source diversification and import price risk in this article i present a theoretical framework and derive an empirical model that relates import price risk to the allocation of an import across exporting sources source diversification a differential approach to expected utility theory and firm demand is used to derive a model comparable to more popular demand systems such as the rotterdam and aids models the model is used in estimating carnation demand in the united kingdom results show that while total carnation imports expected prices and seasonality are important determinants of import demand by source there is significant information loss when price risk is not considered copyright 2012 oxford university press

geo economic approach to energy security measurement principal component analysis abstract currently there is no single accepted methodology for measuring energy security while the prevailing scientific attitude is that energy security should be defined and quantified in a way to be able to follow rapid developments on the global economic and geopolitical scene considering the fact that the national economies represent an integral part of a dynamic international economy where external shocks global financial and economic crisis political conflicts war etc have the impact on energy prices and energy security in general the paper proposes a new geo economic concept of energy security the new approach differs from the existing ones as regards the fact that in addition to basic indicators it takes into account sovereign credit rating as a measure of economic financial and political stability as one of the decisive factors which determines global energy trade and the ability of national economies to be stable and secure when it comes to energy determination and testing of geo economic index of energy security was conducted by using the principal component analysis in the european union and in the selected countries of the world over a period of ten years 2004 2013 the measured values of a newly proposed geo economic index of energy security demonstrate significant deviations from the data obtained by using usual indicators of energy security observed individually gdp per capita has the greatest impact on the change in final value of geo economic index of energy security while the impact of sovereign credit rating is slightly less the study has shown that the least impact on energy security is exerted by energy dependence which is traditionally used as a proxy indicator of energy security and production of energy from renewable sources which is defined by the eu policy as one of the methods for the improvement of energy security due to the results obtained it is necessary to conduct further analysis of sovereign credit rating and to review the type and significance of the impact of energy dependence indicator as a measure of energy security in general

exchange rate uncertainty and agricultural trade panel cointegration analysis for turkey this study addresses the impact of exchange rate levels and uncertainty on bilateral agricultural trade between turkey and 20 major trading partners using panel cointegration analysis for annual data covering the period 1980 2005 results show that i the exchange rate level is less robustly linked to trade volumes than is exchange rate uncertainty ii exchange rate uncertainty is associated with smaller trade volumes in both directions but more so for imports than for exports and iii income growth in turkey is associated with greater imports just as income growth among trading partners is associated with greater exports these findings provide some clues for understanding the recent patterns of turkish agricultural trade and suggest directions for future research

marketing margins and price uncertainty the case of the u s wheat market this paper seeks to determine the effect of changes in output price risk on marketing margins a theoretical model of price determination in a marketing channel with risk averse firms is developed this model shows that if marketing firms are competitive and decreasingly absolute risk averse then an increase in output price risk should result in higher expected marketing margins empirical evidence from the wheat marketing channel supports the theoretical model increased price variability significantly increases wheat marketing margins for both the farm mill margin and the mill retail margin these results suggest a potential benefit from price stabilization programs

using subjective income expectations to test for excess sensitivity of consumption to predicted income growth abstract we test for precautionary saving and excess sensitivity of consumption to predicted income growth using a 1989 1993 panel survey of italian households that has measures of subjective income and inflation expectations these expectations provide a powerful instrument for predicting income growth the empirical specification controls for predictable changes in labor supply and allows a fairly general specification for the stochastic structure of the forecast error we find that consumption growth is positively correlated with the expected variance of income and uncorrelated with predicted income growth overall the results support the precautionary saving model

conscientious vs ambivalent consumers do concerns about energy availability and climate change influence consumer behaviour abstract energy availability and climate change are interrelated concerns with economic components they need to be addressed by policy makers and they require changes in energy consumption this study examines whether concerns about energy availability and climate change influence consumer behaviour policy perceptions and beliefs about future energy consumption this question is investigated by analysing data from the eurobarometer 75 4 a comprehensive survey of citizens from all countries of the european union that was conducted in june 2011 n 26 840 the regression results show that people concerned about climate change were significantly more likely to take action to mitigate climate change and to be more favourably disposed towards energy policies and future changes in energy consumption than people who were not concerned about climate change on the other hand people who were concerned about energy availability undertook fewer actions and neither supported energy policies nor believed in future changes in energy consumption this surprising finding raises questions regarding the adequate communication of energy availability and policies to the public in the european union

