institutions and the environmental kuznets curve for deforestation a crosscountry analysis for latin america africa and asia abstract the relationship between deforestation and income across 66 countries of latin america africa and asia is examined institutional characteristics as well as macroeconomic policies of each country are hypothesized to impact deforestation results show strong evidence of an environmental kuznets curve ekc relationship between income and deforestation for all three continents institutional structure and macroeconomic policy significantly affect the tropical deforestation process improvements in political institutions and governance significantly reduce deforestation the factors leading to deforestation differ across regions however and there is no one size fits all global policy recommendation for restraining the tropical deforestation process

crossing network versus dealer market unique equilibrium in the allocation of order flow the allocation of order flow to alternative trading systems can be understood as a game with strategic substitutes between buyers on the same side of the market as well as one of positive network externalities we consider the allocation of order flow between a crossing network and a dealer market we show that small differences in traders preferences generate a unique switching equilibrium in which patient traders use the crossing network while impatient traders submit orders directly to the dealer market our model explains why assets with large turnovers and low price volatility are likely to be traded on crossing networks while less liquid assets are traded on dealer markets

on the impact of heterogeneity on indeterminacy some recent research indicates that the occurrence of indeterminacy in models with externalities may be overstated because these models ignore agents heterogeneity we consider a neoclassical two sector growth model with technological externalities agents are heterogeneous with respect to their shares of the initial stock of capital and in labor endowments we find that the sign of the effect of inequality on indeterminacy is not pinned down by the standard properties of preferences however when the inverse of absolute risk aversion is a convex respectively concave function homogeneity heterogeneity tends to neutralize the external effects and eliminate indeterminacy

economic growth and pollutant emissions in tunisia an empirical analysis of the environmental kuznets curve abstract this paper investigates the relationship between economic growth and pollutant emissions for a small and open developing country tunisia during the period 1961 2004 the investigation is made on the basis of the environmental kuznets curve hypothesis using time series data and cointegration analysis carbon dioxide co 2 and sulfur dioxide so 2 are used as the environmental indicators and gdp as the economic indicator our results show that there is a long run cointegrating relationship between the per capita emissions of two pollutants and the per capita gdp an inverted u relationship between so 2 emissions and gdp has been found with income turning point approximately equals to 1200 constant 2000 prices or to 3700 in ppp constant 2000 prices however a monotonically increasing relationship with gdp is found more appropriate for co 2 emissions furthermore the causality results show that the relationship between income and pollution in tunisia is one of unidirectional causality with income causing environmental changes and not vice versa both in the short run and long run this implies that an emission reduction policies and more investment in pollution abatement expense will not hurt economic growth it could be a feasible policy tool for tunisia to achieve its sustainable growth in the long run

can heterogeneous preferences stabilize endogenous fluctuations while most of the literature concerned with indeterminacy and endogenous cycles is based on the restrictive assumption of a representative consumer some recent contributions have investigated the role of heterogeneous agents in dynamics this paper adds to this latter strand of the literature by highlighting the effects of heterogeneity in consumers preferences within an overlapping generations economy with capital accumulation endogenous labor supply and consumption in both periods using a mean preserving approach to heterogeneity we show that increasing the dispersion of propensity to save decreases macroeconomic volatility by narrowing down the range of parameter values compatible with indeterminacy and ruling out expectations driven fluctuations under a sufficiently large heterogeneity

ruling out multiplicity and indeterminacy the role of heterogeneity it is well known that economies of scale that are external to the individual decision makers can lead to self fulfilling prophecies and the multiplicity or even indeterminacy of equilibrium we argue that the importance of this source of multiplicity and indeterminacy is overstated in representative agent models as they ignore the potential stabilizing effect of heterogeneity we illustrate this in a version of matsuyama s 1991 two sector model with increasing returns to scale two main results are shown first sufficient homogeneity with respect to individual productivity leads to the instability and non uniqueness of a given stationary state and the indeterminacy of the corresponding stationary state equilibrium second sufficient heterogeneity leads to the global saddle path stability and the uniqueness of a given stationary state and the global uniqueness of equilibrium

