the value added of laboratory experiments for the study of institutions and common pool resources abstract this article provides an overview of the effects of communication on experimental studies of behavior and outcomes in common pool resource cpr dilemmas aggregate outcomes in cpr dilemmas without communication approximate predictions of non cooperative game theory but allowing cheap talk results in higher outcomes when exogenous rules are monitored at realistic levels subjects cheat even though following the rule would generate optimal outcomes if given the opportunity experimental subjects will devise their own rule systems and impose sanctions on each other these findings complement field research on more complex resources and communities by confirming the critical importance of communication and endogenous rule formation

nonmonetary effects of the financial crisis in propagation of the great depression this paper examines the effects of the financial crisis of the 1930s onthe path of aggregate output during that period our approach is complementary to that of friedman and schwartz who emphasized the monetary impact of the bank failures we focus on non monetary primarily credit related aspects of the financial sector output link and consider the problems of debtors as well as those of the banking system we argue that the financial disruptions of 1930 33 reduced the efficiency of the credit allocation process and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand evidence suggests that effects of this type can help explain the unusual length and depth of the great depression this abstract was borrowed from another version of this item

a characterization of erratic dynamics in the overlapping generations model abstract in this paper we characterize and give examples o wide classes of utility functions which generate erratic dynamics in the standard deterministic overlapping generations model erratic dynamics refers to feasible trajectories which are bounded but which do not converge to stationary points or periodic orbits we show that such trajectories are pareto efficient we introduce credit into the model and show how a constant credit expansion rate can result in erratic trajectories in prices and the real value of credit finally we briefly discuss certain technical aspects of the mathematics used and the statistical nature of the dynamics that can arise from deterministic dynamical systems

quantitative easing and the uk stock market does the bank of england information dissemination strategy matter we use intraday aggregate stock market data and an event study framework to assess the uk s equity market reaction to the unexpected element of the bank of england monetary policy committee s mpc asset purchase announcements for the 2009 2017 period we assess the reactions of equity returns and their volatility over various time frames both preceding and following the mpc announcements our results show that the uk unconventional monetary policy shocks have a significant impact on domestic equity returns and volatilities the strength of this impact depends on the bank s information dissemination through inflation reports and the publication of the mpc s voting records jel g14 e44 e52

institutional determinants of success among forestry based carbon sequestration projects in sub saharan africa summary this paper contributes to the debate on the economic and social implications of carbon forestry through the study of 42 programs in africa using carbon offset payments to fund tree planting activities such projects may be understood as multi layered collective action problems growing trees for carbon offsets requires not only international financial incentives to plant trees but also local institutions to monitor impose sanctions and distribute benefits consistent with economic theories large projects appear to realize economies of scale contrary to expectations community based projects on lower quality sites often successfully generate and sell offsets while private for profit initiatives appear susceptible to collapse

tax policy and business fixed investment revisited abstract this paper examines the effect of tax incentives on business capital expenditures in both a single equation and general system framework using equations that extend the neoclassical approach to incorporate more fully expectations and balance sheet variables in the single equation case the average gain in real business fixed investment per dollar of ex ante or static corporate tax loss calculated over a five year period is 0 52 for the investment tax credit with a peak of 0 62 in the third year the corresponding figure for accelerated depreciation is 0 49 with a peak of 0 57 in the second year in the case of reductions in corporate profits taxes the bang for a buck in partial equilibrium is only 0 05 in the complete system simulations the tax incentives show greater impacts due to feedback effects of higher output sales and profits on capital outlays and to some offset for the static revenue losses as corporate profits are increased the ranking for the three tax programs favors accelerated depreciation the investment tax credit then reductions in corporate profits taxes the ratios of the real gain in business fixed investment per dollar of corporate tax loss are 0 81 0 76 and 0 19 increase of 50 to 100 over the single equation results the total elasticities of response average 0 40 for the investment tax credit 0 44 for accelerated depreciation and 0 11 for reductions in corporate profits taxes

