examining the global environmental impact of regional consumption activities part 2 review of input output models for the assessment of environmental impacts embodied in trade this paper offers a detailed review of recently described single and multi region input output models used to assess environmental impacts of internationally traded goods and services it is the second part of a two part contribution in part 1 turner k lenzen m wiedmann t and barrett j in press examining the global environmental impact of regional consumption activities part 1 a technical note on combining input output and ecological footprint analysis ecological economics we describe how to enumerate the resource and pollution content of inter regional and inter national trade flows with the aim to illustrate an ideal accounting and modelling framework for the estimation of ecological footprints a large number of such environment economic models have been described but only in the last few years models have emerged that use a more sophisticated multi region multi sector input output framework this has been made possible through improvements in data availability and quality as well as computability we identify six major models that employ multi sector multi region input output analysis in order to calculate environmental impacts embodied in international trade results from the reviewed studies demonstrate that it is important to explicitly consider the production recipe land and energy use as well as emissions in a multi region multi sector and multi directional trade model with global coverage and detailed sector disaggregation only then reliable figures for indicators of impacts embodied in trade such as the ecological footprint can be derived

testing mean reversion in target zone exchange rates the aim of the paper is to assess to what extent european monetary system ems target zone exchange rates have been characterized by mean reverting behaviour to this purpose a new class of mean reversion tests is introduced with respect to standard approaches the proposed tests which are based on the sample excursion of the exchange rate within the band have a better ability to detect target zone mean reverting dynamics the empirical analysis of the exchange rates among the main ems currencies shows that the degree of mean reversion is much higher than what has been reported in the literature both before and after the target zone widening of 1993 finally the proposed tests have a wider range of applications since they originate a new approach to unit root testing

china usa trade indicators for equitable and environmentally balanced resource exchange abstract trade needs to be evaluated by more comprehensive indicators that complement market based economic value the emergy accounting ema method proved to be a valuable tool to help address trade complexity by means of environmental quality oriented indicators ema is used in this paper to evaluate the environmental and resource flows involved in china united states usa trade in the years 1993 2000 and 2008 results show that china emergy exports i e exports of raw and less processed resources exceed the imports from usa although the money received by china from exports is higher than the money paid for imports the real imbalance relies in the huge amount of resources that outflow from china hardly compensated by the value of imports in terms of support to chinese economy the conclusion is that trade accounting methods should include holistic valuations beyond the financial costs of traded goods policy implications of these results are discussed

uncovering resource losses and gains in china s foreign trade abstract natural resource storages and flows play an important role in economic and social processes in this paper we explore the trade of primary commodities between china and its main trade partners during the years 2000 and 2008 emergy accounting is used to assess the environmental support associated with the resources exchanged mass emergy and financial capital export to import ratios confirm that economy level trade advantages should not just rely on capital flow a holistic evaluation of the trade process including resource environmental value should be performed to identify trade balance and stability results show that while china s imports monetary value is much larger than exports monetary value china receives more emergy environmental support in trade than it gives benefiting from the ability of primary resources to drive its economy developed economies characterized by a low emergy to money ratio gain more from trade of primary commodities with china developing and underdeveloped economies with higher emergy to money ratio lose in the environmental support balance to china indicating the existence of a potentially unsustainable trade imbalance

credibility and disinflation in the european monetary system analysis of interest differentials in the european monetary system has suggested a widespread lack of credibility of the exchange rate mechanism in the sense that in most countries the implicit expected rate of devaluation was significant and not far short of inflation differentials vis a vis the deutschmark we present and test a model in which prices reflect expectations of exchange rate behaviour the results provide mixed evidence that price setting in countries which participated in the erm was influenced by the exchange rate discipline

market structure and organizational form this paper studies the determinants of a firm s organizational form in the context of an imperfectly competitive industry there are two kinds of organizational forms the multi divisional form m form and the unitary form u form an m form firm suffers from ignorance of demand externalities among different products and double marginalization is eliminated in contrast in a u form firm demand externalities are taken into consideration and double marginalization exists a firm s optimal choice of organizational form depends on the market structure