sources procedures and microeconomic effects of innovation fabio arcangeli paul david frank engelman christopher freeman massimo moggi richard nelson luigi orsenigo nathan rosenberg michele salvati g n von tunzelman two anonymous referees and the participants at the meeting of the committee on distribution growth and technical progress of the italian national research council cnr rome november 16 1985 have helped with various redraftings a particularly grateful acknowledgment is for the insightful and patient help of moses abramovitz this work has been undertaken at the science policy research unit spru university of sussex as part of the research program of the designated research centre sponsored by the economic and social research council esrc earlier support to the research that led to this paper by the italian national research council cnr is also gratefully acknowledged the statistical research has been undertaken with the assistance of stephano brioschi ilaria fornari and giovannu prennushi

quantifying the supplier portfolio diversity of embodied energy strategic implications for strengthening energy resilience this paper investigates energy resilience of countries by quantifying the supplier diversification of both direct and embodied energy import in particular we quantify two approaches to diversify a country s supplier portfolio by lowering the dependency on each supplier portfolio diversification and by having embodied energy suppliers that are different from its direct energy suppliers portfolio differentiation we examine possibilities for strategic utilization of embodied energy trade to compensate for low diversity of direct energy trade for three types of fossil resources coal oil and gas we find that the diversity of embodied energy import is much greater than that of direct energy import of the three energy resources coal enables countries to adopt portfolio diversification and portfolio differentiation more than gas and oil our results suggest embodied energy can be considered as a transfer of energy resources across national borders that can directly benefit from the diversity of the world energy production by skipping the limited diversity of the world energy export

exchange rate uncertainty and agricultural trade using a sample of bilateral trade flows across ten developed countries between 1974 and 1995 this article explores the effect of exchange rate uncertainty on the growth of agricultural trade as compared to other sectors based on a gravity model that controls for other factors likely to determine bilateral trade the results show that real exchange rate uncertainty has had a significant negative effect on agricultural trade over this period moreover the negative impact of uncertainty on agricultural trade has been more significant compared to other sectors

the first law of petropolitics finalversion received19 april2011 we examine empirically the relationship between crude oil prices and the ebb and ow of democratic insti tutions in order to test the hypothesis that high oil prices undermine democracy and sustain autocracy we use a variety of time series and panel data methods over a wide range of country subsamples and timeperiods nding strictly no evidence in favour of this so called first law of petropolitics friedman2006

the statistical distribution of exchange rates empirical evidence and economic implications the abundant evidence that changes in exchange rates have distributions with fatter tails than the normal distribution has led researchers to consider non normal distributions including the student the stable paretian and mixtures of distributions this paper compares the empirical fits of three non normal candidates and the normal distribution for daily changes in the logarithms of exchange rates using maximum likelihood estimation of the parameters and chi square goodness of fit tests the student and mixture of two normals provide the best fits but there is evidence that the distribution parameters may vary over time

opportunities incentives and the collective patterns of technological change in a few pages in the introductory article for this debate vernon ruttan succeeds in the unlikely task of flagging many issues at the core of the economic interpretation of technological change and by doing so he implicitly addresses also a few sensitive spots for the economic discipline at large here i will not attempt to provide any thorough view of what i consider the achievements and limitations of the current state of the art see however freeman i 994 for a critical survey which i largely share rather i shall put forward a series of remarks which hopefully could be seen as part of a much wider and still largely unexplored research programme as a premise just note that some form of attention to technology related phenomena has spread over the last 20 30 years from small enclaves of heterodox economists and economic historians to become an important concern even for quite mainstream theories of e g the firm industrial organisation macroeconomics trade growth etc from patent races all the way to new trade and new growth theories and even real business cycle macro models technical change has drawn a consideration which is less by default than it was say in robert solow s original growth models orjoe bain s barriers to entry views on industrial structures and in parallel empirical studies at the levels of specific technologies firms sectors and countries have boomed for overviews cf dosi i988 nelson i993 freeman i982 i 994 cohen i 995 and granstrand i 994 among others so at least in this sense those decreasing returns to the economics of technical change suggested by ruttan do not seem to have set in however ruttan s paper raises also substantive questions about the relative success of three interpretative perspectives which he calls induced evolutionary and path dependent in the following i shall argue that an evolutionary perspective broadly defined can easily accommodate both inducement effects and path dependent patterns of technical change let me start from what i consider the major building blocks of an

