fiscal policy and growth in a small open economy with elastic labour supply endogenizing labour supply leads to fundamental changes in the equilibrium structure of the ak growth model of a small open economy the balanced growth equilibrium is described by two tradeoff loci relating the equilibrium growth rate to the fraction of time devoted to leisure the implications of endogenous labour supply for fiscal policy are addressed the effects of distortionary taxes and government expenditure on the equilibrium growth leisure employment tradeoff are analysed the responses contrast with both those of a closed economy having an elastic labour supply and an open economy with fixed labour supply optimal fiscal policy is also characterized jel classification f41 f43 politique fiscale et croissance dans une petite economie ouverte quand l offre de travail est elastique l endogeneisation de l offre de travail entraine des changements fondamentaux dans la structure d equilibre du modele de croissance du type ak d une petite economie ouverte l equilibre de croissance balancee est decrit par deux lieux de relations d equivalence reliant le taux de croissance d equilibre a la fraction du temps allouee au loisir on examine les implications de cette endogen6isation de l offre de travail pour la politique fiscale on analyse les effets de taxes distorsionnantes et des depenses gouvemementales sur la relation d 6equivalence entre taux de croissance et loisir et donc emploi on obtient des reactions differentes de celles qu on obtient en economie ferm6e quand l offre de travail est elastique et en economie ouverte quand l offre de travail est fixe on proc ede alors a la definition de la politique fiscale optimale

growth habit formation and catching up with the joneses when habits are introduced multiplicatively in a capital accumulation model the consumers objective function might fail to be concave in this paper we provide conditions aimed at guaranteeing the existence of interior solutions to the consumers problem we also characterize the equilibrium path of two growth models with multiplicative habits the internal habit formation model where individual habits coincide with own past consumption and the external habit formation or catching up with the joneses model where habits arise from the average past consumption in the economy we show that the introduction of external habits makes the equilibrium path inefficient during the transition towards the balanced growth path we characterize in this context the optimal tax policy

does trade liberalization increase national energy use abstract this paper utilises the theoretical principles of antweiler et al antweiler w b r copeland and m s taylor 2001 is free trade good for the environment american economic review 91 4 pp 877 908 to estimate empirically the linkages between trade liberalization and energy use focusing on scale technique and composition effects results suggest that trade will increase energy use for the mean country in the sample

a gravity model analysis of international migration to north america this study examines the influence of political economic and demographic factors on the size and composition of migration flows to north america a modified gravity model is specified and adjusted to include immigration regulations and characteristics specific to the origin and destination countries for empirical test of the model the time period of study is from 1976 1986 and 70 countries are covered for a total of 1540 observations of migration flows to canada and the usa the results reveal that the population of origin countries and the income of destination countries are two major determinants of migration to north america high population areas of asia and latin america provided a large share of the immigrants domestic restrictions on political and civil freedom in origin countries are found to significantly impair migration to north america

uniqueness and indeterminacy on the dynamics of endogenous growth abstract in this paper we study the dynamics of endogenous growth both in the model of lucas and in a generalization that incorporates a labor leisure choice we characterize the regions of the parameter space that give rise to unique equilibria as well as the regions that yield a continuum of equilibria with positive growth rates we find that such multiple equilibria exist for empirically very plausible parameters in particular when the lucas model is modified to incorporate endogenous labor journal of economic literature numbers e00 e3 o40

valuation of marginal co2 abatement options for electric power plants in korea the electricity generation sector in korea is under pressure to mitigate greenhouse gases as directed by the kyoto protocol the principal compliance options for power companies under the cap and trade include the application of direct co2 emission abatement and the procurement of emission allowances the objective of this paper is to provide an analytical framework for assessing the cost effectiveness of these options we attempt to derive the marginal abatement cost for co2 using the output distance function and analyze the relative advantages of emission allowance procurement option as compared to direct abatement option real option approach is adopted to incorporate emission allowance price uncertainty empirical result shows the marginal abatement cost with an average of 14 04 ton co2 for fossil fueled power plants and confirms the existence of substantial cost heterogeneity among plants which is sufficient to achieve trading gains in allowance market the comparison of two options enables us to identify the optimal position of the compliance for each plant sensitivity analyses are also presented with regard to several key parameters including the initial allowance prices and interest rate the result of this paper may help korean power plants to prepare for upcoming regulations targeted toward the reduction of domestic greenhouse gases

carbon dioxide emissions allocation a review carbon dioxide co2 emissions allocation plays a fundamental role in determining reduction responsibility at economy level or emission permits at firm level past decades have seen the development and applications of various methods for co2 emissions allocation this paper provides a literature review of co2 emissions allocation with emphasis on the evolution of allocation methods used it begins with a summary of the most popular allocation principles and criteria that lay a foundation for the development of allocation methods we then classify the existing allocation methods into four groups namely indicator optimization game theoretic and hybrid approaches the main features and findings of past studies are identified and summarized while the fairness principle prevails in earlier studies the efficiency principle has been found to receive increasing attention recently we also present a comparison of the empirical results based on ten popular indicator methods to show how indicator choice affects the allocation results issues related to selecting appropriate methods in co2 emissions allocation are finally discussed further research may be carried out to strike a balance between fairness and efficiency so that the allocation results become more widely acceptable and economically feasible

poverty traps indeterminacy and the wealth distribution we consider a one sector growth model in continuous time with a production externality and endogenous labor supply there is a continuum of households who have identical preferences but differ with respect to their initial wealth we show that there exist economies such that an indeterminate steady state exists for some wealth distribution but not for others a second result is that a redistribution of wealth may drive the economy from a steady state with strictly positive output to a poverty trap in which output converges asymptotically to zero these results indicate that differences in the wealth distribution may be responsible for drastic differences in the long run standard of living journal of economic literature classification numbers d31 d50 o41

growth effect of taxes in an endogenous growth model to what extent do taxes affect economic growth abstract this paper presents an endogenous growth model comprising of financial human and physical capital and incorporating major features of a general tax system technology and preference parameter values in the model are chosen to fit the actual growth experiences of the united states and a rapidly growing east asian nic using the calibrated model i assess the role of differences in taxes and other variables in explaining the difference in growth rates the main findings are i the difference in tax systems across countries explains a significant proportion around 30 of the difference in growth rates ii the difference in preferences explains at most 4 and iii differences in labor income tax debt equity ratio and inflation can be important in explaining the growth difference further i evaluate the contribution of the monetary factor to the growth rate gap and the growth effect of us tax reforms e g revenue neutral changes in relative tax structure

