nonmonetary effects of the financial crisis in propagation of the great depression this paper examines the effects of the financial crisis of the 1930s onthe path of aggregate output during that period our approach is complementary to that of friedman and schwartz who emphasized the monetary impact of the bank failures we focus on non monetary primarily credit related aspects of the financial sector output link and consider the problems of debtors as well as those of the banking system we argue that the financial disruptions of 1930 33 reduced the efficiency of the credit allocation process and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand evidence suggests that effects of this type can help explain the unusual length and depth of the great depression this abstract was borrowed from another version of this item

tax distortions and global climate policy abstract we consider the efficiency implications of policies to reduce global carbon emissions in a world with pre existing tax distortions we first note that the weak double dividend the proposition that the welfare improvement from a tax reform where environmental taxes are used to lower distorting taxes must be greater than the welfare improvement from a reform where the environmental taxes are returned in a lump sum fashion need not hold in a world with multiple distortions we then present a large scale computable general equilibrium model of the world economy with distortionary taxation we use this model to evaluate a number of policies to reduce carbon emissions we find that the weak double dividend is not obtained in a number of european countries results also demonstrate the point that the interplay between carbon policies and pre existing taxes can differ markedly across countries thus one must be cautious in extrapolating the results from a country specific analysis to other countries

modeling technology adoptions for sustainable development under increasing returns uncertainty and heterogeneous agents abstract this paper presents a stylized model of technology adoptions for sustainable development under the three potentially most important stylized facts increasing returns to adoption uncertainty and heterogeneous agents following diverse technology development and adoption strategies the stylized model deals with three technologies and two heterogeneous agents a risk taking one and a risk averse one interactions between the two agents include trade in resources and goods and technological spillover free riding and technology trade with the two heterogeneous agents we run optimizations to minimize their aggregated costs in order to find out what rational behaviors are under different assumptions if the two agents are somehow cooperative by considering uncertain carbon taxes the model also addresses environmental issues as potential driving forces for technology adoptions

climate change taxes and energy efficiency in japan in 2003 japan proposed a climate change tax to reduce its co2 emissions to the level required by the kyoto protocol if implemented the tax would be levied on fossil fuel use and the revenue distributed to encourage the purchase of energy efficient equipment analysis using the mit emissions prediction and policy analysis eppa model shows that this policy is unlikely to bring japan into compliance with its kyoto target unless the subsidy encourages improvement in energy intensity well beyond japan s recent historical experience similar demand management programs in the us where there has been extensive experience have not been nearly as effective as they would need to be to achieve energy efficiency goals of the proposal the tax proposal also calls for limits on international emission trading we find that this limit substantially affects costs of compliance the welfare loss with full emissions trading is 1 6 that when japan meets its target though domestic actions only the carbon price is lower and there is a smaller loss of energy intensive exports japan can achieve substantial savings from emissions trading even under cases where for example the full amount of the russian allowance is not available in international markets

estimating elasticities of substitution with nested ces production functions where do we stand abstract prompt by an increasing interest by climate change modelers a rich literature estimating elasticities of substitution in a nested ces production framework has recently developed this article reviews such literature we critically describe the nesting structures estimation approaches data sources and aggregation econometric techniques and types of substitution elasticities used by previous literature to offer a comprehensive description of the various options available to a researcher attempting this estimation we also provide suggestions for potential improvements to the estimation process in particular we warn researchers to use ces production functions with caution in empirical applications given their restrictive build in assumptions

optimal production and carbon emission reduction level under cap and trade and low carbon subsidy policies abstract in recent years massive carbon emissions have caused serious global environmental damage such as a worsening greenhouse effect and thick haze to curb carbon emissions as well as maintain sustainable economic development governments promote the development of low carbon economy by issuing multiple policies among which the cap and trade policy ctp and low carbon subsidy policy lcsp are widely adopted moreover manufacturers are increasingly adopting carbon emission reduction technology to produce greener products considering related government policies and rising environmental awareness among consumers to give policy making insights to governments as well as production and carbon emission reduction decision making insights to manufacturers this paper investigates the impacts of ctp and lcsp on the production and carbon emission reduction level of a manufacturer and explores which policy is better for society the results show that the carbon emission reduction level increases as the carbon trading price increases whereas it is independent of the unit low carbon subsidy interestingly the carbon trading price does not always have a negative effect on the manufacturer s profit and the cap does not always produce a positive effect on the manufacturer s profit more importantly we find that lcsp is more beneficial to society when the environmental damage coefficient is less than a threshold but otherwise ctp is more beneficial

combining carbon tax and r d subsidy for climate change mitigation abstract r d industry is introduced into a cge model kei linkages as a means to mimic the endogenous technological progress in the korean economy we found that providing across the board subsidy on r d expenditure may lead to an increase in the carbon intensity as well as the real gdp for the korean economy however when r d subsidies are combined with a carbon tax real gdp can grow without increasing co 2 emissions carbon tax on top of r d subsidy represses the growth of carbon intensive industries compared to the case of stand alone r d subsidy policy furthermore carbon intensive industries reduce carbon intensity by way of fuel mix change to cope with a higher carbon tax rate to meet the national co 2 reduction target the final outcome impinges on the industry structure of the economy therefore a careful study of the industry structure of the economy is warranted to maximize the effectiveness of climate change policy mix

consequences of a carbon tax on household electricity use and cost carbon emissions and economics of household solar and wind abstract the study was conducted to determine the consequences of a carbon tax equal to an estimated social cost of carbon of 37 2 mg on household electricity cost and to determine if a carbon tax would be sufficient to incentivize households to install either a grid tied solar or wind system u s department of energy hourly residential profiles for five locations 20 years of hourly weather data prevailing electricity pricing rate schedules and purchase prices and solar panel and wind turbine power output response functions were used to address the objectives two commercially available household solar panels 4 kw 12 kw two wind turbines 6 kw 12 kw and two price rate structures traditional meter smart meter were considered averaged across the five households the carbon tax is expected to reduce annual consumption by 4 4 552 kwh year for traditional meter households and by 4 9 611 kwh year for households charged smart meter rates the carbon tax increases electricity cost by 19 202 year for a household cost of 202 year the carbon tax is expected to reduce social costs by 11 annual carbon tax collections of 234 household are expected adding the carbon tax was found to be insufficient to incentivize households to install either a solar panel or wind turbine system installation of a 4 kw solar system would increase the annual cost by 1546 247 and decrease co 2 emissions by 38 2526 kg valued at 94 household the consequence of a carbon tax would depend largely on how the proceeds of the tax are used

could a monetary base rule have prevented the great depression abstract this paper continues an ongoing investigation of the properties of a policy rule that specifies settings of the monetary base that are designed to keep nominal gnp growing smoothly at a noninflationary rate counterfactual historical simulations for 1923 1941 are conducted with the rule and a small model of nominal gnp determination estimated with u s quarterly data with residuals fed in as estimates of the behavioral shocks that occurred the simulation results indicate that nominal gnp would have been kept reasonably close to a steady three percent path over 1923 1941 if the rule had been in effect