nonlinear liquidity growth dynamics with corridor stability abstract the paper presents a dynamic model of the financial real interaction in particular it shows that i liquidity when facilitated through credit can operate procyclically ii credit may add to the asymmetry of business cycles and iii endogenous propagation mechanisms in monetary economies are shock dependent using a variant of foley s growth cycle model we demonstrate that the portrayal of financial read forces exhibits corridor stability in this case small shocks have no lasting effects but large enough shocks can lead to persistent cycles or unstable non periodic fluctuations the hopf birfurcation theorem is rendered inapplicable due to the fact that the trajectories are stable in the vicinity of equilibrium a global characterization of the dynamics is required instead as credit by growing makes itself grow so when distrust has taken the place of confidence failure and panic breed panic and failure marshall 1879 99

level slope curvature of the sovereign yield curve and fiscal behaviour abstract we study fiscal behaviour and the sovereign yield curve in the us and germany we obtain the latent factors level slope and curvature with the kalman filter and use them in a var with macro fiscal and financial stress variables in the us fiscal shocks generate an immediate response of the short end of the yield curve associated with monetary policy lasting 6 8 quarters followed by a response of the whole yield curve lasting 3 years with an implied elasticity of long term yields of 80 for the government debt shock and 48 for the budget balance shock in germany fiscal shocks have entailed no significant reactions of the yield curve shape and no response of the monetary policy interest rate notably after 1999 only in the case of debt shocks there is a short lived decrease in the medium end of the yield curve in the following 2nd and 3rd quarters

macroeconomic issues for latin america abstract recent macroeconomic issues in latin america are reviewed with an emphasis on theory topics covered include multiple equilibria from hysteresis or increasing returns exchange rate management and the output and asset market effects of devaluation speculation interest rate management and financial reform government behavior income distribution and growth inertial inflation and heterodox policy shocks and disequilibrium theories

local enforcement and better forests summary current studies of local resource management examine many factors thought to be associated with good resource conditions despite the number of studies and the importance of such resources to millions of people worldwide a lack of theory and hypothesis testing beyond the case level limits the lessons empirical studies offer we argue that regular monitoring and sanctioning of rules rule enforcement is a necessary condition for successful resource management we test our theory using data regarding 178 user groups and by pairing rule enforcement with other important factors social capital formal organization and dependence on forest products

determinants of conservation among the rural poor a charitable contribution experiment this paper examines how conservation decisions are affected by environmental degradation donations to an environmental ngo and participation in actual conservation activities capture individual preferences for environmental conservation environmental degradation is measured both through survey based data on experiences of deforestation and environmental shocks and through indices of deforestation constructed with gis data the results show that being exposed to environmental degradation is correlated both with higher donations and conservation behavior the relationship between conservation choices and individual social preferences is also explored experimental measures of individual altruism and inequality aversion and survey measures of trust time preferences and civic engagement are correlated with donations and real world conservation decisions respectively these findings show the role of environmental awareness in fostering environmental conservation even in very poor settings they also highlight the potential of experiments which closely mirror real world decisions to generate conclusions generalizable to individual behavior outside the laboratory

firm level investment spikes and aggregate investment over the great recession it is widely accepted that firm level investment is characterized by periods of low investment punctuated by spikes but widely debated whether such lumpiness matters for aggregate investment we provide new empirical evidence that variation in uk aggregate investment is driven by variation in the number of firms undertaking investment spikes this pattern holds for all sectors and across the business cycle we set out and estimate a tractable firm level model of the timing of investment spikes that incorporates the effect of specific macroeconomic factors and aggregates to match observed variation in aggregate investment using simulations we establish that low demand growth was the dominant factor inhibiting uk firms investment spikes immediately following the great recession while heightened uncertainty prolonged low investment and prevented a v shaped economic recovery we use the great recession as a source of exogenous variation with which to study heterogeneity in response to aggregate shocks we find that the minority of firms operating with persistently high debt levels and therefore with balance sheets more exposed to the costs of financial distress were significantly less likely to undertake an investment spike following the recession

quantitative easing a sceptical survey evaluation of quantitative easing qe is difficult as it is only used in response to severe and unusual economic difficulties despite this we argue that two main conclusions can be drawn from a sceptical reading of the evidence first large scale asset purchases reduce government bond rates especially at the longer end of the yield curve however this effect may be temporary and is small if bond rates are already low while initial waves of qe are more effective than subsequent programs second qe appears to have been effective in late 2008 and 2009 preventing even larger declines in output and inflation than were experienced we argue that the literature is limited relying on similar methodologies and largely originating in central banks exploration of alternative approaches to qe would be useful in widening an evidence base that is currently too narrow

