the ir relevance of real wage rigidity in the new keynesian model with search frictions we explore the role of real wage dynamics in a new keynesian business cycle model with search and matching frictions in the labor market both job creation and destruction are endogenous we show that the model generates counterfactual inflation and labor market dynamics in particular it fails to generate a beveridge curve vacancies and unemployment are positively correlated introducing real wage rigidity leads to a negative correlation and increases the magnitude of labor market flows to more realistic values however inflation dynamics are only weakly affected by real wage rigidity this is because of the presence of labor market frictions which generate long run employment relationships the measure of real marginal cost that is relevant for inflation dynamics via the phillips curve contains a dynamic component that does not necessarily move with real wages

state of the irish housing stock modelling the heat losses of ireland s existing detached rural housing stock estimating the benefit of thermal retrofit measures on this stock ireland s housing stock has been identified as being amongst the least energy efficient in northern europe consequently atmospheric emissions are greater than necessary government funded schemes have been introduced to incentivise the uptake of thermal retrofit measures in the domestic irish market a study of ireland s housing highlights the dominance of detached houses 43 72 of which are rurally located and are predominantly heated with fuel oil this paper investigates the economic and carbon case for thermal retrofit measures to the existing detached oil centrally heated rural housing stock the study found the case for energy efficiency measures to be categorical and supports the irish government s focus on energy efficiency policy measures thermal retrofit measures in the detached housing stock have the potential to realise an averaged 65 theoretical reduction in heating costs and co2 emissions for houses constructed prior to 1979 coinciding with the introduction of building regulations and around 26 for newer homes thus offering a significant contribution 44 to ireland s residential carbon abatement projections and hence in meeting the eu s directives on energy and carbon the greatest savings 36 of ireland s carbon abatement projections result from improving the energy efficiency of the pre 1979 stock

efficiency wages and the business cycle puzzle abstract the main thrust of this work is to open the real business cycle rbc methodology to non walrasian considerations and reciprocally to submit some non walrasian models to the discipline of the rbc approach in doing so we provide a first rbc model with involuntary unemployment and a suboptimal equilibrium path we also demonstrate the promise and difficulty of resolving the business cycle puzzle by appealing to quantity rationing in the labor market

search theoretic models of the labor market a survey we survey the literature on search theoretic models of the labor market we show how this approach addresses many issues including the following why do workers sometimes choose to remain unemployed what determines the lengths of employment and unemployment spells how can there simultaneously exist unemployed workers and unfilled vacancies what determines aggregate unemployment and vacancies how can homogeneous workers earn different wages what are the tradeoffs firms face from different wages how do wages and turnover interact what determines efficient turnover we discuss various modeling choices concerning wage determination and the meeting process including recent models of directed search

firm incentives to promote technological change in pollution control reply abstract the process of technological change in pollution control is broken into three basic steps innovation diffusion and optimal agency response firm incentives to promote these steps are then examined under five regulatory regimes direct controls emission subsidies emission taxes free marketable permits and auctioned marketable permits on a relative basis emission taxes and auctioned permits provide the highest firm incentives to promote technological change at times free permits generate lower incentives direct controls which are common regulatory tools usually provide the lowest relative firm incentives to promote technological change

getting into the energy efficiency scene does corporate social responsibility matter for energy efficiency in smes a growing body of literature argues that improving energy efficiency is an essential step that firms must take to mitigate climate change issues it is assumed that corporate social responsibility

regulatory balancing and the efficiency of green r d we identify and analyse several dynamic implications of setting environmental standards such as to balance marginal costs and benefits the adoption of such a regulatory approach is shown to effect i the speed of improvement of abatement technologies ii the direction in a sense to be defined of that improvement iii its source and the distribution of the rents from it and iv the rate of development of defensive averting technologies existing views are thoroughly synthesised in the context of a simple diagrammatic model several new results are derived and at least one conventional wisdom questioned the message of the analysis for legislators and regulators is that cost benefit balancing should be done with care

