aid volatility policy and development summary we build on bulir and hamann s analysis of aid volatility bulir a hamann j 2003 aid volatility an empirical assessment imf staff papers 50 1 64 89 bulir a hamann j 2008 volatility of development aid from the frying pan into the fire washington dc imf paper submitted to this special section showing that the conclusions reached depend on the dataset used their argument that the poorest countries have the highest volatility appears not to be correct the impact of volatility on growth is negative overall but differs between positive and negative volatility the mix between responsive components of aid for example programme aid and proactive components for example technical assistance is important finally we conclude that measures which increase trust between donor and recipient and reductions in the degree of donor oligopoly reduce aid volatility without obviously reducing its effectiveness

are higher levels of inflation less predictable a state dependent conditional heteroscedasticity approach milton friedman proposed that there is a positive relationship between inflation and uncertainty about the future path of inflation in contrast to previous studies of this hypothesis we find strong statistical evidence that higher levels of inflation are less predictable although innovations in inflation are somewhat better predictors of future volatility than the actual level of inflation we argue that previous failures to find an inflation uncertainty relationship are due to two factors first none of the previous work directly tested friedman s hypothesis by including the level of inflation in the model of the conditional variance second these studies also used symmetric models which appears inconsistent with friedman s hypothesis our results are robust to different sample periods and to assumptions about the presence of a unit root in inflation to test the inflation uncertainty hypothesis we use state dependent models sdm s of conditional moments to estimate the time varying conditional v

perceived price in residential water demand evidence from a natural experiment abstract under complicated billing structures the price to which consumers respond remains inconclusive in this paper i exploit a quasi experiment to estimate a causal effect of price for residential water customers during the introduction of increasing block rates for a north carolina utility perceived price is identified through a billing anomaly in which changes in marginal and average prices move in opposite directions empirical results contribute evidence that residential water customers respond to average price average price elasticity estimates vary from 0 43 to 1 14 across the distribution of consumption in triple difference models with an estimate of 0 31 in the tightest bandwidth of regression discontinuity specifications

aid and sectoral growth evidence from panel data this article examines empirically the proposition that aid to poor countries is detrimental for external competitiveness giving rise to dutch disease type effects at the aggregate level aid is f

inflation output growth and nominal and real uncertainty empirical evidence for the g7 abstract we use univariate garch models of inflation and output growth and monthly data for the g7 covering the 1957 2000 period to test for the causal effect of real and nominal macroeconomic uncertainty on inflation and output growth and the effect of inflation on inflation uncertainty our evidence supports a number of important conclusions first inflation is a positive determinant of uncertainty about inflation second output growth uncertainty is a positive determinant of the output growth rate third there is mixed evidence regarding the effect of inflation uncertainty on inflation and output growth hence uncertainty about the inflation rate is not necessarily detrimental to economic growth finally there is not much evidence supporting the hypothesis that output uncertainty raises inflation

does energy consumption respond to price shocks evidence from a regression discontinuity design this paper exploits unique features of a recently introduced tariff schedule for natural gas in buenos aires to estimate the short run impact of price shocks on residential energy utilization the schedule induces a nonlinear and non monotonic relationship between households accumulated consumption and unit prices thus generating exogenous price variation which is exploited in a regression discontinuity design the results reveal that a price increase causes a prompt and significant decline in gas consumption they also indicate that consumers respond more to recent past bills than to expected prices which argues against the assumption that consumers have perfect awareness of complex price schedules

on the empirics of foreign aid and growth the present paper re examines the effectiveness of foreign aid theoretically and empirically using a standard olg model we show that aid inflows will in general affect long run productivity the size and direction of the impact may depend on policies deep structural characteristics and the size of the inflow the empirical analysis investigates these possibilities overall we find that aid has been effective in spurring growth but the magnitude of the effect depends on climate related circumstances finally we argue that the collier dollar allocation rule should be seriously reconsidered by donor agencies if aid effectiveness is related to climate the usefulness of foreign aid in promoting growth in developing countries has been an area of controversy ever since rosenstein rodan in 1943 advocated for aid to eastern and south eastern europe browsing through successive editions of a leading textbook in development economics provides a telling illustration of how the confidence in aid effectiveness dwindled over the years in the first edition of leading issues in economic development meier 1964 dedicated a full 18 page section to the issue of foreign aid he started out asking how much aid by the time of the sixth edition meier 1995 the treatment of foreign aid had been cut into half and the questions in focus were why official assistance and does aid work in the 2000 edition meier and rauch 2000 foreign aid is not even listed in the index

regime changes in international real interest rates are they a monetary phenomenon in this paper we use the bai and perron 1998 2001 2003 methodology to test for multiple structural breaks in the mean real interest rate for 13 industrialized countries we find extensive evidence of structural breaks in the mean real interest rate for all 13 countries in an attempt to explain the breaks in international real interest rates we also test for multiple structural breaks in the mean inflation rate for the 13 countries once again we find extensive evidence of structural breaks in the mean inflation rate for all of the countries interestingly the breaks in inflation rates and real interest rates often coincide with increases decreases in the mean inflation rate as we move from one regime to the next typically associated with decreases increases in the mean real interest rate

electricity subsidy reform in indonesia demand side effects on electricity use abstract indonesia s budget has for years been burdened by large subsidies for electricity consumption a series of recent reforms has delivered a substantial reduction in these subsidies in this paper we estimate demand side effects of these reforms on electricity use our analysis utilizes a three dimensional dataset covering six consumer groups 16 regions and 1992 2015 we control for various fixed effects and use an instrumental variable approach our estimates suggest that subsidy reductions since 2013 had induced savings in annual electricity use of around 7 relative to the no reform counterfactual as of 2015 the phase out of remaining subsidies has the potential to generate further improvements in the efficiency of electricity use while freeing up resources for other priorities such as infrastructure spending

