equilibrium and efficiency under pure entitlement systems two types of answer have been given to the question of how government should contribute to the happiness of its citizens one is that it should take a direct and perhaps coercive role in the pursuit of optimality or efficiency the other is that it should indirectly promote voluntary cooperation among its citizens by providing procedural justice to them e g enforcement of property rights this paper addresses the question of how cooperative equilibria of a minimal government one which guarantees rights but which does not make direct allocative decisions would compare with social states which are pareto efficient for its citizens specifically it examines whether or not such a government would be unbiased i e whether every pareto efficient social state would be possible to support as a cooperative equilibrium in an environment where its citizens might impose externalities on one another unbiasedness of equilibrium could be interpreted to mean that under ideal circumstances i e that cooperative outcomes would in fact be achieved a minimal government would be procedurally fair however unbiasedness would also imply that such a government could not guarantee an egalitarian distribution of wealth or any other feature except pareto efficiency in an equilibrium social state

male female urban income distributions in canada the service sector in a dependency model international trends of increasing income inequality have not occurred equally for male and female income distributions in canadian cities urban male income inequality declined from 1970 to 1980 it increased in the next decade but only to its 1990 level female income inequality has declined consistently these urban income distributions can be well explained using a dependency model in which the female income distribution is influenced by the male income distribution and the income gap between males and females this dependence effect is modified by urban characteristics male and female income distributions are more alike in larger cities and in cities with relatively higher female median incomes beginning in 1990 service sector employment contributes significantly to income inequality for both gender groups with a slightly greater effect for females

experimental tests of core theory and the coase theorem inefficiency and cycling abstract we examine experimentally the bargaining process and the final allocation of payoffs in games that differ in terms of whether the core exists and in the initial allocation of property rights among the players this paper highlights the interaction among property rights transaction costs and the empty core our experimental results indicate that the existence of the core is an important determinant of bargaining generally and the coase theorem in particular they confirm our conjecture that when the core is empty and property rights are ill defined coasean efficiency breaks down among other results our experiments show that the number of inefficient non pareto optimal agreements and bargaining rounds with cycling are significantly greater when the core is empty than when the core exists especially when property rights are ill defined our results suggest an economic role for specific property right arrangements to resolve the empty core

the effects of oil price shocks on the economies of the gulf co operation council countries nonlinear analysis abstract this paper examines the effects of oil price shocks on the real gdp of the gulf cooperation council gcc countries the empirical method used is the nonlinear cointegrating autoregressive distributed lag nardl model of shin et al 2013 in which short run and long run nonlinearities are introduced via positive and negative partial sum decompositions of the explanatory variable s the results suggest evidence of asymmetries in all the cases we find significant positive oil price changes in all the cases with the expected positive sign implying that increases in oil price lead to increases in real gdp conversely negative oil price changes are significant for only kuwait and qatar with the expected positive sign suggesting that decreases in oil price lead to decreases in their real gdp further analysis implemented using panel data shows that positive oil prices changes increase real gdp and negative changes decrease real gdp overall the results suggest that positive oil price changes have a considerably larger impact on real gdp than negative changes

oil price shocks and the macroeconomy this paper examines the impact of oil price shocks and attempts to explain why the rise in oil prices up to 2008 had little impact on the world economy it makes three main arguments first that oil prices have never been as important as is popularly thought second that the most important route through which oil prices affect output is monetary policy when oil prices pass through to core inflation monetary authorities raise interest rates slowing growth based on the second argument the third argument is that high oil prices have not reduced growth in recent years because they no longer pass through to core inflation so the monetary tightening previously seen in response to high oil prices is absent it also argues that oil prices had little impact on the global recession of 20089

exogenous oil shocks fiscal policy and sector reallocations in oil producing countries abstract previous literature has suggested that different mechanisms of transmission of exogenous oil shocks are responsible for the negative effects on the economic performances of oil exporting countries this paper aims at providing further evidence on the role of sectoral reallocation between private and public sectors in explaining the impact of shocks to oil revenues on the economic growth rates of major oil producing countries namely the gcc gulf corporation council countries the effects of oil shocks and expansionary fiscal policy on the business cycle of oil producing countries are examined the possibility to distinguish between various components of public sector spending policy that is purchases of consumption goods investments in productive activities and compensation for public employees is in particular allowed for a real business cycle rbc model is calibrated to fit the data on an average oil producing country results from the simulation of the theoretical model suggest that the possibility that the expansion of the size of the government due in particular to the increase in the number of employees can explain a large fraction of the negative effects of shocks to oil revenues on the private sector of the economy however since the growth in size of the public sector more than compensate for the reduction in size of the private sector an increase in oil revenues has the effect to boost total output