not just the great contraction friedman and schwartz s a monetary history of the united states 1867 to 1960 milton friedman and anna j schwartz published a monetary history of the united states 1867 to 1960 with princeton university press in 1963 to critical acclaim since then the book s reputation has grown and it clearly has become one of the most influential volumes in economics in the twentieth century in this paper we document the extraordinary impact of a monetary history and argue that the key to this success was the use of the narrative approach to the problem of identifying the effects of monetary policy on economic activity

testing for the presence of some features of increasing returns to adoption factors in energy system dynamics an analysis via the learning curve approach the purpose of this paper is to explain the sources of energy system lock in it presents a comparative analysis of the respective contributions of some features of increasing returns to adoption factors i e learning by doing learning by searching and returns to scale effects in explaining the technological change dynamics in the energy system the paper is technically based on a critical analysis of the learning curve approach econometric estimation of learning and scale effects inherent to seven energy technologies were performed by the use of several learning curve specifications these specifications permit to deal with some crucial issues related to the learning curve estimation which are associated with the problem of omitted variable bias the endogeneity effects and the choice of learning indicators results show that dynamic economies from learning effects coupled with static economies from scale effects are responsible for the lock in phenomena of the energy system they also show that the magnitude of such effects is correlated with the technology life cycle maturity in particular results point out that 1 the emerging technologies exhibit low learning rates associated with diseconomies of scale which are argued to be symptomatic of the outset of the deployment of new technologies characterized by diffusion barriers and high level of uncertainty 2 the evolving technologies present rather high learning rates meaning that they respond quickly to capacity expansion and r d activities development 3 conventional mature technologies display low learning rates but increasing returns to scale implying that they are characterized by a limited additional diffusion prospects

will markets direct investments under the kyoto protocol lessons from the activities implemented jointly pilots under the kyoto protocol countries can meet treaty obligations by investing in projects that reduce or sequester greenhouse gases elsewhere prior to ratification treaty participants agreed to launch country based pilot projects referred to collectively as activities implemented jointly aij to test novel aspects of the project related provisions relying on a ten year history of projects we investigate the determinants of aij investment our findings suggest that review agency preferences related to national political objectives and possibly deeper cultural ties influenced project selection and limited the number of aij projects bilateral ties also appear to have affected investment decisions directly possibly because of related transaction costs the results suggest an investment process different from the assumptions that underlie well known estimates of cost savings related to the protocol s flexibility mechanisms we conclude that if approaches developed under the aij programs to approve projects are retained the scale of investment under kyoto s flexibility provisions and their cost savings will be less than what is generally anticipated and the pattern of investment less driven by abatement costs

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

branch banking bank competition and financial stability it is often argued that branching stabilizes banking systems by facilitating diversification of bank portfolios however previous empirical research on the great depression offers mixed support for this view using data on national banks from the 1920s and 1930s we show that branch banking raises the level of competition and increases exit from the banking system this consolidation strengthens the system as a whole without necessarily strengthening the branch banks themselves our empirical results suggest that the effects that branching had on competition were quantitatively more important than geographical diversification for bank stability in the 1920s and 1930s

parametric efficiency tests economies of scale and input demand in u s electric power generation duality theory has been applied increasingly in recent years to study the structure of production a major advantage of using duality theory is that systems of input demand equations can be derived by simple differentiation facilitating the use of flexible functional forms also use of duality theory makes it possible to choose a representation of the technology which has desirable properties for estimation such as exogeneity of the regressors however the use of a dual representation of production structure is appropriate only if the corresponding maintained hypothesis concerning economic behavior e g cost minimization or profit maximization is valid the perceived advantages of the dual approach to studying production structure have led to some applications in which the maintained hypothesis concerning economic behavior is unlikely to be appropriate for example neoclassical cost functions have been used to study the characteristics of production in regulated industries despite an extensive theoretical literature indicating that a profit maximizing regulated firm would not minimize costs subject to market prices 2 in this paper we propose a generalized cost function that retains the principal advantages of the neoclassical cost function but does not require that cost minimization subject to market prices be imposed as a maintained hypothesis in our model firms are assumed to base their production decisions on unobservable shadow prices which reflect the effects of regulation on the effective prices of inputs parametric tests for cost minimization are obtained by expressing shadow prices as functions of market prices the generalized cost function is estimated with data for regulated electric utilities the parametric restrictions corresponding to cost minimizing behavior subject to market prices are rejected implying that the use of a neoclassical cost function is not appropriate in this application 3

assessing energy price induced improvements in efficiency of capital in oecd manufacturing industries to assess how capital stocks adapt to energy price changes it is necessary to account for the impacts on different vintages of capital and to account separately for price induced and autonomous improvements in the energy efficiency of capital stock the results of econometric analysis for five manufacturing industries in 19 oecd countries between 1990 and 2005 indicate that higher energy prices resulted in smaller energy use due to both improved energy efficiency of capital stock and reduced demand for the energy input the investment response to energy prices varied considerably across manufacturing industries being more significant in energy intensive sectors the results of policy simulations indicate that a carbon tax can deliver significant reductions in energy consumption in the medium run with modest declines in energy using capital stock

measuring the value of induced technological change in this paper we analyze the value of induced technological change itc for cutting the costs of reaching climate stabilization targets using techniques from the tax burden literature first itc is valuable as it increases the elasticity of emissions with respect to carbon prices and thereby it decreases the burden associated with an enforced emission reduction second under itc emission abatement may generate a positive learning dividend when the social value of the induced change in learning exceeds its costs we discuss under which assumptions we expect itc to turn out a valuable feature or not we also carry out a numerical analysis with two models one focusing on energy savings the other focusing on energy transition the models suggest that both the decreased carbon tax burden and the learning dividend gain can be substantial compared to the costs of abatement without itc

the implications of the historical decline in us energy intensity for long run co2 emission projections this paper analyzes the influence of the long run decline in us energy intensity on projections of energy use and carbon emissions to the year 2050 we build on our own recent work which decomposes changes in the aggregate us energy gdp ratio into shifts in sectoral composition structural change and adjustments in the energy demand of individual industries intensity change and identifies the impact on the latter of price induced substitution of variable inputs shifts in the composition of capital and embodied and disembodied technical progress we employ a recursive dynamic computable general equilibrium cge model of the us economy to analyze the implications of these findings for future energy use and carbon emissions comparison of the simulation results against projections of historical trends in gdp energy use and emissions reveals that the range of values for the rate of autonomous energy efficiency improvement aeei conventionally used in cge models is consistent with the effects of structural changes at the sub sector level rather than disembodied technological change even so our results suggest that us emissions may well grow faster in the future than in the recent past