disaggregate evidence on the persistence of consumer price inflation this paper uses disaggregate inflation data spanning all of consumption to examine i the persistence of disaggregate inflation relative to aggregate inflation ii the distribution of persistence across consumption sectors and iii whether persistence has changed assuming mean inflation to be unchanged disaggregate persistence inflation is consistently below aggregate persistence taking into account an early 1990s shift in mean inflation identified by break tests yields much lower estimates of both aggregate and disaggregate persistence for 1984 2002 but with the mean break average disaggregate persistence is actually as great as aggregate inflation persistence a factor model provides a natural framework for interpreting the relationship between aggregate and disaggregate persistence copyright 2006 john wiley sons ltd

residential consumption of gas and electricity in the u s the role of prices and income abstract we study the residential demand for electricity and gas working with nationwide household level data that cover recent years namely 1997 2007 our dataset is a mixed panel multi year cross sections of dwellings households in the 50 largest metropolitan areas in the united states as of 2008 we estimate static and dynamic models of electricity and gas demand we find strong household response to energy prices both in the short and long term from the static models we get estimates of the own price elasticity of electricity demand in the 0 860 to 0 667 range while the own price elasticity of gas demand is 0 693 to 0 566 these results are robust to a variety of checks contrary to earlier literature metcalf and hassett 1999 reiss and white 2005 we find no evidence of significantly different elasticities across households with electric and gas heat the price elasticity of electricity demand declines with income but the magnitude of this effect is small these results are in sharp contrast to much of the literature on residential energy consumption in the united states and with the figures used in current government agency practice our results suggest that there might be greater potential for policies which affect energy price than may have been previously appreciated

a new look at residential electricity demand using household expenditure data the recent push for a federal energy policy that could substantially change electricity prices in the u s highlights the need to obtain accurate residential electricity demand estimates many electricity demand estimates have been obtained based on the assumption that consumers optimize with respect to known marginal prices but increasing empirical evidence suggests that consumers are more likely to respond to average prices under this assumption this paper develops a new strategy based on gmm to estimate household electricity demand our approach allows a national level demand estimation from publicly available expenditure data and utility level consumption data complementing studies that use individual billing data which are richer yet often proprietary we estimate the price elasticity near 1 which is at the upper end in magnitude among the estimates from previous studies we apply our elasticity estimates in a u s climate policy simulation to determine how these elasticity estimates alter consumption and price outcomes compared to the more conservative elasticity estimates commonly used in policy analysis

modeling commercial demand for water exploring alternative prices instrumental variables and heterogeneity in this paper we introduce a previously unused instrumental variable to estimate the elasticity of commercial water demand for firms served by a large municipal utility we then present evidence that firms are more responsive to one period lagged average price than marginal price finally we find notable differences in elasticity among different categories of businesses the findings in this paper are particularly important as water utilities consider how to maintain revenue while coping with limited water supplies and increasing commercial demand

capital market imperfections and the theory of optimum currency areas this paper studies how within and cross country capital market imperfections affect the welfare effects of forming a currency union the analysis considers a bank only world where intermediaries compete in cournot fashion and monitoring and state verification are costly the first part determines the credit market equilibrium and the optimal number of banks prior to joining the union the second part discusses the benefits from joining a currency union a competition effect is identified and related to the added monitoring costs that banks may incur when operating outside their home country through an argument akin to the brander krugman reciprocal dumping model of bilateral trade however in our framework whether joining a union raises welfare of the home country is ambiguous it depends on the relative strength of investment creation and intermediation diversion effects

the level and uncertainty of inflation results from oecd forecasts bryce e kanago there is considerable evidence that inflation variability and the level of inflation are positively related across countries evidence of a within county relation is mixed evidence for a significant positive relation comes mostly from studies using some survey measure contrary evidence comes mostly from studies using regression errors our measure of uncertainty is the squared forecast error from organization for economic cooperation and development inflation forecasts most countries do not exhibit a positive and significant relation the greatest number of positive coefficients is for relative uncertainty regressed on contemporaneous inflation jel e310 e370 1342 1340 1323 i introduction although empirical studies have not reached a unanimous conclusion most economists believe one detriment of high inflation is the greater uncertainty it generates about future inflation affirmative evidence of a positive relation between inflation and uncertainty is most frequently found in cross country studies that regress some measure of variability or uncertainty for each country on their average inflation rate time series regressions for individual countries provide mixed results those time series studies that derive inflation uncertainty from a survey of forecasters conclude that higher inflation causes greater uncertainty time series studies that derive uncertainty from ex post regressions constructed by researchers provide most of the negative evidence 1 it is tempting to dismiss this negative evidence as the consequence of poorly or opportunistically constructed ex post forecasts in this paper we use annual inflation forecasts for organization for economic cooperation and development oecd countries that have been published in the oecd s economic outlook for about 30 years these data circumvent the problems of constructing forecasts after the fact for each date and each country a single forecast is provided by contrast survey data such as the livingston data average the forecasts of a number of respondents to the extent that the survey sample is representative of the population the surveys may provide a better approximation to the public s expectations however survey respondents have nothing to lose if their forecasts are wildly inaccurate whereas professional forecasters put their reputation on the line a distinct advantage of the published forecasts is that the oecd provides forecasts for 24 countries whereas surveys are available for only a few countries of course ex post forecasts could be constructed for the same set of countries while these ex post forecasts could utilize modern econometrics techniques such as autoregressive conditional heteroscedasticity arch and time varying parameters they cannot replicate the specialized human capital the judgment or the particular perspective of the times that were used to construct ex ante forecasts davis and kanago 1998 regressed the squared error from ex ante inflation forecasts produced and published by business international on inflation and found no significant relation for most countries this result makes it less tempting to dismiss the time series evidence of ex post inflation forecasts we extend the results of davis and kanago 1998 by computing the same regression but using squared errors from ex ante forecasts made by the oecd and published in economic outlook the 24 countries in the oecd data include canada iceland luxembourg new zealand the united states and turkey that are not included in the business international data for some countries the oecd data includes a few more years than the business international data the results from the oecd and business international data are broadly similar few countries show a significant relation between inflation and uncertainty we further test the robustness of these results by using relative uncertainty as the dependent variable