common property institutions and sustainable governance of resources abstract the literature on common property based resource management comprises many important studies that seek to specify the conditions under which groups of users will self organize and sustainably govern resources upon which they depend using three of the more comprehensive such studies and with an extensive review of writings on the commons this paper demonstrates that the enterprise of generating lists of conditions under which commons are governed sustainably is a flawed and impossibly costly research task for a way out the paper examines the relative merits of statistical comparative and case study approaches to studying the commons it ends with a plea for careful research design and sample selection construction of causal mechanisms and a shift toward comparative and statistical rather than single case analyses such steps are necessary for a coherent empirically relevant theory of the commons

quantitative easing and the post crisis surge in financial flows to developing countries abstract this paper examines gross financial inflows to developing countries between 2000 and 2013 with a focus on the potential effects of quantitative easing qe policies in the united states and other high income countries we find evidence for potential transmission of qe along observable liquidity portfolio balancing and confidence channels moreover we find that qe had an additional latent effect over and above these observable channels one that survives an array of robustness tests retains its significance across different types of financial flows and which cannot be attributed to changes in expectations or elasticity our baseline estimates place the lower bound of a qe effect at around 5 percent of gross inflows above trend for the average developing economy which is a magnitude comparable to a one standard deviation change along the traditional channels we also find evidence of heterogeneity among different types of flows portfolio especially bond flows tend to be more sensitive than fdi to our measured qe effects

legal institutions political economy and development this article reviews some of the recent literature on the relationship between the legal system and economic development we also look at the historical socio cultural and political factors that explain the differences in the characteristics of legal systems across countries and thus affect the link between the legal environment and economic outcomes although the field of law and economics of developing countries is still in its youth it is growing rapidly and is a fertile ground for exciting new findings both theoretical and empirical further progress in this field is likely to come from the studies of the elements of the legal system other than the substantive law enforcement and dispute resolution and should move beyond specific analyses of the impact of particular success or failure stories towards more general analyses of the determinants and outcomes of successful legal institutions

liquidity profit rate cycles in a capitalist economy abstract a monetary economy consisting of independent capitalist firms in which workers spend wages instantly and labor is not scarce is studied the firms create demand for each other s output through their capital outlays and create the backing for money through borrowing when all firms are identical in behavior and initial conditions and the rate of growth of money is constant the economy may be unstable around the equilibrium steady state growth path due to strong accelerator effects and follow a limit cycle trajectory

corporate credit risk dynamics the lack of widely available and comprehensive data of default activity on the corporate level has encouraged the advance of theories of corporate credit risk far beyond related empirical work this article addresses this deficit by examining a unique data set corporate bond defaults and credit ratings compiled by moody s investors service since 1920 the article investigates the time inhomogeneity of company default risk that is the pattern in which the risk of default for a company changes over time the empirical analysis addresses company default risk within a regression framework of competing risks or hazards the analysis identifies and quantifies variations in default risk with macroeconomic conditions with industries and through time an important characterization for many approaches to measuring and managing credit risk

the effects of migration on collective action in the commons evidence from rural china summary over the past three decades scholars have studied the effects of more than three dozen factors on collective action in the commons but little is known about the effects of rural to urban migration we examine this question with the case of china which has the world s most extensive levels of rural to urban migration using ols logit and probit models and data from a survey of 1 780 households from 18 provinces we find that migration has a statistically significant adverse effect on collective irrigation controlling for a large number of theoretically relevant variables the effects of migration on collective action in the commons are possibly mediated by a number of factors frequently identified in the literature including leadership social capital sense of community economic heterogeneity and dependence on resources we speculate that massive out migration partly explains the significant drop in the use of collective canal irrigation and exacerbated the significant increase in groundwater irrigation since the start of reforms in 1980s these findings have important policy implications for commons governance in china given that massive rural to urban migration will continue in the next decade because of the increasing rural to urban migration worldwide especially in developing countries the findings could also partly explain the deteriorating state of rural village infrastructure natural common pool resources and ecological systems in many developing countries