the evolution of engel curves and its implications for structural change theory the tendency for expenditure engel curves to flatten out at high income levels is frequently cited as evidence that major shifts in household spending patterns take place as households become more affluent empirically little has been done to examine i how pervasive this tendency is across the engel curves of different goods and services ii whether the rate at which engel curves flatten out may significantly change over time and iii how robust engel curves are in the face of changes in the income distribution of households using data from the uk family expenditure survey we find evidence that the tendency for engel curves to flatten out which we dub saturation is indeed widespread across a wide range of goods and services however a tendency for their shape to shift over time and for these shifts to co move with changes in the income distribution of households casts some doubt on whether the declining slope of engel curves can be used to predict slowdowns in the growth rate of demand for particular goods and services

loss aversion in a consumption savings model abstract we propose a model of consumption and saving based on kahneman and tversky s prospect theory that implies a fundamental asymmetry in consumption behavior inconsistent with other models of consumption when there is sufficient income uncertainty a person resists lowering consumption in response to bad news about future income this resistance is greater than the resistance to increasing consumption in response to good news we present empirical evidence from five countries that confirms this behavior

bandwagons and the threat of chaos interpersonal effects revisited abstract this paper extends granovetter and soong s work on bandwagons by introducing interpersonal effects at the level of preferences rather than at the level of demand it is found that markets generally will not follow the first order difference equations analyzed by g s because consumers will form expectations based on the market s entire history rather than the last period alone when those expectations are adaptive and the rate of expectations adjustment sufficiently low the threat of unstable and chaotic dynamics is eliminated the paper also describes the efficiency problems generated by interpersonal effects

consumer behaviour theory and empirical evidence a survey this survey is designed to emphasize the relationship between empirical a nd theoretical considerations in the analysis of consumer behavior a lthough it focuses primarily on analysis at the individual or micro l evel it tries where possible to draw implications for the estimati on of aggregate relationships the importance of micro level analysis stems from the rapid expansion in available panel and survey data se ts this development has generated its own theoretical and empirical issues many of which are raised in this survey copyright 1988 by royal economic society

union contracts and the life cycle permanent income hypothesis this paper isolates households in the psid whose heads can be matched to particular long term union contracts with high confidence the author uses use published information on these contracts to construct a household specific measure of expected wage growth he finds that predictable wage movements are significantly correlated with consumption changes contrary to neoclassical consumption theory the author finds that consumption responds more strongly to predictable income declines than to predictable income increases this asymmetry is inconsistent with liquidity constraints and myopia but is qualitatively consistent with models in which preferences exhibit loss aversion copyright 1995 by american economic association

the effects of real exchange rate risk on international trade abstract by assuming real profit maximization and uncertain prices as well as exchange rates we conclude that it is uncertain percentage changes in the real exchange rate that are risky in international trade empirical estimation of fourteen bilateral trade flows among industrialized countries finds a significant negative effect on trade quantity from such risk in a number of these cases the expectation variable has a positive effect in a larger number of cases significant price effects from the expectation variable are fewer and from risk are negligible