consequences of aid volatility for macroeconomic management and aid effectiveness we conclude that individual aid sector volatility matters as well as total aid volatility easily the most important contributor to total volatility is debt aid the most volatile aid sectors per se include debt industry and humanitarian and the least include education and health in several sectors volatility appears to have peaked around 2006 within individual countries sector volatility is often corrected for in the following period there are also sometimes knock on effects on other sectors finally we examine the impact of sector aid and aid volatility on school completion rates death rates internet usage and mobile phone subscriptions

a theory of ambiguity credibility and inflation under discretion and asymmetric information this paper develops a positive theory of credibility ambiguity and inflation under discretion and asymmetric information the monetary policymaker maximizes his own politically motivated objective function that is positively related to economic stimulation through monetary surprises and negatively related to monetary growth the relative importance he assigns to each target shifts stochastically through time his current preference trade off is known to him but not to the public when choosing the state contingent path of money growth for the present and the future the policymaker compares the benefits from current stimulation with the costs associated with higher future inflation expectations current monetary growth conveys information to the public about future money growth because there is persistence in the policymaker s objectives although expectations are rational information is imperfect because monetary control procedures are imprecise as a result the public cannot correctly distinguish persistent changes of emphasis on different policy objectives from transitory monetary control errors the public becomes aware of changes gradually by observing past monetary growth credibility is defined in terms of the speed with which the public recognizes changes in the objectives of the policymaker credibility is lower the noisier monetary control and the more stable the objectives of the policymaker looser monetary control and a higher degree of time preference on the part of the policymaker induce him to produce higher and more variable monetary growth when the policymaker is free to determine the accuracy of monetary control he does not always choose the most effective control available in spite of the fact that monetary surprises always have an expected value of zero the reason is that ambiguous control procedures enable the policymaker to generate positive surprises when he cares more than on average about economic stimulation he leaves the inevitable negative surprises for periods in which he cares more about inflation prevention this result provides an explanation for the fed s preference for ambiguity recently documented by goodfriend 1986 the policymaker is more likely to pick more ambiguous control procedures the more uncertain his objectives and the higher his time preference the paper also provides a theoretical underpinning for the well documented crosscountry positive correlation between the level and the variability of inflation

the euro and inflation uncertainty in the european monetary union in this paper we investigate empirically the relationship between inflation and inflation uncertainty in twelve emu countries we estimate a time varying parameter model with a garch specification for the conditional volatility of inflation in order to distinguish between short run structural and impulse and steady state uncertainty we then introduce a dummy variable to model the policy regime shift which occurred in 1999 with the introduction of the euro and its effects on the links between inflation and inflation uncertainty we find that steady state inflation has generally remained stable with the important exception of germany where the trend has become positive steady state inflation uncertainty and inflation persistence have both increased and the relationship between inflation and inflation uncertainty has broken down in many countries these findings cast doubt on the optimistic view taken by the ecb concerning its success in controlling inflation and suggest the need for improvements in its analytical framework

alternate price specifications for estimating residential water demand with fixed fees using a new model formulation and data from a sample of colorado utilities we investigated the price specification controversy marginal price versus average revenue when estimating residential water demand the improved statistical fit using average revenue as the price variable was shown to be an artifact of the unitary elastic identity created when monthly rate schedules contain a fixed fee when the fixed fee was purged from the data average price was not significant but marginal price remained significant in the preferred double log marginal price model estimated price elasticity was 0 3 and conservation programs had no significant effect on water use

analysing inflation by the fractionally integrated arfima garch model this paper considers the application of long memory processes to describing inflation for ten countries we implement a new procedure to obtain approximate maximum likelihood estimates of an arfima garch process which is fractionally integrated i d with a superimposed stationary arma component in its conditional mean additionally this long memory process is allowed to have garch type conditional heteroscedasticity on analysing monthly post world war ii cpi inflation for ten different countries we find strong evidence of long memory with mean reverting behaviour for all countries except japan which appears stationary for three high inflation economies there is evidence that the mean and volatility of inflation interact in a way that is consistent with the friedman hypothesis

an empirical survey of residential water demand modelling abstract the increased reliance on demand side management policies as an urban water consumption management tool has stimulated considerable debate among economists water utility managers regulators consumer interest groups and policymakers in turn this has fostered an increasing volume of literature aimed at providing best practice estimates of price and income elasticities quantifying the impact of non price water restrictions and gauging the impact of non discretionary environmental factors affecting residential water demand this paper provides a synoptic survey of empirical residential water demand analyses conducted in the last 25 years both model specification and estimation and the outcomes of the analyses are discussed