the real plan stabilization and destabilization abstract the paper analyzes brazil s real plan an exchange rate based stabilization program implemented in 1994 which mixed a spectacular price stabilization with some serious macroeconomic destabilization the paper focuses on two of these imbalances the consumption boom and the financial destabilization showing that the former represented nothing but the reverse side of a collapsed investment boom which in turn led to the financial banking crisis we hold that these instabilities were produced by a policy arrangement in which monetary and fiscal policies alone had to compensate for a largely appreciated almost fixed exchange rate anchor

an anatomy of the s p game the effects of changing the rules this study analyzes the effects of changes in s p 500 index composition from january 1986 through june 1994 a period during which standard and poor s began its practice of preannouncing changes five days beforehand the new announcement practice has given rise to the s p game and has altered the way stock prices react we find that prices increase abnormally from the close on the announcement day to the close on the effective day the overall increase is greater than under the old announcement policy although part of the increase reverses after the stock is included in the index the s p game is based upon the perceived price reaction of a stock to news that it will be added to the s p 500 the game involves buying the shares of the stock ahead of s p 500 funds and then selling after index fund demand is satisfied the opportunity to play the s p game arose in october 1989 when standard and poor s p began its practice of preannouncing changes to the s p 500 before that time s p announced the change in composition after the close of trading with the change becoming effective by the following morning s open with no lead time index funds bought the shares of the newly included stock on the day following the announcement the buying pressure caused prices to rise for additions during the period 1976 through 1983 for example shleifer 1986 found an abnormal price increase of 2 79 percent on the day following the announcement using roughly the same sample period harris and gurel 1986 reported a 3 13 percent average increase

flow effects of central bank asset purchases on sovereign bond prices evidence from a natural experiment we estimate the response of sovereign bond prices to net supply shocks caused by purchase operations under the ecb s public sector purchase programme pspp to avoid simultaneity bias in the estimated relationship between prices and purchases we exploit a pspp feature that renders securities temporarily ineligible for reasons unrelated to their prices using these purchase restrictions as an instrument to identify exogenous variation in purchase volumes we find that pspp causes statistically significant and economically relevant upward price impacts the impacts are short lived and concentrated in securities issued by higher yield jurisdictions and characterized by higher maturity and lower liquidity

analyzing collective action collective action problems pervade all societies as well as ecological systems used by humans substantial evidence has accrued during the last several decades that human actors are able to solve some but definitely not all collective action problems on their own without external rules and enforcement imposed from the outside in this article i review some of the structural variables that have been found to affect the likelihood of collective action then i address the need to base future work on collective action on a more general theory of human behavior than has been used to model collective action over the last five decades in the last section i discuss how structural variables affect the core relationships of reputation trust and reciprocity as these affect levels of cooperation

on endogenous competitive business cycles the belief that the long run equilibrium of a competitive monetary economy that does not experience any exogeneous shocks whether originating from the external environment or from policy should be modelled as a state that is stationary or perhaps growing at a constant rate seems to be deeply rooted in the mind of some economists

addressing global environmental externalities transaction costs considerations is there a way to understand why some global environmental externalities are addressed effectively whereas others are not the transaction costs of defining the property rights to mitigation benefits and costs is a useful framework for such analysis this approach views international cooperation as a contractual process among country leaders to assign those property rights leaders cooperate when it serves domestic interests to do so the demand for property rights comes from those who value and stand to gain from multilateral action property rights are supplied by international agreements that specify resource access and use assign costs and benefits including outlining the size and duration of compensating transfer payments and determining who will pay and who will receive them four factors raise the transaction costs of assigning property rights i scientific uncertainty regarding mitigation benefits and costs ii varying preferences and perceptions across heterogeneous populations iii asymmetric information and iv the extent of compliance and new entry these factors are used to examine the role of transaction costs in the establishment and allocation of property rights to provide globally valued national parks implement the convention on the international trade in endangered species of wild fauna and flora execute the montreal protocol to manage emissions that damage the stratospheric ozone layer set limits on harvest of highly migratory ocean fish stocks and control greenhouse gas emissions jel d23 p14 q22 q51 q54 q58