global energy security and the implications for the eu abstract the following article will analyse the global and geopolitical dimensions of the future international energy security and its implications for europe and the eu 27 in this context i will discuss to which extent the eu s newly proclaimed energy action plan of the eu spring summit of 2007 and its declared common energy foreign policy are a sufficient strategy to cope with the new global and geopolitical challenges the article concludes the following 1 the interlinkage between globally designed traditional energy security concepts that rely just on economic factors and market strategies and domestic as well as regional political stability demands new thinking with regard to both energy supply security and foreign and security policies 2 although after the russian ukrainian gas conflict in january 2006 energy security has forced its way up the european energy and foreign policy agendas the eu 27 member states have largely failed to forge a coherent european energy security and energy foreign policy strategy after their spring summit of 2007 because its declared political solidarity has been still lacking but the 2nd strategic energy review of november 2008 has recommended new initiatives to overcome this lack by promoting concrete infrastructure and other projects for enhancing europe s supply security and its political solidarity as part of a common energy foreign policy if the eu is able to implement the march 2007 and november 2008 decisions the eu oil and gas demand will drastically reduce and freeze at current levels in this case putin s energy policies by using russia s energy resources and pipeline monopolies as a political instrument to enforce its economic and geopolitical interests will be proved as self defeating in russia s long term strategic interests it will reduce gazprom s gas exports to a much smaller eu gas market than originally forecasted as the result of a deliberate eu policy of decreasing its overall gas demand and by diversifying its gas imports

the integration of the market for soybeans and soybean products abstract this article addresses the question of whether soybeans soybean meal and soybean oil produced in the usa and exported were part of a single world geographic market during the decade of the 1980s an answer to this question is sought using an approach to defining a geographic market based on the notion of instantaneous causality the empirical results based on prices for soybeans soybean meal and soybean oil for three spatially diffuse locations suggest that there was but a single identifiable world market for these commodities over the period of study this has implications for the continued presence of soybean production subsidies and discussions on international agreements designed to reduce or eliminate these subsidies

excess sensitivity and asymmetries in consumption an empirical investigation most empirical studies on liquidity constraints classify a consumer as being constrained on the basis of a single indicator such as the asset to income ratio in this analysis the authors model the probability that a consumer faces liquidity constraints as a function of multiple social and economic factors this probability function is estimated simultaneously with the degree of excess sensitivity of consumption to income in a switching regressions framework the switching regressions apply optimal weights to the densities for the euler equations in the two states and are less susceptible to sample misclassification our results based on data from the cex confirm that liquidity constrained consumers are excessively sensitive to variables already known to economic agents however there is also evidence that the unconstrained consumers exhibit behavior that is inconsistent with the theoretical predictions further analysis suggests that such behavior could be explained by time non separable preferences copyright 1997 by ohio state university press

measuring and analysing the effects of short term volatility in real exchange rates this paper examines short term volatility in the real effective exchange rates of industrial countries and its impact on their imports it yields three conclusions first volatility has not diminished as markets have gained experience with floating exchange rates the trend appears to be in the opposite direction for some countries second exposure to short term volatility has differed among countries japan and sweden have experienced much more than most other industrial countries third volatility appears to depress the volume of international trade this third finding is consistent with results reported by cushman and by akhtar and hilton and challenges earlier findings by hooper and kohlhagen

statistical properties of country risk ratings under oil price volatility evidence from selected oil exporting countries abstract this paper focuses on the application of panel models for identification and analysis of influence of oil price volatility on statistical properties of country risk ratings which stem from uncertainty of macroeconomic fluctuations firstly two statistical properties of country risk ratings volatility clustering and asymmetrical revision were identified in a theoretical framework based on cruces 2006 secondly considering the oil price volatility numerical experiments were conducted based on extended models to test and verify specific properties of country risk ratings in selected oil exporting countries empirical results suggest that properties of country risk remain comparatively steady despite oil price volatility it is also found that the oil price volatility can obviously exaggerate the country risk volatility as it happened during 2007 2009 country clustering based on the properties of country risk ratings shows that the selected countries maintain a significant clustering tendency these features are of great importance for estimating risk exposure of international trade and investments in oil export during extreme situations

excess sensitivity of consumption to income growth a model of loss aversion the article provides an empirical test on micro data of a model of individual behavior based on loss aversion utility is s shaped i e concave above reference consumption and convex below it as a consequence individuals do not reduce current consumption in response to an expected income decline as long as uncertainty is high enough such a behavior is consistent with excess sensitivity of consumption to income growth an empirical regularity which is hard to explain within a standard life cycle model loss aversion is tested on an italian dataset the bank of italy s survey on households income and wealth the conclusion is that excess sensitivity could be explained by a model that do not assume individuals to be expected utility maximizers copyright 2009 oxford university press