the impacts of china s household consumption expenditure patterns on energy demand and carbon emissions towards 2050 abstract this paper explores how china s household consumption patterns over the period 2005 2050 influence the total energy demand and carbon dioxide co2 emissions in two baseline scenarios and how it influences carbon prices as well as the economic cost in the corresponding carbon mitigation scenarios to this end we first put forward two possible household consumption expenditure patterns up to 2050 using the working leser model taking into account total expenditure increase and urbanization for comparison both expenditure patterns are then incorporated in a hybrid recursive dynamic computable general equilibrium model the results reveal that as income level increases in the coming decades the direct and indirect household energy requirements and co2 emissions would rise drastically when household expenditure shifts from material products and transport to service oriented goods around 21 000 mtce 1 of primary energy and 45 billion tons of co2 emissions would be saved over the 45 year period from 2005 to 2050 moreover carbon prices in the dematerialized mitigation scenario would fall by 13 in 2050 thus reducing the economic cost

large scale scenario analysis of future low carbon energy options abstract in this study we use a multi model framework to examine a set of possible future energy scenarios resulting from rd and portfolios lacking ccs and nuclear tend to be stochastically dominated by others we find that the dominance of ccs becomes even stronger as uncertainty in climate damages increases finally we show that there is significant value in carefully choosing a portfolio as relatively small portfolios can dominate large portfolios

towards a low carbon economy coping with technological bifurcations with a carbon tax abstract technological learning is understood as an endogenous mechanism for the diffusion of advanced clean energy technologies technological learning is quite uncertain previous research showed that an optimization model with uncertain technological learning could generate technological bifurcations various local optimal solutions of technology development strategies with very similar total costs but different environmental impacts with a simplified energy system optimization model this paper explores technological bifurcations and the effect of a carbon tax on the development and diffusion of new energy technologies with a three stage analysis the main findings of this paper are 1 that technological learning instead of its uncertainty is an essential mechanism for technological bifurcations and 2 a carbon tax can reduce carbon emission but not necessarily technological bifurcations an implication from these findings is that with a carbon tax there still could be potential for other policy interventions to reduce carbon emissions without much additional cost

could stable money have averted the great contraction i introduction although over fifty years have elapsed since the onset of the great contraction controversy still swirls about the factors responsible for its depth and long duration a basic issue is the hypothesis due to friedman and schwartz 1963 that the great contraction would have been attenuated had the federal reserve not allowed the money stock to decline although the validity of the hypothesis has been a subject of much debate there is little empirical evidence directly addressing it a direct test of the friedman and schwartz hypothesis requires simulating the behavior of output under a counterfactual policy of stable money that approach was adopted by warburton 1966 friedman 1960 and modigliani 1969 none of whom constructed a model of the economy on the basis of which to conduct his test recently mccallum 1990 has used simulations from a macro model to show that his base rule with feedback would have avoided the severe decline in nominal income that occurred between 1929 and 1933 1 the extent to which his rule would have improved the behavior of nominal income depends on the value of the feedback coefficient mccallum s simulations however do not address the issue considered here of how a stable money rule would have performed in this paper we present simulations that focus on the stable money counterfactual our model is based on mccallum s but we use a more general framework than his that a estimates separate relations for output and the price level and b places no prior restrictions on the feedback from output and the price level to money our stable money counterfactual does not change the long term rate of money growth from that actually experienced and thus involves only short run changes in the behavior of the money supply we assume that dynamics embedded in the output and price relation are not especially sensitive to this type of policy change we simulate two variants of milton friedman s 1960 constant money growth rule the first a strong form of the rule assumes that the fed could quickly offset changes in the money multiplier by changes in high powered money and thus keep the money stock on the constant growth rate path in each quarter the second a weaker form of the rule assumes that the money multiplier is observed with a one quarter lag and the fed can only set the expected rate of growth of money conditional on last period information equal to the constant rate our basic simulation is derived from a model estimated for the 1921 1 1941 4 interwar period the results of this simulation buttress the views of friedman and schwartz had a constant money growth rule with an annual rate equal to the average 1921 41 rate of 2 95 percent been followed throughout the interwar period the great contraction would have been avoided real output would have declined from 1929 3 to 1933 1 but the order of magnitude of the cumulative change 11 1 to 21 6 percent and the annual rate of change 3 3 to 6 6 percent when the actual cumulative change was 36 2 percent and the annual rate of change was 12 1 percent would have been comparable to other recessions in the nineteenth and twentieth centuries in the basic simulation we assume that the output and price relations remained stable over the entire interwar period the extraordinary economic conditions of the great contraction could have arguably shifted the output and price relations thus we also present an alternative simulation that uses estimates of these relations based on the 1920s data this simulation shows that a constant money growth rule with an annual rate equal to the 1921 29 average of 3 29 percent would have prevented even a mild recession during the great contraction period section ii contains a brief survey of the continuing debate over the cause and propagation mechanism of the great contraction and its implications for the stable money hypothesis

fundamentals panics and bank distress during the depression we assemble bank level and other data for fed member banks to model determinants of bank failure fundamentals explain bank failure risk well the first two friedman schwartz crises are not associated with positive unexplained residual failure risk or increased importance of bank illiquidity for forecasting failure the third friedman schwartz crisis is more ambiguous but increased residual failure risk is small in the aggregate the final crisis early 1933 saw a large unexplained increase in bank failure risk local contagion and illiquidity may have played a role in pre 1933 bank failures even though those effects were not large in their aggregate impact

production functions for climate policy modeling an empirical analysis abstract quantitative models for climate policy modeling differ in the production structure used and in the sizes of the elasticities of substitution the empirical foundation for both is generally lacking this paper estimates the parameters of 2 level ces production functions with capital labour and energy as inputs and is the first to systematically compare all nesting structures using industry level data from 12 oecd countries we find that the nesting structure where capital and labour are combined first fits the data best but for most countries and industries we cannot reject that all three inputs can be put into one single nest these two nesting structures are used by most climate models however while several climate policy models use a cobb douglas function for part of the production function we reject elasticities equal to one in favour of considerably smaller values finally we find evidence for factor specific technological change with lower elasticities and with factor specific technological change some climate policy models may find a bigger effect of endogenous technological change on mitigating the costs of climate policy

substitutability and the cost of climate mitigation policy we explore how and by how much the values of elasticities of substitution affect estimates of the cost of emissions reduction policies in computable general equilibrium cge models we use g cubed an intertemporal cge model to carry out a sensitivity and factor decomposition analysis the decomposition analysis determines the contributions of changes in average abatement costs and changes in baseline emissions to the change in total mitigation costs the latter has not previously been considered average abatement cost rises non linearly as elasticities are reduced changes in the substitution elasticities between capital labor energy and materials have a greater impact on mitigation costs than do inter fuel elasticities of substitution the former have more effect on business as usual emissions and the latter on average abatement costs as elasticities are reduced business as usual emissions and gdp growth also decrease so that there is not much variation in the total costs of reaching a given target across the parameter space our results confirm that the cost of climate mitigation policy is at most a few percent of global gdp