the african political business cycle varieties of experience abstractwe seek to understand both the incidence and the impact of the african political business cycle in the light of a literature which has argued that with major extensions of democracy since the 1990s the cycle has both become more intense and has made african political systems more fragile with the help of country case studies we argue first that the african political business cycle is not homogeneous and occurs relatively infrequently in so called dominant party systems where a pre election stimulus confers little political advantage secondly we show that in those countries where a political cycle does occur it does not necessarily cause institutional damage whether it does or not depends not so much on whether there is an electoral cycle as on whether this cycle calms or exacerbates fears of an unjust allocation of resources in other words the composition of the pre election stimulus in terms of its allocation between different categories of voter is as important as its size

response of residential electricity demand to price the effect of measurement error abstract in this paper we present an empirical analysis of the residential demand for electricity using annual aggregate data at the state level for 48 us states from 1995 to 2007 earlier literature has examined residential energy consumption at the state level using annual or monthly data focusing on the variation in price elasticities of demand across states or regions but has failed to recognize or address two major issues the first is that when fitting dynamic panel models the lagged consumption term in the right hand side of the demand equation is endogenous this has resulted in potentially inconsistent estimates of the long run price elasticity of demand the second is that energy price is likely mismeasured to address these issues we estimate a dynamic partial adjustment model using the kiviet corrected least square dummy variables lsdv 1995 and the blundell bond 1998 estimators we find that the long term elasticities produced by the blundell bond system gmm methods are largest and that from the bias corrected lsdv are greater than that from the conventional lsdv from an energy policy point of view the results obtained using the blundell bond estimator where we instrument for price imply that a carbon tax or other price based policy may be effective in discouraging residential electricity consumption and hence curbing greenhouse gas emissions in an electricity system mainly based on coal and gas power plants

aid volatility and poverty traps abstract this paper studies the impact of aid volatility in a two period model where production may occur with either a traditional or a modern technology public spending is productive and time to build requires expenditure in both periods for the modern technology to be used the possibility of a poverty trap induced by high aid volatility is first examined in a benchmark case where taxation is absent the analysis is then extended to account for self insurance taking the form of a first period contingency fund financed through taxation an increase in aid volatility is shown to raise the optimal contingency fund but if future aid also depends on the size of the contingency fund as a result of a moral hazard effect on donors behavior the optimal policy may entail no self insurance

on inflation and inflation uncertainty in the g7 countries abstract the relationship between inflation and inflation uncertainty is investigated in the g7 countries from 1948 to 1993 garch models are used to generate a measure of inflation uncertainty and then granger methods are employed to test the causality between average inflation and inflation uncertainty in all g7 countries inflation significantly raises inflation uncertainty as predicted by friedman and ball weaker evidence is found that inflation uncertainty granger causes inflation in three countries us uk and germany increased inflation uncertainty lowers inflation while in two countries japan and france increased inflation uncertainty raises inflation

estimation of residential water demand with imperfect price perception using data from a household survey carried out in the french overseas territory of reunion we investigate the price of drinking water perceived by households faced with an increasing multi step pricing scheme to this purpose we use an improved version of the method introduced by shin 1985 to estimate the demand for residential water when consumers are imperfectly informed about their pricing schedule the empirical results suggest that reunion households underestimate the price of water and thus consume more than what is economically rational providing information to households about the marginal price of water may be an innovative means of inducing them to respond to pricing policies designed to promote water conservation

fiscal composition and aid effectiveness a political economy model summary in the long run tax effort we argue determines the effectiveness of aid and this relationship operates simultaneously with the negative link in the opposite direction observed by brautigam and knack 2004 and others tax effort and the ability of the state to diversify its taxation structure we find are significantly linked to growth and poverty indicators the key message for policy is that a broadening of the tax structure in low income countries is crucial in order to enable those countries to escape from the weak state low tax trap and to make aid effective

price knowledge in household demand for utility services a household s decision to acquire price knowledge is endogenous in the demand for utility services and may affect elasticities and consumption levels a simultaneous equation model with endogenous switching is developed to evaluate the effects of price knowledge and other sources of heterogeneity results indicate informed households were more responsive to average and marginal price signals informed households also use less water but this is due to heterogeneity rather than price knowledge controlling for heterogeneity price knowledge actually increases monthly water usage the implications of accounting for differences in price knowledge in utility demand modeling and demand management policy are discussed

residential electricity demand in spain new empirical evidence using aggregate data this paper presents an empirical analysis on residential demand for electricity this analysis has been performed using aggregate panel data at the province level for 47 spanish provinces for the period from 2000 to 2008 for this purpose we estimated a log log demand equation for electricity consumption using a dynamic partial adjustment approach this dynamic demand function has been estimated using a two step system gmm estimator proposed by blundell and bond 1998 the purpose of this empirical analysis is to highlight some of the characteristics of spanish residential electricity demand particular attention has been paid to the influence of price income and weather conditions on electricity demand the estimated short and long run own price elasticities are negative as expected but lower than 1 furthermore weather variables have a significant impact on electricity demand

u turns and full circles two decades of agricultural reform in malawi 1981 2000 abstract this paper traces the evolution of malawi s agricultural policy over the past two decades during this period the world bank has played a key role in shaping policy reform through its adjustment loans three distinct reform phases can be identified 1981 87 when policy was dominated by the dogmatism of the world bank s pricist and state minimalist policies 1988 94 when a more flexible position was taken by both the bank and the malawi government both of whom acknowledged the structuralist critique of earlier policies and 1994 to the present when the reform process in agriculture became more politicized and a schism developed between the bank and the government this latter period is used to illustrate some of the unresolved policy issues pertaining to similar low income agrarian economies