sources of production inefficiency and productivity growth in china a global data envelopment analysis abstract the current mode of production in china is extensive and inefficient and has caused great stress on both resources and the environment this paper focuses on analyzing the sources of production inefficiency and productivity growth in china here a developed slacks based measure is utilized to decompose production inefficiency into three components input inefficiency economic output inefficiency and environmental inefficiency furthermore by applying a method based on global data envelopment analysis we take a further step to analyze the key factors responsible for the change of environmental productivity during 2003 2011 from the point of view of technical progress productive scale and management level the results show that redundancy in energy and labor inputs and excessive emission of sulfur dioxide chemical oxygen demand and ammonia nitrogen are the main sources of production inefficiency in china during the sample period the efficiency in all inputs and environmental emissions has improved except for capital input efficiency which had a decreasing trend further analysis shows that the overall environmental productivity in china has begun to follow an ascending path technical progress is the most powerful contributor to china s productivity growth while the decreases in scale and management efficiency are the two main obstacles preventing productivity improvement

natural disasters in a two sector model of endogenous growth using an endogenous growth model with physical and human capital accumulation this paper considers the sustainability of economic growth when the use of a polluting input e g fossil fuels intensifies the risk of capital destruction through natural disasters we find that growth is sustainable only if the tax rate on the polluting input increases over time the long term rate of economic growth follows an inverted v shaped curve relative to the growth rate of the environmental tax and it is maximized by the least aggressive tax policy of those that asymptotically eliminate the use of polluting inputs unavailability of insurance can accelerate or decelerate the growth maximizing speed of the tax increase depending on the relative significance of the risk premium and precautionary savings effects welfare is maximized under a milder environmental tax policy especially when the pollutants accumulate gradually

two sector growth models with productive public goods equilibrium in determinacy author affiliation been lon chen institute of economics academia sinica 128 academia road section 2 taipei 11529 taiwan e mail bchen econ sinica edu tw corresponding author shun fa lee department of industrial economics tamkang university 151 ying chuan road tamsui taipei county 25137 taiwan e mail alphalee mail tku edu tw acknowledgment we are grateful to two anonymous referees and an editor for constructive comments and to participants in several workshops for valuable comments and suggestions in earlier versions of the paper 1 introductionmodels of economic growth with multiple equilibrium paths offer an explanation as to why we often observe diverse growth performances among countries with similar economic environments a central question is under what conditions is it possible to establish local indeterminacy in this paper we study a lucas 1988 human capital based growth model and investigate whether there are multiple equilibrium paths and thus local equilibrium indeterminacy in the neighborhood of a balanced growth path equilibrium indeterminacy in existing two sector human capital based growth models emerges based upon two mechanisms one of the mechanisms is differential factor tax rates initiated in the work of bond wang and yip 1996 and followed by that of raurich 2001 the other mechanism is sector specific externalities pioneered in the work of benhabib and farmer 1996 in an exogenous growth model and followed by the work of benhabib meng and nishimura 2000 and mino 2001 in endogenous growth models ben gad 2003 combined the two mechanisms these two mechanisms establish local indeterminacy when the mechanisms cause the factor intensities at the social perspective and those at the private perspective to reverse the purpose of this paper is twofold first we argue that once productive public goods are considered the two existing mechanisms are not robust in creating local indeterminacy then we take into account congestion in public services so a two sector model with the two existing mechanisms can generate local indeterminacy our purpose is motivated by the following in the existing models with sector specific externalities or distorted factor taxes there is either no government spending or if the government spending is taken into account only consumptive public spending and government transfers are considered recently a number of authors have documented the positive impact of public expenditure upon the productivity of private capital 1 when there is productive public spending the production technology is externally enhanced by the public goods productive public goods as an engine of economic growth have received much attention in endogenous growth models in particular a number of studies in this line of modeling strategy have obtained local indeterminacy 2 thus it is important to determine whether or not differential factor tax rates and sector specific externalities create local indeterminacy in models with productive public goods however as we will find the two existing mechanisms no longer create local indeterminacy in a two sector growth model with productive public goods unless the difference in the factor tax rates and the gap in the sector specific externalities are implausibly large intuitively productive public goods introduce the effects of intersectoral externalities they offset the effects of the two existing mechanisms that would have otherwise reversed the factor intensity at the social viewpoint from the factor intensity at the private viewpoint as a consequence the two existing mechanisms are not robust in the establishment of local indeterminacy in models with productive public goods this paper then introduces the congestion effect in the use of public goods an effect offsetting the effect from public spending to salvage the two existing mechanisms

on the complexities of complex economic dynamics complex economic nonlinear dynamics endogenously do not converge to a point a limit cycle or an explosion their study developed out of earlier studies of cybernetic catastrophic and chaotic systems complexity analysis stresses interactions among dispersed agents without a global controller tangled hierarchies adaptive learning evolution and novelty and out of equilibrium dynamics complexity methods include interacting particle systems self organized criticality and evolutionary game theory to simulate artificial stock markets and other phenomena theoretically bounded rationality replaces rational expectations complexity theory influences empirical methods and restructures policy debates

human development and economic sustainability abstract this paper attempts to integrate the concern for human development in the present with that in the future in arguing for sustainable human development it appeals to the notion of ethical universalism an elementary demand for impartiality of claims applied within and between generations economic sustainability is often seen as a matter of intergenerational equity but the specification of what is to be sustained is not always straightforward the addendum explores the relationship between distributional equity sustainable development optimal growth and pure time preference

beyond the economics of more the place of consumption in ecological economics abstract the relation between consumption and welfare generally assumed by orthodox economists must be re examined by ecological economists present attitudes towards consumption among the latter are often ambiguous resulting in a modified form of consumerism yet questioning the often dubious benefits of consumption is as important for the environmental debate as emphasising its neglected costs beyond basic needs satisfaction it is at most one s consumption level relative to others which counts for welfare so that benefits from consumption cannot be increased in the aggregate thus there is much scope for reducing consumption and thus environmental costs while increasing or maintaining welfare identifying those goods the consumption of which adds little or nothing to welfare and assessing the effect of reducing their consumption on resource use natural and human should be a major concern of an ecological economics aimed at promoting sustainable welfare

solving consumption models with multiplicative habits this paper provides derivations necessary for solving an optimal consumption problem with multiplicative habits and a crra outer utility function either for a microeconomic problem with both labor income risk and rate of return risk or for a macroeconomic representative agent model

factor taxation and labor supply in a dynamic one sector growth model abstract this paper studies a class of ak type growth models with factor income taxes public capital stock and labor leisure trade offs while a higher capital tax rate reduces economic growth in the short run the long term growth effect is ambiguous and remains ambiguous even if the level of tax rate is larger than the degree of government externality a higher labor income tax rate has ambiguous growth effects both in the short and long runs however if the intertemporal elasticity of substitution for labor supply is sufficiently small a higher labor tax rate always lowers economic growth in the long run despite the existence of productive government taxation

the approach of institutional economics this paper assesses the old institutional economics it emphasizes the importance of key old institutionalist themes concerning the necessity of habits and rules and the role of institutions a problem in the alternative theoretical program of the new institutionalism is the untenability of its assumption of an original institution free market or state of nature even optimizing behavior requires the prior existence of habits and rules although it still lacks a complete and systematic theory the evolutionary approach of the old institutionalists tackles the problem of the interactive relationship of actor to structure without analytical reduction to one or the other