a real option model for renewable energy policy evaluation with application to solar pv power generation in china abstract this study proposes a policy evaluation model from the perspective of government and investors the proposed model which integrates american option method and two factor learning curve method can be used to evaluate the unit decision value and save path rate for renewable energy development and examine the existence of balance point of interest several uncertain factors including non renewable energy cost carbon price renewable energy cost and price subsidy are all considered in this model the model has been applied to evaluate the solar photovoltaic pv power generation in china our empirical results show that real option analysis roa is more effective than net present value analysis npv when handling uncertainty under current level of subsidy the government would suffer loss and the investors could benefit so that it is difficult to achieve the balance of interest during the planning period with the reduction of subsidy rate they can achieve the balance of interest

technology development and the environment abstract in an attempt to achieve the positive externalities from a more knowledge intensive economy many developing countries have emphasized improvements in their science and technology st a substitution of energy for other factors of production and greater energy consumption by households our findings underscore the importance of considering the economy wide implications of a technology policy recognizing that better technology does not necessarily imply a cleaner environment

can tariffs be used to enforce paris climate commitments we evaluate the potential of border carbon adjustments bcas and strategic tariffs to compel noncompliant countries to meet emission reduction targets pledged under the paris climate agreement our analysis employs a numerical economy wide model with energy sector detail and given recent actions by the us administration considers bcas on us exports we find that when the us does not restrict emissions and faces bcas on its exports us welfare losses are smaller than when the us meets its paris commitments hence bcas are preferable for the us and cannot be used to enforce paris climate commitments the use of strategic tariffs on the contrary would result in a trade war and a larger welfare decrease in us welfare than when it meets its paris commitments strategic tariffs also decrease welfare in countries that meet their paris pledges accordingly strategic tariffs which are much higher than bca rates can be used to enforce paris climate commitments if compliant countries are willing to incur welfare losses to punish non compliant countries

representing induced technological change in models for climate policy analysis induced technological change itc whereby the relative price effects of reducing greenhouse gas emissions stimulate innovation that mitigates the cost of abatement is both tantalizing to decision makers and challenging to represent in the computational economic and engineering models used to analyze climate change policy this overview reconciles the divergent views of technology and technological change within different types of models elucidates the theoretical underpinnings of itc introduces the reader to the techniques of their practical implementation and evaluates the implications for models results

the timing of taxes on co2 emissions when technological change is endogenous abstract how do technology spillovers affect the relationship between emissions taxes and technological change without spillovers a regulator applies pigovian taxes which lead to a first best optimum optimal emissions and optimal technology investment given spillovers pigovian taxes are likely to be second best optimal if emissions saving technology and production technology are equally undersupplied raising taxes above the pigovian level boosts emissions saving investment but only at the expense of production investment the technologies are equally undersupplied when there is a degree of symmetry between the sectors and the economy is on a balanced growth path on a transition path with rising atmospheric stocks and a high level of investment in emissions saving technology a regulator may raise carbon taxes above the pigovian level in order to encourage investment in emissions saving technology at the expense of production technology i show this using both analytical and numerical results

lessons from the 1930s great depression this paper provides a survey of the great depression comprising both a narrative account and a detailed review of the empirical evidence focusing especially on the experience of the united states we examine the reasons for and flawed resolution of the american banking crisis as well as the conduct of fiscal and monetary policy we also consider the pivotal role of the gold standard in the international transmission of the slump and leaving gold as a route to recovery policy lessons for today from the great depression are discussed as are some implications for macroeconomics

climate change policy in brazil and mexico results from the mit eppa model based on an in depth analysis of results from the mit economic projection and policy analysis eppa model of climate policies for brazil and mexico we demonstrate that commitments by mexico and brazil for 2020 made during the un climate meetings in copenhagen and cancun are reachable but they come at different costs for each country we find that brazil s commitments will be met through reduced deforestation and at no additional cost however mexico s pledges will cost 4 billion us dollars in terms of reduced gdp in 2020 we explore short and long term implications of several policy scenarios after 2020 considering current policy debates in both countries the comparative analysis of these two economies underscores the need for climate policy designed for the specific characteristics of each country accounting for variables such as natural resources and current economic structure our results also suggest that both brazil and mexico may face other environmental and economic impacts from stringent global climate policies affecting variables such as the value of energy resources in international trade

reforming china s institutional environment for urban infrastructure provision summary rapid urbanisation in the reform period has resulted in a very high demand for basic urban infrastructure in china improving its provision by the public sector is a challenge as problems persist in the form of unmet demand de ciencies in cost recovery and inadequate maintenance institutional hurdles particularly the lack of organisational and nancial autonomy for the providers of urban infrastructure are in part to blame urban construction authorities have yet to rid themselves of political interference and overlapping responsibilities but measures have been taken to reform the institutional environment speci cally increasingly decentralised central local scal relations are allowing municipalities an unprecedented degree of freedom for resource mobilisation through a wide range of mechanisms that greatly expand extra budgetary revenue a case study of shanghai s reform efforts shows that results can be immediate and promising

the economic and budgetary impact of climate policy in portugal carbon taxation in a dynamic general equilibrium model with endogenous public sector behavior the objective of this paper is to study hbox co 2 taxation in its dual role as a climate and fiscal policy instrument using a dynamic general equilibrium model of the portuguese economy which highlights the mechanisms of endogenous growth and incorporates a detailed modeling of public sector behavior and accounts in addition to the conventional marginal abatement cost curve we present a pair of complementary marginal abatement cost curves which highlight the impact hbox co 2 taxation has on economic performance and public debt and are therefore directly relevant to the terms of the policy debate these marginal abatement cost curves provide an effective tool for understanding the rate at which the environmental effectiveness economic costs and budgetary effects change with the tax level our results indicate that hbox co 2 taxes can be an important policy instrument for reducing emissions and promoting fiscal consolidation although this will come at a cost in terms of economic performance simulation results suggest that a tax of 17 00 euros per hbox tco 2 can satisfy existing climate policy targets the tax revenue effects together with reductions in public spending yield a 4 8 reduction in public debt these desirable outcomes come at the cost of a 1 3 reduction in gdp over the long term our analysis highlights that limiting public consumption expenditures can contribute to larger reductions in public debt albeit at a marginally greater cost to economic activity in turn reducing public investment although effective in reducing public debt produces a much larger negative economic impact this evokes an important trade off particularly pronounced in the present debates regarding austerity measures in the eu between fiscal consolidation efforts and efforts to promote convergence to eu standards of living these results further highlight that modeling assumptions with respect to public spending decision are not innocuous an exogenous trajectory for public spending suggests substantially smaller gdp effects and substantially larger public debt effects for any given emissions target