assessing the credibility of a target zone evidence from the ems this paper provides some new evidence on the credibility of the exchange rate mechanism erm of the european monetary system ems the study differs from previous research in the literature in three main respects first the main contribution is the use of several credibility indicators some of which have never been applied before to all of the currencies under study this allows one to strengthen the results obtained in this paper second a longer period than that of previous studies is analysed covering the complete ems history third a comparison has been made of the prediction qualities of the different indicators in order to explore their ability to capture the main erm events realignments changes in the fluctuations bands and speculative pressures fourth the indicators are applied to the experience of the new modified erm linking the currencies of non euro area member states to the euro showing the relevance of this approach in the near future with the enlargement of the european union

an interpretation of recent research on exchange rate target zones how do exchange rate bands work compared to completely fixed rates between realignments or more precisely what are the dynamics of exchange rates interest rates and central bank interventions within exchange rate bands does the difference between bands and completely fixed exchange rates matter and if so which of the two arrangements is best or more precisely what are the tradeoffs that determine the optimal bandwidth this article will present an interpretation of some selected recent theoretical and empirical research on exchange rate target zones with emphasis on main ideas and results and without technical detail

revisiting china africa trade from an environmental perspective international trade patterns can be seen as ways to redistribute natural resources and manufactured products by means of convergence and divergence pathways in support of production and consumption processes worldwide by making needed resources to potential users individuals and economies trade acts as a driver of resource extraction processing degradation especially if this is facilitated by market dynamics in which prices are determined by contingent factors that have no links to the environmental dynamics of resource generation and do not match the real quality of natural capital and ecosystems services involved a fair trade relationship should take these aspects into proper account in so promoting additional criteria for resource value and as a consequence towards efficient resource use and cleaner production processes a comprehensive cost and benefit evaluation to consider the economic and ecological impacts is therefore a much needed prerequisite for a balanced trade relationship to conduct this evaluation we firstly choose the trade data of china with south africa sudan algeria nigeria egypt and morocco in the years 2001 2004 2008 and 2012 as sample set then we apply the emergy accounting approach to the international trade dynamic between china and above selected african countries to quantify the exchange of natural capital and ecosystem services among partners including resources that support know how and technology exchange as well as to identify benefits and compensation measures that may increase trade balance and equity via the prevention of uncompensated resource exploitation by accounting for the environmental support embodied in traded resources and their capability to support an economic process the emergy approach applied in this study provides a complementary tool to economic evaluation which enables a more comprehensive understanding of trade beyond the monetary terms of trade in terms of the total emergy exchange the investigated african countries with the exception of south africa and sudan receive more emergy from china over the investigated period which appears to suggest a reversal of the typical trend in which industrialized economies exploit african countries and return small or no benefit to their economies however the composition of the emergy trade indicates that china s import from africa is mainly composed of primary products whereas manufactured products dominate its export this composition is likely to promote the chinese economy supporting resource processing and jobs as well as increase the lifestyle of the wealthy fractions of the african population as a result of increased access to consumer goods however in turn it may contribute to heavier pollution in china and certainly does not favor the development of local industry in africa thus more balanced import and export relations and trade structure that simultaneously involves human and natural capital will be helpful to construct a cooperative relationship

fiscal policy debt management and exchange rate credibility lessons from the recent italian experience abstract this paper explores some potential determinants of exchange rate credibility with reference to the italian experience of the 1990s the analysis relies on a nonlinear framework emphasizing shifts between credible and non credible states and assuming a significant degree of persistence in the above regimes almost all fiscal and debt management indicators display significant effects on devaluation expectations the main policy implications of the paper are that a restrictive fiscal stance a lengthening of average debt maturity and an increase in the share of foreign denominated debt are crucial to stabilize the lira exchange rate and to qualify italy in the former group of countries which will join emu

anomalies foreign exchange most all behavior can be explained by assuming that agents have stable well defined preferences and make rational choices consistent with those preferences in markets that eventually clear an empirical result qualifies as an anomaly if it is difficult to rationalize or if implausible assumptions are necessary to explain it within the paradigm this column will present a series of such anomalies readers are invited to suggest topics for future columns by sending a note with some reference to or better yet copies of the relevant research comments on anomalies printed here are also welcome the address

