out in Decree 232 of 1983 (with the distribution in part based on 1973 population).

- b. Thus allocation actually only takes effect only as of July 1, for the first six months, 1985 formula applies.

- c. Includes Bogota, and after mid-1986, municipalities in national territories. Note however, that 302 of allocation to cities between 100,000 and 500,000 population and 502 of

allocation to cities over 500,000 in fact goes directly to FERs.

- d. To be allocated in accordance with fiscal effort formula among municipalities of less than

- 100,000 inhabitants.

- *. After mid-1986, this amount goes directly to national territories for their own use, without restriction.

- f. This share goes to the sectional social security funds (including those in the territories) and is intended mainly to cover social security payments for teachers.

- g. Instituto Geografica Agustin Coddazi. To be used for revaluation in smaller municipalities.

- h. Escuela Superior de Administracion Publica. To commence as of 1987.

Source: "IBRD Colombia - A Revie- of Recent Decentralization Measures", Washington, D.C.; April 6, 1987, p. 36.

quickly adjusted from the census of 1964 to those of 1973 and then 1985. Because of the size and elasticity of the sales tax, the transfer became an important source of municipal finance. It was the most important transfer to Colombian municipalities and, most particularly, to those cities other than Bogota and the departmental capitals for whom it was the equivalent of twice the level of municipal tax collections in the late 1970s. Because there were no incentives to raise local resources, there is some evidence that the sales tax transfer mainly substituted for local resources.
Table **6: De-Composed Deposit Insurance Choices and Subsequent Changes in Financial Depth**

|**Explan.**<br>**Variable**|**Dep Var: C**|**hange in Ratio**<br>**GDP**|**of M2 to**|**Dep**Var:**Ch**<br>**M**|**ange in Ratio**<br>**onev to GDP**|**of Quasi-**|
|---|---|---|---|---|---|---|
||(1)|(2)|(3)|(4)|(5)|(6)|
|_Constant_|.264|.201|-1.48|.775|.720|-.549|
||(0.30)|(1.02)|(1.11)|(0.88)|(0.73)|(0.40)|
|_Avg. Inflat._|-.111|-.115|-.093|-.095|-.097|-.081|
||(6.73)|(6.29)|(5.42)|(5.71)|(5.47)|(4.57)|
|_% Growth_|.092||.108|.046||.060|
|(Real GDP)|(0.69)||(0.79)|(0.34)||(0.42)|
|_Income Per_||0.065|||0.046||
|_Capita_||(0.52)|||(0.38)||
|_Explicit_|1.98|2.18|3.79|2.04|2.18|3.38|
||(1.63)|(1.52)|(2.36)|(1.68)|(1.56)|(2.04)|
|_Exp x Volat_|-1.42|-1.40|-.576|-.985|-.957|-.369|
||(3.71)|(3.31)|(3.67)|(2.56)|(2.31)|(2.28)|
|_Volatility]_|1.102|1.100||.986|.981||
|(st dev M2)|(4.33)|(3.68)||(3.85)|(3.38)||
|_V'olatilitv 2_|||.357|||.305|
|(coef of var)|||(3.54)|||(2.93)|
|Adj. R-Sqre|.603|.528|.575|.475|.422|.406|
|Obs|40|41|40|40|41|40|
|F|12.83|9.93|11.56|8.05|6.84|6.34|
|Prob > F|.0000|.0000|.0000|.0000|.0002|.0003|

Notes: t-statistics in parentheses. Observations for countries with average 3-year inflation higher than 1000% excluded from the analysis. Avg inflat. and Income Per Capita are described in notes to Table 4. Explicit is a dummy variable equal to one for countries with explicit deposit insurance. Volatility I is the standard deviation of M2/GDP. For countries with explicit insurance. the standard deviation was computed over the three years prior to its adoption. For countries that retained implicit insurance. standard deviations were computed for all three-year periods from 1980-95: the average of those standard 24 deviations enters these regressions. Volatilitv 2 is the coefficient of variation in M2/GDP (standard deviation/mean). It was computed over the same time intervals as Volatility 1. % growth (real GDP) is the average annual growth rate in real GDP. For implicit countries it was computed over the same time intervals as the volatility measures. For explicit countries it was computed over the three years just after a program's inception.

The dummy variable for explicit insurance, which should capture non-stabilityrelated circumstances surrounding deposit insurance decisions such as past crises, legal tradition, and neighbor adoption effects, appears to exert a very different influence on 24 Similar qualitative results obtain when the standard deviation in M2/GDP is computed over the five years prior to adoption for countries with explicit schemes, and when a simple standard deviation from 1980-95 is computed for countries that retained implicit insurance.