stability properties of a growth model abstract in existing one sector endogenous growth models a condition for indeterminacy is that labour demand is upward sloping in this paper we present conditions for indeterminacy given decreasing returns to labour

estimating the environmental efficiency and marginal co2 abatement cost of coal fired power plants in china abstract we estimate the environmental efficiency reduction potential and marginal abatement cost of carbon dioxide co2 emissions from coal fired power plants in china using a novel plant level dataset derived from the first and second waves of the national economic survey which were implemented in 2004 and 2008 respectively the results indicate that there are large opportunities for co2 emissions reduction in china s coal fired power plants given that all power plants operate fully efficiently china s co2 emissions in 2004 and 2008 could have been reduced by 52 and 70 respectively accompanied by an expansion in electricity output in other words the opportunities for double dividend exist in 2004 the average marginal abatement cost of co2 emissions for china s power plants was approximately 955 yuan ton whereas in 2008 the cost increased to 1142 yuan ton the empirical analyses show that subsidies from the government can reduce environmental inefficiency but the subsidies significantly increase the shadow price of the power plants older and larger power plants have a lower environmental efficiency and marginal co2 abatement cost the ratio of coal consumption negatively affects the environmental efficiencies of power plants

financial contagion and economic development an epidemiological approach abstract we develop an epidemiological approach to analyze how financial contagion may affect and be affected by economic activity we show that according to specific parameter values the economy may converge either to a non speculative or to a speculative equilibrium in the former situation the level of per capita income is maximal while in the latter it is reduced by financial contagion the presence of economic and financial feedback effects may also give rise to macroeconomic fluctuations during the transitional path clearly showing that such economic and financial links are an important driver of the short run macroeconomic performance by extending the analysis to a spatial dimension we also show that financial contagion in some specific region may propagate quickly also in regions far away from those in which the contagion initially occurs highlighting the role of regional policy coordination to avoid interregional contagion

an efficient mechanism to control correlated externalities redistributive transfers and the coexistence of regional and global pollution permit markets abstract we examine joint tradable permit markets as a self enforcing mechanism to control correlated externality problems by correlated we mean multiple pollutants that are jointly produced by a single source but which simultaneously cause differentiated regional and global externalities e g smog and global warming by self enforcing we mean a mechanism that accounts for the endogeneity that exists between competing jurisdictions in the setting of environmental policy within a federation of regions we find that joint domestic and international permit markets are pareto efficient for a wide class of preferences

economic structure and strategies for greenhouse gas mitigation abstract greenhouse gas ghg emission mitigation policy impacts the economic system directly in the short term by altering relative prices and indirectly in the long term by shifting the structure of the economy there may also be adjustments to economic structure independent of policy intervention due to changes in population consumption patterns and global markets the overall effectiveness of specific mitigation policy will partly depend on these indirect and exogenous changes to economic structure this study develops a new measure linking economic development with its environmental effects the technical cost of ghg mitigation under economic growth in an economy is calculated by combining traditional input output io analysis and a linear programming based sensitivity analysis the approach is applied to northern ireland ni producing an isoemission matrix that maps emission neutral expansion paths for the economy the measurement provides an indicator of the demand for technical improvement to achieve ghg mitigation at a national or regional level the flexibility and transparency of the approach make it useful for evaluating potential ghg mitigation strategies

pathways to a low carbon economy estimations on macroeconomic costs and potential of carbon emission abatement in beijing abstract developing reliable frameworks to estimate the potential of co2 emission abatement and its associated costs merits urgent attention this study aims to estimate the potential as well as macroeconomic costs of co2 emission abatement in beijing using the industrial economy as the basis multiobjective programming and genetic algorithm are integrated into the input output analysis several important findings have been gathered in the study 1 the abatement cost varies between 259 97 and 535 46 per ton at different rates of economic growth 2 a reinforced emission abatement target can induce higher macroeconomic costs 3 an inverse u shaped relationship between co2 reduction cost and gdp growth rate was found when gdp growth rate is above the threshold value of 7 marginal abatement costs decrease rapidly in parallel with gdp growth when the gdp growth rate is below 7 the marginal abatement cost increases significantly with economic growth 4 industries that have the highest and least potential of abatement have been identified for effectively reducing co2 emissions beijing needs to promote economic restructuring to maximize the potential of emission abatement and also fulfil the emission abatement target in a cost effective way this paper provides a quantitative approach to rationalize the policy design process of enacting emission targets and recommends cost effective abatement strategies

nonrenewable resource scarcity nonrenewable resource theory often is summarized by hotelling s rule this paper reviews theoretical extensions and empirical investigations of resource extraction models observed data are often inconsistent with the hotelling rule suggesting that other characteristics of nonrenewable resource supply including exploration heterogeneous ore quality technological progress and capital investment are important determinants of the dynamic behavior of resource prices given the persistent recurrence of concern about nonrenewable resource scarcity measures of nonrenewable resource scarcity and the empirical evidence for the time trends of those measures are reviewed finally the implications of nonrenewable resource scarcity for economic growth are examined

decoupling china s carbon emissions increase from economic growth an economic analysis and policy implications as the world s second largest carbon emitter china has long been criticized as a free rider benefiting from other countries efforts to reduce greenhouse gas emissions but not taking responsibility for its own emissions china has been singled out as one of the major targets at the subsequent negotiations after the kyoto meeting bq analyzing the historical contributions of interfuel switching energy conservation economic growth and population expansion to china s co2 emissions during 1980 97 this article clearly demonstrates that the above criticism is unjustified moreover given the fact that the role of china is an issue of perennial concern at the international climate change negotiations the article envisions some efforts and commitments that could be expected from china until its per capita income catches lip with the level of middle developed countries by emphasizing the it win win strategies these efforts and commitments are unlikely to jeopardize china s economic development and at the same time would give the country more leverage at the international climate change negotiations subsequent to the buenos sires meeting c 2000 elsevier science ltd all rights reserved

factors that influence carbon emissions due to energy consumption based on different stages and sectors in china abstract this study analyzes carbon emissions due to energy consumption based on different stages and sectors in china and by applying the logarithmic mean divisia index decomposition method carbon emissions were decomposed into energy structure energy intensity economic structure and economic output effects the study period was divided into high efficiency and high output low efficiency and low output high efficiency and low output and low efficiency and high output considering different carbon emission characteristics and economic development carbon emissions exhibit different characteristics at different stages the degree of increase in carbon emissions at these stages depends on the combined effect of the energy efficiency and the economic output the main factor driving carbon emissions was the economic output effect in each stage and the main factor inhibiting carbon emissions was the energy intensity effect the economic and energy structures had only a modest effect on carbon emissions at each stage the industry sector was the top contributor to carbon emissions followed by the transport sector the policy implications in terms of economic growth the economic structure and energy consumption are discussed in relation to the different stages

