Per Strömberg

Sweden was one of the first countries to introduce a carbon tax back in 1991. We assemble a unique data set tracking CO2 emissions from Swedish manufacturing firms over 26 years to estimate the impact of carbon pricing on firm-level emission intensities. We estimate an emission-to-pricing elasticity of around two, with substantial heterogeneity across subsectors and firms, where higher abatement costs and tighter financial constraints are associated with lower elasticities. A simple calibration suggests that 2015 CO2 emissions from Swedish manufacturing would have been roughly 30% higher without carbon pricing. (JEL H23, Q54, Q58, G32)

Financial sector wages have increased extraordinarily over the last decades. We address two potential explanations for this increase: (1) rising demand for talent and (2) firms sharing rents with their employees. Matching administrative data of Swedish workers, which include unique measures of individual talent, with financial information on their employers, we find no evidence that talent in finance improved, neither on average nor at the top. The increase in relative finance wages is present across talent and education levels, which together can explain at most 20% of it. In contrast, rising financial sector profits that are shared with employees account for up to half of the relative wage increase. The limited labour supply response may partly be explained by the importance of early-career entry and social connections in finance. Our findings alleviate concerns about "brain drain" into finance but suggest that finance workers have captured rising rents over time.

We develop a model of private equity capturing two fundamental features of this market: the fund structure and illiquidity. A fund structure with sequential capital calls arises as an optimal solution to fund managers' (GPs) moral hazard problem but exposes investors (LPs) to illiquidity risk. Funds with more illiquidity-tolerant LPs realize higher returns, leading to different expected returns across both funds and LPs in equilibrium. GPs may inefficiently accelerate drawdowns to avoid default by LPs on capital commitments. With a secondary market for LP claims, differences in fund returns are attenuated but differences in LP returns remain. The model can rationalize several empirical findings on primary and secondary private equity markets.

We examine the role private equity (PE) sponsors play in the resolution of financial distress of portfolio companies. PE-backed firms have higher leverage and default at higher rates than other companies borrowing in leveraged loan markets. But, PE-backed firms restructure more quickly, avoid bankruptcy court more often, and liquidate less often compared to other highly leveraged firms experiencing financial distress. PE owners are also more likely to retain control post-restructuring, often by infusing capital as firms approach distress. While default frequencies are higher among PE-backed firms, PE investors appear to manage financial distress at lower cost compared to other owners.

Det är nu nästan 30 år sedan Sverige införde en koldioxidskatt. Vi sammanställer i denna rapport en omfattande databas av koldioxidutsläppen i den svenska tillverkningsindustrin på företagsnivå sedan 1990 och beräknar marginalkostnaden för koldioxidutsläpp för samtliga företag och år. Vi uppskattar att en ökning av marginalprissättningen med 1 procent är associerad med en minskning av företagens koldioxid intensitet på 3,4 procent. Avslutningsvis visar vi att koldioxidutsläppen från tillverkningssektorn minskat med 31 procent sedan 1990. Ungefär en tredjedel av denna minskning kan kopplas till förändrad sammansättning av tillverkningssektorn och resterande del av minskningen beror på teknisk utveckling.

Kungl Vetenskapsakademien har delat ut årets ekonomipris till William Nordhaus (verksam vid Yale University) ”för att ha integrerat klimatförändringar i långsiktig makroekonomisk analys” och Paul Romer (verksam vid New York University) ”för att ha integrerat teknisk utveckling i långsiktig makroekonomisk analys.” Nordhaus och Romer har vidgat vyerna för ekonomisk analys genom att konstruera modeller som visar hur marknadsekonomin växelverkar med naturen och med våra samlade kunskaper. Deras modeller och metoder hjälper oss att angripa några av vår tids mest avgörande och utmanande frågor om uthållig och hållbar ekonomisk tillväxt samt globalt välstånd.