market power in a gis based hedonic price model of local farmland markets buyers of farmland are usually interested in parcels for sale that are close to their own farms with a limited number of parcels for sale this may lead to market power in local farmland markets the objective of this paper is to investigate whether market power affects farmland prices hedonic price models are adapted to allow for local market power of either sellers or buyers a distinction is made between rural and urban farmland markets the results provide evidence of market power effects in rural farmland markets however for farmland in urban areas market prices are dominated by speculation effects

the effects of potential land development on agricultural land prices abstract we conduct a national scale analysis of the determinants of agricultural land values the theoretical basis for the study is a spatial city model with stochastic returns to future land development the empirical model of agricultural land prices is estimated with a cross section on approximately three thousand counties in the contiguous us the results provide evidence that option values associated with irreversible and uncertain land development are capitalized into current farmland values for each county we decompose the current agricultural land value into components measuring rents from agricultural production and rents from future land development

potential for private cost increasing technological innovation under a tax based economic incentive pollution control policy a criticism of the current pollution control policy is its lack of incentive for technological innovation the author argues that the implementation of a tax based economic incentive policy may have its pay off in terms of lower real control outlays but this makes it possible for total private compliance costs resource costs and tax or transfer costs to actually increase upon the introduction of some new less expensive control technologies he presents a numerical illustration of this phenomenon then derives the conditions under which such cost increases may occur cost increasing technological innovations could generally be avoided if the tax incentive is coupled with a net revenue lid for the pollution control authorities 4 references 3 tables

the cyclicality of separation and job finding rates this paper uses cps gross flow data to analyze the business cycle dynamics of separation and job finding rates and to quantify their contributions to overall unemployment variability cyclical changes in the separation rate are negatively correlated with changes in productivity and move contemporaneously with them while the job finding rate is positively correlated with and tends to lag productivity contemporaneous fluctuations in the separation rate explain between 40 and 50 percent of fluctuations in unemployment depending on how the data are detrended this figure becomes larger when dynamic interactions between the separation and job finding rates are considered

domestic uk retrofit challenge barriers incentives and current performance leading into the green deal copyright 2012 elsevier the official published version can be accessed from the link below

pollution abatement subsidies and the eco industry this paper considers the combination of pollution taxes and abatement subsidies when some polluting firms procure their abatement goods and services from an oligopolistic eco industry the regulator must here cope with two simultaneous price distortions one that comes from pollution and the other which is caused by the eco industry s market power in this context we show that taxing emissions while subsidizing polluters abatement efforts cannot lead to first best but the opposite occurs provided it is the eco industry s output which is subsidized when public transfers also create distortions welfare can be higher if the regulator uses only an emission tax but subsidizing abatement suppliers while taxing emissions remains optimal when the eco industry is concentrated

fiscal implications of effluent charges and input taxes abstract taxing inputs that cause pollution is an alternative to effluent fees the literature has identified an economic relationship between these two market approaches that results in equivalent emission reductions however the fiscal implications of each approach may differ considerably this investigation shows total revenues collected from polluters under each instrument are identical only if the production of residuals exhibits constant returns to scale empirical estimates of the difference in revenues collected are presented for the case of deep percolated nitrate losses in irrigated agriculture

labor market dynamics with search frictions and fair wage considerations fairness considerations in wage setting can improve the ability of the diamond mortensen pissarides search and matching model to account for u s labor market dynamics firms production is influenced by workers effort input which depends on whether workers consider the employment relation as fair a typical worker s effort is determined in a comparison of individual current wage with wage norms including the outside option the individual past wage and the wage level in the steady state the fairness considerations in the search framework give rise to endogenous real wage rigidity and realistic volatilities of unemployment vacancies and labor market tightness jel e24 e32 j64

costly search and mutual fund flows this paper studies the flows of funds into and out of equity mutual funds consumers base their fund purchase decisions on prior performance information but do so asymmetrically investing disproportionately more in funds that performed very well the prior period search costs seem to be an important determinant of fund flows high performance appears to be most salient for funds that exert higher marketing effort as measured by higher fees flows are directly related to the size of the fund s complex as well as the current media attention received by the fund which lower consumers search costs