an equilibrium conflict model of land tenure in hunter gatherer societies i apply features of the economics of conflict and spatial competition in developing a model of the emergence of land ownership in hunter gatherer societies tenure regimes are the result of interactions between those seeking to defend claims to land and those seeking to infringe on those claims the model highlights the dependence of land ownership on ecological parameters such as resource density and predictability and allows for situational ownership in which the nature of ownership changes as realized ecological conditions change the paper concludes with a comparative assessment of tenure across a representative sample of hunter gatherer peoples

pollution from the electric power sector in japan and efficient pollution reduction abstract under the scheme of the kyoto protocol there are plans for the efficient reduction of carbon dioxide emissions in the electric power sector nuclear power generation which emits no carbon dioxide in the process of generating electricity has come under scrutiny however this energy produces a new environmental issue the disposal of radioactive waste first we derive shadow prices of carbon dioxide and low level waste as marginal abatement costs in the case of the electric power sector in japan employing a directional output distance function it is found that the shadow prices are us 39 per tonne for carbon dioxide and us 1531 per liter for low level waste secondly we calculate the indirect morishima elasticity between carbon dioxide and low level waste in order to identify their substitutability and it is found that the substitution of low level waste for carbon dioxide is easier than the reverse this result suggests that with the amount of generated electricity fixed carbon dioxide can be substituted more easily by low level waste when the relative price of carbon dioxide increases for example as a result of implementation of a carbon dioxide tax or an emissions trading system

estimating the marginal abatement cost curve of co2 emissions in china provincial panel data analysis abstract this paper estimates the marginal abatement cost curve macc of co2 emissions in china based on a provincial panel for the period of 2001 2010 the provincial marginal abatement cost mac of co2 emissions is estimated using a parameterized directional output distance function four types of model specifications are applied to fit the mac carbon intensity pairs the optimal specification controlling for various covariates is identified econometrically a scenario simulation of china s 40 45 carbon intensity reduction based on our macc is illustrated our simulation results show that china would incur a 559 623 yuan t roughly 51 57 increase in marginal abatement cost to achieve a corresponding 40 45 reduction in carbon intensity compared to its 2005 level

multilateral productivity comparisons with undesirable outputs in a recent paper in this journal caves christensen and diewert i982 hereafter ccd derive what they term multilateral superlative indexes for use in the comparison of output input and productivity across economic entities the indexes derived are distinguished both by transitivity and by a high degree of characteristicity a term introduced by dreschler i 973 to refer to the degree to which the weights used in a comparison are specific to the observations being compared though the indexes are presented with the application to multicountry comparisons of output input and productivity foremost in mind the authors note that they may be useful in a number of other contexts as well i e firms and industries time series and pooled time series and cross section all of the applications mentioned or implied however have this in common they involve the comparison of productive entities all of whose outputs are sold for positive prices this is not surprising of course since most products with which economists are concerned possess this characteristic however it does render incomplete or potentially misleading the comparison of productive entities which produce significant amounts of undesirable outputs such as water and air pollution since the list of such entities is rather long and includes industries critical to many national and regional economies e g chemicals paper petroleum refining copper and steel the omission of this factor from consideration may be a matter of some importance 2 consider for example a comparison of the productivity of the steel industries

cost of energy and environmental policy in portuguese co2 abatement scenario analysis to 2020 abstract this paper quantifies the contribution of portuguese energy policies for total and marginal abatement costs mac for co2 emissions for 2020 the times pt optimisation model was used to derive mac curves from a set of policy scenarios including one or more of the following policies ban on nuclear power ban on new coal power plants without carbon sequestration and storage incentives to natural gas power plants and a cap on biomass use the different mac shows the policies effects in the potential for co2 abatement in 2020 in the most encompassing policy scenario with all current and planned policies is possible to abate only up to 35 of 1990 emissions at a cost below 23 t co2 in the more flexible policy scenarios it is possible to abate up to 10 of 1990 emissions below the same cost the total energy system costs are 10 13 higher if all policies are implemented 76 to 101 b roughly the equivalent to 2 01 2 65 of the 2005 gdp thus from a co2 emission mitigation perspective the existing policies introduce significant inefficiencies possibly related to other policy goals the ban on nuclear power is the instrument that has the most significant effect in mac

an empirical analysis of the co2 shadow price in chinese thermal power enterprises abstract this paper estimates the shadow price of co2 and explores its determinants for thermal power enterprises in china using a parametric quadratic directional distance function we evaluate the inefficiency and shadow price of co2 for 124 power enterprises in 2004 applying deterministic and econometric methods a regression analysis is undertaken to examine the factors that drive shadow prices our results indicate that there are large inefficiencies in terms of electricity production and co2 emissions the shadow price is a negative function of firm size age and coal share and is positively correlated with the technology level this correlation between shadow prices and its determinants is not sensitive to changing assumptions regarding directional vectors although such changes do alter the distribution of shadow prices the large variation witnessed in shadow prices across power enterprises argues in favor of market based regulation such as an emissions trading system as opposed to the command and control regulation currently used in china to minimize overall abatement cost

marginal abatement costs of carbon dioxide emissions in china a parametric analysis this paper investigates the technical inefficiency shadow price and substitution elasticity of hbox co 2 emissions of china based on a provincial panel for 2001 2010 using linear programming to calculate a quadratic parameterized directional output distance function we show that china s technical inefficiency increases over the period implying further scope for hbox co 2 emissions reduction in the medium and longer term at best by 4 5 and 4 9 respectively our results notwithstanding regional differences highlight increases in the shadow price of hbox co 2 abatement 1 000 yuan ton in 2001 to 2 100 yuan ton in 2010 additionally increasingly steep substitution elasticity highlights the difficult reality of reducing china s hbox co 2 emissions

population consumption and resources ethical issues abstract this article is about the concept of optimum population and consumption even though it is primarily concerned with foundational issues the various ideas that have been discussed in the literature are tested in the context of economic models with limited resources it is argued that broadly speaking existing theories of optimum population and consumption are variants of average and what is often termed classical utilitarianism respectively both classes of theories are shown to have deficiencies in great measure because of their reliance on a defective concept of personhood it is also argued that contractual theories are of little use because potential people as opposed to future people cannot be parties to any contract a generation relative ethics is developed and is put to work in an overlapping generations model it is shown that generation relative ethics even when it is a variant of classical utilitarianism can prescribe a considerably lower population than classical utilitarianism

technical efficiency shadow price of carbon dioxide emissions and substitutability for energy in the chinese manufacturing industries abstract china is the world s largest co 2 producer and energy consumer in this paper we calculate the maximum technically obtainable co 2 emissions reduction from the efficient use of inputs and estimate the shadow prices of co 2 emissions in order to assess the potential cost savings deriving from trading emissions among industries by measuring the input distance function for 30 chinese manufacturing industries our empirical results indicate that co 2 emissions could be reduced by as much as 680 million tons in the aggregate the shadow prices of co 2 vary from a high of 18 82 to a low of zero across industries with an average of 3 13 per ton additionally the estimated indirect morishima elasticities of substitution of capital for fossil fuels indicate that the substitutabilities of capital for oil gas and coal are higher than the substitutability for labor