measuring and predicting heterogeneous recessions this paper examines the usefulness of a more refined business cycle classification for monthly industrial production ip beyond the usual distinction between expansions and contractions univariate markov switching models show that a three regime model is more appropriate than a model with only two regimes interestingly the third regime captures severe recessions contrasting the conventional view that the additional third regime represents a recovery phase this is confirmed by means of markov switching vector autoregressive models that allow for phase shifts between the cyclical regimes of ip and the conference board s leading economic index lei the timing of the severe recession regime mostly corresponds with periods of substantial financial market distress and severe credit squeezes providing empirical evidence for the financial accelerator theory

macrodynamics of debt regimes financial instability and growth this paper develops a post keynesian dynamic model of capacity utilisation and growth in which the supply of credit money is endogenous and firms debt position and thus the financial fragility of the economy a la hyman minsky is explicitly modelled the interest rate is set by banks as a markup over a base rate exogenously determined by the monetary authority the banking markup varies with changes in capacity utilisation while the debt ratio varies with changes in the rates of interest capital accumulation and growth regarding dynamics it is shown the possibility of relating the stability properties of a system with the interest rate and the debt ratio as state variables to the prevailing minskyan regime hedge speculative or ponzi

applying a macro finance yield curve to uk quantitative easing we estimate a macro finance yield curve model for both the nominal and real forward curve for the uk from 1993 to 2008 our model is able to accommodate a number of key macroeconomic variables and allows us to estimate the instantaneous response of the yield curve and so gauge the impact of quantitative easing on forward rates we find that 10 year nominal interest rates on average are lower by 46 basis points which can largely be explained by three main channels portfolio balance liquidity premium and signalling but there is no sizeable impact on real interest rates

an institutional analysis of payment for environmental services on collectively managed lands in ecuador the application of payment for environmental services pes programs on communal lands raises questions about how pes interacts with collective resource management institutions we explore how an ecuadorian payment program is associated with the development of rules to manage shared grazing lands in addition we assess the communal characteristics that make it more likely that a participant community will change their land use rules our analysis draws from an almost complete census of participant communities in the ecuadorian highlands n 44 a survey of non participant communities n 23 and a household questionnaire n 420 we find that the majority of participant communities have strengthened their land use rules since program participation communities that craft new rules and apply their rules are more likely to be organized and have internal monitoring and enforcement mechanisms poorer communities are also more likely to have made a rule change in response to participation wealthier communities are more likely to maintain existent land use institutions we find no association between rule change and level of payment our results highlight the need to disaggregate the role of payments and contract commitment and to further analyze how community characteristics may influence the effectiveness and equity of pes in communal contexts

rural forest management in sierra leone the role of economic in equality in facilitating collective action while significant theoretical developments have been made in the research on common pool resources heterogeneity remains a contested issue focusing on economic inequality one particular aspect o

quantitative easing in the united kingdom evidence from financial markets on qe1 and qe2 during the recent financial crisis the bank of england like many other central banks loosened monetary policy using both conventional and unconventional measures the main unconventional measure used by the bank was the policy of asset purchases mainly of government bonds financed by the creation of central bank money so called quantitative easing qe during march 2009 to january 2010 and october 2011 to may 2012 the bank completed asset purchases of 200 billion qe1 and 125 billion qe2 respectively the decision to resume purchases in july 2012 will mean that by november 2012 the bank will have bought a total of 375 billion of assets equivalent to around 25 per cent of annual gdp this article reviews the transmission channels through which asset purchases operate and assesses the impact of qe1 and qe2 on financial markets copyright 2012 oxford university press

minsky models a structured survey minsky s ideas have recently gained prominence in the mainstream as well as in the heterodox literature however there exists no agreement upon the formal presentation of minsky s insights the aim of this paper is to survey the literature and identify differences and similarities in the ways through which minskyan ideas have been formalised we distinguish between the models that focus on the dynamics of debt or interest with no or a secondary role for asset prices and the models in which asset prices play a key role in the dynamic behaviour of the economy within the first category of models we make a classification between i the kalecki minsky models ii the kaldor minsky models iii the goodwin minsky models iv the credit rationing minsky models v the endogenous target debt ratio models and vi the minsky veblen models within the second category of models we distinguish between i the equity price minsky models and ii the real estate price minsky models key limitations of the models and directions for future research are outlined