technology detail in a multisector cge model transport under climate policy a set of three analytical models is used to study the imbedding of specific transport technologies within a multisector multiregion evaluation of constraints on greenhouse emissions the key parameters of a computable general equilibrium cge model are set to mimic the behavior of a model of modal splits and a market allocation markal model of household and industry transport activities in simulation mode the cge model provides key economic data to an analysis of the details of transport technology under policy restraint results focus on the penetration of new automobile technologies into the vehicle market

autonomous efficiency improvement or income elasticity of energy demand does it matter observations of historical energy consumption energy prices and income growth in industrial economies exhibit a trend in improving energy efficiency even when prices are constant or falling two alternative explanations of this phenomenon are a productivity change that uses less energy and a structural change in the economy in response to rising income it is not possible to distinguish among these from aggregate data and economic energy models for forecasting emissions simulate one as an exogenous time trend or the other as energy demand elasticity with respect to income or both processes for projecting energy demand into the future in this paper we ask whether and how it matters which process one uses for projecting energy demand and carbon emissions we compare two versions of the mit emissions prediction and policy analysis eppa model one using a conventional efficiency time trend approach and the other using an income elasticity approach we demonstrate that while these two versions yield equivalent projections in the near term that they diverge in two important ways long run projections and under uncertainty in future productivity growth we suggest that an income dependent approach may be preferable to the exogenous approach

uncertainty in integrated assessment models modeling with minicam 1 0 abstract human initiated climate change remains one of the major science based public policy issues facing the nations of the world one feature of the issue that inhibits effective decisions is the ubiquity of uncertainty many if not most of the parameters of mathematical relationships that forecast emissions atmospheric processes impacts and effectiveness of countermeasures are uncertain we have added a stochastic simulation capability to the commonly used integrated assessment model minicam 1 0 to analyze the sources of uncertainty and their relative importance and to help devise strategies for depicting and coping with uncertainty the analysis shows that 1 the projected range of uncertainty in global temperature increase during the next century is greater than previously supposed but the central tendency is not dramatically higher 2 many of the major sources of uncertainty previously discussed in the literature remain significant but not all 3 an adaptive policy of act then learn then act appears to offer better prospects for balancing uncertain costs and benefits of controlling greenhouse gas emissions than do rigid precautionary measures and 4 current targets for atmospheric stabilization appear excessively ambitious

the great depression versus the great recession in the u s how fiscal monetary and financial polices compare abstract this study reviews the financial distress that triggered and amplified the financial crises of the great depression and great recession and compares macroeconomic and financial policy responses shadow banking funded the build up of the financial excesses that preceded both the quicker and forceful response of monetary and fiscal policy during the great recession and stronger action to restore market functionality mitigated the downturn and aided recovery nevertheless actions to address the mortgage debt overhang were slower post depression reforms focused on preventing deposit runs and post great recession reforms on preventing runs on bank debt and shadow banks while boosting capital buffers

international spillover and rebound effects from increased energy efficiency in germany the pollution energy leakage literature raises the concern that policies implemented in one country such as a carbon tax or tight energy restrictions might simply result in the reallocation of energy use to other countries this paper addresses these concerns in the context of policies to increase energy efficiency rather than direct action to reduce energy use using a global cge simulation model we extend the analyses of economy wide rebound from the national focus of previous studies to incorporate international spill over effects from trade in goods and services our focus is to investigate whether these effects have the potential to increase or reduce the overall global rebound of local energy efficiency improvements in the case we consider increased energy efficiency in german production generates changes in comparative advantage that produce negative leakage effects thereby actually rendering global rebound less than national rebound

urban infrastructure financing in reform era china urban infrastructure has been substantially upgraded in reform era china this paper explains contextually and empirically how chinese cities finance their infrastructure it demonstrates that china has succeeded in addressing urban infrastructure backlogs by opening up new venues for financing but simultaneously heavily relying on unconventional sources the paper also argues that urban infrastructure financing has much to do with the country s transition to a market oriented economy that fosters the pro growth role of city governments as well as the redistribution of fiscal power between the levels of the urban hierarchy that produces significant variation of financial capacities among the different administrative ranks of cities

assessment of copenhagen pledges with long term implications abstract this study first evaluates the pledges under the copenhagen accord using the dne21 model our estimates for the 2020 pledges fall collectively within the range of 46 700 49 100 mt co 2 eq our study also finds the efforts arising from the current 2020 pledges have wide ranging implications in terms of mitigation costs and types of actions based on this analysis we seek to place the copenhagen pledges in a long term context putting focus on costs and feasibility we set up a carbon prices convergence scenario assuming that all countries start from the copenhagen commitments and gradually undertake their own individual efforts in accordance with the convergence of carbon prices toward a uniform price in 2050 despite soaring carbon prices in most countries total costs as share of gdp show modest increase ranging mostly between 0 and 0 4 we also find that there does not seem to be much difference in the degree of burden between developed and major developing countries under this scenario since the challenge of climate change will require significant reductions in ghg emissions in the coming decades we need to make long lasting efforts getting on the right track toward the ultimate goal of stabilizing ghgs

technological learning in energy environment economy modelling a survey abstract this paper aims at providing an overview and a critical analysis of the technological learning concept and its incorporation in energy environment economy models a special emphasis is put on surveying and discussing through the so called learning curve both studies estimating learning rates in the energy field and studies incorporating endogenous technological learning in bottom up and top down models the survey of learning rate estimations gives special attention to interpreting and explaining the sources of variability of estimated rates which is shown to be mainly inherent in r d expenditures the problem of omitted variable bias the endogeneity relationship and the role of spillovers large scale models survey show that despite some methodological and computational complexity related to the non linearity and the non convexity associated with the learning curve incorporation results of the numerous modelling experiments give several new insights with regard to the analysis of the prospects of specific technological options and their cost decrease potential bottom up models and with regard to the analysis of strategic considerations especially inherent in the innovation and energy diffusion process in particular the energy sector s endogenous responses to environment policy instruments top down models

technology and technical change in the mit eppa model potential technology change has a strong influence on projections of greenhouse gas emissions and costs of control and computable general equilibrium cge models are a common device for studying these phenomena using the mit emissions prediction and policy analysis eppa model as an example two ways of representing technology in these models are discussed the sector level description of production possibilities founded on social accounting matrices and elasticity estimates and sub models of specific supply or end use devices based on engineering process data a distinction is made between exogenous and endogenous technical change and it is shown how because of model structure and the origin of key parameters such models naturally include shifts in production process that reflect some degree of endogenous technical change as a result the introduction of explicit endogenous relations should be approached with caution to avoid double counting