inflation and its unpredictability theory and empirical evidence the effect of inflation on its unpredictability is theoretically ambiguous arthur m okun 1971 and milton friedman 1977 suggest that the effect is positive however a negative effect may exist if higher inflation induces the relevant economic agents to invest more in generating accurate predictions this paper provides a theoretical model to analyze these opposing arguments and specifies the conditions under which a positive effect exists new survey data regarding inflationary expectations in israel are used to empirically examine the model the data which allow single hypothesis testing of the relationship reveal a positive effect only in periods of high inflation indicating a possible threshold effect copyright 1993 by ohio state university press

inflation output and uncertainty in the era of inflation targeting a multi economy view on causal linkages abstract this study provides cross country robust evidence on interdependencies among inflation output growth and respective uncertainties for the current era of low inflation policies we attribute the extant empirical disagreement on these relations to the fact that long sampling periods and single economies are typically considered for analysis in this study varx mgarch m models are estimated for 34 developed and emerging economies and the time period of 1990 2010 we study average granger causal effects by aggregating parameter estimates over economies the cross sectional variation of estimates serves as a means to assess the robustness of empirical findings over the entire cross section we find that both inflation and inflation uncertainty significantly reduce output growth economies with low inflation rates are particularly at risk to incur output losses from increasing inflation we also find spillover effects among uncertainty variables where the causal impact if present seems to point from the uncertainty in output to inflation uncertainty

aid volatility and donor recipient characteristics in difficult partnership countries one factor limiting aid effectiveness is its volatility we examine aid volatility in 66 countries over 1975 2004 paying particular attention to the characteristics of difficult partnership countries and making a distinction between sector aid and total aid we explore whether weak recipient institutions and policies are associated with greater volatility allowing for differences in donor characteristics institutional quality and macroeconomic stability affect the stability of all kinds of aid as does reliance on a small number of donors however the relative importance of these effects varies across different aid types

electricity demand in multi family renter occupied residences this paper focuses on multi family renter occupied housing where the landlord provides major appliances a large residential sector that has not received widespread attention in the literature experimental data are used from a test where one group of households was billed directly for the electricity they consumed while a control group had unlimited electric service included as part of the monthly rent the empirical analysis yields short run demand estimates that satisfy to a remarkable extent the ceteris paribus assumptions of demand analysis this is the case for two reasons 1 the households did not individually execute the appliance choice decision at various unknown times in the past and 2 the stock of appliances upon which the derived short run demand is conditional is identical for all households in the sample a second important feature is emphasis on functional form examined in some detail is the question of the appropriate functional form for residential electricity demand finally empirical results of the analysis are used to investigate the cost effectiveness and welfare effects of installing submeters in existing multi family residences

can the world cut poverty in half how policy reform and effective aid can meet international development goals abstract poverty in the developing world will decline by about one half by 2015 if the trends of the 1990s persist most of this poverty reduction will occur in asia however while poverty will decline only slightly in africa effective aid could make a contribution to greater poverty reduction in lagging regions even more potent would be significant policy reform in these countries we develop a model of efficient aid in which flows respond to policy improvements that create a better environment for poverty reduction and effective aid we investigate scenarios of policy reform and efficient aid that point the way to how the world can cut poverty in half in every major region

urban residential demand for water in the united states further discussion using a new model formulation and data from a sample of colorado utilities we investigated the price specification controversy marginal price versus average revenue when estimating residential water demand the improved statistical fit using average

aid poverty reduction and the new conditionality the paper examines the effect of aid on poverty rather than on economic growth we devise a pro poor public expenditure index and present evidence that together with inequality and corruption this is a key determinant of the aid s poverty leverage after presenting empirical evidence which suggests a positive leverage of aid donors on pro poor expenditure we argue for the development of conditionality in a new form which gives greater flexibility to donors in punishing slippage on previous commitments and keys aid disbursements to performance in respect of policy variables which governments can influence in a pro poor direction

the macroeconomic impact of aid volatility we analyse the impact of aid volatility on gdp gnp shares of expenditure given the level of aid positive and negative volatility reduce investment and government expenditure shares but the former reduces import share and the latter increases consumers expenditure share

discovering the link between inflation rates and inflation uncertainty a new time series model is used to reassess the strength of the link between inflation uncertainty and the level of inflation in the united states the model provides several statistical measures that can be used to examine different aspects of uncertainty the main finding is that uncertainty about the long rather than short term prospects for inflation moved strongly with the rate of inflation since the early 1970s copyright 1991 by ohio state university press

a review of time use models of residential electricity demand residential electricity demand in most european countries accounts for a major proportion of overall electricity consumption the timing of residential electricity demand has significant impacts on carbon emissions and system costs this paper reviews the data and methods used in time use studies in the context of residential electricity demand modelling it highlights key issues which are likely to become more topical for research on the timing of electricity demand following the roll out of smart metres

the negative side of inflation targeting revisiting inflation uncertainty in the emu this article tests the friedman ball hypothesis for the european monetary union emu countries using a garch methodology the empirical results show a positive relationship between inflation and

does energy consumption respond to price shocks evidence from a regression discontinuity design does energy consumption respond to price shocks this paper exploits unique features of a recently introduced tariff schedule for natural gas in buenos aires to estimate the short run impact of price shocks on residential energy utilization the schedule induces a non linear and non monotonic relationship between households accumulated consumption and unit prices thus generating an exogenous source of variation in perceived prices which is exploited in a regression discontinuity design the estimates reveal that a price increase in the utility bill received by consumers causes a substantial and prompt decline in gas consumption hence they suggest that policy interventions via the price mechanism such as price caps and subsidies are powerful instruments to influence residential energy utilization patterns even within a short time span