the consequences of rigid wages in search models the standard theory of equilibrium unemployment the mortensen pissarides search and matching model cannot explain the magnitude of the business cycle fluctuations in two of its central elements unemployment and vacancies modifying the model to make the present value of wages unresponsive to current labor market conditions amplifies fluctuations in unemployment and vacancies by an order of magnitude significantly improving the performance of the model despite this the welfare consequences of such rigid wages is negligible jel e24 e32 j30 j41 j63 j64

economic potential of energy efficient retrofitting in the swiss residential building sector the effects of policy instruments and energy price expectations the aim of this paper is to analyse the profitability of energy efficient retrofit investments in the swiss residential building sector from the house owner s perspective different energy price expectations policy instruments such as subsidies income tax deduction and a carbon tax as well as potential future cost degression of energy efficiency measures were taken into account the discounted cash flow method was used for the investment analysis of different retrofit packages applied to a model building scheduled for renovation i e a single family house constructed between 1948 and 1975 the results show that present swiss policy instruments push investments for energy efficient retrofitting to profitability cost degression has a minor significance for investment profitability however the most relevant factor for the investment analysis is the expected energy price expecting a future fuel oil price at the level of 2005 efficiency investments are close to profitability even without policy support if higher energy prices were expected energy efficient retrofitting would be an attractive investment opportunity

shirking unemployment and aggregate fluctuations empirically real wages exhibit relatively little cyclical variation and a weak cyclical pattern early real business cycle rbc models predict to the contrary large procyclical real wage movements incorporating efficiency wages into a rbc environment would seem promising since one prediction from the efficiency wage literature is real wage rigidity this paper evaluates a common microfoundation for efficiency wages the shirking model with respect to its predictions for real wages within a rbc style model simulations of the model reveal that it can generate dampened but still strongly procyclical real wage behavior

how pollution taxes may increase pollution and reduce net revenues this paper develops a positive theory of pollution taxation by a federal authority when pollution abatement subsidies are used by local governments environmental and industry lobby groups influence governments with campaign contributions first pollution may increase in the pollution tax because the abatement subsidy increases decreases with the tax and pollution increases decreases in the abatement subsidy this occurs because the lobbying incentives change at a pollution tax reform second pollution taxes may reduce net revenues because subsidy expenditures rise third pollution may increase simultaneously as net revenues fall finally the welfare effect of a pollution tax may be negative

production uncertainty and pollution there has been considerable interest in two sector models in which the production of one of the goods is subject to uncertainty the major papers in this area are by rothenberg and smith 13 batra 1 britto 3 diamond 5 mills 12 and harford and park 8 in the latest of these papers harford and park 8 41 build on a model in mills 12 to show that if constant relative risk aversion r which is mathematically analogous to the pratt arrow measure is less than exceeds or equal to unity the direction of efficient resource flow under uncertainty as compared to certainty is away from the risky sector toward the risky sector or unchanged respectively in their model as in mills 12 the preferences of consumers are represented by a community expected utility function in the present two sector model the risky sector is an industry that is adversely affected by air pollution which is a by product of production in the other industry although there is a deterministic relation between the output and emissions of the polluting stable sector the damage caused to the other sector as a result of any given level of emissions depends upon random variables such as mixing height and wind velocity and is therefore stochastic it is not intuitively obvious whether the results of harford and park 8 hold if the uncertainty in the risky sector is the consequence of production in the stable sector in fact there is substantial dissimilarity in the results if the measure of risk aversion r is less than unity the efficient direction of resource flow is generally though not always toward the risky polluted sector if r equals unity the results also differ with resources shifting under uncertainty in the direction of the risky polluted sector only if r exceeds unity are the results always the same in both models with resources flowing toward the risky sector this paper presents the marginal condition such that under uncertainty the optimal combination of outputs includes less of the stable polluting good and more of the risky pollution sensitive good than would be the case if pollution damage were anticipated with certainty if this marginal condition does not hold the risk averse community may prefer either more or less of the polluting good a narrowed interpretation of the marginal condition is then used to predict the special case in which the efficient flow of resources under uncertainty is toward the polluting sector

