banking technology and the existence of a consistent output aggregate abstract this paper addresses the question of the existence of a consistent output aggregate in banking specific necessary and sufficient conditions for output aggregation are developed and tested in the context of a second order approximation to any arbitrary multi product bank cost function the analysis provides evidence that a composite aggregate measure of output fails to provide a proper representation of banking technology and therefore previous studies that used aggregate output measures may well be subject to specification errors

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

how bank capital buffers vary across countries the influence of cost of deposits market power and bank regulation abstract this paper analyzes the bank and country determinants of capital buffers using a panel data of 1337 banks in 70 countries between 1992 and 2002 after controlling for adjustment costs and the endogeneity of explanatory variables the results show that capital buffers are positively related to the cost of deposits and bank market power although the relations vary across countries depending on regulation supervision and institutions their impact is the result of two generally opposing effects restrictions on bank activities and official supervision reduce the incentives to hold capital buffers by weakening market discipline but at the same time they promote higher capital buffers by increasing market power institutional quality has the two opposite effects better accounting disclosure and less generous deposit insurance however have a clear positive effect on capital buffers by both strengthening market discipline and making charter value better able to reduce risk taking incentives

bank competition and credit standards this article offers an explanation for the substantial variation of credit standards and price competition among banks over the business cycle as the economic outlook improves the average default probabilities of borrowers decline this affects the profitability of screening and causes bank screening intensity to display an inverse u shape as a function of economic prospects low screening activity in expansions creates intense price competition among lenders and loans are extended to lower quality borrowers as the economic outlook worsens price competition diminishes and credit standards tighten significantly deposit insurance may contribute to the countercyclical variation of credit standards copyright 2004 oxford university press

assessing bank competition for consumer loans abstract based on frontier analysis we derive inferences of bank consumer loan competition from estimating a revenue cost competition efficiency ce frontier the competitiveness of the 400 billion u s bank consumer loan market is then assessed by comparing results from our frontier ce measure with other competition measures such as hhi lerner index and h statistic these measures are weakly related to one another and only half of them identify banks with the highest loan price as also being the least competitive this is the opposite of what is expected using the frontier ce measure the most and least competitive banks are not located in the most populous states and the largest banks are underrepresented overall the hhi should not be used to indicate competition

imperfect competition in a multi security market with risk neutrality the central purpose of this paper is to develop a model of insider trading i e trading based on private information in the context of an imperfectly competitive multi security market with risk neutral agents imperfect competition allows us to consider strategic behavior and a multi security market lets us study the effect of a correlated environment on equilibrium we employ the informational assumption that market makers can observe all order flows and so portfolio diversification arises in this model for strategic reasons given correlated fundamentals market makers can potentially learn about every security from each order flow this causes even a risk neutral trader who does not face short selling restrictions to refrain from determining the demand for each security independently this contrasts with traditional multi asset models which focus on the incentive to reduce portfolio variance or the effect of short selling restrictions or budget constraints under imperfect competition correlation has two effects one ceteris paribus it allows the uninformed to learn from additional variables since each order flow could potentially have information about all payoffs on the other hand it creates an incentive for informed traders to restrict what others can learn from public information thus our analysis can be viewed as an application to the multi security heterogeneous information model in admati 1985 of the imperfectly competitive equilibrium concept which kyle 1985 first applied to the single security homogeneous information model of grossman and stiglitz 1980 our principal results include an explicit characterization of a linear equilibrium as a function of three general covariance matrices associated with payoffs noise trading and errors in private signals under general covariance structures we show that there always exists an equilibrium in which the relationship between the vector of prices and the vector of order flows is governed by a symmetric positive definite matrix the plan of the paper is as follows in section 2 we introduce our model we derive the equilibrium in section 3 and section 4 comments on the properties of the equilibrium the proofs of the results are in the appendix

a study of bank efficiency taking into account risk preferences abstract i use the stochastic cost frontier approach to investigate efficiency of banks operating in the third federal reserve district accounting for the quality and riskiness of bank output in addition to the mean and mode of the conditional distribution of the one sided error term i calculate confidence intervals for the inefficiency measures based on the conditional distribution the results indicate that third district banks are operating at cost efficient output levels and product mixes but are not efficiently using their inputs the second part of the article relates the inefficiency measures to several correlates

temporal and spatial variations in consumption based carbon dioxide emissions in china china s co2 emissions have sharply increased in recent years with soaring economic development and urbanization consumption based accounting of co2 emissions could provide new insights for allocating regional mitigation responsibility and curbing the emissions a multi regional input output model is used to study the trends and disparities of consumption based emissions from chinese provinces during the period 2002 2007 results show that china s consumption based co2 emissions grew from 3549 mt in 2002 to 5403 mt in 2007 with an annual average growth rate of 8 8 the annual growth rate in the richer eastern region was over 10 because of a rapid increase in capital investment and the growth of urban consumption consumption based co2 emissions embodied in interprovincial trades contributed only 10 351 mt to the national total of such emissions in 2002 but 16 864 mt in 2007 given low per capita emissions currently china s consumption based emissions have much room to grow because of further development of urbanization and stimulation of domestic demand the government should pay greater attention to controlling co2 emissions from a consumption based perspective 2014 elsevier ltd