exchange rate uncertainty and us bilateral fresh fruit and fresh vegetable trade an application of the gravity model in order to analyse the effect of exchange rate uncertainty we apply an empirical gravity equation to two sets of us bilateral trade data fresh fruit over the period 1976 1999 for a panel of 26 countries and fresh vegetables over the period 1976 2006 for a panel of nine countries based on panel estimation methods and using both a moving sd measure and the peree and steinherr 1989 measure of exchange rate uncertainty the results show that us bilateral fresh fruit trade has been negatively affected by exchange rate uncertainty we also find some evidence that the exchange rate between the us dollar and the currencies of latin american trading partners accounts for most of the negative impact of exchange rate uncertainty on bilateral trade flows in fresh fruit in contrast when using panel estimation methods and both measures of exchange rate uncertainty we find no statistically significant evidence for any negative effect of exchange rate uncertainty on us bilateral fresh vegetable trade however

the market for preferences learning processes are widely held to be the mechanism by which boundedly rational agents adapt to environmental changes we argue that this same outcome might also be achieved by a different mechanism namely specialisation and the division of knowledge which we here extend to the consumer side of the economy we distinguish between high level preferences and low level preferences as nested systems of rules used to solve particular choice problems we argue that agents while sovereign in high level preferences may often find it expedient to acquire in a pseudo market the low level preferences in order to make good choices when purchasing complex commodities about which they have little or no experience a market for preferences arises when environmental complexity overwhelms learning possibilities and leads agents to make use of other people s specialised knowledge and decision rules

an empirical analysis of earnings and employment risk the mean and higher moments of the distribution of future income are crucial determinants of individual choices these moments are usually estimated in panel data from past income realizations inthis article we rely instead on subjective expectations available in the 1995 survey of household income and wealth a large random sample representative of italian households the survey elicits information on the distribution of future earnings and on the probability of unemployment analysis of this distribution helps us understand how individual uncertainty evolves over the life cycle and if attitudes toward risk affect occupational choices and income riskiness

consumption puzzles and precautionary savings abstract when marginal utility is convex agents accumulate savings as a precautionary measure against labor income eventualities this paper shows that precautionary savings can go a long way in making the excess growth excess smoothness and excess sensitivity features of consumption consistent with the stochastic processes of labor income observed in the u s at the microeconomic level

bilateral trade flows the linder hypothesis and exchange risk bilateral trade flows are used to examine the linder hypothesis and the effect of exchange rate variability in a gra vity type trade model derived from an underlying demand and supply mo del a behavioral model is used to justify examining these issues joi ntly the model performs well empirically using a sample of seventeen countries for the period 1974 82 the authors find overwhelming supp ort for the linder hypothesis and this version of the gravity model moreover they find strong support for the hypothesis that increased exchange rate variability affects bilateral trade flows copyright 1987 by mit press

talk is cheap although friedrich a von hayek leonid hurwicz and others stressed how the price system communicates private information on preferences technology and endowments our main means of communication is surely words but it is unclear whether mere words can be trusted absent outside sanctions for lying such as perjury law or a valuable reputation for honesty talk is cheap the perspective of the standard theory of signaling seems to suggest that cheap talk should be uninformative but this is misleading cheap talk can sometimes convey information and affect real payoffrelevant actions yet cheap talk s power is limited for example even given an unlimited chance to talk rational people may not reach an equilibrium or may not escape a bad one a growing literature in game theory political science and economics which i cannot survey here studies what cheap talk can and cannot do here i merely sketch some themes

demand dynamics with socially evolving preferences in this work we first identify a few stylized facts concerning microconsumption acts second building on them we develop a simple model of boundedly rational consumers who endogenously evolve their preferences via both innovation and social imitation third we explore some statistical properties of the demand patterns generated by the model which despite its simplicity are surprisingly in line with the empirical evidence these results we suggest bring encouraging support to microfoundations of demand theory based on cognitive and behavioral foundations more in tune with the psychological and sociological evidence based on heterogeneous agents who are much less rational and much more social than in standard theory and who collectively discover along the way what they like within a growing universe of available commodities