wealth inequality preference heterogeneity and macroeconomic volatility in two sector economies we explore the link between wealth inequality preference heterogeneity and macroeconomic volatility in a two sector neoclassical growth model first we prove that if agents have homogeneous preferences when the absolute risk tolerance is a strictly convex concave function sufficiently high low levels of wealth inequality may lead to endogenous fluctuations in the neighborhood of the steady state second we consider the effects of preference heterogeneity when agents are homogeneous with respect to their wealth we show that when the utility function belongs to the hara class sufficiently high levels of preference heterogeneity may lead to endogenous fluctuations in the neighborhood of the steady state if the elasticity of intertemporal substitution in consumption is greater than one

carbon dioxide emissions and economic growth panel data evidence from developing countries in this paper we test the environment kuznet s curve ekc hypothesis for 43 developing countries we suggest examining the ekc hypothesis based on the short and long run income elasticities that is if the long run income elasticity is smaller than the short run income elasticity then it is evident that a country has reduced carbon dioxide emissions as its income has increased our empirical analysis based on individual countries suggests that jordan iraq kuwait yemen qatar the uae argentina mexico venezuela algeria kenya nigeria congo ghana and south africa approximately 35 per cent of the sample carbon dioxide emissions have fallen over the long run that is as these economies have grown emissions have fallen since the long run income elasticity is smaller than the short run elasticity we also examine the ekc hypothesis for panels of countries constructed on the basis of regional location using the panel cointegration and the panel long run estimation techniques we find that only for the middle eastern and south asian panels the income elasticity in the long run is smaller than the short run implying that carbon dioxide emission has fallen with a rise in income

the monetary compensation mechanism an alternative to the clean development mechanism abstract one of the key challenges in resolving global warming problem is how to induce developing countries to reduce emissions the cdm was proposed in the kyoto protocol as a means of obtaining the cooperation of developing countries in controlling greenhouse gases but it has some intrinsic problems and has generated considerable controversy this paper presents an alternative mechanism the monetary compensation mechanism mcm i study the characteristics of this mechanism with a dynamic principal agent model by solving the model numerically i obtain the optimal solution for a scenario based on 1990 data the monetary compensation rate under the mcm is comparable to the price of cers in the cdm but the mcm has several advantages over the cdm

complementarities and macroeconomics poisson games in many situations in macroeconomics strategic complementarities arise and agents face a coordination problem an important issue from both a theoretical and a policy perspective is equilibrium uniqueness we contribute to this literature by focusing on the macroeconomic aspect of the problem the number of potential innovators speculators etc is large in particular we follow myerson that in large games a more realistic model should admit some uncertainty about the number of players in the game myerson r 1998 population uncertainty and poisson games int j game theory 27 375 392 myerson r 2000 large poisson games j econ theory 94 7 45 in more detail we model the coordination problem as a poisson game and investigate the conditions under which unique equilibrium selection is obtained

persistent ideology and the determination of public policy over time this article investigates how public policy responds to persistent ideological shifts in dynamic politico economic equilibria to this end i develop a tractable model to analyze the dynamic interactions among public policy individuals intertemporal choice and the evolution of political constituency my main finding is that a right wing ideology may increase the size of government data from a panel of 18 oecd countries confirm that after controlling for the partisan effect there is a positive relationship between the right wing political constituency and government size this is consistent with my theoretical prediction but hard to explain by existing theories

wealth distribution and output fluctuations we explore the link between wealth inequality and output fluctuations in a general two sector neoclassical growth model with endogenous labor and heterogeneous agents when agents have homogeneous crra preferences and individual wealth is pareto distributed a sufficiently large rise in the gini index typically leads to an increase in endogenous fluctuations of output for general economies we show that under plausible conditions on the fundamentals wealth inequality is still a destabilizing factor