consequences of the clean water act and the demand for water quality since the 1972 u s clean water act government and industry have invested over 1 trillion to abate water pollution or 100 per person year over half of u s stream and river miles however still violate pollution standards we use the most comprehensive set of files ever compiled on water pollution and its determinants including 50 million pollution readings from 240 000 monitoring sites and a network model of all u s rivers to study water pollution s trends causes and welfare consequences we have three main findings first water pollution concentrations have fallen substantially between 1972 and 2001 for example the share of waters safe for fishing grew by 12 percentage points second the clean water act s grants to municipal wastewater treatment plants which account for 650 billion in expenditure caused some of these declines through these grants it cost around 1 5 million 2014 dollars to make one river mile fishable for a year we find little displacement of municipal expenditure due to a federal grant third the grants estimated effects on housing values are smaller than the grants costs we carefully discuss welfare implications

the dynamic study on firm s environmental behavior and influencing factors an adaptive agent based modeling approach employing an adaptive agent based modeling approach the present study explored the evolvement of firms environmental behavior and influencing factors using empirical data from 167 firms in china the simulation results revealed that firms environmental behavior followed this evolvement path defensive behavior preventive behavior and enthusiastic behavior computational experiments indicated that with increased financial ability and level of environmental preparedness the number of firms in all three categories of environmental behavior increased and so did their profits with increased public pressure the number of firms with defensive environmental behavior and their profits decreased but the number of firms with preventive and enthusiastic environmental behavior and their profits increased on the other hand when managers education level increased the number of firms with defensive behavior deceased but their profits increased slightly though the number of firms with preventive and enthusiastic behavior and their profits increased sharply in addition with the increased regulation level the number of firms with a different category of environmental behavior and their profits decreased finally with increased financial subsidy and market share the number of firms with different behavior and their profits were modified slightly

empirical estimates of the direct rebound effect a review beginning with william stanley jevons in 1865 a number of authors have claimed that economically justified energy efficiency improvements will increase rather than reduce energy consumption jevons paradox is extremely difficult to test empirically but could have profound implications for energy and climate policy this paper summarises and critiques the arguments and evidence that have been cited in support of jevons paradox focusing in particular on the work of len brookes and harry saunders it identifies some empirical and theoretical weaknesses in these arguments highlights the questions they raise for economic orthodoxy and points to some interesting parallels between these arguments and those used by the biophysical school of ecological economics while the evidence in favour of jevons paradox is far from conclusive it does suggest that economy wide rebound effects are larger than is conventionally assumed and that energy plays a more important role in driving productivity improvements and economic growth than is conventionally assumed 2008 elsevier ltd all rights reserved

private information wage bargaining and employment fluctuations shimer 2005 pointed out that although we have a satisfactory theory of why some workers are unemployed at any given time we don t know why the number of unemployed workers varies so much over time the basic mortensen pissarides 1994 model does not generate nearly enough volatility in unemployment for plausible parameter values this paper extends the mortensen pissarides model to allow for informational rents productivity is subject to publicly observed aggregate shocks and to idiosyncratic shocks that are seen only by the employer it is shown that there is a unique equilibrium provided that the idiosyncratic shocks are not too large the main result is that small fluctuations in productivity that are privately observed by employers can give rise to a kind of wage stickiness in equilibrium and the informational rents associated with this stickiness are sufficient to generate relatively large unemployment fluctuations