crude oil import policy of turkey historical analysis of determinants and implications since 1968 turkey is one of the most energy import dependent countries in the world suffering deeply from the economic and strategic burdens of oil importation our purpose is to determine the factors behind the crude oil import policy of turkey and to measure their contribution to a well organized import strategy we implemented a principle component analysis to construct an oil import vulnerability index oivi based on four factors which are crude oil import dependency of primary energy consumption crude oil import bill as a share of gross domestic product gdp non diversification of import sources and share of oil in total energy import the contribution of these factors to the oivi is found to be approximately equal while an overall deterioration in the oivi has been observed during periods of increasing oil prices better diversification of oil import sources has lead to significant improvements we suggest turkish policy makers implement sound policies emphasizing diversification of crude oil import sources and reduction of the share of crude oil in primary energy imports to increase energy supply security this study has also demonstrated that it is possible to construct an index representing crude oil vulnerability caused by import dependency

rationality in psychology and economics the task i shall undertake here is to compare and contrast the concepts of rationality that are prevalent in psychology and economics respectively economics has almost uniformly treated human behavior as rational psychology on the other hand has always been concerned with both the irrational and the rational aspects of behavior in this paper irrationality will be mentioned only obliquely my concern is with rationality economics sometimes uses the term irrationality rather broadly e g becker 1962 and the term rationality correspondingly narrowly so as to exclude from the domain of the rational many phenomena that psychology would include in it for my purposes of comparison i will have to use the broader conception of psychology one point should be set immediately outside dispute everyone agrees that people have reasons for what they do they have motivations and they use reason well or badly to respond to these motivations and reach their goals even much or most of the behavior that is called abnormal involves the exercise of thought and reason freud was most insistent that there is method in madness that neuroses and psychoses were patients solutions not very satisfactory solutions in the long run for the problems that troubled them the assumption that actors maximize subjective expected utility economic rationality supplies only a small part of the premises in economic reasoning and that often not the essential part the remainder of the premises are auxiliary empirical assumptions about actors utilities beliefs expectations and the like making these assumptions correctly requires an empirically founded theory of choice that specifies what information decision makers use and how they actually process it this behavioral empirical base is largely lacking in contemporary economic analysis and supplying it is essential for enhancing the explanatory and predictive power of economics

residential electricity consumption in portugal findings from top down and bottom up models an econometric study of the portuguese residential electricity consumption is presented with a focus on the influence of dwelling characteristics on consumption the relationship between the dwelling and household characteristics on per capita residential electricity consumption is estimated at two different scales involving two distinct databases the first includes data at the municipality level for 2001 the second is the most recent portuguese consumer expenditure survey that was collected in 2005 and 2006 the results of the analysis at both scales are consistent and indicate that household and dwelling characteristics have a significant influence on residential electricity consumption our results show that in portugal the direct effect of income on electricity consumption is low and becomes smaller when more relevant control variables are included in the analysis future demand of electricity in portugal will be significantly influenced by trends in socioeconomic factors as well as changes in the building stock these trends should be taken in consideration in the formulation of policy measures to reduce electricity consumption

how prudent are consumers using data from the consumer expenditure survey this paper presents a simple test that provides an explicit estimate of the parameter in the utility function that reflects the strength of the precautionary saving motive the coefficient of relative prudence the test yields a fairly precise estimate of a small precautionary motive in fact the estimate is too small to be consistent with widely accepted beliefs about risk aversion the presence of liquidity constrained households does not appear to explain this finding and there is some evidence that self selection of households into risky environments also cannot explain the results