determinants of co2 emissions in a small open economy abstract the aim of the paper is to explore the relationship between economic development and carbon dioxide co2 emissions for a small open and industrialized country austria we test whether an environmental kuznets curve relationship also holds for a single country rather than concentrating on panel or cross section data for a set of countries a cubic i e n shaped relationship between gdp and co2 emissions is found to fit the data most appropriately for the period 1960 1999 and a structural break is identified in the mid seventies due to the oil price shock furthermore two variables are additionally significant import shares reflecting the well known pollution haven hypothesis and the share of the tertiary service sector of total production gdp accounting for structural changes in the economy emission projections derived from this single country specification support the widely held opinion that significant policy changes are asked for when implementing the kyoto protocol in order to bring about a downturn in future carbon emissions

drifting together or falling apart the empirics of regional economic growth in post unification germany the objective of this article is to address the question of convergence across german districts in the first decade after german unification by drawing out and emphasizing some stylized facts of regional per capita income dynamics we achieve this by employing nonparametric techniques which focus on the evolution of the entire cross sectional income distribution in particular we follow a distributional approach to convergence based on kernel density estimation and implement a number of tests to establish the statistical significance of our findings this article finds that the relative income distribution appears to be stratifying into a trimodal bimodal distribution

is economic growth good or bad for the environment empirical evidence from korea abstract the effects of economic growth on the environment in korea for a given level of energy consumption and fossil fuels and nuclear energy in electricity production are examined in a dynamic cointegration framework to that end the autoregressive distributed lag ardl approach is used we find empirical evidence supporting the existence of the environmental kuznets curve ekc hypothesis for korea that is economic growth indeed plays a favorable role in influencing environmental outcomes it is also found that in both the short and long run nuclear energy has a beneficial effect on environmental quality whereas fossil fuels in electricity production and energy consumption have a detrimental effect on the environment

environmental kuznet s curve for india evidence from tests for cointegration with unknown structuralbreaks this study revisits the cointegrating relationship between carbon emission energy use economic activity and trade openness for india using threshold cointegration tests with a view to testing the environmental kuznet s curve hypothesis in the presence of possible regime shift in long run relationship of the variables for the period 1971 to 2008 the article confirms the existence of regime shift or threshold cointegration among the variables and environmental kuznet s curve for india it challenges previous empirical works for india which fail to establish cointegrating relationship among these variables and explains its logical and econometric reasons the study finds that the carbon emission is highly elastic with respect to real per capita income and energy use in india this finding is critical and warns successful design and execution of energy and environmental policy framework which would pave the low carbon sustainable growth path inindia

an experimental study of uncertainty in coordination games global games and poisson games have been proposed to address equilibrium indeterminacy in common knowledge coordination games where fundamentals are commonly known by all players global games assume that agents face idiosyncratic uncertainty about economic fundamentals whereas poisson games model the number of actual players as a poisson random variable to capture population uncertainty in large games the present study investigates in a controlled setup using as controls common knowledge coordination games whether idiosyncratic uncertainty about economic fundamentals or uncertainty about the number of actual players may influence subjects behavior our findings suggest that uncertainty about the number of actual players has a more significant impact on subjects behavior than idiosyncratic uncertainty about economic fundamentals furthermore subjects behavior under poisson population size uncertainty is consistent with the theoretical prediction of poisson coordination games

a global game with strategic substitutes and complements abstract we study a global game in which actions are strategic complements over some region and strategic substitutes over another region an agent s payoff depends on a market fundamental and the actions of other agents if the degree of congestion is sufficiently large agents strategies are non monotonic in their signal about the market fundamental in this case a signal that makes them believe that the market fundamental is more favorable for an action may make them less likely to take the action because of the risk of overcrowding