20
<!-- Start of picture text --> SsoO ;<br>2<br>°S '<br>= |<br>f=) '<br>2 \<br>a ae<br>; perenne<br>Si) |<br>o 17 1<br>2010 2011 2012 2013<br>—— Treatment —-—--- Synthetic control unit<br><!-- End of picture text -->

<!-- Start of picture text --> fo)<br>lo) '<br>Oo '<br>oO '<br>N ‘<br>ro)3 1<br>oOz '<br>°<br>f=) wer<br>fo)© 1\= Lec _-<br>= “I<br>[=] cer<br>fo) ” '<br>fo) “7 1<br>wv on '<br>o O = '<br>Na, '<br>- “” '<br>;a<br>S<br>oa '<br>(=) 1<br>=<br>2010 2011 2012 2013<br>—— Treatment —-—--- Synthetic control unit<br><!-- End of picture text -->
**Figure 2.  Selected Countries with Peak in Youth Population before 2000 Population Aged 12-24 (1950=100), U.N. Medium Variant Projections**

<!-- Start of picture text --> 300<br>Thailand<br>250 China<br>200<br>150<br>100<br>50<br>0<br>1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050<br>Year<br>Population (1950=100)<br><!-- End of picture text --> 28
are more intricate to treat and need further elaboration and assumptions. All details of the country’s taxes and transfers system, and how they are identified and assigned to households using the data sources described above, are presented in the methodological Annex A.

One methodological contribution we make to the approach is to treat VAT non-compliance in a distributionally-sensitive manner. Incidence studies typically treat VAT as if all households pay the statutory rates in their purchases, or as if they contribute an effective VAT rate calculated from national accounts. In the former case, households are assumed to fully comply with VAT in all their purchases. In the latter, the full compliance assumption is lifted, but all households are assumed to pay the same rate, regardless of their socio-economic background. The majority of CEQ studies fit the latter case, treating VAT evasion as uniformly distributed.

In developing countries, however, where the informal economy is more prevalent, VAT compliance is a function of consumer behavior and purchase channel, and this varies across the household income distribution. Lower income households tend to make a larger share of their purchases in informal outlets without invoice. Using this observation, we depart from previous studies and lift the assumption of uniformly distributed non-compliance.

To do that, we use data from the IPSOS consumption survey to estimate the share of purchases made in places that normally do not invoice (like open bazaars) by each socio-economic segment of the population. We then apply these shares of no-VAT purchases to adjust the calculation of VAT in the purchases declared by each socio-economic segment in the HBS. As expected, the share of purchases in places like open bazaars is higher among lower-income households than higher-income households. This small tweak in the methodology matters from a distributional viewpoint.<sup>10</sup> After calculating taxes and transfers for all households, we aggregate them and compare the aggregates to the public administrative records. Table 3 below present the results of the comparison. We find that HBS does a relatively good job in capturing the magnitudes of fiscal interventions. Overall, HBS captures 46 percent of total government revenue (as presented in Table 1), including 74 percent of social contributions and 50 percent of direct and indirect tax revenue; and about 50 percent of government spending (as shown in Table 2), including 87 percent of social spending.

**Table 3. Fiscal Interventions in the HBS: Amounts and Comparison with Administrative Records**

> 10 The approach is described in more detail in Annex A.

15
- Ma, Yuan, Qiang Zhang, and Qiyue Yin (2021). “Top management team faultlines, green technology innovation and firm financial performance”. _Journal of Environmental Management_ 285, 112095.

- Marin, Giovanni and Francesco Vona (2021). “The impact of energy prices on socioeconomic and environmental performance: Evidence from French manufacturing establishments, 1997-2015”. _European Economic Review_ 135, 103739.

- Martin, Ralf, Mirabelle Muûls, et al. (2012). “Anatomy of a paradox: Management practices, organizational structure and energy efficiency”. _Journal of Environmental Economics and Management_ 63, 208–223.

- Martin, Ralf, Laure B. de Preux, and Ulrich J. Wagner (2014). “The impact of a carbon tax on manufacturing: Evidence from microdata”. _Journal of Public Economics_ 117, 1–14.

- Masson-Delmotte, V. et al. (2018). “IPCC, 2018: Annex I: Glossary”. _Global Warming of 1.5C. An IPCC Special Report on the impacts of global warming of 1.5Â°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty_ . Cambridge, UK and New York, NY, USA: Cambridge University Press, 541–562.

- Masuda, Yuta J., Brianna Castro, et al. (2019). “How are healthy, working populations affected by increasing temperatures in the tropics? Implications for climate change adaptation policies”. _Global Environmental Change_ 56, 29–40.

- Masuda, Yuta J., Teevrat Garg, Ike Anggraeni, Kristie Ebi, et al. (2021). “Warming from tropical deforestation reduces worker productivity in rural communities”. _Nature Communications_ 12. Number: 1 Publisher: Nature Publishing Group, 1601.

- Masuda, Yuta J., Teevrat Garg, Ike Anggraeni, Nicholas H. Wolff, et al. (2020). “Heat exposure from tropical deforestation decreases cognitive performance of rural workers: an experimental study”. _Environmental Research Letters_ 15, 124015.

47