measuring heterogeneous preferences for preserving farmland and open space abstract public preferences for environmental policies often vary among individual citizens according to their socio economic characteristics and attitudes toward environmental programs most researchers account for socio economic characteristics when conducting public preference surveys but do not account for differences in preferences that transcend socio economic categories identifying the public s attitudes regarding environmental programs and the role they play in shaping individuals preferences for policy alternatives can assist policy makers in developing programs that are consistent with public expectations this paper uses factor analysis and a discrete choice model to describe differences in public preferences that result from different attitudes regarding the goals of programs designed to preserve farmland and open space results describe policy implications that are not apparent when using models that address socio economic characteristics alone

the value of domestic building energy efficiency evidence from ireland abstract following the transposition of the eu energy performance of buildings directive into irish law all properties offered for sale or to let in ireland are obliged to have an energy efficiency rating this paper analyses the effect of energy efficiency ratings on the sale and rental prices of properties in the republic of ireland using the heckman selection technique we model the decision to advertise the energy efficiency rating of a property and the effect of energy efficiency ratings on property values our results show that energy efficiency has a positive effect on both the sales and rental prices of properties and that the effect is significantly stronger in the sales segment of the property market we also analyse the effect of energy efficiency across different market conditions and we find that the effect of the energy rating is generally stronger where market conditions are worse

labor market dynamics when unemployment is a worker discipline device efficiency wage models of the effort elicitation type have important implications for labor market dynamics these models have a wide array of discontinuous sunspot equilibria driven by extraneous variables in addition to well behaved equilibria characterized by continuous slowly adjusting patterns of employment many aspects of actual labor markets can be replicated by these models for example the longer run movements they predict in employment allow macroeconomic evidence for a large labor supply elasticity to be reconciled with panel data evidence for a small labor supply elasticity many testable but as yet untested predictions about labor market dynamics can also be generated this abstract was borrowed from another version of this item

employment fluctuations with downward wage rigidity the role of moral hazard we study the cyclical dynamics of job creation and destruction when workers effort is not perfectly observable the no shirking constraint may amplify fluctuations in hiring by making firms surplus share procyclical and may cause a burst of inefficient firing when a downturn begins but quantitatively it mainly raises the cost of motivating marginal workers in booms since firms cannot commit to keep them in recessions and thereby strongly damps the countercyclical fluctuations in the separation rate this implies a robust beveridge curve but casts doubt on ramey and watson s 1997 contractual fragility mechanism and worsens shimer s 2005a volatility puzzle

an experimental analysis of the effectiveness of an environmental assurance bonding system on player behavior in a simulated firm it has long been recognized that the present command and control methods for pollution abatement are inefficient using market mechanisms for environmental management is a promising alternative to the direct regulatory approach market mechanisms are just beginning to appear in u s environmental policy for example tradable permit schemes are being developed and implemented for some air pollutants under the amended clean air act various other forms of taxes and tradable permits have been proposed however these systems do not address the large uncertainty inherent in most environmental problems one mechanism currently being studied to address uncertainty more effectively is a flexible environmental assurance bonding system designed to incorporate environmental criteria and uncertainty into market incentives this study uses an experimental approach employing an interactive computer game simulation model with human players to examine the effectiveness of the assurance bonding system under varying degrees of uncertainty an environmental cost efficiency index ecei or profit per unit waste is used to measure player performance preliminary results indicate that players are more successful under the assurance bonding system in terms of ecei than under the simulated current system

value for money in energy efficiency retrofits in ireland grant provider and grant recipients abstractthe sustainable energy authority of ireland seai administers the better energy homes scheme to provide a financial incentive for home owners to engage in energy efficiency retrofits this study analyses data from the scheme and building energy rating data for participants to the scheme to examine the value for money achieved by households in addition this research identifies which retrofit combinations provide greatest value for money in terms of energy efficiency gains for the grant provider we utilize an error in variables approach to model the variation in benefits accruing to households of varying characteristics we find that household and grant provider surplus can be maximized in the short term by retrofitting less energy efficient and larger homes timber or steel frame homes and houses rather and apartments the types of retrofits leading to the greatest surplus for both household and grant provider include cavity wall insulation paired with either a boiler with heating controls or