accounting for china s regional carbon emissions in 2002 and 2007 production based versus consumption based principles abstract analysing the characteristics of virtual carbon flows among regions is essential for china to deploy effective regional mitigation strategies this study established a multi regional input output model to assess the characteristics of interregional carbon flows and account for carbon emissions by different regions according to one production based and two consumption based accounting principles results indicate that interregional carbon flows grew from 136 4 mtc in 2002 to 377 8 mtc in 2007 the proportion of total national emissions represented by interregional carbon flows rose from 15 2 in 2002 to 21 1 in 2007 therefore different accounting principles tend to have more and more different impacts on the emission responsibility that a region is assumed to take according to the results under different accounting principles the northeast and northwest regions will need to assume much greater emission responsibilities under the production based principle than under either of the consumption based principles the eastern coastal and southern coastal regions in contrast will need to assume much greater emission responsibilities under the two consumption based principles moreover the carbon flows from the central and northwest regions to the eastern coastal region were the greatest contributors to both the total interregional carbon flows in 2007 and the growth in interregional carbon flows from 2002 to 2007 given this situation and considering the economic disparity among these regions methods similar to the joint implementation could be considered when discussing the regions emission responsibilities results also indicate that the total use direct emission principle is a more feasible and practical consumption based choice

sources and flows of china s virtual so 2 emission transfers embodied in interprovincial trade a multiregional input output analysis abstract china faces immense difficulties caused by its domestic regional air pollution caused by atmospheric diffusion of pollutants across administrative boundaries because of the closer interregional economic connections that have formed in this study we focus on the virtual flows of pollutants embodied in interprovincial trade we compared two methods embodied emissions in bilateral trade eebt and the multiregional input output mrio model to determine emission flows for 2002 and 2007 and found that the results between these two approaches differed significantly particularly for the year 2007 this indicates that the choice of the accounting method has obvious impacts on subsequent decisions further analysis based on the mrio method which captures the complete interregional supply chains and is more applicable to consumption based studies showed that the embodied so 2 emissions in interprovincial trade accounted for 27 58 of the total so 2 emissions in china in 2002 and 35 25 in 2007 inner mongolia shanxi and guizhou were the major embodied emission exporting regions with sources mainly from the electricity nonmetal mineral production chemicals and metal smelting sectors the exported emissions mainly ended up in rich provinces including beijing tianjin shanghai and guangdong due to those provinces final demands for products of the construction food production and transport equipment manufacturing sectors furthermore rich provinces were net importers in interprovincial trade with a pollution terms of trade value less than one the results yield important implications for china s air pollution controls emission reduction tasks should be reasonably distributed among provinces to prevent developed provinces from outsourcing more pollution emissions to less developed provinces through interprovincial trade regulation of consumption in developed provinces would help to control national pollution financial and technical support for pollution control should favor the less developed regions

input output analysis of co2 emissions embodied in trade the effects of sector aggregation abstract energy related co2 emissions embodied in international trade have been widely studied by researchers using the environmental input output analysis framework it is well known that both sector aggregation and spatial aggregation affect the results obtained in such studies with regard to the latter past studies are often conducted at the national level irrespective of country or economy size for a large economy with the needed data studies may be conducted at different levels of spatial aggregation we examine this problem analytically by extending the work of su et al su b huang h c ang b w zhou p 2010 input output analysis of co2 emissions embodied in trade the effects of sector aggregation energy economics 32 1 166 175 on sector aggregation we present a numerical example using the data of china and by dividing the country into eight regions it is found that the results are highly dependent on spatial aggregation our study shows that for a large country like china it is meaningful to look into the effect of spatial aggregation

china s emissions embodied in exports how regional and trade heterogeneity matter abstract trade facilitates the shifts of emissions from one place to another although studies have shown that regionally disaggregated model and model that distinguishes processing exports at national level are necessary to estimate the embodied emissions in china s exports no study evaluates this issue by simultaneously taking both regional and trade heterogeneity into account to fill this gap we re estimate the co2 emissions embodied in china s exports at both regional and industrial level by using the newly developed inter regional input output iriop model that distinguishes processing trade from other trade at regional level results show that comparing to the iriop model the traditional multi regional input output mrio model has overestimated the environmental loss from exports by 14 25 in 2002 and 7 20 in 2012 for different regions the largest bias is found in regions and industries with the highest processing export shares therefore the iriop model gives more accurate accounting on the regional environmental loss due to national exports and thus is important for establishing effective emission mitigation policies