environmental and economic consequences of the overexploitation of natural capital and ecosystem services in xilinguole league china abstract the evaluation of natural capital and environmental services has always been an important step in the implementation of sustainable development concepts and policies the results presented in this study address the demand for environmental support of the economy of xilinguole league in the inner mongolia autonomous region as well as the value of its natural and human made capital the results show that the reliance of the economy of xilinguole league on local and imported non renewable resources coal and minerals decreases both the environmental and economic sustainability of the area emergy based performance indicators of the xilinguole league economy show a low sustainability index esi 0 79 though it is higher than for the chinese economy as a whole esi 0 47 as well as a low percentage of renewable resources being used ren 0 16 though this is higher than for all of china 0 09 in contrast the grassland based livestock sector shows a higher renewability index ren 0 67 and sustainability esi 9 61 the emergy exchange ratios exported emergy imported emergy are calculated to be 4 38 for the livestock system and 4 28 for the xilinguole economy which is much higher than the value of 1 74 for the overall chinese economy indicating uncompensated overexploitation of local systems meat and coal respectively intensified coal exploitation and intensive cattle grazing are discussed to support the decision making process for setting local energy policy and ecological compensation it is proposed that conservation of coal resources avoiding misuse and moderating excess extraction and trade and protection of natural grassland capital are more advantageous in emergy terms than the blind pursuit of accelerated economic growth

the material basis of the global economy worldwide patterns of natural resource extraction and their implications for sustainable resource use policies abstract material flow accounting and analysis mfa has been established as an influential framework for quantifying the use of natural resources by modern societies so far however no reference data for overall scale and trends of global extraction of natural resources and their distribution between different world regions has been available this paper presents the first comprehensive quantification of the material basis of the global economy i e used domestic extraction in a time series from 1980 to 2002 we analyse time trends for major material groups fossil fuels metals industrial and construction minerals and biomass disaggregated into seven world regions this allows for a an illustration of the global economy s physical growth driven by worldwide processes of economic integration over the past decades and b an indication of the worldwide distribution of environmental pressures associated with material extraction the results show that annual resource consumption of the world economy increased by about one third between 1980 and 2002 this indicates that scale effects due to economic growth more than compensated for other effects such as the relative increase of the service sectors contribution to gdp structural effect and the use of new production technologies with higher material and energy efficiency technology effect the observed growth of natural resource extraction is unevenly distributed over the main material categories with metals showing the highest growth rate the regional analysis shows the increasing importance of asia and latin america in global resource extraction on the global level material intensity i e resource extraction per unit of gdp decreased by about 25 indicating relative decoupling of resource extraction from economic growth the paper concludes with policy recommendations for a more sustainable use of natural resources

target zones and realignments recent contributions emphasize that the presence of exchange rate target zones has important effects on the within band behavior of exchange rates when agents are forward looking the authors find that the implications of available models are inconsistent with european exchange rate data and they suggest that the frequent realignments occurring in the period they consider may be responsible for this they construct a model in which the likelihood of a realignment in the near future increases as the exchange rate approaches the limits of its fluctuation band and show that its implications are broadly consistent with the evidence copyright 1992 by american economic association

reputation and credibility in the european monetary system ems credibility axel weber this article provides a quantitative assessment of the credibility of the european monetary system during the disinflation period of the 1980s the results contradict the widely held view that the ems has operated as a dm zone it is shown that after a brief early phase the ems has functioned as a bipolar system with a hard currency option supplied by the german bundesbank and a soft currency option offered by the banque de france whilst from the onset the netherlands have chosen the hard currency option at least in a first stage the remaining smaller economies belgium denmark and ireland adopted the soft currency alternative at a later stage of the ems however the soft currency block has disintegrated and some countries most noticeably ireland and to a lesser extent france have shifted towards the hard currency standard it is argued that this increased tightening of the ems provides a favourable starting condition for the transition to economic and monetary union

opportunism incentives and the m form hypothesis a laboratory study abstract opportunism is one central premise of the m form hypothesis this premise is investigated in a laboratory experiment using m form and u form organizations under incentives based on corporate profit and divisional profits there was greater opportunism under u form organization than under the m form and under divisional profit than under corporate profit incentives additionally a misguided altruism lead a number of individuals to misrepresent information the m form yields higher performance than the u form also corporate profit incentives yield higher total profit than divisional profit incentives the results partially explain why empirical studies do not strongly support the m form hypothesis

