The proposed European Carbon Border Adjustment Mechanism (CBAM) seeks to curb carbon leakage, which undermines the EU’s ambitious goal of climate neutrality by 2050. This column explores whether the mechanism succeed in reducing carbon leakage, while at the same time restoring a level playing field for EU producers and minimising the likelihood of WTO panels or retaliation by trading partners. The authors argue that the mechanism will significantly curb European carbon leakages, but at a cost. EU member states will need at the very least to agree on how to end free allowances to be compatible with the WTO. By Cecilia Bellora and Lionel Fontagné

The Ukrainian conflict has brought to the forefront the issue of Europe's dependence on hydrocarbon imports. Trade data are the usual source to construct a measure of interdependence between states. In the case of natural gas, however, they do not provide a reliable picture of actual flows.  By Cecilia Bellora, Pierre Cotterlaz, Malte Thie

Romain Duval, Assistant Director of the Research Department (IMF), presents the findings of the recent IMFs report "Labor Market Tightness in Advanced Economies". Two years after the onset of the COVID-19 pandemic, a puzzle has emerged in several advanced economies: Unfilled job vacancies have increased sharply even though employment has yet to fully recover. This new IMF Staff Discussion note sheds light on three contributing factors— barriers to returning to work, changing worker preferences away from certain types of jobs, and sectoral and occupational job mismatch—and assesses the impact of labor market tightness on wage growth.

International Economics is a peer-reviewed journal devoted to the publication of research in the area of applied international economics. The journal especially welcomes empirical contributions that include, but are not limited to, topics in international trade, commercial policy, open economy macroeconomics, international finance, exchange rates, financial and monetary policies, economic development, migration and factor movements.
The August 2022 issue is in progress but contains articles that are final and fully citable.