market frictions technology adoption and economic growth this paper develops an endogenous growth model with labor market matching and technology adoption while labor market search and entry frictions lengthen technology diffusion exogenous technology arrival may creatively destruct jobs in the short run such interrelationships give rise to multiple equilibria global and local indeterminacy under which a small autonomous technological improvement may create a large growth effect we characterize the effects of exogenous technology arrival on equilibrium matching adoption effort wage and the overall dispersion of wages social inefficiency arises as a result of individuals failure to account for free rider thick matching job destruction effects in making technology adoption decision

allowance price drivers in the first phase of the eu ets abstract in the first phase of the eu emissions trading scheme eu ets the price per ton of co 2 initially rose to over 30 the price then collapsed to essentially zero by mid 2007 by deriving a structural model of the allowance price under the assumption of efficient markets i examine the extent to which this variation in price can be explained by marginal abatement costs i then gradually relax the model by allowing for delayed adjustment of price to fundamentals as well as by introducing lagged lhs variables the pattern of results suggests that while prices were not initially driven by marginal abatement costs this inefficiency was largely corrected after the accounting of 2005 emissions in april 2006

water pollution abatement by chinese industry cost estimates and policy implications using factory level data provided by china s national environmental protection agency and the tianjin environmental protection bureau the authors of this report estimate the costs of water pollution abatement for chinese industry using their econometric results they analyze the cost effectiveness of current pollution control policy in china and make the conclusions that follow 1 for each pollutant marginal abatement costs exhibit great differences by sector scale and degree of abatement 2 the benefits of stricter discharge standards should be weighed carefully against the costs 3 emissions charges as low as 1 per ton would be sufficient to induce 80 percent abatement of suspended solids chemical oxygen demand and biological oxygen demand respectively 4 the current regulatory system provides an economic incentive to abate by charging a levy on pollution that exceeds the standard the results of this analysis suggest however that changing to a full emissions charge system would greatly reduce overall abatement costs the approach the authors recommend for measuring the costs of abatement is to use joint abatement cost functions that relate total costs to treatment volume and the simultaneous effect of reductions in suspended solids chemical oxygen demand biological oxygen demand and other pollutants tests of alternative functional forms suggest that a simple constant elasticity model fits the data as well as a complex translog model does permitting sophisticated policy experiments with relatively simple calculations

georgescu roegen daly versus solow stiglitz revisited there are two key issues which are not fullyelaborated in the papers in a recent special issueof ecological economics the contribution ofnicholas georgescu roegen vol 22 no 3 1997 i the operational meaning of substitutionin production function and ii the effect of tech nological improvement on resource utilization inthis piece we examine these two issues based on i georgescu roegen s conceptualization of pro duction process and ii jevons paradox neoclassical production functions whether forindividual rms or the aggregate economy as sume that any factor can always be substituted forany other factor except the cases of xed coef cients and or the existence of limitational factors the implication or entailment of this assumptionis that an increase in the input of any factoralways yields an increase in output this is thebasis for solow s contention that t he world can in effect get along without natural resources solow 1974 however those neoclassical economists adopt ing the substitution assumption have not paid dueattention to the essential distinction between ows quantities of materials qualitatively trans formed in the process and funds agents trans forming a given set of in ows into a given set ofout ows in the material production process georgescu roegen 1971 neglecting this dis tinction results in a systematic indifference to thebiophysical foundation of economic activities infact according to georgescu roegen 1990 fordesigning a blueprint of a factory process anexpert has to consider a set of three relationships i the normal rate of output

corrigendum to congestible public goods and local indeterminacy a two sector endogenous growth model journal of economic dynamics control 31 7 2007 2486 2518

externalities and fiscal policy in a lucas type model abstract this paper devises a fiscal policy capable of decentralizing the optimal growth path in a lucas type model when average human capital has an external effect in the goods sector and average learning time has an external effect in human capital accumulation

the indirect energy consumption and co2 emission caused by household consumption in china an analysis based on the input output method in recent decades china s rapid economy development has been coupling with the steadily increasing household consumption which in turn leads to ever growing energy consumption and co2 emission with a focus on the decade of 2000 2010 this study examines the energy consumption and co2 emission caused by household consumption using the input output method as well as the influencing factors of the indirect co2 emission the results show that first the indirect energy consumption and co2 emission appear the main parts of total energy consumption and co2 emission caused by household consumption accounting for 69 77 and 77 84 respectively second the indirect co2 emission indicates an increasing trend mainly driven by per capita household consumption and energy intensity finally the five sectors with relatively higher direct or total co2 emission intensity are the key sectors for reducing co2 emission in china i e 1 production and distribution of electric power and heat power pdeh 2 smelting and pressing of metals spm 3 processing of petroleum coking processing of nuclear fuel ppcpn 4 manufacture of non metallic mineral products mnm and 5 manufacture of chemical materials mcm

are we consuming too much this paper articulates and applies frameworks for examining whether consumption is excessive we consider two criteria for the possible excessiveness or insufficiency of current consumption one is an intertemporal utility maximization criterion actual current consumption is deemed excessive if it is higher than the level of current consumption on the consumption path that maximizes the present discounted value of utility the other is a sustainability criterion which requires that current consumption be consistent with non declining living standards over time we extend previous theoretical approaches by offering a formula for the sustainability criterion that accounts for population growth and technological change in applying this formula we find that some poor regions of the world are failing to meet the sustainability criterion in these regions genuine wealth per capita is falling as investments in human and manufactured capital are not sufficient to offset the depletion of natural capital

endogenous labor supply growth and overlapping generations abstract this paper explores a simple model of endogenous growth in an overlapping generations framework when labor supply is made endogenous the following results are obtained if leisure and consumption are substitutes the economy can experience multiple equilibrium paths including high growth and high labor supply or no growth and low labor supply if the demand for leisure is inelastic then the economy enjoys steady growth as in standard models if leisure and consumption are complements then production remains bounded although endogenous growth is possible and socially desirable

impatience and equilibrium indeterminacy abstract this paper extends the neoclassical one sector optimal growth model by postulating that individual agents time preference impatience depends on the economy wide average consumption and average income which are social factors taken as external by individual agents the paper shows that with the socially determined individual time preference local equilibrium indeterminacy can arise moreover local indeterminacy can also be associated with global indeterminacy in many cases the results hold in models with bounded and unbounded growth