the ties that bind monetary policy and government debt management the financial crisis and subsequent economic recession led to a rapid increase in the issuance of public debt but large scale purchases of bonds by the federal reserve and other major central banks have significantly reduced the scale and maturity of public debt that would otherwise have been held by the private sector we present new evidence that tilting the maturity structure of private sector holdings significantly influences term premia even outside crisis times our framework helps explain both the bond yield conundrum and the effectiveness of quantitative easing we suggest that these findings raise two important policy questions one is should a central bank contrary to recent orthodoxy use its balance sheet as an additional complementary instrument of monetary policy to influence as part of the monetary transmission mechanism the long term interest rate the second is how should central banks and governments ensure that debt management properly takes account of the implications for both monetary and financial stability

are forest incomes sustainable firewood and timber extraction and productivity in community managed forests in nepal summary lack of combined forest productivity and income studies means there is scant evidence for the sustainability of rural household level forest incomes in developing countries this study examines levels and patterns of forest increment wood product extraction and household level incomes in three community managed forests in nepal using data from 240 permanent sample plots and a structured household survey conducted in 2006 and 2009 n 507 and 558 respectively we find that analyses of sustainability need to recognize the complexity of forest stand utilization and that there is considerable scope by altering how existing local forest management rules are implemented for increasing rural household forest incomes while keeping harvesting levels sustainable

unconventional monetary policy the assessment the uncon ventional monetary policy measures adopted by the major central banks in the period since 2008 are discussed in this paper we highlight some important differences between quan titative easing and conventional monetary policy and then evaluate the mechanisms through which quantitative easing may propagate to financial markets and the real economy drawing on perspec tives from monetarist and new keynesian theory additional measures intended to supplement or strengthen the effects of pure quantitative easing often termed unconventional unconventional monet ary policy are also assessed in our discussion we relate the various articles in this issue to some of the key research questions posed in relation to unconventional monetary policy

the credit channel at the zero lower bound through the lens of equity prices this study examines the impact of unconventional monetary policies on the stock market when the short term nominal interest rate is stuck at the zero lower bound zlb unconventional monetary policies appear to have significant effects on stock prices and the effects differ across stocks in agreement with existing credit channel theories i find that firms subject to financial constraints react more strongly to unconventional monetary policy shocks especially large scale asset purchases lsaps than do less constrained firms these results imply that the credit channel is as important as the interest rate channel in the transmission of unconventional monetary policies at the zlb

ben bernanke and bagehot s rules former federal reserve chairman ben bernanke has claimed that the fed s bank bailouts during the 2008 financial crisis were consistent with walter bagehot s rules for a lender of last resort this paper demonstrates bernanke s claims to be mistaken first we outline bagehot s doctrine for a classical lender of last resort next we discuss bernanke s theory of bank bailouts and his statements regarding the fed s role in the 2008 bank bailouts finally we examine the bailouts and demonstrate that contrary to bernanke s claims the fed s actions were not consistent with bagehot s rules for a lender of last resort

is there an optimal size for the financial sector abstract this paper derives the optimal size of the financial sector using a general equilibrium framework that is an extension of the paper of holmstrom and tirole 1997 quarterly journal of economics 112 663 691 we show that the financial sector has a unique optimal size relative to the size of the economy as a whole creating and maintaining this sector requires diversion of some physical capital from production of output to monitoring that production however the efficiency gain in output production brought about by monitoring warrants the diversion it is also found that the optimal size of the financial sector is independent of the state of the economy and does not vary over the business cycle

fluctuations in a dynamic intermediate run is lm model applications of the poincare bendixon theorem abstract this paper proves the existence uniqueness and stability of closed orbits for nonlinear intermediate run macroeconomic models using the poincare bendixon theorem on planar dynamic systems the models integrate a kaldor goodwin type nonlinear investment function and an is lm model augmented by a government budget constraint the budget constraint allows for money and or debt creation as alternative means of financing the treasury s operations