entry barriers and multiproduct oligopolies do they forebear or spoil abstract we provide a flexible method to test for a variety of multiproduct oligopolistic models and to estimate the relevance of entry conditions on industrial conduct we find that for the case of the uruguayan banking sector during the late 1970s multiproduct oligopolistic interactions were present however the partial relaxation of legal entry barriers substantially removed the multiproduct nature of these interactions

measuring multi product banks market power using the lerner index abstract the aggregate lerner index is a popular composite measure of multi product banks market power based on total assets as the single aggregate output factor we show that the aggregate lerner index only qualifies as a consistently aggregated lerner index if three conditions hold under these conditions the aggregate lerner index reduces to a weighted average of the product specific lerner indices we test the three conditions for a sample of u s banks covering the years 2011 2017 all three conditions are rejected and we show that they may cause an economically relevant bias to the aggregate lerner index depending on the economic context as a general solution we propose using the always consistently aggregated weighted average lerner index whenever a composite lerner index is needed

china s inter regional spillover of carbon emissions and domestic supply chains in this study we apply the inter regional input output model to explain the relationship between china s inter regional spillover of co2 emissions and domestic supply chains for 2002 and 2007 based on this model we propose alternative indicators such as the trade in co2 emissions co2 emissions in trade and the regional trade balances of co2 emissions our results do not only reveal the nature and significance of inter regional environmental spillover within china s domestic regions but also demonstrate how co2 emissions are created and distributed across regions via domestic and global production networks results show that a region sc o2 emissions depend on its intra regional production technology energy use efficiency as well as its position and participation degree in domestic and global supply chains 2013 elsevier ltd all rights reserved

how to measure the market power of banks in the lending business accurately a segment based adjustment of the lerner index numerous empirical studies use the price cost margin based lerner index li to assess the general market power of banks a common procedure within those li applications is to approximate the market price required for the li measurement as the ratio of a bank s total revenues to total assets we discuss the major flaws of this aggregated procedure and propose an adjusted i e business segment orientated li approach which is then applied to assess the market power of banks in the specific lending business at the country level our empirical study is based on an original data set containing all interest related categories weighted by the respective loan as well as deposit volumes in the countries of the european monetary union zone emu from 2003 to 2013 our results reveal that the country specific market power of banks in the lending business has been substantially underestimated in previous studies based on aggregated outputs for example averaged across the five most important economies in the em

long lived private information and imperfect competition we develop a multi period auction model in which multiple privately informed agents strategically exploit their long lived information we show that such traders compete aggressively and cause most of their common private information to be revealed very rapidly in the limit as the interval between auctions approaches zero market depth becomes infinite and all private information is revealed immediately these results are in contrast to those of kyle 1985 in which the monopolistic informed trader causes his information to be incorporated into prices gradually and when the interval between auctions is vanishingly small market depth is constant over time fama 1970 defines a strong form efficient market as one in which security prices fully reflect all available information including both publicly and privately held information in a pioneering and influential article kyle 1985 develops a model in which a single privately informed trader with long lived information optimally exploits his monopoly power over time kyle s 1985 main results are i the informed trader trades in a gradual manner so that his information is incorporated into prices at a slow almost linear rate and ii when auctions are held continuously the depth of the market is constant over time however kyle s 1985 assumption of a single informed trader is strong in the sense that in actual financial markets it is reasonable to expect that at least a few players will have access to private information and will trade in the knowledge that they will face competition with other informed agents in the market 1 we develop a multi period auction model in which multiple strategic informed traders optimally exploit their long lived informational advantage we thus explore the restrictiveness of kyle s assumption of a single informed trader and also examine

the co2 trade balance between scotland and the rest of the uk performing a multi region environmental input output analysis with limited data in this paper we attempt an empirical application of the multi region input output mrio method proposed by turner lenzen wiedmann and barrett turner k lenzen m wiedmann t barrett j 2007 examining the global environmental impact of regional consumption activities part 1 a technical note on combining input output and ecological footprint analysis ecological economics 62 1 37 44 in a recent issue of this journal in order to enumerate the co2 pollution content of interregional trade flows between scotland and the rest of the uk ruk we extend the analysis to account for direct emissions generation by households as final consumers and to a social accounting matrix sam where a more comprehensive account of incomes and expenditures is possible while the existence of significant data problems mean that the quantitative results of this study should be regarded as provisional the interregional economy environment io and sam framework for scotland and ruk allows an illustrative analysis of some very important issues in terms of the nature and significance of interregional environmental spillovers within the uk and the existence of a co2 trade balance between scotland and ruk

non structural measures of competition toward a synthesis of alternatives abstract procedures for detecting or measuring market power have been suggested in recent years by iwata rosse and panzar and bresnahan this paper integrates elements from all three approaches to provide a single more unified alternative to the structure conduct performance paradigm