asymmetric effects of oil price uncertainty on corporate investment abstract using a comprehensive data set of a large panel of us firms over 1984 2017 we show that the negative effect of crude oil price return uncertainty on investments is asymmetric in particular we show that investment is more significantly reduced following the volatility of positive oil price changes than that of negative changes and this asymmetric effect is more pronounced in small firms in addition we find that the asymmetric effect is stronger in the crude oil and gas producing companies where the effect of the volatility of negative oil price changes is greater than that of positive oil price changes we also find that the impact of positive or negative oil price change uncertainty on investments substantially differs across different industries the results are quite robust to the way in which we measure the investment and oil price uncertainty and to alternative regression methods

oil price effects on personal consumption expenditures abstract this paper uses a logistic smooth transition model to examine the impact of rising oil prices on personal consumption expenditures in open and industrialized economies the empirical results suggest a nonlinear and asymmetric relation between oil price changes and personal consumption expenditures in particular the effects of rising oil prices on personal consumption expenditures are greater than those of falling oil prices while oil price changes affect personal consumption expenditures via real balance effects smooth transition effects also come into play below a threshold value an increase in oil prices reduces personal consumption expenditures in other words in the face of uncertainty regarding future oil prices consumers initially rationally postpone spending however once oil prices above the threshold after a prolonged upward trend the prices of domestic production factors rise this fuels continued price hikes and further increases personal consumption expenditures until a cost pushed inflation takes hold due to differences in economic developments and structures the effects of rising oil prices vary from one country to another with different countries usually to different monetary policies from each other as a result personal consumption expenditures also show various patterns across countries

oil prices inflation and interest rates in a structural cointegrated var model for the g 7 countries sharp increases in the price of oil are generally seen as a major contributor to business cycle asymmetries moreover the very recent highs registered in the world oil market are causing concern about possible slowdowns in the economic performance of the most developed countries in this paper a structural cointegrated var model has been considered for the g 7 countries in order to study the direct effects of oil price shocks on output and prices and the reaction of monetary variables to external shocks our results can be summarized as follows i a stationary money demand as suggested by the classic theory of money can be identified for most countries ii according to the estimated coefficients of the structural part of the model for all countries except japan and u k the null hypothesis of an influence of oil prices on the inflation rate cannot be rejected inflation rate shocks are transmitted to the real economy by increasing interest rates iii impulse response analysis suggests for most countries the existence of an instantaneous temporary effect of oil price innovations on prices iv impulse response functions indicate different monetary policy reactions to inflationary and growth shocks v the simulation exercises directed to estimate the total impact of the 1990 oil price shock indicate that for some countries u s a significant part of the effects of the oil price shock is due to the monetary policy reaction function for other countries canada france and italy however the total impact is offset at least in part by an easing of monetary conditions

current accounts and oil price fluctuations in oil exporting countries the role of financial development abstract oil exporting countries usually experience large current account improvements following a sharp increase in oil prices in this paper we investigate this oil price current account relationship on a sample of 27 oil exporting economies relying upon the estimation of panel smooth transition regression models over the 1980 2010 period we provide evidence that refines the traditional interpretation of oil price effects on current accounts while current accounts are positively affected by oil price variations this effect is nonlinear and depends critically on the degree of financial development of oil exporting economies more specifically oil price variations exert a stronger impact on the current account position for less financially developed countries this influence diminishing with financial deepness

the usefulness of core theory in economics economic problems it has an undeserved reputation of being too abstract owing mainly to the manner in which it is employed in the theory of general equilibrium in fact core theory is a highly flexible way of looking at practical economic problems especially problems in industrial orga nization this paper seeks to show how simple numerical examples can illus trate the idea of the core and in turn how the core can illustrate basic principles of economics

the effects of oil price shocks on the iranian economy abstract the iranian economy is highly vulnerable to oil price fluctuations this paper analyzes the dynamic relationship between oil price shocks and major macroeconomic variables in iran by applying a var approach the study points out the asymmetric effects of oil price shocks for instance positive as well as negative oil price shocks significantly increase inflation we find a strong positive relationship between positive oil price changes and industrial output growth unexpectedly we can only identify a marginal impact of oil price fluctuations on real government expenditures furthermore we observe the dutch disease syndrome through significant real effective exchange rate appreciation