credibility and changes in policy regime this paper addresses the issue of credibility from an econometric perspective it develops a rational expectations model of inflation in which the dynamics are driven by the level of government spending and by the effect of past inflation rates on the value of real taxes government expenditure is modeled as an exogenous autoregressive process subject to discrete changes in regime the regimes are defined by whether the level of spending is or is not consistent with the rate of inflation targeted by the government as part of a stabilization program in making their money demand decision the agents need to construct probability inferences regarding the state of the expenditure process credibility is quantified by the agents inferred probability that the joint observation of inflation the nominal interest rate and government spending is generated by the reformed expenditure regime in an application to israel results indicate that the failed stabilization program of november 1984 was less than fully c

stochastic devaluation risk and the empirical fit of target zone models in the model of this paper an exchange rate fluctuates between given boundaries for random lengths of time and jumps discretely when devaluation occur we provide explicit solutions for the stochastic processes followed by the exchange rate and by the expected rate of depreciation when the likelihood and the size of devaluations vary stochastically over time the model produces realistic patterns of covariation between exchange rates and interest rate differentials and provides interesting interpretations of available empirical evidence we also specify how to infer devaluation risk from target zone data

exchange rates under ems target zones an econometric investigation this study tests krugman s model on exchange rate target zones using four old ems exchange rates those of the currencies of belgium france italy and the netherlands against the deutsche mark vast theoretical literature is available but there are very few empirical studies testing the main results of krugman s model namely the honeymoon effect smooth pasting and the overall s curved relationship between fundamental and exchange rate the present study supports the honeymoon effect but does not find any evidence in support of smooth pasting or of an s curved relationship between the exchange rate and fundamentals for the belgian franc french franc and italian lira against the deutsche mark the dutch guilder very closely follows movements in the german mark throughout the period 1981 90 end of month exchange rates and euro currency interest rates data are used

an emergy and decomposition assessment of china japan trade driving forces and environmental imbalance abstract with the robust development of economic globalization international trade should be fairly conducted in order to strengthen the relations among different nations currently due to different resource endowments and trade policies different nations face different resources and environmental challenges previous studies suggested that even when trade seems balanced in monetary terms it may be unequal in terms of resources exchanges due to different purchasing power of national currencies as such imbalance also exist in terms of environmental quality of traded resources and related environmental costs and emissions such as embodied energy water land carbon ecosystem services under such circumstances it is necessary and urgent to identify environmental imbalance of international trade and seek appropriate tools so that more balanced and fairer trade among nations can be implemented this study investigates the quality of resource flows exchanged between china and japan during the period 2000 2012 emergy accounting a well established environmental accounting method is used in this study to quantify the environmental work past and present ecosystem services embodied in traded resources within a broader emergy based bio physical perspective a logarithmic mean divisia index lmdi decomposition approach is applied to identify the driving forces that affect the evolution of import export resources balance in the investigated period lmdi decomposes the driving forces into three factors a scale factor which depends on the total export volume b technology factor which depends on the emergy intensity of trade emergy of traded resources and c structural factor which depends on the trade structure mix of exchanged commodities results show that china was a net emergy exporter in the years 2000 and 2005 with figures of 7 46e 22 sej yr and 5 76e 21 sej yr respectively but was a net importer in the years 2008 and 2012 with imported emergy figures of 8 82e 22 sej yr and 2 43e 23 sej yr respectively scale and technology factors are the most significant drivers to promote china japan trade from an emergy point of view i e from the point of view of environmental quality assessment while the influence of structural factor was relatively marginal trade imbalance and lack of focus on environmental value of resources cannot be the basis for stable economic relations with partner countries which calls for compensation measures in money or resource terms this study by investigating the sustainability of china japan international trade also suggests a methodological approach to increase worldwide trade stability and fairness