business cycles with worker moral hazard we consider an economy with unemployment where firms pay efficiency wages due to effort enforcement problems and face output prices that vary cyclically between a high and a low level ph and pl we show that for a range of pl ph 1 employment and the wage will be cylically rigid and that this range is greater the shorter h periods are for lower pl ph employment will vary procyclically but then also the wage and more so the more employment varies this implies a limited role for efficiency wage theory in explaining employment variations over the business cycle but a greater role for explaining productivity fluctuations according to okun s law

business cycles unemployment insurance and the calibration of matching models this paper theoretically and empirically documents a puzzle that arises when an rbc economy with a job matching function is used to model unemployment the standard model can generate sufficiently large cyclical fluctuations in unemployment or a sufficiently small response of unemployment to labor market policies but it cannot do both variable search and separation finite ui benefit duration efficiency wages and capital all fail to resolve this puzzle however either sticky wages or match specific productivity shocks can improve the model s performance by making the firm s flow of surplus more procyclical which makes hiring more procyclical too

when subsidies for pollution abatement increase total emissions in a first best deterministic world it is well known 2 28 30 that a unit tax on emissions equal to marginal damage is an efficient mechanism for internalizing the damages caused by polluting firms a unit subsidy for emissions abated also equal to marginal pollution damage has the same desirable property but only in the short run in the long run such subsidies induce polluting firms to operate at too small a scale and attract an excessive number of new firms to the polluting industry this can have the perverse result that there are more emissions when abatement is subsidized than when it is not nevertheless economists have been reluctant to give up entirely on the subsidy approach recognizing with oates 23 290 that polluters will obviously be far more receptive to measures that assist with the costs of pollution control than to those that place the burden upon themselves it is therefore not surprising that economists have continued to look for and find new justifications for subsidizing pollution control thus mestelman 20 187 argues that the subsidy scheme may be a second best alternative for externality control when the direct taxation alternative is not politically viable mchugh 17 64 shows that subsidies for pollution abatement expenditures can be a useful instrument in the case of cost increasing technological innovations harford 6 demonstrates that subsidies for pollution control inputs may be efficient when enforcement is sufficiently costly harford 7 makes still another argument for subsidies in the case in which the day to day performance of abatement equipment is uncertain but the uncertainty can be reduced by maintenance expenditures finally there are schemes for combining subsidies and taxes 14 26 given the continuing interest in subsidies it is important to examine carefully the disturbing case in which subsidies increase rather than decrease total emissions

the political economy of pollution taxes in a small open economy abstract this paper develops a positive theory explaining pollution tax policy outcomes in a small open economy the equilibrium tax rate depends on lobby group membership the relative importance of lobbying activities and the tax elasticity of pollution the equilibrium properties are investigated the model is extended to incorporate pollution abatement and a pollution abatement subsidy we show that total pollution may be increasing in the pollution abatement subsidy rate this effect arises because the equilibrium pollution tax rate may be decreasing in the subsidy rate due to altered political influence of the lobby groups in the political equilibrium

agricultural land values and the value of rights to future land development we investigate the inuence of fu ture land development on current agricultural land values from a theoretical model of land markets we derive a reduced form expression for agricultural land values in terms of observable variables this result dictates the speci cation of our econometric model and we nd strong sup port for the model in an application to new york state the estimated model together with a spa tial interpolation algorithm is used to generate a surface of estimated development rights values for orange county this approach overcomes several problems that arise with the use of stan dard appraisal methods to value conservation easements jel q24

labor market volatility in matching models with endogenous separations the business cycle behavior of a matching model with endogenous separations is studied in this paper we show that whether aggregate productivity shocks have a larger effect on the vacancy unemployment ratio than in a model with exogenous separations depends on whether worker productivity stochastically increases with tenure the difference in the response is quantitatively small however we also show that the cleansing effect introduced by allowing for endogenous separations can help in reconciling the model with observed fluctuations in the unemployment rate but not with those in the vacancy rate