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

the coase theorem and coalitional stability it is the contention of this paper that the coase theorem has yet to be formulated and proved in a rigorous manner the problem addressed is that of strategic coalitional behaviour when more than two agents are involved in the externality it is shown that there are examples for which non efficient allocations are stable in the sense of aumann maschler bargaining sets thereby vitiating the coase theorem hence a proper formulation of the coase theorem must exclude bargaining set stability it is our contention that the coase theorem which asserts that with zero transaction costs and zero income effects the identical pareto efficient allocation of resources will emerge regardless of the initial assignment of property rights has yet to be formulated and proved in a rigorous manner the problem addressed here is that of strategic coalitional behaviour when more than two agents are involved in the externality for the coase theorem to hold in such situations two conditions are important first assuming that the maximum joint payoff can be effected only by the formation of the grand coalition e g by the merger of all parties involved in the externality the grand coalition must be stable second only the grand coalition must be stable for if some other coalition is also stable then the latter may form instead of the grand coalition so that a pareto optimal allocation need not obtain the point of this note is to show that a rigorous statement of the coase theorem must exclude bargaining set notions of coalitional stability because

oil prices and real exchange rates in this paper we investigate the long run relationship between real oil prices and real exchange rates by using a monthly panel of g7 countries from 1972 1 to 2005 10 we first test whether exchange rates are cointegrated with real oil prices it is shown that real oil prices may have been the dominant source of real exchange rate movements and that there is a link between real oil prices and real exchange rates we then examine the ability of real oil prices to forecast future real exchange returns panel predictive regression estimates suggest that real oil prices have significant forecasting power the out of sample prediction performances demonstrate greater predictability over longer horizons

the relationship between oil price shocks and china s macro economy an empirical analysis china postdoctoral science foundation 20090460751 ministry of education of the people s republic of china 09yjc790167 09yja820074 national social science funds 09zd050 08ajy031

short and long run asymmetric effect of oil prices and oil and gas revenues on the real gdp and economic diversification in oil dependent economy abstract the aim of this paper is to explore the short and long run asymmetric impact of oil prices shocks and oil and gas revenues changes on the total real gdp and the level of economic diversification of the qatar economy to this end two econometric approaches have been used 1 the a b structural vector autoregressive ab svarx model with exogenous variables where four different asymmetric oil prices and oil and gas revenues measures have been employed and 2 the nonlinear autoregressive distributed lag nardl model the results show that in the short run the responses of both total real gdp and non oil real gdp to negative shocks on real oil prices and real oil and gas revenues are higher than the impact of positive shocks indicating evidence for the existence of asymmetric impact of shocks in the short run however the results suggest that the impact of shocks do not last more than three quarters this evidence for the existence of asymmetric behavior is also confirmed by the nardl analysis which shows that in the long run positive oil prices shocks and oil and gas revenues changes have higher impact on the two proxies of economic activity than negative changes do a result that confirms the resilience of the qatar economy to negative shocks and the positive role played by the energy sector in improving the qatar economic diversification degree finally the results show that the non oil sector is completely resilient to negative shocks in the long run as the impact of negative shocks are insignificant on the non oil real gdp several policies aimed to improve the level of economic diversification of the country and delink the government revenues from oil and gas revenues are proposed and discussed

oil price shocks and stock market returns evidence for some european countries abstract in this paper we examine the impact of oil price shocks on stock returns in 12 oil importing european economies using vector autoregressive var and vector error correction models vecm for the period 1973 02 2011 12 we propose an alternative oil price shock specification that takes into account both world oil production and world oil prices in order to disentangle oil supply and oil demand shocks we find that the response of the european real stock returns to an oil price shock may differ greatly depending on the underlying causes of the oil price change the results suggest the existence of a negative and significant impact of oil price changes on most european stock market returns furthermore we find that stock market returns are mostly driven by oil supply shocks

price of oil and world inflation and recession new evidence shows that the commonly held assumption that the 1973 74 oil price increase directly affected us and world inflation and subsequent recession is consistent with the empirical data an extended lucas varro real income equation applied to the us united kingdom canada france germany italy japan and the netherlands gives mixed results partly because of price control and decontrol programs simulation experiments on the price control variable using us data finds strong effects further studies can be made when consistent international data is available for the 1979 80 period 18 references 4 figures 3 tables dck