combining price and quantity controls to mitigate global climate change abstract uncertainty about compliance costs causes otherwise equivalent price and quantity controls to behave differently and leads to divergent welfare consequences although most of the debate on global climate change policy has focused on quantity controls due to their political appeal this paper argues that price controls are more efficient simulations based on a stochastic computable general equilibrium model indicate that the expected welfare gain from the optimal price policy is five times higher than the expected gain from the optimal quantity policy an alternative hybrid policy combines both the political appeal of quantity controls with the efficiency of prices using an initial distribution of tradeable permits to set a quantitative target but allowing additional permits to be purchased at a fixed trigger price even sub optimal hybrid policies offer dramatic efficiency improvements over otherwise standard quantity controls for example a 50 trigger price per ton of carbon converts the 3 trillion expected loss associated with a simple 1990 emission target to a 150 billion gain these results suggest that a hybrid policy is an attractive alternative to either a pure price or quantity system

re spending rebound a macro level assessment for oecd countries and emerging economies abstract it is well known that energy conservation can lead to rebound effects that partly offset the original energy savings one particular rebound mechanism is re spending of money savings associated with energy savings on energy intensive goods or services we calculate the average magnitude of this re spending rebound for different fuels and countries and for both energy and carbon co2 emissions we find that emerging economies neglected in past studies typically have larger rebounds than oecd countries since such economies play an increasingly important role in the global economy the re spending rebound is a growing concern the re spending effect is generally larger for gasoline than for natural gas and electricity paradoxically stronger financial incentives to conserve energy tend to increase the rebound this suggests that with climate regulation and peak oil the re spending rebound may become more important we discuss the policy implications of our findings

recent progress of cooperation on climate mitigation a bibliometric analysis abstract effective international cooperation is an important measure to mitigate climate change the purpose of this study is to clarify the research progress in the field of cooperation on emission reduction identify the influential authors and articles and reveal the main research topics based on the bibliometric method and the web of science database this study analyzes the literature in the field of cooperation on emission reduction the results show that the publications in this field have increased significantly over the past decade with the usa and china are the most influential countries keyword co occurrence and frequency analysis show that the most important research topics are as follows burden sharing and equity the stability of the climate coalition and international environmental agreements technology transfer and climate finance the linkage of carbon markets and the response to noncooperation behavior the main methods involved are game theory model integrated assessment models and computable general equilibrium model equitable distribution of mitigation responsibilities is the basis for cooperation on carbon reduction specific rulebooks for carbon market linkage is the key to its successful implementation this study helps researchers to clarify the current research status in the field of cooperation on emission reduction and provide valuable information for future research

application of computable general equilibrium cge to climate change mitigation policy a systematic review abstract with the growing literature related to climate change mitigation measures and policy interventions a systematic review of the application of computable general equilibrium cge model is inevitable therefore this article aims to characterise the relevant studies define a comparative framework to identify the current state of the art and the gaps in applied general equilibrium models firstly the systematic review found a total of 301 research articles from scopus and web of science databases and finally analysed 154 articles based on inclusion and exclusion criteria from 67 refereed journals the review analysis found that application of cge model is very vital in addressing climate change mitigation issues at the national regional and global levels however china attracted the most substantial research interests followed by the usa india and australia among others which are in line with their share of greenhouse gas emissions in the world most of the research themes focus on the carbon tax emission reduction target emission trading renewable energy energy efficiency and carbon capture and storage as primary drivers of low carbon economy nevertheless there is a trend of employing more static cge model compared to the dynamic cge although application of the latter has a limitation of providing right inputs to the macroeconomic policy finally research directions and gaps envision other complementary models such as dynamic stochastic general equilibrium dsge and agent based model abm for proper policy interventions

climate policies and induced technological change which to choose the carrot or the stick policies to reduce emissions of greenhousegases such as co2 will affect the rate andpattern of technological change in alternativeenergy supply and other production processes imperfections in markets for non pollutingtechnologies imply that a decentralised economydoes not deliver a socially optimal outcome and this could justify policy interventionssuch as subsidies this paper considers thewelfare effects of technology subsidies as partof a carbon abatement policy package we arguethat the presence of spillovers in alternativeenergy technologies does not necessarily implythat subsidy policies are welfare improving weillustrate this point in the context of ageneral equilibrium model with two forms ofcarbon free energy an existing alternative energy which is a substitute for carbon basedfuels and new vintage energy which providesa carbon free replacement for existing energyservices subsidisation of alternative energyon the grounds of spillover effects can bewelfare worsening if it crowds out new vintagetechnologies

central banking in the credit turmoil an assessment of federal reserve practice abstract central banking is understood in terms of the fiscal features of monetary credit and interest on reserves policies monetary policy expanding reserves by buying treasuries transfers all revenue from money creation directly to the fiscal authorities credit policy selling treasuries to fund loans or acquire non treasury securities is debt financed fiscal policy interest on reserves frees monetary policy to fund credit policy independently of interest rate policy an ambiguous boundary of responsibilities between the fed and the fiscal authorities contributed to economic collapse in fall 2008 accord principles are proposed to clarify fed credit policy powers and secure its independence on monetary and interest rate policy the fed needs more surplus capital from the fiscal authorities to be fully flexible against both inflation and deflation at the zero interest bound

increasing carbon pricing in the eu evaluating the options abstract a streamlined model applied at the member state level is used to evaluate possibilities for greater reliance on carbon pricing to meet the european union s mitigation pledge for the paris agreement the economic welfare costs of currently envisioned policies including the emissions trading system ets requirements for energy efficiency vehicle emission rates and national targets for non ets emissions are estimated at 1 1 of eu gdp in 2030 or 167 per ton of carbon dioxide co2 reduced on net these policies lose a small amount of revenue 0 05 of eu gdp a series of reforms progressively extending emissions pricing across sectors and countries reduces costs by about 0 6 of 2030 eu gdp or 90 per ton of co2 reduced while increasing revenues by almost 1 of eu gdp higher emissions prices in the eu ets would create the largest welfare gain and no country is made worse off from this reform

monetary intervention mitigated banking panics during the great depression quasi experimental evidence from a federal reserve district border 1929 1933 the federal reserve act divided mississippi between the 6th atlanta and 8th st louis districts during the great depression these districts policies differed atlanta championed monetary activism and the extension of aid to ailing banks st louis eschewed expansionary initiatives during a banking crisis in 1930 atlanta expedited lending to banks in need st louis did not outcomes differed across districts in atlanta banks survived at higher rates lending continued at higher levels commerce contracted less and recovery began earlier these patterns indicate that central bank intervention influenced bank health credit availability and business activity

disentangling temporal patterns in elasticities a functional coefficient panel analysis of electricity demand abstract we introduce a panel model with a nonparametric functional coefficient of multiple arguments the coefficient is a function both of time allowing temporal changes in an otherwise linear model and of the regressor itself allowing nonlinearity in contrast to a time series model the effects of the two arguments can be identified using a panel model we apply the model to the relationship between real gdp and electricity consumption our results suggest that the corresponding elasticities have decreased over time in developed countries but that this decrease cannot be entirely explained by changes in gdp itself or by sectoral shifts