exchange rate uncertainty and the demand for u s soybeans this study examines the effects of exchange rate uncertainty on bilateral soybean trade flows and finds that imports for japan france and spain are sensitive to short term variations in nominal bilateral exchange rates this research extends previous work by focusing on bilateral trade for a single commodity using a longer sample period and testing over a variety of model specifications the results suggest that the effects vary across countries depending on access to forward markets the availability of alternative soybean suppliers the degree of market concentration in the domestic soybean processing sector and the degree of currency risk importers are willing to assume the decline in u s agricultural exports during the 1980s has been explained by numerous factors including stagnant world income increased foreign competition the existence of trade barriers and the level of the exchange rate an additional factor exchange rate volatility has received less attention in agricultural trade models since the adoption of the flexible exchange rate system in the early 1970s variability in exchange rates has had a potentially destabilizing impact on trade disruptions in trade can occur because exchange rate variations change the actual price paid or received for traded goods causing adjustments in quantities traded domestic prices or in the timing of sales in order to avoid the effects of variability on profits other longer term effects may occur if exchange rate uncertainty persists to the extent that goods are substitutable such adjustments can be manifested as a sustained preference for domestic suppliers over foreign suppliers or alternative sources of foreign supply may be explored the magnitude of the effect of exchange rate uncertainty on quantity imported is dependent upon inter alia the respective exchange rate elasticities and the importer s response to variability for some goods this magnitude can be substantial the objective of this study is to determine

biogas and eu s 2020 targets evidence from a regional case study in italy abstract the provision of renewable energy by agriculture so called agroenergy is a key element of the europe 2020 strategy and has sparked public and research debates on the bio based economy hot topics involve direct and indirect land use change and the ability of agroenergy to foster or hinder food and energy security worldwide research has dealt with these and other issues associated with the sustainability of the diffusion of agroenergy generation systems but the subject is still open this paper contributes to the ongoing debate on the sustainability of agroenergy we propose an empirical model to simulate the diffusion of farm biogas installations and estimate a set of indicators covering the economic environmental and social dimensions of sustainability at the regional level model results show that the current incentive mechanism does not allow to meet eu s energy targets at the local level to do so the policy mix needs an improved design accounting for regional peculiarities across the eu model results show that agroenergy production can help farmers stabilise their income and keep viable rural areas despite some trade offs among socioeconomic and environmental indicators major drawbacks are environmental risks associated with farming intensification

the effects of exchange rate variability on international trade a meta regression analysis the trade effects of exchange rate variability have been an issue in international economics for the past 30 years the contribution of this article is to apply meta regression analysis mra to the empirical literature on average exchange rate variability exerts a negative effect on international trade yet mra confirms the view that this result is highly conditional by identifying factors that help to explain why estimated trade effects vary from significantly negative to significantly positive mra evidence on the pronounced heterogeneity of the empirical findings may be instructive for policy first by establishing that average trade effects are not sufficiently robust to generalize across countries and second by suggesting the importance of hedging opportunities hence of financial development for trade promotion for the practice of mra we make a case for checking the robustness of results with respect to estimation technique model specification and sample

from utilities to mental models a critical survey on decision rules and cognition in consumer choice this work critically discusses a selected body of mainly experimental studies on consumer behavior in the light of two general questions first can one identify within the vast literature from psychology marketing etc a few stylized facts which might be the grounds of a behavioral theory of consumption parsimonious enough to be useful to economic theorizing and at the same time not in open violation of the evidence on how consumers actually behave second to what extent should such theories be nested into an explicit account of the cognitive processes leading to particular consumption acts copyright 1999 by oxford university press

the behavior of an open economy firm under flexible exchange rates most proponents and opponents of floating believe that greater variability of foreign exchange rates will increase uncertainty in international transactions and hence that the volume of international trade and financial flows will be curtailed without well developed facilities for hedging against exchange uncertainty the effects of exchange risk on merchant exporters and importers have been studied by some authors under the assumption of fixed production ethier 1973 clark 1973 hodder 1977 etc others have investigated the production behaviour of an export firm in a static context see for example baron 1976a b however the impact of the greater volatility of exchange rates upon domestic employment and capital accumulation on the one hand and upon international financial transactions on the other has received scant attention in the literature this paper establishes a dynamic model of a small competitive firm which is engaged in domestic production foreign trade through exports of its products and or imports of its inputs and financial transactions in domestic and foreign currencies since the firm faces uncertainty about future exchange rates and future prices of outputs and inputs it attempts to hedge against the risk if it is risk averse a forward foreign exchange market is assumed to exist the firm s decisions on production investment forward contracting and financing which are closely related in the model are based on exogenously given probability distributions of exchange rates and prices the paper is planned as follows section i presents a model of the firm and formulates its objective function and constraints section ii solves its maximization problem and interprets the first order conditions for short run equilibrium in particular three different roles of the firm in the forward exchange or financial market are emphasized pure hedging speculative hedging and pure speculation section iii analyses the dynamic behaviour of a typical open economy firm section iv conducts comparative dynamic exercises of the firm in a long run steady state equilibrium and discusses how exchange rate uncertainty affects the firm s optimal decisions the implications of the purchasing power parity condition are also developed section v summarizes our conclusions