the value of remoteness a hedonic estimation of ranchette prices abstract throughout the western united states production ranches are being subdivided into recreation oriented ranchettes this change has dramatic impacts on local environmental and economic viability ranchettes fall in a gap in the economic literature between production agriculture and residential uses this paper presents the first hedonic model for ranchettes introducing the use of remote sensing vegetative indices and the use of sale status of adjacent ranchettes as explanatory variables parcel level sale data in yavapai county arizona is combined with satellite greenness indices it is found that increased greenness raises sale prices access to roads cities and neighbors also increase sale prices implying that isolation is a disamenity and that it may be beneficial for policymakers to encourage ranchette grouping

implicit contracts incentive compatibility and involuntary unemployment this paper considers the enforceability of employment contracts when employees performance cannot be verified in court so that piece rate contracts are not legally enforceable part i shows that there exists a variety of self enforcing implicit contracts modelled as perfect equilibria in a repeated game and characterizes all the wage and performance outcomes that can be implemented implementation requires a strictly positive surplus from employment the form of the contract depending on how this surplus is divided between firm and employee piece rate contracts and contracts with an informally agreed bonus can be made self enforcing but the use of severance pay and bonding does not extend the set of implementable allocations the resulting contracts resemble actual labor contracts more than do the contracts in standard principal agent models part ii analyses market equilibrium with these contracts also modelled as perfect equilibria in a repeated game and shows that many such equilibria exist unfilled vacancies and unemployed workers can co exist despite the existence of contracts that are potentially mutually beneficial for those jobs that are filled any division of the potential surplus is possible so that the market can have at the same time involuntary unemployment and vacancies that are unfilled despite filled jobs earning positive profits as a criterion for selecting equilibria a notion of renegotiation proofness is applied then either all workers are employed or all jobs filled but any division of the potential surplus is still possible the paper explores what further restrictions on beliefs give rise to a walrasian outcome in which all the potential surplus goes to the short side of the market and to an efficiency wage type outcome in which the potential surplus goes to the long side

production externalities and corrective subsidies a general equilibrium analysis abstract several recent attempts have been made to demonstrate that corrective subsidies and taxes do not have symmetric allocation effects these demonstrations have utilized graphical partial equilibrium analysis in this paper a general equilibrium model is introduced to show that a standard partial equilibrium result may be incorrect and that subsidies may lead to equilibrium states which are socially preferred to the status quo position

employment efficiency and sticky wages evidence from flows in the labor market i consider three views of the labor market in the first wages are flexible and employment follows the principle of bilateral efficiency workers never lose their jobs because of sticky wages in the second wages are sticky and inefficient layoffs do occur in the third wages are also sticky but employment governance is efficient i show that the behavior of flows in the labor market strongly favors the third view in the modern u s economy recessions do not begin with a burst of layoffs unemployment rises because jobs are hard to find not because an unusual number of people are thrown into unemployment

uncertainty over future environmental taxes impact on current investment in resource conservation besides static efficiency properties environmental policies should be evaluated in terms of their longer run impacts on investment and technological change to reduce pollution and degradation of natural resources using a stochastic dynamic programming approach this paper analyzes how uncertainty about a future environmental tax on a polluting input alters investment in resource conservation and how such investment affects future demand for the polluting input the impact on investment depends crucially on price elasticities of demand and on the manner in which investment shifts and rotates the demand schedule for the polluting input in the future the expectation of a higher tax does not necessarily create stronger incentives for investment in resource conservation more uncertainty about future policies does encourage investment if it makes a firm more responsive to future price changes and discourages investment if it makes a firm less responsive to price changes

ex post evaluation of an earmarked tax on air pollution in this paper we do an ex post evaluation of the french tax on air pollution the revenues of this tax were redistributed to polluters in the form of subsidies to abatement technologies and the policy is a typical example of an earmarked tax we use a two stage estimation procedure on an unbalanced panel data set of 226 plants from three industrial sectors that are some of the main contributors to nitrogen oxide and sulfur dioxide emissions the results indicate that the overall environmental effectiveness of this particular tax subsidy scheme can be questioned