redesigning the aid contract donors use of performance indicators in uganda abstract the perceived failure of traditional ex ante conditionality has led to proposals for using performance indicators as a basis for aid allocations ex post conditionality in this article we assess the role of performance indicators and their impact on the aid contract between donors and the government of uganda in uganda the use of performance indicators has radically changed donor recipient relations by improving both program monitoring and donor coordination it has however not yet fundamentally changed the incentive structure in the aid contract to improve the incentive structure we propose a distinction between indicators used for monitoring and those designed to guide aid allocations

deconstructing the rosenfeld curve making sense of california s low electricity intensity abstract regulatory regimes that have increased household energy efficiency are of widespread interest to policymakers today a prominent example is the state of california where electricity intensities in the residential sector have stayed near constant since the 1970s in sharp contrast to nationwide trends in the united states a structural model of residential energy consumption is used to show that the use of energy intensities alone to evaluate the success of california efficiency programs is misleading and glosses over important policy independent factors we quantify important effects of price climate conditions and demographic characteristics on energy consumption in california we also provide evidence of split incentive considerations in residential energy consumption patterns we conclude that while state policy may have had some effect on efficiency caution needs to be exercised in using the california example to inform expectations from similar measures in other regions

comparing residential water demand estimates under decreasing and increasing block rates using household data using a new model formulation and data from a sample of colorado utilities we investigated the price specification controversy marginal price versus average revenue when estimating residential water demand the improved statistical fit using average

response of residential electricity demand to price in this paper we present an empirical analysis of the residential demand for electricity using annual aggregate data at the state level for 48 us states from 1995 to 2007 we estimate a dynamic partial adjustment model using the kiviet corrected lsdv 1995 and the blundell bond 1998 estimators in addition to the lagged dependent variable our equation includes energy prices income cooling and heating degree days and average household size we find that the short run own price elasticity of consumption is similar across ldsv bias corrected lsdv and the variant of the blundell bond where we instrument for price the short run elasticity is the lowest when we use the blundell bond gmm approach that treats the price of electricity as exogenous the long term elasticities produced by the blundell bond system gmm methods are largest and that from the bias corrected ldsv is greater than that from the conventional lsdv from an energy policy point of view the results obtained using the blundell bond estimator where we instrument for price imply that there is room in an electricity system mainly based on coal and gas power plants for discouraging residential electricity consumption and curbing greenhouse gas emissions by imposing a carbon tax

how should structural adjustment programs be designed abstract more than seven years have elapsed since the onset of the generalized debt crisis of 1982 yet the affected countries have still not managed to stabilize their economies these countries must now attempt structural adjustment in the midst of pervasive macroeconomic and political instability structural adjustment packages should be designed with this reality in mind this paper argues that structural adjustment programs should strive for sustainability rather than the economic liberalization that they presently stress illiberal policies which do not damage overall macro stability are preferable to liberal policies which are inherently unsustainable or engender macro instability liberalization programs that are not sustainable are likely to bring few benefits but have high costs in terms of private investment the paper discusses some of the chief implications of this opinion for the design of adjustment programs

price elasticities of residential electricity demand estimates from household panel data in bangladesh abstract we collect a household level panel dataset to estimate the price elasticities of electricity demand for different types of urban households in bangladesh we use an instrumental variable estimation strategy which exploits exogenous variation in average electricity prices induced by a value added tax shock the results indicate significant heterogeneity in price elasticities by electricity consumption levels we conduct a number of simulations under alternative policy scenarios to illustrate how incorporating the heterogeneous nature of price elasticities into pricing policy can help decrease electricity demand supply mismatch and inequality in electricity consumption the results have important policy implications for developing countries aiming to address major energy issues by implementing tariff reforms

exchange rate dynamics in anticipation of time contingent regime switching modelling the effects of a possible delay abstract the procedure of fixing a currently floating exchange rate at a given and publicly announced future date has a broad range of applications based on a continuous time monetary exchange rate model with flexible prices this paper analyzes exchange rate dynamics during the transition from floating to fixed rates in a situation in which market participants are uncertain about adherence to the fixing date and in which they take account of a possible delay in the regime switch the closed form solutions derived here allow us to quantify announcement effects as well as effects on the exchange rate variance caused by news that significantly changes the market s assessment of uncertainty

perception of price when price information is costly evidence from residential electricity demand a bstract residential electricity consumption is an example of a good for which it is costly to determine marginal price since price changes with the quantity purchased according to multistep block rate schedules this paper investigates the effect of the price information problem on consumers price perceptions an alternative hypothesis of average price perception is tested against the marginal price postulate which assumes wellinformed consumers the model which includes a price perception variable allows the estimation of the price to which consumers actually respond the empirical results support the hypothesis that consumers respond to average price perceived from the electricity bill

darlings and orphans interactions across donors in international aid we examine how bilateral aid flows of an individual donor to a recipient depend on aid flows from all other bilateral and multilateral donors to that recipient we thereby assess to what extent issues including donor coordination free riding selectivity specialization and common donor interests drive bilateral aid allocations we find that others bilateral flows lead to a significant increase in aid flows from a particular donor but primarily within a given year the effects are particularly pronounced for large donors and so called darling recipients overall the results suggest that herding is a dominant feature of aid inter relationships this article is protected by copyright all rights reserved

residential electricity consumption in seattle abstract recent empirical research for different regions of the united states indicates that residential electricity may be an inferior good whose consumption is negatively correlated with income that is a provocative result that runs counter to what many earlier econometric studies indicate given that it makes sense to examine how electricity consumption behaves in different regional service areas even if residential electricity is an inferior good whose usage declines as income rises there is no guarantee that this will be the case across all service areas this study examines residential electricity consumption for seattle washington the largest metropolitan economy in the northwestern region of the united states results from a dynamic error correction modeling approach indicate that residential electricity consumption reacts in statistically significant manners to changes in real price real income and cold weather in the short run residential electricity is a normal good in this metropolitan economy in the long run residential electricity appears to be an inferior good in seattle all else equal whenever real per capita income growth exceeds 1 2 per capita residential electricity usage declines in seattle