measuring environmental efficiency of industry a case study of thermal power generation in india technical and environmental efficiency of some coal fired thermal power plants in india is estimated using a methodology that accounts for firm s efforts to increase the production of good output and reduce pollution with the given resources and technology the methodology used is directional output distance function estimates of firm specific shadow prices of pollutants bad outputs and elasticity of substitution between good and bad outputs are also obtained the technical and environmental inefficiency of a representative firm is estimated as 0 06 implying that the thermal power generating industry in andhra pradesh state of india could increase production of electricity by 6 while decreasing generation of pollution by 6 this result shows that there are incentives or win win opportunities for the firms to voluntarily comply with the environmental regulation it is found that there is a significant variation in marginal cost of pollution abatement or shadow prices of bad outputs across the firms and an increasing marginal cost of pollution abatement with respect to pollution reduction by the firms this result calls for the use of economic instruments like pollution taxes instead of command and control regulation used currently in india to reduce air pollution

a two sector endogenous growth model with habit formation abstract in this paper we study an endogenous growth model with physical and human capital in which consumption habits enter the utility function multiplicatively we show that although the utility function with multiplicative habits is nonconcave and unbounded an interior optimal growth path still exists it is uniquely determined and it converges to a balanced growth path we also find that habit formation in consumption lowers the convergence speed of the optimal path toward the balanced growth path

non concavity problems in the dynamic macroeconomic models a note abstract this note provides a method to convert the dynamic models in cysne cysne rubens p 2006 a note on the non convexity problem in some shopping time and human capital models journal of banking and finance 30 10 2737 2745 and in cysne cysne rubens p 2008 a note on inflation and welfare journal of banking and finance 32 9 1984 1987 to concave optimization problems we do this by introducing new control and state variables in the models cysne 2006 2008 restrict attention to continuous time models and derive parametric conditions to use arrow s sufficiency theorem when the sufficient conditions presented in cysne 2006 are satisfied but not under the sharper sufficient conditions presented in cysne 2008 we can rewrite these models as concave optimization problems even if time is discrete

a two sector model of endogenous growth with leisure externalities abstract this paper considers the impact of leisure preference and leisure externalities on growth and labor supply in a lucas 1988 12 type model as in gomez 2008 7 with a separable non homothetic utility and the assumption that physical and human capital are both necessary inputs in both the goods and the education sectors in spite of the non concavities due to the leisure externality the balanced growth path is always unique which guarantees global stability for comparative static exercises we find that small differences in preferences toward leisure or in leisure externalities can generate substantial differences in hours worked and growth which may play a significant role in explaining differences in growth paths between the us and europe in addition to the mechanisms uncovered in prescott 2004 15 relying on differing marginal tax rates on labor income our model indicates however that a higher preference for leisure or leisure externality implies less growth but also less education attainment which seems counterfactual

stability global dynamics and markov equilibrium in models of endogenous economic growth abstract this paper studies the local and global dynamics of two sector models of endogenous growth with economy wide external effects and taxes on capital and labor the local analysis classifies the parameter space depending on the number of stationary solutions and local stability of equilibria the global analysis shows that if taxes are within certain bounds and the size of the external effects on the average level of human capital is smaller than the share of physical capital the equilibrium path is monotone and therefore a continuous markov equilibrium can be constructed

indeterminacy under constant returns to scale in multisector economies recently there has been a renewed interest in indeterminacy or alternatively put in the existence of a continuum of equilibria in dynamic economies that exhibit some market imperfections one of the primary concerns of this literature has been the empirical plausibility of indeterminacy which arises in markets with external effects or with monopolistic competition often coupled with some degree 10 of increasing returns

quantifying co2 abatement costs in the power sector co2 cap and trade mechanisms and co2 emission taxes are becoming increasingly widespread to assess the impact of a co2 price marginal abatement cost curves maccs are a commonly used tool by policy makers providing a direct graphical link between a co2 price and the expected abatement however such maccs can suffer from issues related to robustness and granularity this paper focuses on the relation between a co2 emission cost and co2 emission reductions in the power sector the authors present a new methodology that improves the understanding of the relation between a co2 cost and co2 abatement the methodology is based on the insight that co2 emissions in the power sector are driven by the composition of the conventional power portfolio the residual load and the generation costs of the conventional units the methodology addresses both the robustness issue and the granularity issue related to maccs the methodology is based on a bottom up approach starting from engineering knowledge of the power sector it offers policy makers a new tool to assess co2 abatement options the methodology is applied to the central western european power system and illustrates possible interaction effects between e g fuel switching and renewables deployment

stabilization of human population through economic increasing returns abstract the assumptions of declining fertility with rising income and rising per capita output with rising population imply the existence of a stable demographic equilibrium with a high standard of living and relatively low total population this smithian equilibrium differs from the well known malthusian equilibrium in its comparative statics technical progress lowers the smithian equilibrium population while it raises the malthusian equilibrium population a fall in fertility lowers the smithian equilibrium income but raises the malthusian equilibrium income economic data show strong support for the hypotheses of increasing economic returns to population and declining fertility with income and suggest that the human population of the world and per capita output will stabilize at about 25 30 above their current size that is at 7 8 5 billion people with a per capital output of 6500 7500 1990 dollars

endogenous technical change with externalities in a classical growth model abstract a growth model with three inputs capital labor and land extends foley and michl s d foley t r michl s growth and distribution harvard university press cambridge ma 1999 classical accumulation model by adding a goodwin r goodwin a growth cycle in c h feinstein ed socialism capitalism and economic growth cambridge university press cambridge 1967 labor market and a model of endogenous technical change that can represent either dumenil and levy s metroeconomica 46 1995 213 j econ behav org this issue or kennedy s econ j 74 295 1964 541 models when land is priced there is a stable steady state growth path with desirable allocational properties when land is not priced no steady state exists and the growth path leads to a catastrophe these results hold when the elasticity of substitution between capital and labor is less than unity

fiscal policy elastic labor supply and endogenous growth abstract endogenizing labor supply leads to fundamental changes in the equilibrium structure of the ak growth model the balanced growth equilibrium can be described in terms of two tradeoff loci relating the equilibrium growth rate to the fraction of time devoted to leisure the implications of endogenous labor supply for fiscal policy are analyzed three issues are addressed first the effects of various distortionary tax changes and government expenditure changes on the equilibrium growth leisure employment tradeoff are analyzed second optimal fiscal policy is characterized finally the formal analysis is supplemented by numerical results focusing particularly on the quantitative welfare implications

marginal abatement costs of carbon dioxide emissions and its influencing factors a global perspective abstract reducing co 2 emissions has become a major and urgent environmental goal worldwide in this paper we sample the data of 41 regions including 165 countries from 2000 to 2014 and adopt a gravity model to obtain an overview of the global flows of co 2 emissions energy consumption the global economy and capital stock since the beginning of the 21st century we then investigate global technical efficiency reduction potential shadow prices and factors influencing the marginal abatement costs of co 2 emissions based on a quadratic directional output distance function the empirical results show the following 1 the global centres of gravity for co 2 emissions energy consumption and capital stock have accelerated their shift to the asian inland in the 21st century but the global centre of gravity for the economy did not show the same trend 2 global technical inefficiency demonstrates a u shape with a turning point in 2007 average annual total global co 2 emissions could be reduced by 4482 28 mt and the global marginal abatement costs of co 2 emissions are approximately 673 74 697 73 usd t 3 the relationship between economic development and marginal abatement costs is represented by a u shaped curve the world is currently in the climbing phase of this curve implying that controlling co 2 emissions is becoming more costly moreover energy structure industrial structure and co 2 emissions are negatively correlated with marginal abatement costs finally the financial crisis has had a significant effect on marginal abatement costs