uncertainty co ordination and path dependence abstract our objective is to assess whether dynamics hinder or assist co ordination in a game with strategic complementarities we study two dynamic aspects different agents make decisions at different points in time and extra information about a payoff relevant state of nature becomes available over time we find that the dynamic resolution of information matters most for uniqueness of equilibrium this is demonstrated by showing that the condition for uniqueness is weaker when learning occurs we also analyse how successfully agents co ordinate when there is a unique equilibrium finally we show that path dependence occurs the order in which signals arrive matters as well as the total amount of information received

economic growth and co2 emissions in malaysia a cointegration analysis of the environmental kuznets curve this paper attempts to establish a long run as well as causal relationship between economic growth and carbon dioxide co2 emissions for malaysia using data for the years from 1980 to 2009 the environmental kuznets curve ekc hypothesis was tested utilizing the auto regressive distributed lag ardl methodology the empirical results suggest the existence of a long run relationship between per capita co2 emissions and real per capita gross domestic product gdp when the co2 emissions level is the dependent variable we found an inverted u shape relationship between co2 emissions and gdp in both short and long run thus supporting the ekc hypothesis the granger causality test based on the vector error correction model vecm presents an absence of causality between co2 emissions and economic growth in the short run while demonstrating uni directional causality from economic growth to co2 emissions in the long run

bounds testing approach to analysis of the environment kuznets curve hypothesis abstract this paper examines the long run and the dynamic temporal relationships between economic growth energy consumption population density trade openness and carbon dioxide co 2 emissions in brazil china egypt japan mexico nigeria south korea and south africa based on the environment kuznets curve ekc hypothesis we employ the ardl bounds test to cointegration and cusum and cusumsq tests to ensure cointegration and parameter stability the estimated results show that the inverted u shaped ekc hypothesis holds in japan and south korea in the other six countries the long run relationship between economic growth and co 2 emissions follows an n shaped trajectory and the estimated turning points are much higher than the sample mean in addition the results indicate that energy consumption granger causes both co 2 emissions and economic growth in all the countries our results are consistent with previous studies that show that there is no unique relationship between energy consumption population density economic growth trade openness and the environment across countries

the rise and fall of centralized wage bargaining during the three decades spanning the early 1950s to the early 1980s the wage setting process in most northern european countries was dominated by centralized bargaining i e peak level labor and employer associations set wages nationwide in the early 1980s centralized wage bargaining began to collapse in this paper we assess a novel explanation for both the initial establishment of a centralized wage setting process and its subsequent collapse according to our theory centralized wage bargaining was set up as a response to the spillovers created by the unemployment benefit program its collapse was the result of the increase in the productivity gap across workers brought about by equipment specific technological progress and equipment skill complementarity

on the stability of the two sector neoclassical growth model with externalities we study a class of two sector growth models with sector specific externalities in which one sector produces consumption and the other sector produces investment the novelty is that investment allocated to the consumption sector is an imperfect substitute for investment allocated to the investment sector we show analytically that in this case local indeterminacy near the steady state is impossible for every empirically plausible specification of the model parameters more specifically we show that a necessary condition for local indeterminacy is an upward sloping aggregate labor demand curve in the investment sector which requires a counterfactual strength of the externality we show numerically that an elasticity of substitution of plausible size implies determinacy near the steady state these findings differ sharply from the standard result for two sector models that if the investments allocated to the two sectors are perfect substitutes then local indeterminacy occurs for a wide range of plausible parameter values

foreign direct investment income and environmental pollution in developing countries panel data analysis of latin america abstract effects of foreign direct investment fdi and income on pollution emissions are examined using time series data from 1980 to 2010 for 14 latin american countries specifically we test the validity of pollution haven hypothesis phh and environmental kuznets curve ekc hypothesis for this region results from panel fixed and random effects models that controlled the effects of physical capital energy human capital population density and unemployment rate indicate the validity of both the phh and ekc hypothesis estimating two separate models for high and low income countries does not alter the findings for the phh however the impacts of human capital on pollution emission are found to be different for the two groups of countries policies that focus on attracting clean and energy efficient industries through fdi have potential to improve environmental health while enhancing economic growth in latin america