assessing sustainability of soybean supply in china evidence from provincial production and trade data abstract with the increasing demand and limited production china has to import a large amount of soybeans however soybean has been chosen as one target of the recent trade war between the us and china it is therefore critical to assess the sustainability of soybean supply in china under such a circumstance this study aims to fill such a research gap by using an emergy accounting approach from both spatial and temporal perspectives and at provincial level the impact of trade war on soybean imports and production is simulated by one gtap global trade analysis project model the results of emergy sustainability indices esi show that it is urgent to improve the sustainability of soybean planting in heilongjiang while yunnan is the most appropriate place for planting soybean for the international supply the eer emergy exchange ratio of china has decreased by 72 and the decrease of eers at provincial level ranged from 59 to 86 during 2000 2015 the simulation results indicate the necessity of adjusting spatial structure of soybean planting and applying reasonable economic instruments to encourage sustainable soybean production

shared wealth or nobody s land the worth of natural capital and ecosystem services the prerequisite for a sustainable and equitable use of common resources the so called commons must be the proper evaluation of their role within the complex network of relationships that ensure ecosystems functioning resilience and evolutionary dynamics it is crucial to ascertain to what extent the common wealth is used for the common benefit money based schemes for valuing the commons such as the so called willingness to pay provide a user side evaluation perspective based on the idea that value only stems from utilization by humans as a complement to such a point of view we present and discuss in this paper a donor side evaluation method emergy synthesis based on the idea that a proper measure of value can be achieved by also accounting for the work done by the biosphere in generating services and resources it should not be disregarded that such resources and services also provide support to other species in the web of life emergy a scientific measure of such environmental support is suggested as a tool capable to assess quantity and quality of shared resources thus providing a basis for their environmentally sound management

a multi task principal agent approach to organizational form this paper studies the choice of organizational forms in a multi task principal agent model we compare a functional organization in which the firm is organized into functional departments such as marketing and r d to a product based organization in which the firm is organized into product lines managers compensation can be based on noisy measures of product line profits measures of a functional area s contribution to total profits are not available however this effect favors the product organization however if there are significant asymmetries between functional area contributions to organizational success and cross product externalities within functions organizing along functional lines may dominate the product organization the functional organization can also dominate when a function is characterized by strong externalities while the other is not

an overview of mercury emissions by global fuel combustion the impact of international trade abstract this study provides an overview of mercury emissions by global fuel combustion by compiling the detailed inventory as well as elaborating the impact of international trade based on the global fuel related mercury emissions inventory covering 26 sectors in 186 economies for the year of 2010 systems multi region input output analysis is employed for the first time to investigate international trade s impact on mercury emissions induced by each economy the estimated mercury emissions mainly contributed by coal burning are 859 12 t approximately 30 of which are embodied in commodities transported to consumers in other economies via international trade the emerging economies such as mainland china and india are the prominent net exporters of embodied mercury emissions while developed economies like japan germany and the usa are the net importers indicating that developed economies avoided a large amount of direct mercury emissions by transferring the production of emission intensive commodities to developing economies by integrating the direct emissions and the net trade effect mainland china has the largest embodied mercury emissions followed by the usa and india this study verifies the significant role of international trade in drawing a holistic picture of global fuel related mercury emissions the findings also suggest that focusing on the atmospheric mercury pollution directly emitted by local producers in isolation may result in an absurd situation of regional reduction at the cost of global rise it is anticipated that the current study provides insights for forming a reasonable emission responsibility sharing mechanism and facilitating comprehensive abatement strategies

internal organization and economic performance an empirical analysis of the profitability of principal firms business historians have long been aware that organizational innovations have had remarkable productivity ramifications a h cole has asserted that if changes in business procedures and practices were patentable the contributions of business change to the economic growth of the nation would be as widely recognized as the influence of mechanical inventions 9 pp 61 62 some economists have come to recognize the role of organizational innovation kenneth arrow noting that truly among man s innovations the use of organization to accomplish his ends is among both his greatest and earliest 2 p 2441 oliver williamson 271 has further championed the study of organizational innovation doing much to provide the theoretical underpinnings necessary to bring the topic into the corpus of economic theory furthermore richard caves has observed that both corporate strategy and organizational structure influence the economic performance of the firm and the market in which it sells 6 p 641 however structural parameters are absent from the neoclassical theory of production which masquerades as the economic theory of the firm developments in the theory of the firm are unlikely to accommodate organizational structure considerations until connections between structure and performance have been demonstrated empirically the purpose of this paper is to explore the relationships between a particular kind of decentralized and divisionalized internal hierarchical structure what oliver williamson has called the m form innovation 27 ch 81 and firm profitability in essence the methodology involves examining the differential performance between the m form innovator in an industry and its principal rival application of two non parametric statistical tests the sign test and the wilcoxon matched pairs signed ranks test is supportive of the hypothesis that the m form structure is associated with superior firm