environmental regulation of households an empirical review of economic and psychological factors abstract the literature on sustainable consumption and environmental regulation of household behavior is dominated by conceptual and normative approaches as a result many suggestions lack a firm empirical basis to overcome this deficiency econometric studies in three areas of environmentally relevant activities of households are reviewed residential use of energy generation of solid waste and recycling and residential use of water next to price and income elasticities attention is devoted to individual socio economic features and psychological factors such as attitudes knowledge perceptions and values potential psychological determinants and related insights are further examined by discussing a range of representative and illustrative statistical psychological studies of environmental behavior one important general finding is that there are very few empirical studies that systematically combine socio economic and psychological determinants a range of insights for environmental policy is derived and research recommendations are offered

european central bank footprints on inflation forecast uncertainty the finding of the paper shows the relative effectiveness of the one size fits all policy of the european central bank the paper provides strong evidence in favor of this by testing whether the monetary policy effects footprints found in inflation uncertainty converge to a common level these footprints are measured as the fraction of the estimated policy induced reduction in this uncertainty the testing was conducted by applying a bootstrap type test in a regression of the rate of growth of these fractions on their initial values computed for 16 euro area countries jel c33 e52 e58

eurosystem monetary targeting lessons from u s data abstract using a small empirical model of inflation output and money estimated on u s data we compare the relative performance of monetary targeting and inflation targeting the results show monetary targeting to be quite inefficient yielding both higher inflation and output variability this is true even with a nonstochastic money demand formulation our results are also robust to using a p model of inflation therefore in these popular frameworks there is no support for the prominent role given to money growth in the eurosystem s monetary policy strategy

convergence of inflationary shocks evidence from the caribbean in this paper we aim to shed some light on the inflation dynamics in the caribbean we analyse the inflation rates for twelve countries using various time series methods the results show that the inflation rates are mean reverting processes and that there is evidence of a convergence club in inflation rates within the area which contradicts previous studies our contribution implies a high degree of similarity in the dynamics of our target countries inflation rates

optimal control of heteroscedastic macroeconomic models summary this paper analyses the implications of heteroscedasticity for optimal macroeconomic policy and welfare we find that changes in the variance structure driven by exogenous processes like generalized autoregressive conditional heteroscedasticity garch affect welfare but not the optimal feedback rule however changes in the variance structure driven by state dependent processes affect both we also derive certainty equivalent transformations of state dependent volatility models that allow standard quadratic dynamic programming algorithms to be employed to study optimal policy these results are illustrated numerically using a reduced form model of the us economy in which changes in volatility are driven by a garch process and the rate of inflation copyright 2015 john wiley sons ltd

price and income elasticities of residential water demand a meta analysis this article presents a meta analysis of variations in price and income elasticities of residential water demand meta analysis constitutes an adequate tool to synthesize research results by means of an analysis of the variation in empirical estimates reported in the literature we link the variation in estimated elasticities to differences in theoretical microeconomic choice approaches differences in spatial and temporal dynamics as well as differences in research design of the underlying studies the occurrence of increasing or decreasing block rate systems turns out to be important with respect to price elasticities the use of the discrete continuous choice approach is relevant in explaining observed differences

the value of free water analyzing south africa s free basic water policy this paper analyzes south africa s free basic water policy under which households receive a free water allowance equal to the world health organization s recommended minimum of 6 kiloliters per month i structurally estimate residential water demand evaluate the welfare eects of free water and provide optimal price schedules derived from a social planner s problem i use a unique dataset of monthly metered billing data for 60 000 households for 2002 2008 from a particularly disadvantaged suburb of pretoria the dataset contains rich price variation across 18 dierent nonlinear tarischedules and includes a policy experiment which removed the free allowance i nd that without government subsidy the mean monthly consumption would decrease from 12 6 to 5 6 kiloliters which is below the clean water consumption recommended by the who however it is possible to reallocate the current subsidy to form an optimal tari without a free allowance which would increase welfare while leaving the water provider s revenue unchanged this optimal tariwould also reduce the number of households consuming below the who recommended level

price setting and inflation persistence did emu matter surprisingly it did not or at least not directly using micro data on consumer prices and sectoral inflation rates from 6 euro area countries spanning several years before and after the introduction of the euro we look at whether emu has altered the behaviour of retail price setting and or inflation dynamics we find no evidence that anything has changed around 1999 if anything persistence may have slightly increased at the end of 2001 and in the beginning of 2002 period surrounding the euro cash changeover retail price adjustment frequencies both up and down increased substantially while the magnitude of the price adjustment also both up and down was smaller than otherwise however both settled quickly back to the earlier patterns on the contrary we do find evidence of a decline in the persistence of the inflation process in the mid 1990s this could be due to a structural change in private inflationary expectations due at least in part to policies linked to the preparation of emu however this interpretation is weakened by the fact that a similar decline occurred also in the us

estimation of japanese price elasticities of residential electricity demand 1990 2007 abstract this paper estimates elasticities of japanese residential price electricity from 1990 to 2007 the first difference generalized method of moment estimator is employed to avoid dynamic panel bias which is not considered in most previous studies the results show that while short run elasticities are similar to those in previous studies long run elasticities are significantly lower in our study we also find that the price elasticity of japanese residential electricity consumption is notably affected by income inequality and severe weather based on these results we provide some insights to tailor environmental taxation so as to effectively attain the kyoto protocol

