In this paper, we fill the gap in the literature by identifying a negative relationship between fuel ethanol consumption and CO2 emissions, building on a sample of 17 European countries covering seven years, from 2010 to 2016. Based on a Panel Smooth Transition Regression approach we show that countries with high levels of income inequality have difficulties in avoiding environmental degradation by promoting policies and regulations for more intense use of biofuels. Furthermore, we bring strong empirical evidence suggesting that biofuels could be an alternative in the future to reducing CO2 emissions. In our opinion, this non-linear analysis could provide the scientific basis for authorities, especially the European Commission to promote environmental policies to a specific country with different levels of carbon emissions rather than to the entire group.

Using data from the Bucharest Stock Exchange, we examine the factors influencing the probability of informed trading (PIN) during February—October 2020, a COVID-19 pandemic period. Based on an unconditional quantile regression approach, we show that PIN exhibit asymmetric dependency with liquidity and trading costs. Furthermore, building a customized database that contains all insider transactions on the Bucharest Stock Exchange, we reveal that these types of orders monotonically increase the information asymmetry from the 50th to the 90th quantile throughout the PIN distribution. Finally, we bring strong empirical evidence associating the level of information asymmetry to the level of fake news related to the COVID-19 pandemic. This novel result suggests that during episodes when the level of PIN is medium to high (between 15 and 50%), any COVID-19 related news classified as misinformation released during the lockdown period, is discouraging informed traders to place buy or sell orders conditioned by their private information.

In this paper, we investigated how policy rate modifications – the main instrument used by central banks to provide liquidity during the current health crisis – influenced the evolution of the exchange rate, which is a key element within macro-stabilization policies. We documented that foreign exchange markets in European countries responded asymmetrically to monetary policy interventions devoted to the encouragement of spending and the stimulation of the economy. However, this only occurred during extreme events, which is a side-effect of the monetary policy on the foreign exchange market. These results contribute to the assessment of the space for manoeuvres by monetary policymakers regarding key policy rate modifications as a response to pandemic shocks.