induced innovation and energy prices this paper uses u s patent data from 1970 to 1994 to study the impact of energy prices on energy efficient innovations theories of technological change have focused both on demand side factors which spur innovative activity by increasing the value of new innovations and supply side factors such as scientific advancements that make new innovations possible data on demand side factors are easily obtained but data on supply side factors that influence innovation are not readily available this paper uses patent citations as a measure of the usefulness of the existing base of scientific knowledge citations to previous patents are used to construct productivity estimates which measure the usefulness of the existing stock of knowledge to inventors in a given energy field for any given year these estimates are then combined with data on demand side factors to estimate a model of induced innovation in energy technologies the results indicate that both energy prices and the supply of knowledge have strongly significant positive effects on innovation the paper concludes with a discussion of the implication of this work for environmental policy

credit crises money and contractions an historical view abstract the relatively infrequent nature of major credit distress events makes an historical approach particularly useful using a combination of historical narrative and econometric techniques we identify major periods of credit distress from 1875 to 2007 examine the extent to which credit distress arises as part of the transmission of monetary policy and document the subsequent effect on output using turning points defined by the harding pagan algorithm we identify and compare the timing duration amplitude and co movement of cycles in money credit and output regressions show that financial distress events exacerbate business cycle downturns both in the 19th and 20th centuries and that a confluence of such events makes recessions even worse

back to the future backtesting systemic risk measures during historical bank runs and the great depression abstract we evaluate the performance of two popular systemic risk measures covar and srisk during eight financial panics in the era before fdic insurance bank stock price and balance sheet data were not readily available for this period we rectify this shortcoming by constructing a novel dataset for the new york banking system before 1933 our evaluation exercise focuses on two challenges ranking systemically important financial institutions sifis and financial crisis prediction we find that covar and srisk meet the sifi ranking challenge that is they help identify systemic institutions in periods of distress beyond what is explained by standard risk measures up to six months before panics in contrast aggregate covar and srisk are only somewhat effective at predicting financial crises

the process of commercialisation of urban housing in china the role of the state in housing has been the subject of controversial debate recently in china more and more decision makers consider that the supply of housing should be left to market forces of demand and supply various new policies have been introduced from as early as 1979 designed to commercialise and reform the public sector dominated housing system this paper provides a review of housing reforms and a systematic account of the key features of the commercialisation process it focuses principally on the attempts to privatise public sector housing in urban areas in the context of the major characteristics and problems of the urban housing system the development of reform policies and legislation and current reform practice

the impact of learning by doing on the timing and costs of co2 abatement abstract a particular ceiling on atmospheric co 2 concentrations can be maintained through a variety of emission pathways over the past decade there has been considerable debate over the characteristics of a least cost pathway some have suggested that a gradual departure from the emissions baseline will be the most cost effective because it reduces the pressure for premature retirement of the existing capital stock and it provides valuable time to develop low cost low carbon emitting substitutes others counter that a major flaw in analyses that support this line of reasoning is that they ignore learning by doing lbd in this paper we examine the impact of lbd on the timing and costs of emissions abatement with regard to timing we find that including learning by doing does not significantly alter the conclusions of previous studies that treated technology cost as exogenous the analysis supports the earlier conclusion that for a wide range of stabilization ceilings a gradual transition away from the no policy emissions baseline is preferable to one that requires substantial near term reductions we find that the major impact of including learning by doing is on the costs of emission abatement depending upon the sensitivity of costs to cumulative experience lbd can substantially reduce the overall costs of emissions abatement

technological change in economic models of environmental policy a survey this paper provides an overview of the treatment of technological change in economic models of environmental policy numerous economic modeling studies have confirmed the sensitivity of mid and long run climate change mitigation cost and benefit projections to assumptions about technology costs in general technical progress is considered to be a noneconomic exogenous variable in global climate change modeling however there is overwhelming evidence that technological change is not an exogenous variable but to an important degree endogenous induced by needs and pressures hence some environmenteconomy models treat technological change as endogenous responding to socio economic variables three main elements in models of technological innovation are i corporate investment in research and development ii spillovers from r d and iii technology learning especially learning by doing the incorporation of induced technological change in different types of environmental economic models tends to reduce the costs of environmental policy accelerates abatement and may lead to positive spillover and negative leakage

technological change and the timing of mitigation measures we use a coupled carbon cycle and energy systems engineering model to analyze the future time path of carbon emissions under an illustrative co2 concentration stabilization limit of 550 ppm our findings confirm the emission pattern as found by wre global emissions rise initially pass through stabilization in order to decline in the second half of the 21st century we show that for a given co2 concentration target emission trajectories within an intertemporal optimization framework depend mainly on two factors the discount rate and the representation of technological change as either static or dynamic we obtain a similar near term emission time path as wre when using a model with static technology and a discount rate of 7 we obtain a trajectory with lower emissions in the near term when using a lower discount rate and or treating technology dynamics endogenously in the model we briefly outline a model that endogenizes technological change through learning curves we then compare differences in emission trajectories between alternative model formulations of technological change they are sufficiently small as to be of secondary importance when compared to treating co2 concentration stabilization as an inter temporal optimization problem or not whereas our results confirm the computational results of wre we arrive nonetheless at different policy conclusions if long term emission reduction is the goal we cannot follow business as usual even in the short term action needs to start now action does not necessarily mean aggressive short term emission reductions but rather enhanced r d and technology demonstration efforts that stimulate technological learning these are the necessary preconditions that long term reduction targets can be met with improved technology and at costs lower than today we close by pointing out two further critical issues uncertainty and the possible mismatch between the world of economic models and that of climate policy

learning by doing and the costs of a backstop for energy transition and sustainability we assess the impact of being able to substitute an unlimited but costly energy substitute like wind solar for a non renewable resource like oil coal in a model of sustainable growth the prospects for sustainability on the optimal path depend crucially on the costs of this substitute furthermore the poorer a country measured in terms of capital stock at a given point in time the later it should switch to the renewable substitute and the more likely it will be unsustainable taking learning by doing in account we find that this leads to an earlier switching time but does not guarantee sustainability

do national level policies to promote low carbon technology deployment pay off for the investor countries abstract national level policies to promote deployment of low carbon technologies have been suggested and used as a means to reduce greenhouse gas emissions in the context of international climate change mitigation the long term benefits of such policies in the context of international climate change mitigation depend on their effects on near term emissions abatement and resultant long term technological change that will reduce abatement costs of achieving global mitigation goals there is also an argument that these policies might foster early mover advantages in international low carbon technology markets we first review the factors that could influence such benefits and use a global integrated assessment model to present an illustrative example to understand the potential magnitude of these benefits we find that reductions in long term abatement costs might not provide sufficient incentives to justify policies to promote the deployment of low carbon technologies in particular the emerging higher risk and currently expensive alternatives we also find that early mover advantages can potentially provide substantial benefits but only if these advantages are both strong and persistent our results suggest a role for international cooperation in low carbon technology deployment to address the existence of free riding opportunities in the context of global climate change mitigation