the impact of oil prices on gdp in european countries an empirical investigation based on asymmetric cointegration this paper investigates the existence of a long term relationship between oil prices and gdp in 12 european countries to account for the fact that economic activity responds asymmetrically to oil price shocks we propose an approach based on asymmetric cointegration our results show that while standard cointegration is rejected there is evidence for asymmetric cointegration between oil prices and gdp in the majority of the considered european countries

organizational politics and complexity coase vs arrow march and simon this article argues that the transaction cost approach to the problem of organizing economic activities is undermined by a neglect of the consequences of the complexity of the interconnections among such activities and in particular of the complexity generated by conflict and divergent interests of the agents involved with the increase of conflict organizational equilibria cease to exist thus hierarchy is in principle not necessarily an efficiency increasing remedy to the existence of transaction costs but can be explained also as a way to provide temporary equilibria in the everlasting organizational conflict

opec saudi arabia and the shale revolution insights from equilibrium modelling and oil politics why did opec not cut oil production in the wake of 2014 s price fall this study aims at aiding the mostly qualitative discussion with quantitative evidence from computing quarterly partial market equilibria q4 2011 q4 2015 under present short term profit maximisation and different competition setups although the model performs reasonably well in explaining pre 2014 prices all setups fail to capture low prices which fall even beyond perfect competition outcomes this result is robust with respect to large variations in cost parameters rejecting present short term profit maximisation as well as a qualitative discussion of saudi arabian politics and the shale oil revolution lead to the conclusion that the price drop of 2014 16 was most plausibly the result of an attempt to defend market shares and to test for shale oil resilience besides being fuelled by other factors such as rising competitiveness of alternative technologies although shale oil might have increased competition permanently as supported by model results the agreement of december 2016 should not be misunderstood as an opec defeat

this is what happened to the oil price macroeconomy relationship abstract many of the quarterly oil price increases observed since 1985 are corrections to even bigger oil price decreases the previous quarter when one looks at the net increase in oil prices over the year recent data are consistent with the historical correlation between oil shocks and recessions

dynamic spillovers between oil and stock markets in the gulf cooperation council countries this article exploits a new spillover directional measure proposed by diebold and yilmaz 2009 2012 to investigate the dynamic spillover of return and volatility between oil and equities in the gulf cooperation council countries during the period 2004 to 2012 our results indicate that return and volatility transmissions are bi directional albeit asymmetric in particular the oil market gives other markets more than it receives in terms of both returns and volatilities these trends were more pronounced in the aftermath of the global financial crisis in 2008 as the net contribution of oil has intensified after a burst during the crisis the empirical evidence from the sample is consistent with a system in which oil is playing the dominant role in the information transmission mechanism between oil and equities in the gcc countries

confining the coase theorem contracting ownership and free riding if individuals own the right to take any action that they please and are free to contract about behaviour will outcomes be efficient in all situations that is does the coase theorem hold we study this classic question through the lens of a non cooperative model of contract negotiations considering both compulsory and voluntary participation in negotiations in either case we find that all consistent equilibria of the contracting game are efficient in the case of two players but if participation is voluntary and there are more than two players there are situations in which all consistent equilibria are inefficient specifically the provision of public goods tends to be inefficiently low due to strategic abstention from contracting free riding on others agreements can be avoided if individuals do not own all their actions when actions involve the use of assets efficient action ownership may correspond to collective rather than individual asset ownership

coasean bargaining in the presence of pigouvian taxation coasean arguments against the pigouvian perspective are well established a central tenet in this criticism argues that a pigouvian tax may be a source of inefficiency if parties were to bargain in the presence of a pigouvian tax allocative inefficiencies would occur the so called buchanan stubblebine turvey theorem by analyzing a coasean environment where the appropriation of property rights is costly we show coasean bargaining in the presence of a pre existing pigouvian tax may be superior this has implications for policy where dual regulatory environments exist such as regulation at the state and federal level as well as environmental liability and litigation

the economic effects of energy price shocks large fluctuations in energy prices have been a distinguishing characteristic of the u s economy since the 1970s turmoil in the middle east rising energy prices in the u s and evidence of global warming recently have reignited interest in the link between energy prices and economic performance this paper addresses a number of the key issues in this debate what are energy price shocks and where do they come from how responsive is energy demand to changes in energy prices how do consumers expenditure patterns evolve in response to energy price shocks how do energy price shocks affect u s real output inflation and stock prices why do energy price increases seem to cause recessions but energy price decreases do not seem to cause expansions why has there been a surge in the price of oil in recent years why has this new energy price shock not caused a recession so far have the effects of energy price shocks waned since the 1980s and if so why as the paper demonstrates it is critical to account for the endogeneity of energy prices and to differentiate between the effects of demand and supply shocks in energy markets when answering these questions