intertemporal complementarity and optimality a study of a two dimensional dynamical system the theory of optimal intertemporal allocation has been developed primarily for the case in which the objective function of the planner or representative agent can be written as u c1 c2 ldots equiv sum infty t 1 delta t 1 w c t where c t represents consumption at date t w the period felicity function and delta epsilon o 1 a discount factor representing the time preference of the agent

indeterminacy and endogenous fluctuations in two sector growth models with externalities abstract this paper discusses the influence of technological externalities on the dynamic properties of accumulation paths in a two sector growth model in discrete time following the recent paper of boldrin and rustichini 1994 in which the authors study indeterminacy in a particular case we first provide some necessary and or sufficient conditions for the indeterminacy of equilibria in the general two sector model we also provide some conditions for the existence of period two cycles when equilibria are indeterminate we prove finally that depending on the nature of externality indeterminacy may lead to the existence of quasi periodic paths

budget balance welfare and the growth rate dynamic scoring of the long run government budget this paper determines conditions under which a reduction in the role of government either through a tax cut alone or together with accompanying expenditure cuts will improve long run government fiscal balance for a ceteris paribus cut in the income tax rate to improve long run government balance the intertemporal elasticity of substitution must exceed unity a tax cut balanced by an expenditure cut is likely to improve the long run balance even if it does not improve the short run balance the relationship between improving the long run fiscal balance and economic welfare is also analyzed

congestible public goods and local indeterminacy a two sector endogenous growth model abstract this paper shows that the congestible public goods can generate local indeterminacy in a two sector constant return human capital enhanced growth model while the productive public good exerts positive sector specific externalities the congestion effect generates negative aggregate externalities the sector specific externalities alone arising from productive public goods cannot establish local indeterminacy without the combination of negative externality in a model with social constant return technology congestible public good generates local indeterminacy if the degree of productive public good externality and the degree of congestion effect are large enough the condition for indeterminacy is independent of the factor intensity rankings the conditions are quantitatively assessed and the required parameter values for the degrees of public good externality and congestion are consistent with the estimated values in existing literature

time and frequency connectedness among oil shocks electricity and clean energy markets abstract this paper examines the time and frequency connectedness among electricity carbon and clean energy markets and oil price demand and supply shocks in doing so we use the spillover method proposed by diebold and yilmaz 2012 and its extension in the frequency domain by barunik and k ehlik 2018 we find increased connectedness during the global financial crisis as well as in the shale oil revolution period the total connectedness is also higher in the short run compared to the long run due to their low connectedness electricity futures can act as a risk diversifier and safe haven asset against oil shocks net pairwise directional connectedness among oil shocks and the clean energy index is higher during the shale oil revolution these results have important implications for investors with different investment time horizons

indeterminacy and fiscal policies in a growing economy this paper studies the dynamic properties of a standard one sector model of endogenous growth with inelastic labor supply in which capital taxes are used to nance public production and consumption services the government is benevolent and chooses its tax policy by taking into account the decentralized competitive equilibrium within this second best setup we establish conditions for multiple balanced growth paths in conjunction with indeterminacy of transitional dynamics the mechanism for global and local indeterminacy is a simple combination of public production services that provide production externalities to private rms and hence cause a wedge between private and social returns public consumption services that provide direct utility to households and endogenously chosen distorting taxes

non separable utility function and indeterminacy of equilibrium in a model with human capital abstract this paper shows that non separability of utility function may produce indeterminacy of equilibrium in the representative agent models with labor leisure choice by using a two sector model of endogenous growth we show that if the utility function is not additively separable between consumption and leisure indeterminacy may emerge even in the absence of external increasing returns

cultural endowments and economic development what can we learn from anthropology this article discusses a pattern model used to map the general equilibrium relationship relationship between resource endowments cultural endowments technology and institutions one advantage of the pattern model is that helps to identify areas of ignorance our capacity to model and test the relations between resource endowments and technical change is relatively strong our capacity to model and test the relations between cultural endowments and either technical or institutional change is relatively weak a second advantage of the model is that it is useful in identifying the components that enter into other attempts to account for secular economic and social change failure to analyze historical change in a general equilibrium context tends to result in a unidimensional perspective on the relations bearing on technical and institutional change for example historians working within the marxist tradition often tend to view technical change as dominating both institutional and cultural change cultural endowments including religion and ideology exert at least some influence on the supply of institutional innovation cultural endowments make some forms of institutional change less costly to establish and impose severe costs on others there are a number of reasons that one might look to the field of anthropology for guidance in attempting to understand the sources and impact of cultural endowments on economic development one is that anthropology has traditionally embraced a broad conception of culture ethnographic research through its examination of alternative culture patterns has made substantial contributions to institutional reform

the design of stable international environmental agreements economic theory and political economy international environmental agreements typically strive for the solution of a common property resource dilemma since the sovereignty of states precludes external enforcement international environmental agreements must be self enforcing game theoretical models explain why rewards and punishments imposed through the environmental externality generally fail to enforce full cooperation therefore environmental treaties incorporate provisions that enhance the incentives for participation such as transfers sanctions and linkage to other negotiation topics in international politics moreover interaction with markets and governments as well as the rules and procedures adopted in the negotiation process influence the design and the effectiveness of an international environmental agreement

is the asymptotic speed of convergence a good proxy for the transitional growth path this paper compares transitional dynamics in two alternative r d non scale growth models one with endogenous human capital and the other without we show that focusing only on the asymptotic speed of convergence to discriminate between the two models performance can be misleading our analysis suggests that a careful study of the entire adjustment paths predicted by alternative growth models starting far away from the balanced growth path is required in order to successfully discriminate among them

technical efficiency shadow price and substitutability of chinese industrial so2 emissions a parametric approach abstract in china s transition process towards sustainable development fighting against the rising so2 emission has become a great and urgent challenge based on a parametric quadratic directional distance function this paper investigates the inefficiency level shadow price and substitution elasticity of chinese industrial so2 emission from 1998 to 2011 the results show a u shape for the technical inefficiency indicating an efficiency improvement before 2005 but it getting worse since then which is that the east area displays a declining trend while the west goes up and the middle follows the national pattern at the east middle west region level as of the shadow price and morishima elasticity both the national and regional levels hold an increasing trajectory the shadow price is continuously increased a lot during the whole period implying to control additional so2 emission become more costly the positive morishima substitution elasticity suggests there may exist the win win opportunities for so2 regulation moreover the large regional disparity highlights the needs to adopt a differentiated regional policy