the simple analytics of competitive equilibrium with multiproduct firms the familiar model of free entry competitive equilibrium has long played a central role in applied analysis of product markets among its stylizations is the restriction that firms produce a single output for many situations however it is necessary to relax this assumption while models permitting multiproduct firms exist so far there is no framework that begins to rival the singleproduct analysis in terms of the ease with which it may be manipulated and extended to deal with specific applications this paper develops such a model specifically in section i a two good model is set out that parallels the classic singleproduct analysis very closely the sole difference is that alongside the single product specialized technologies which would usually be permitted a multiproduct diversified technology is available the model s competitive equilibrium is then characterized and it is shown that this equilibrium may take one of three forms obviously if diversification offers large cost advantages no specialized firms can operate in equilibrium and conversely if there are sizable disadvantages the only other possibility is that diversified firms and exactly one type of specialized firm operate contiguously section ii shows that the model is easy to manipulate extends straightforwardly and simple as it is offers some new propositions this demonstration involves examining the predictions the model offers in both its most general form and several extensions to illustrate basic features of equilibrium in the standard single product environment are that price is determined by the cost of production with all operating firms producing the same level of output also demand variation has no effect on either price or the actions of these firms in contrast in any equilibrium centre for decision sciences and econometrics social science centre university of western ontario london ontario n6a 5c2 comments from david donaldson ignatius horstmann boyan jovanovic peter lloyd michael parkin charles plott edward prescott sherwin rosen christopher robinson hugo sonnenschein and the referees are gratefully acknowledged research allowing multiproduct firms comes in a variety of forms early work by roy g d allen 1938 john hicks 1939 paul samuelson 1947 as well as more recent efforts by keith laitinen 1980 analyzed in detail the isolated behavior of firms having access to an m input n output production technology also the arrow debreu mckenzie general equilibrium model allows each producer a distinct production set so that firms might choose to produce many goods more recently the contestability literature surveyed by elizabeth bailey and ann friedlander 1982 analyzes a setting in which firms produce more than one good of all the contestability material the work of william baumol et al 1982 ch 9 is the most closely related to the present analysis therein firms are permitted to choose a set of goods to produce and a condition is provided that is necessary and sufficient for the otherwise exogenously imposed symmetric outcome to be supported in equilibrium that this condition is indeed a relevant restriction is shown by means of a two good numerical example in which the condition fails and the equilibrium is asymmetric finally there is what might be termed the where there is sawdust there may be pressed logs approach dating back at least to alfred marshall 1920 pp 321 22 in which joint products are the result of unstructured technological complementarities

embodied environmental damage in interregional trade a mrio based assessment within china abstract a new lifelong accountability system for ecological and environmental damage will be established for local officials in china however if this new production based accountability system does not consider the responsibilities of consumers it is likely to aggravate the imbalance of regional development using a multi regional input output model this paper tracked the environmental damage transfers in interprovincial trade trade related damage from four major pollutants was quantified for each province in 2007 the results show that nearly 45 of the environmental damage that occurs at home to meet consumption in other regions can be ascribed to the interprovincial trade flows in china in 2007 the north municipalities the east coast and the south coast where the share of production based environmental damage in relation to the local gdp is lower transferred environmental damage to the developing northwest and central regions to make the local gdp greener via interregional trade leading to inequality in regional development it is suggested that the importance of environmental damage from a consumer perspective should be integrated into the future implementation of the new lifelong accountability system

trade factor proportions and political rights abstract this paper uses aggregate data to test the implication that capitalpoor individuals favor trade liberalization in poor capital scarce countries and are against it in rich labor scarce countries income per capita is used as a proxy for the country capital labor ratio while political rights is used as a proxy for the capital labor ratio of the median voter we analyze the determinants of average tariff rates in a cross section of countries to find that they are negatively associated with both income per capita and political rights while they are positively significantly and robustly associated with their interaction corroborating our initial hypothesis

optimal departures from marginal cost pricing focuses on departures from marginal cost pricing optimal allocation or resources level of tax revenue that will be collected by the government theorems developed for resource allocation ebsco

informed speculation with imperfect competition competitive rational expectations models have the unsatisfactory property dubbed the schizophrenia problem by hellwig that each trader takes the equilibrium price as given despite the fact that he influences that price an examination of information aggregation in a non competitive rational expectations model using a nash equilibrium in demand functions shows that the schizophrenia problem is avoided by having each trader take into account the effect his demand has on the equilibrium price given a distribution of private information across traders prices reveal less information than in the competition equilibrium and prices no longer become fully informative in the limit as noise trading vanishes or as traders become risk neutral with small traders the model may become one of monopolistic competition not perfect competition in contrast to the competitive model a reasonable model of endogenous acquisition of costly private information is obtained even when traders are risk neutral