male female income distributions city size and urban characteristics canada 1970 1980 the separate effects of city size on male and female income distributions are analyzed using canadian data for the period 1970 1980 the results indicate that cities with greater male income equality do not necessarily exhibit greater female equality further the variables which contribute to equality for males are different from those for females excerpt

energy price shocks in the 1970s impact on industrialized economies abstract the energy price increases in the 1970s profoundly affected the major macroeconomic variables in the economies of the industrialized world this article measures the magnitude of the effect of the 1973 energy price shock on the economies of the usa canada the uk germany and france a short run model of aggregate supply is developed estimated and tested for overall performance and then calibrated to the experience of the 1973 1979 period a positive feature of the model is that it adopts a generalized multisector framework in which an energy sector is explicitly introduced in construction of the aggregate supply function the model also heeds labour market rigidities according to the model the 1973 leap in energy prices generated a major inflationary impulse in all of the countries studied the effects on labour productivity real wages capital utilization rate and energy consumption were also found to be considerable and to a large degree similar an interesting result concerning labour demand is that higher energy prices led to substitution of labour intensive methods of production for energy intensive ones raising the magnitude of the labour output ratio

the effect of city size on the urban income distribution through time 1950 70 in the literature on the urban income distribution two important questions have been ignored first is the question of the appropriateness of hypotheses testing on samples of smsas with broad ranges of populations sizes the second question is the stability of the effects of city size and other determinants on the urban income distribution through time this stability is crucial to the propriety of drawing policy implications from previous studies which have employed data from only a single point in time this study finds that hypotheses tests are sensitive to the size classes of cities being examined and hence the results of hypotheses tested for smsas with broad ranges of population may be misleading the present analysis also reveals that significant structural changes have taken place in the standard linear model over time and therefore inferences regarding the future from past studies should be viewed with caution

the private provision of excludable public goods an inefficiency result abstract does voluntary contracting suffice for the efficient provision of excludable public goods even in a complete information environment we find that the answer is negative the reason is that some agents may profit from not participating at the provision stage but instead negotiate access ex post

oil prices and economic activity an asymmetric cointegration approach the aim of this paper is to study the long term relationship between oil prices and economic activity proxied by gdp to account for asymmetries existing in the links between the two variables we propose an approach based on asymmetric cointegration our empirical analysis concerns the u s economy but also the g7 europe and euro area economies results indicate that while standard cointegration is rejected there is evidence for asymmetric cointegration between oil prices and gdp

the effects of oil price shocks on asian exchange rates evidence from quantile regression analysis abstract this paper investigates the effects of oil price shocks on asian exchange rates we employ quantile regression analysis and allow for structural breaks and asymmetry our results indicate that positive and negative oil price shocks have asymmetrical effects on exchange rate returns that vary in significance size and sign throughout the distribution of exchange rate returns the impact of oil price shocks is also affected by market conditions bearish and bullish currency markets during bullish markets in domestic currencies at lower quantiles of currency movements in terms of u s dollar exchange rates rising oil prices cause further appreciation for indonesia korea the philippines and thailand currencies during bearish markets in the domestic currencies at higher quantiles of exchange rate movements in terms of u s dollar exchange rates rising falling oil price causes further currency depreciation for indonesia malaysia thus currencies respond differently to oil price shocks under extreme bullish or bearish currency market conditions and the impact of rising or falling oil prices on foreign exchange markets can vary by country and market conditions

oil and the macroeconomy when prices go up and down an extension of hamilton s results in an important paper hamilton 1983 demonstrated a strong correlation between oil price changes and gross national product growth in u s data however his study pertained to a period in which all the large oil price movements were upward and thus it left unanswered the question whether the correlation persists in periods of price decline moreover the price variable he used was somewhat distorted by price controls in the 1970s this note investigates whether hamilton s results continue to hold when the sample is extended to include the recent oil market collapse and the oil price variable is corrected for the effects of price controls particular attention is given to the possibility of asymmetric responses to oil price increases and decreases as suggested in the structural employment literature loungani 1986 davis 1987 hamilton 1988 like hamilton i based my investigation on the gnp equation in sims s 1 980b six variable quarterly vector autoregressive model