the effects of real and nominal uncertainty on inflation and output growth some garch m evidence in this paper we use garch m methods to test four hypotheses about the effects of real and nominal uncertainty on average inflation and output growth in the united states from 1948 to 1996 we find no evidence that higher inflation uncertainty or higher output growth uncertainty raises the average inflation rate we also find no support for the idea that more risky output growth is associated with a higher average real growth rate our key result is that in a variety of models and sample periods inflation uncertainty significantly lowers real output growth copyright 2000 john wiley sons ltd

aid instability as a measure of uncertainty and the positive impact of aid on growth this article contributes to the literature on aid and economic growth we posit that uncertainty measured as the instability of aid receipts will influence the relationship between aid and investment how recipient governments respond to aid and will capture the fact that some countries are especially vulnerable to shocks when we account for uncertainty which is negative and significant we find that aid has a significant positive effect on growth largely due to its effect on the volume of investment the finding that uncertainty of aid receipts reduces the effectiveness of aid is robust when the regression is estimated for the sub sample of african countries these findings hold although the effectiveness of aid appears weaker than for the full sample

urban water demand with periodic error correction monthly demand for publicly supplied water to u s residences and businesses is estimated from a 10 year panel of 167 cities a periodic error correction model integrates monthly annual and long run time scales statistical consistency is validated by unit root tests adapted to the monthly frequency water and wastewater price elasticity of demand is estimated by sector calendar month and time horizon

information provision and consumer behavior a natural experiment in billing frequency abstract in this study i estimate a causal effect of increased billing frequency on consumer behavior i exploit a natural experiment in which residential water customers switched exogenously from bimonthly to monthly billing customers increase consumption by 3 5 5 in response to more frequent information this result is reconciled in models of price and quantity uncertainty where increases in billing frequency reduce the distortion in consumer perceptions using treatment effects as sufficient statistics i calculate consumer welfare gains equivalent to 0 5 1 of annual water expenditures heterogeneous treatment effects suggest increases in outdoor water use

residential water demand in the northwest of spain a panel of monthly aggregate data from the northwest of spain is used to estimate domestic water demand functions under linear and non linear tariffs price billing climatic and sociodemographic variables are used as explanatory variables the use of intraannual data constitutes a relevant contribution in the european context overall marginal price elasticity estimates lie between 0 12 and 0 17 summer only elasticities and elasticities associated with uses beyond the effectively free allowances seem significantly higher climatic variables significantly affect monthly use although probably less than in other wealthier and drier areas domestic water use appears to be a normal good

nominal uncertainty and inflation the role of european union membership abstract we provide evidence that higher inflation uncertainty leads to higher inflation in the new european union eu member states and candidate countries only prior to eu accession during eu accession and entry inflation uncertainty has no effect on mean inflation

aid and growth regressions this paper examines the relationship between foreign aid and growth in real gdp per capita as it emerges from simple augmentations of popular cross country growth specifications it is shown that aid in all likelihood increases the growth rate and this result is not conditional on good policy there are however decreasing returns to aid and the estimated effectiveness of aid is highly sensitive to the choice of estimator and the set of control variables when investment and human capital are controlled for no positive effect of aid is found yet aid continues to impact on growth via investment we conclude by stressing the need for more theoretical work before this kind of cross country regressions are used for policy purposes

the effects of inflation on the predictability of price changes in latin america some estimates and policy implications abstract this paper argues that the relationship between price variability and inflation in high inflation countries should be estimated on a frequent basis and that rational expectations are the appropriate formulation for predicting inflation analysis of seven latin american countries taking these factors into account suggests that higher inflation contributes to the difficulty of predicting price changes the impact is more moderate than that found in previous studies however indicating that less concern may be warranted about the possible stagflationary effects of expansionary policies

testing the behavior of rationally inattentive consumers in a residential water market abstract rationally inattentive consumers tend to apply simplified heuristics when making decisions we test the hypothesis of rational inattention in the context of residential water usage where water bills typically account for a small fraction of household expenditures and only attract casual attention we begin by rigorously testing whether or not residential water customers exhibit evidence of rational inattention we then propose a heuristic water demand model to explore the decision making of rationally inattentive consumers and validate the model by comparing the model with the discrete continuous choice model on attentive and fully informed decision makers in out of sample predictions

cross country evidence on the link between volatility and growth this paper presents empirical evidence against the standard dichotomy in macroeconomics that separates growth from the volatility of economic fluctuations in a sample of ninety two countries as well as a sample of oecd countries the authors find that countries with higher volatility have lower growth the addition of standard control variables strengthens the negative relationship the authors also find that government spending induced volatility is negatively associated with growth even after controlling for both time and country fixed effects copyright 1995 by american economic association

demand customer base line and demand response in the electricity market a survey the increasing use of demand side management as a tool to reliably meet electricity demands at peak time has stimulated interest among researchers consumers and producer organiza tions managers regulators and policymakers this research reviews the growing literature on models which are used to study demand customer base line cbl and demand response in the electricity market after characterizing the general demand models the cbl based on which the demand response models are studied is reviewed given the experience gained from the review and existing conditions the study combines an appropriate model for each case for a possible application to the electricity market moreover it discusses the implications of the results in the literature these aspects are studied independently the main contribution of this survey is attributed to the treatment of the three issues as sequentially interdependent the review is expected to enhance the understanding of the demand cbl and demand response in the electricity market and their relationships the objective is conducted through a combination of demand and supply side managements in order to reduce demand through different demand response programs during peak times this enables electricity suppliers to save costly electricity generation and at the same time reduce energy vulnerability