ownership organization and private firms efficient use of resources the principal agent theory asserts that public firms performance is driven by efficient capital and labor markets but is silent about non listed private companies which are less permeable to market forces both capital and labor than are public companies we propose and test a 2 x 2 framework distinguishing owner controlled vs agent led firms from firms with a flat vs multilayer organization our findings provide highly contrasted results and raise important issues for further study of private firms

hierarchies and markets abstract whereas previous empirical studies have found performance gains from the adoption of multidivisional organization in u s and u k companies this paper reports a reduction in profitability for german m form firms for several years following reorganization with no sign of an eventual positive gain these results emerge from a cross section analysis of 48 among the top 100 german companies we suggest the constrasting results may flow from certain legal and institutional features not present in the u s and u k attenuating potential gains and enlarging short run transactions costs these include the role of the banks the relative concentration of shareholdings and the dual system of company boards

should multiproduct firms provide divisional or corporate incentives abstract this paper points out some of the implications of the internal organization of a multiproduct firm for its market conduct in particular we study the strategic use of organizational forms based on corporate incentives versus forms based on divisional incentives the equilibrium internal organization is determined in a model with full information it is shown that firms provide corporate incentives when goods are substitutes and divisional incentives when goods are complements and the result holds both in the case of quantity setting and price setting

the role of co2 embodiment in us china trade abstract this study examines the influence of us china trade on national and global emissions of carbon dioxide co2 the three basic questions are as follows 1 what amount of co2 emissions is avoided in the us by importing chinese goods 2 how much are co2 emissions in china increased as a result of the production of goods for export to the us and 3 what are the impacts of us china trade on global co2 emissions our initial findings reveal that during 1997 2003 1 us co2 emissions would have increased from 3 to 6 if the goods imported from china had been produced in the us 2 about 7 14 of china s current co2 emissions were a result of producing exports for us consumers and 3 us china trade has increased global co2 emissions by an estimated 720 million metric tons we suggest that the export of us technologies and expertise related to clean production and energy efficiency to china could be a win win strategy for both countries for reducing their trade imbalance and mitigating global co2 emissions improved international accounting methodologies for assigning responsibility for co2 emissions must be designed to account for the dynamic nature of international trade

the term structure of interest rate differentials in a target zone theory and swedish data abstract the term structure of interest rate differentials is derived in a model of a small open economy with a target zone exchange rate regime for given time to maturity the interest rate differential is decreasing in the exchange rate and for given exchange rate the interest rate differential s absolute value and its instantaneous variability are both decreasing in the time to maturity devaluation realignment risks are incorporated and imply upward shifts of the interest rate differentials several implications of the theory are found to be broadly consistent with data on swedish exchange rates and interest differentials for the period 1986 1989

the foreign exchange risk premium in a target zone with devaluation risk abstract the foreign exchange risk premium in an exchange rate target zone is derived when the exchange rate is heteroskedastic within the band and there is a separate devaluation risk the risk premium is then the sum of two separate risk premia arising from uncertainty about exchange rate movements within the band and from uncertainty about devaluations both real and nominal risk premia are considered real and nominal risk premia from movements within the band are very small real and nominal risk premia from devaluations are larger but still relatively small proportions of the interest rate differential

decision support for target based resource allocation of public services in multiunit and multilevel systems this paper is concerned with the problem of resource allocationand target setting in the provision of public services the paper develops a network based representation of multilevel resource management with equity efficiency and effectiveness being recognised as the fundamental objectives of the system on the modelling side the proposed method combines data envelopment analysis and goal programming formulations integrated within an interactive planning framework an illustrative application on fire departments is used to show the applicability of the method developed to assist the resource allocation process