limit cycles in a model of supply side liquidity profit rate in the presence of a phillips curve abstract in the present paper we study how the dynamics of foley s model may be affected by the introduction of a money wage phillips curve with a perfect spill over of price inflation on wage inflation the upshot is a model with endogenous price and wage dynamics with unstable equilibrium meaning that the integration of the foley liquidity profit rate cycle with the goodwin cycle requires state intervention to stabilize the economy with this approach we show that foley s initial insight is consistent with flexible prices and wages only in the presence of a rule for money supply the stable equilibrium in this case may degenerate into a limit cycle if the growth rate of liquidity increases to a sufficient degree to illustrate this result we carry out the analysis both regarding general functions as well as in terms of a particular example

insiders outsiders and the role of local enforcement in forest management an example from tanzania in low income countries both nearby local villagers insiders and non locals outsiders extract products from protected forests even though their actions are illegal forest managers typically combine enforcement and livelihood projects offered to nearby communities to reduce this illegal activity but with limited budgets cannot deter all extraction we develop a game theoretic model of a forest manager s decision interacting with the extraction decisions of insiders and outsiders our analysis suggests that depending on the relative ecological damage caused by each group budget constrained forest managers may reduce total forest degradation by legalizing insider extraction in return for local villagers involvement in enforcement activities against outsiders

bank profitability leverage and financial instability a minsky harrod model this paper develops a stock flow consistent macroeconomic model where bank profitability and bank leverage play a crucial role in the determination of firms liability structure the model assumes that banks credit supply depends on bank profitability as well as firms profit interest ratio our analysis suggests that a strong expansionary effect of bank profitability on credit supply tends to destabilise the economy leading to cycles driven by the interactions between firms and banks financial behaviour the formal framework is used to discuss hyman minsky s proposal in his stabilizing an unstable economy for the control over the permissible leverage ratios and payout ratios of banks copyright oxford university press

a framework for evaluating collective action and informal institutional dynamics under a resource management policy of decentralization the decentralization of resource property rights has become an increasingly popular policy in many natural resource dependent communities of the developing world however the success of this policy approach depends on both collective action and institutionalization it is therefore important to evaluate collective action and institutionalization where the process of property rights decentralization is in progress this paper presents a modified version of the institutional analysis and development iad framework designed to analyze the decentralization of property rights and the collective action of community members to obtain these rights it describes a three phased framework for analyzing i the government property right decentralization policy ii the stock of capital assets in the community required to achieve property rights by initiating collective action and iii the development of an informal institution for effective property right distribution in the community finally to demonstrate its utility to collective action research we present a case study application of our modified framework to the fisheries property right decentralization policy of the bangladesh government and the subsequent collective action of a wetland dependent community

the financial market impact of uk quantitative easing after outlining some of the monetary developments associated with quantitative easing qe we measure the impact of the uk s initial 2009 10 qe programme on bonds and other assets first we use a macro nance yield curve both to create a counterfactual path for bond yields and to estimate the impact of qe directly second we analyse the impact of individual qe operations on a range of asset prices we nd that qe signi cantly lowered government bond yields through the portfolio balance

governance of the commons a role for the state the paper examines property regimes and common pool resources using examples and case studies the relative merits of private community and state based rights are detailed the insights from the case studies and an analysis of institution costs provide a tentative framework for understanding the role of the state in the governance of the commons

could a higher inflation target enhance macroeconomic stability recent international experience with the effective lower bound on nominal interest rates has rekindled interest in the benefits of inflation targets above 2 per cent we evaluate whether an increase in the inflation target to 3 or 4 per cent could improve macroeconomic stability in the canadian economy