optimal factor tax incidence in two sector human capital based models abstract this paper studies the optimal factor tax incidence in a standard two sector human capital based endogenous growth model elucidated by lucas 1988 capital income taxes generate dynamic inefficiency for capital accumulation and labor income taxes create dynamic inefficiency for human capital accumulation a factor tax incidence is a tradeoff between these two inefficiencies a switch from capital income taxes to labor income taxes reduces the long run welfare coming from lower leisure and increases the long run welfare originated from higher economic growth and higher consumption because the representative agent s learning time and human capital are inseparable and thus affect learning activities at the same degree we find that based on the current us income tax code it is optimal to first tax capital income and to resort to taxing labor income only when tax revenue is insufficient to cover government expenditure

the environmental kuznets curve and equilibrium indeterminacy abstract we illustrate that the existence of the environmental kuznets curve ekc could be the result of indeterminacy of equilibria in a simple neoclassical growth model with a single environmental externality in households utility function and with public abatement we characterize the condition on the parameters in preferences and in the pollution technology leading to local indeterminacy of equilibrium estimates of the crucial parameters of the model using data from economies that display the ekc satisfy the theoretical indeterminacy condition we find that the presence of abatement activities is not a necessary condition for indeterminacy equilibria and hence an ekc to arise on the other hand non separability of consumption and pollution in the utility function is crucial

critical survey endogenous growth theory a critical assessment a critical assessment is made of endogenous growth theory from the perspective of recent developments within economics as a discipline these include its increasing mathematical formalisation its focus upon microfoundations the casual use of econometrics to test models and the incorporation of factors that have traditionally been outside mainstream economics it is found that the theory focuses upon market imperfections and technological progress in a variety of ways and reconstructs their impact upon the macroeconomy as a growth rather than as a level effect whilst the growth rate is endogenised this leads to the problem of multiple equilibria and extremely complex dynamics the generalisation from exogenous growth theory is however associated with even more extreme assumptions and analytical distance from the socioeconomic processes of growth itself copyright 2000 by oxford university press

consumption and habits evidence from panel data the purpose of this paper is to test for the presence of habit formation in consumption decisions using household panel data we use the test proposed by meghir and weber 1996 and estimate the within period marginal rate of substitution between commodities which is robust to the presence of liquidity constraints to that end we use a spanish panel data set in which households are observed up to eight consecutive quarters this temporal dimension is crucial since it allows us to take into account time invariant unobserved heterogeneity across households fixed effects and therefore to investigate if the relationship between current and past consumption reflects habits or heterogeneity our results confirm the importance of accounting for fixed effects when analyzing intertemporal consumption decisions allowing for time non separabilities once fixed effects are controlled for and a proper set of instruments is used the results yield supporting evidence of habit formation in the demand system of food at home transport and services

human capital formation and business cycle persistence abstract in this paper we examine the role of the formation of human capital in propagating shocks over the business cycle we show that a two sector equilibrium business cycle model with human capital is able to generate persistence in the growth of output and other aggregate variables comparable to that observed in the post war us data a key feature is the relatively low elasticity of substitution between skilled and unskilled labor in the production of human capital

issue in pollution control interplant cost differences and economies of scale debate on interplant pollution control cost differences focuses on the question of whether a system of taxes or transferable discharge permits should require those plants with low treatment costs to control a higher share of effluents another issue under debate is whether those industries with a large minimum size may be effectively barred by pollution control requirements evidence of the inefficiency of present institutional arrangements is shown by studying production function estimations of 30 pulp and paper mills in wisconsin and michigan a more efficient reallocation of pollution control resources could be effected with more market oriented regimes 58 references 6 tables dck

optimal carbon allowance price in china s carbon emission trading system perspective from the multi sectoral marginal abatement cost abstract china s carbon emission trading system ets was officially launched at the end of 2017 to further promote carbon emissions mitigation in the ets the carbon price is the key factor determining whether the emission reduction target can be achieved the optimal carbon price is the smallest marginal abatement cost that can achieve the emission reduction target this study simulates the marginal abatement cost curves of different sectors in china s ets and calculate the optimal carbon price of sector coverage scenarios based on the criteria that involve eight sectors in turn the results show that the marginal abatement cost decreases with increasing sector involvement the optimal carbon price to achieve the two intensity targets at the same time is between 345 yuan ton and 1140 yuan ton from the sectoral perspective the power sector undertakes the largest emission reduction while the transportation sector is responsible for smaller emission reduction china s ets will cause gdp losses from 1 63 to 2 27 compared with the bau scenario but it can achieve co2 reduction from 9 56 to 10 13

ethics politics and nonsatiation in consumption a synthesis in contrast with the production of goods and services by firms where the production costs are minimized under appropriate behavioral assumptions consumer producers in neoclassical theory maximize consumption expenditure i e production costs of their outputs according to kenneth boulding were the impact upon the limited resources available on planet earth taken into account consumption expenditure should be minimized we propose that we keep consumer theory as a reasonable description of reality however we should evaluate the long run consequences of such postulated behavior in a larger context which as a consequence of larger population with increasing per capita consumption comprises the overburdening of natural resources by decomposing the time horizon of cultural evolution into shorter periods of adjustment we may then distinguish several types of institutional determination of how societies take decisions as a group and individually the consumer theory simply reflects the predominant ethical values of which ideologies political platforms and demand patterns are shorter run adjustments

the evolution of preferences why sovereign preferences may not lead to sustainable policies and what to do about it abstract the conventional economic paradigm assumes that tastes and preferences are exogenous to the economic system and that the economic problem consists of optimally satisfying those preferences tastes and preferences usually do not change rapidly and in the short term this assumption makes sense sustainability is an inherently long term problem and in the long run it does not make sense to assume tastes and preferences are fixed and given if preferences are expected to change over time and under the influence of education advertising changing cultural assumptions etc the old assumption of consumer sovereignty is not adequate different criteria of optimality are needed how preferences change how they relate to the goal of sustainability and how they can or should be actively influenced to satisfy the new criteria needs to be determined ecological economics has emphasized the three rank ordered goals of ecological sustainability fair distribution and allocative efficiency this paper examines how preferences evolve and change over time and the implications of this for developing policies that meet these three goals in democratic societies

individual firm and market dynamics of csr activities this paper investigates how firms should plan corporate social responsibility short csr this dynamic analysis starts with a firm s intertemporal optimization problem and proceeds to analyze interactions with other firms which are crucial if csr is profitable for firm a then it is most likely also profitable for competitors b and c and these simultaneous decisions affect the gain each would achieve from trying to advance its own position we find that multiple equilibria exist irrespective of whether interactions with other firms are taken into account interactions can eliminate or create additional steady states and can lead to a situation in which history is insufficient to determine the long run outcome among multiple steady states so that coordination is beneficial