uncertainty and consumer durables adjustment we characterize infrequent durables stock adjustment by consumers who also derive utility from non durable consumption flows in the presence of idiosyncratic income uncertainty the data we analyse include subjective future income uncertainty measures which we use as instruments in the estimation of relevant parameters of heterogeneous consumers dynamic adjustment problems the data feature two conceptually distinct sources of variation cross sectional heterogeneity of the sampled households dynamic problems and history dependent heterogeneity in their situation during the observation period we note that the latter should affect the likelihood but not the size of stock adjustment decisions and find broad support for theoretical predictions in formal selection controlled regressions based on this insight

energy security measurement a sustainable approach abstract the main objective of this paper is to define new energy security indicator with the long term sustainability and to test it in a sample of 28 european union countries for the period 1990 2012 as well as to determine the level of impact of six different indicators on energy security the previous methodologies for measuring of energy security have been mainly focused on security of supply while not taking into account environmental indicators and the social component the newly proposed indicator energy security index differs from the existing measuring methods precisely in a way that it includes environmental and social aspects energy security index recorded a decline in values in most countries in the period 1990 2000 in the period 2000 2008 the values became positive and after 2008 some countries reported again gradual deterioration the index value varies by year and the biggest positive changes were recorded in the case of the netherlands slovenia and spain the four economically strongest eu countries the united kingdom france germany and italy recorded significantly less fluctuations in energy security over 23 years compared to other countries the data for france and denmark show that an increased share of energy from nuclear and renewable sources can compensate even increased energy import dependence the assessment of impact of individual indicators on energy security index was conducted by using principal component analysis and showed that energy intensity gdp per capita and carbon intensity have the greatest impact the countries of the former eastern bloc are facing particular challenges of energy security which is primarily related to the rapid economic growth and at the same time a high degree of dependence on import of energy generating products in terms of energy security the most stable transition was reported in hungary and poland

precautionary saving in the small and in the large the theory of precautionary saving is shown to be isomorphic to the arrow pratt theory of risk aversion making possible the application of a large body of knowledge about risk aversion to precautionary saving and more generally to the theory of optimal choice under risk in particular a measure of the strength of the precautionary saving motive analogous to the arrow pratt measure of risk aversion is used to establish a number of new propositions about precautionary saving and to give a new interpretation of the dreze modigliani substitution effect copyright 1990 by the econometric society

real exchange rate misalignment and agricultural export performance in developing countries the influence of fluctuating currency values on agricultural trade has been acknowledged especially since the demise of the bretton woods system of fixed exchange rates following g e schuh s pioneering articles linking exchange rates to country performance in the global agricultural market several attempts were made to quantify the effects of nominal and real exchange rate movements on agricultural trade recently another body of literature emerged aimed at quantifying the effects of exchange rate risk on trade 2 despite these studies inadequate attention has been directed toward analyses of underlying policies that directly influence real exchange rates and that indirectly affect trade performance specifically the issue of incorrect real exchange rate alignment has been ignored real exchange rate misalignment occurs in markets in which actual exchange rates are not allowed to adjust to changes in economic fundamentals unsustainable monetary fiscal and various trade and exchange control policies are its principal cause calculation of misaligned exchange rates is dependent on the ability to disentangle equilibrium from disequilibrium disturbances affecting movements in actual real exchange rates quantification represents a major challenge purchasing power parity ppp provides the simplest way to estimate misalignment however real exchange rate deviations from ppp often do not indicate incorrect alignment of the real exchange rate because the actual rate ought to vary in response to external or internal shocks that modify the equilibrium rate ideally misalignments are measured using real exchange rates that are permitted to vary in response to changed economic conditions the changing path of real equilibrium exchange rates is somewhat elusive and can be identified using a structural model