the effectiveness of alternative monetary policy tools in a zero lower bound environment this paper reviews alternative options for monetary policy when the shortterm interest rate is at the zero lower bound and develops new empirical estimates of the effects of the maturity structure of publicly held debt on the term structure of interest rates we use a model of risk averse arbitrageurs to develop measures of how the maturity structure of debt held by the public might affect the pricing of level slope and curvature term structure risk we find that these treasury factors historically were quite helpful for predicting both yields and excess returns over 1990 2007 the historical correlations are consistent with the claim that if in december 2006 the fed were to have sold off all its treasury holdings of less than 1 year maturity about 400 billion and use the proceeds to retire treasury debt from the long end this might have resulted in a 14 basis point drop in the 10 year rate and an 11 basis point increase in the 6 month rate we also develop a description of how the dynamic behavior of the term structure of interest rates changed after hitting the zero lower bound in 2009 our estimates imply that at the zero lower bound such a maturity swap would have the same effects as buying 400 billion in long term maturities outright with newly created reserves and could reduce the 10 year rate by 13 basis points without raising short term yields

do demand curves for currencies slope down evidence from the msci global index change traditional portfolio balance theory derives a downward sloping currency demand function from limited international asset substitutability historically this theory enjoyed little empirical support we provide direct evidence by examining the exchange rate effect of a major redefinition of the msci international equity index in 2001 and 2002 the index changes implied large changes in the representation of different countries in the msci world index and therefore produced strong exogenous equity flows by index funds our event study shows a strong announcement effect in which countries with a decreasing equity representation vis a vis the u s depreciated against the dollar

participation in the world s first clean development mechanism forest project the role of property rights social capital and contractual rules abstract clean development mechanism cdm forest projects are perceived as an attractive way to both help mitigate climate change and transfer income to rural poor however to engender participation of small scale producers a cdm forest project must offer sufficient incentives while minimizing their costs of participation all the while respecting the need for additionality property rights social capital and contractual rules are critical in the success of cdm forest projects in this paper we ask what factors affect participation in the world s first cdm project established in guangxi province china using village level surveys we find that although the project facilitates participation through carbon pooling and a share holding system much of the project land remains unforested we find that the primary reasons for the unforested regions are constrained contractual rules property rights allocation disputes and low levels of social capital in some villages

credit rationing and effective supply failures the topic of this paper is among the oldest and most fundamental in monetary theory how and why does monetary policy affect real economic activity traditional answers hold that the central bank can manipulate aggregate demand by engineering expansions or contractions of the medium of exchange in its monetarist variant this story posits a direct link between something called m and aggregate spending in its keynesian variant the story holds that adjustments in asset prices brought about by a change in m lead to more spending especially on capital goods in either case short run stickiness of prices is needed to translate some of the changes in demand into movements of real output in recent years these conventional stories have become increasingly implausible as stiglitz and i blinder and stiglitz i 983 have argued elsewhere with money becoming more and more difficult to define it is becoming increasingly difficult to believe that the central bank can cause a recession by contriving a shortage of an arbitrary subset of assets called m put differently the point seems both simple and compelling if there are ready substitutes for money control of money will not give the authorities much leverage over the real economy hence this paper develops an explanation for how central bank policy affects

long waves and short cycles in a model of endogenous financial fragility this paper presents a stock flow consistent macroeconomic model in which financial fragility in firm and household sectors evolves endogenously through the interaction between real and financial sectors changes in firms and households financial practices produce long waves the hopf bifurcation theorem is applied to clarify the conditions for the existence of limit cycles and simulations illustrate stable limit cycles the long waves are characterized by periodic economic crises following long expansions short cycles generated by the interaction between effective demand and labor market dynamics fluctuate around the long waves

short and medium term financial real cycles an empirical assessment 2019 elsevier ltd theories such as minsky s financial instability hypothesis or new keynesian financial accelerator models assign a key role to financial factors in business cycle dynamics we propose a simple var based estimation framework to examine some of the financial real interaction mechanisms that are at the core of these theories we examine cycle frequencies in seven oecd countries over the period 1970 2015 and find that output contains short and medium business cycle frequencies while interest rates business debt and household debt exhibit short medium and long cycles respectively we find robust evidence for financial real interaction mechanisms i at high frequencies between interest rates and gdp in australia and the usa and ii at medium frequencies between business debt and gdp in canada and great britain the effect of interest rates and debt seems to operate via investment rather than consumption we find no evidence for an interaction mechanism between household debt and gdp our results provide support for minskyan and financial accelerator models in which output interacts with interest rates or corporate debt