The latest decades have been marked by rapid climate change and global warming due to the release of greenhouse gas emissions into the atmosphere. Environmental taxes have emerged as a cost-effective way to tackle environmental degradation. However, the effectiveness of environmental taxes in reducing pollution remains a topic of ongoing debate. The purpose of this paper is to examine empirically the effects of various environmental tax categories (energy, pollution, resource and transport) on CO₂ emissions in 34 OECD countries between 1995 and 2019. The dynamic panel threshold regression developed by Seo and Shin (2016) is implemented to assess whether the impact of environmental taxes on CO₂ emissions depends on a given threshold level. The locally weighted scatterplot smoothing analysis provides evidence for a nonlinear association between environmental taxes and CO₂ emissions. The analysis indicates the existence of one significant threshold and two regimes (lower and upper) for all environmental tax categories. The dynamic panel threshold regression reveals that the total environmental tax, energy tax and pollution tax reduce CO₂ emissions in the upper regime, i.e., once a given threshold level is reached. The threshold levels are 3.002% of GDP for the total environmental tax, 1.991% for the energy tax and 0.377% for the pollution tax. Furthermore, implementing taxes on resource utilization may be effective but with limited environmental effects. Based on the research results, it is recommended that countries in the OECD implement specific environmental taxes to reduce greenhouse gas emissions.

Climate change represents one of the most serious threats to the well-being of humanity. In recent decades, there has been a significant increase in the amount of research dedicated to analysing the economic impacts of climate change. Nevertheless, the spatial aspect of climate change has not been addressed. This research is the first to empirically assess both direct and indirect (spillover) effects of climate change, as measured by temperature variations, on economic growth. The empirical analysis is based on a balanced dataset for 86 countries between 1980 and 2019. The preliminary analysis suggests the presence of spatial autocorrelation and the suitability of the dynamic spatial autoregressive model to assess the spillover effects of climate change. The results for the full sample reveal that there are no substantial short- or long-run effects of climate change on economic growth. When the sample is decomposed by income, the analysis indicates that climate change has direct and indirect spillover effects on economic growth only in low–middle-income countries over the short- and long run. The decomposition according to the climate regime also yields interesting findings as climate change exerts adverse direct and indirect spillover effects on economic growth only in the hottest countries over the long run. These findings are robust since they hold regardless of whether the contiguity weight matrix or the inverse distance weight matrix is used. The research advocates for international collaboration in the design and implementation of climate change mitigation and adaptation strategies.

Since Bitcoin has frequently witnessed price fluctuations and high volatility, the factors influencing its returns and volatility is an important research subject. To accomplish this goal, we applied the Gets reduction method which has a good reputation compared to other competing approaches in terms of the statistical apparatus available for a repeated search to determine the final set of determinants and the consideration of location shifts. We found that the reduced set of explanatory variables that affects Bitcoin returns is composed of Twitter-based economic uncertainty, gold return, the return of the Euro/USD exchange rate, the return of the US Nasdaq stock exchange index, market capitalization, and Bitcoin mining difficulty. In contrast, the volatility of Bitcoin is affected by only lagged terms of the ARCH effect and the volume of this cryptocurrency.

This paper discusses the effects of both sustainable development and an Islamic system on the transmission of oil shocks into inflation. Sustainable development in this context includes wealth distribution equity, public governance effectiveness and alternative energy creation for the promotion of economic growth. These factors have been revised by Askari and Mirakhor under an Islamic approach using a set of Islamic indices to reflect a social, economic, political and ecological system that is in compliance with the Sharia principles. Using the ARDL model, we tested whether these Islamic mechanisms could have played the role of sustainable development in the fight against the transmission of oil shocks into inflation in MENA countries during the period 2000–2018. The results show that the Islamic system can play the role of sustainable development better than the traditional one, through fostering social equity, fighting against corruption, promoting humanity in employability and facilitating growth of the real economy. These Islamic values slow down the inflationary phenomenon caused by oil shocks.

This paper tests the ability of the regulatory capital requirement to cover credit losses at default, as carried out by the economic (optimal) capital requirement in Tunisian banks. The common factor in borrowers that leads to a credit default is systematic risk. However, the sensitivity to these factors differs between borrowers. To this end, we derived two kinds of sensitivity to systematic risk: the first is recognised by the Basel Committee; the second is derived from an economic approach. Hence, we can observe the impact of sensitivity to systematic risk on capital requirements. Empirically, we studied a sample of 100 individual borrowers from a Tunisian deposit bank that had credit in January 2020. We estimated the default probability for each borrower and then simulated their systematic risk sensitivity using the Monte Carlo approach, and compared them with the regulatory risk sensitivity. Then, we tested their effects on the economic and regulatory capital requirements. The results indicate that regulatory capital overestimates economic capital. This is due to the overestimation of borrowers’ contagion in terms of default risk, as shown by the superiority of their regulatory sensitivity systematic risk compared to the simulated risk. This leads banks to devote more capital than is really necessary to reach the regulatory standard. Hence, there was an increase in capital costs and the possibility of an arbitrage opportunity.

This paper examines the effects of Islamic economic and social systems within a democratic environment on the causal relationships among uncertainty, informal economy, corruption, and economic growth. For this purpose, we considered a set of Middle East/North Africa MENA countries considered to be in economic difficulty and undergoing the democratic transition process (Tunisia, Algeria, Egypt, Libya, Yemen, and Iraq) for the period of 2000–2018. Our contribution is to use the social index that measures the degree of Islamicity in each country in terms of economic and political matters. We examine the effects of Islamicity and democracy on uncertainty, informal economy, corruption, and economic growth using a vector autoregression (VAR) model. Our empirical findings show that, if a theoretical Islamic system is applied in practice, it must be accompanied by a democratic regime to effectively mitigate uncertainty, informal economy, and corruption and contribute to economic growth. Democracy is a necessary component for achieving an optimal level of Islamicity.