impacts of co2 taxes in an economy with niche markets and learning by doing in this paper we analyse the impact of carbon taxes on emission levels when niche markets exist for new carbon free technologies and when these technologies experience learning by doing effects for this purpose a general equilibrium model has been developed demeter that specifies two energy technologies one based on fossil fuels and one on a composite of carbon free technologies initially the carbon free technology has relatively high production costs but niche markets ensure positive demand learning by doing decreases production costs which increases the market share which in turn accelerates learning by doing and so forth this mechanism allows a relatively modest carbon tax of about 50 us tc to almost stabilise carbon emissions at their 2000 levels throughout the entire 21st century sensitivity analysis shows that the required carbon tax for emission stabilisation crucially depends on the elasticity of substitution between the fossil fuel and carbon free technology

developing by borrowing inter jurisdictional competition land finance and local debt accumulation in china although the investment oriented development model for economic growth adopted by chinese governments has generated spectacular results the risks of debt financed urbanisation and economic development have recently become evident in mounting local debts that are undermining the financial system triggering concerns with respect to local governments indebtedness financial stability and sovereign risk in china in this paper we portray the uneven spatial and temporal dynamics of local government debt in china and examine the ways in which it is intertwined with institutional political and economic factors our analysis shows that while global and national economic conditions have resulted in a dramatic increase in local government debt particularly in the late 2000s and the early 2010s the spatial variation of local debt accumulation in china could be partly explained by two institutional factors land finance and inter jurisdictional competition we argue that the behaviour of local governments may

regional economic impacts of biomass based energy service use a comparison across crops and technologies for east styria austria abstract biomass action plans in many european countries seek to expand biomass heat and fuel supply mainly to be supplied by peripheral agricultural regions we develop a two plus ten region energy focused computable general equilibrium cge model that acknowledges land competition in analysing the sub state local regional economic implications of such a strategy embedded within a global context our model is based on a full cost analysis of selected biomass technologies covering a range of agricultural and forestry crops as well as thermal insulation the local regional macroeconomic effects differ significantly across technologies and are governed by factors such as net labour intensity in crop production the high land intensity of agricultural biomass products crowds out conventional agriculture and thus lowers employment and drives up land prices and the consumer price index the regional economic results show that net employment effects are positive for all forestry based biomass energy and also show for which agriculture based biomass systems this is true even when accounting for land competition when regional consumer price development governs regional wages or when the agricultural sector is in strong enough competition to the international market positive employment and welfare impacts vanish fully for agriculture based bio energy

the banking panics in the united states in the 1930s some lessons for today in this paper we discuss the lessons learned from the us banking panics in the 1930s for the response by the federal reserve to the crisis of 2008 we revisit the debate over illiquidity versus insolvency in the banking crises of the 1930s and provide empirical evidence that the banking crises largely reflected illiquidity shocks in the recent crisis the fed under bernanke had well learned the lesson from the banking panics of the 1930s of conducting expansionary monetary policy to meet demands for liquidity however unlike in the 1930s the deeper problem of the recent crisis was not illiquidity but insolvency and especially the fear of insolvency of counterparties a number of virtually insolvent us banks deemed too big and too interconnected to fail were rescued by fiscal bail outs

the role of technological change for a sustainable development technological change has become a major focus in environmental policy as well as in energy and climate policy indeed there is a growing body of knowledge about how and in which direction technological change might have an impact on environmental resource constraints and how environmental policy might have an impact on this direction in this article we introduce the contributions to this special issue showing how they add to recent developments in the field of economics of technological change and sustainability we also discuss potential avenues for future research

on the impacts of carbon tax and technological progress on china using a dynamic national computable general equilibrium model we investigate the impact of carbon tax and energy efficiency improvement on the economy and environment of china the chinese social

poverty human development and growth an emerging consensus this paper considers several issues relevant to the debate on the extent to which poverty or development progress in general should be measured by income or by a broader set of objectives issues covered here are practical implications of the two approaches for poverty reduction efforts the impact of growth on basic social indicators and how national achievement on social indicators is best measured sri lanka and pakistan countries often cited in this debate are used as examples

contagion and bank failures during the great depression the june 1932 chicago banking panic the authors examine the social costs of asymmetric information induced bank panics in an environment without government deposit insurance their case study is the chicago bank panic of june 1932 the authors compare the ex ante characteristics of panic failures and panic survivors despite temporary confusion about bank asset quality on the part of depositors during the panic which was associated with widespread depositor runs and bank stock price declines the panic did not produce significant social costs in terms of failures among solvent banks copyright 1997 by american economic association

changing land policy and its impact on local growth the experience of the shenzhen special economic zone china in the 1980s having elaborated the transformation of land policy in the wake of chinese economic reform and the background to the formation of a new land policy in the shenzhen special economic zone china thi

on the environmental economic and budgetary impacts of fossil fuel prices a dynamic general equilibrium analysis of the portuguese case abstract this paper examines the influence of fossil fuel prices on carbon dioxide emissions economic activity and the public sector account in portugal it uses a dynamic general equilibrium model which highlights the mechanisms of endogenous growth and includes a detailed modeling of the public sector fuel price scenarios are based on forecasts by the us department of energy doe us the international energy agency iea oecd and ihs global insight inc the differences in relative fuel prices among the three scenarios lead to substantially different environmental impacts higher fuel prices in the doe us scenario lead to a 10 2 reduction in the policy effort required to meet the eu 2020 emission targets while relative price changes in the iea oecd scenario result in a 19 2 increase in the required policy effort and decreasing fuel prices increase the emissions deficit by 95 9 under the ihs scenario in terms of the long term economic impacts our results suggest a 2 2 reduction in gdp in the doe us scenario and 1 9 in the iea oecd scenario and an increase of 1 4 in the ihs scenario as to the budgetary impact higher fuel prices lead to lower tax revenues which coupled with a reduction in public spending translates to lower public deficits from a methodological perspective our results highlight the importance of the mechanisms of endogenous growth a scenario of higher fuel prices would under exogenous economic growth assumptions result in larger baseline emissions growth substantially smaller economic effects and rather different budgetary effects from a policy perspective our results highlight the importance of fossil fuel prices in defining the level of policy intervention required for compliance with international and domestic climate change legislation

the cost of reducing co2 emissions integrating abatement technologies into economic modeling we explore two methods of incorporating bottom up abatement cost estimates into top down modeling an economy wide method and a sector specific method carbon emissions generally depend on technology and scale given the technology options abatement is possible without a substantial reduction in scale otherwise the change must come purely through a reduction in demand our analysis shows that the cost of environmental policy is considerably overestimated by top down models if a bottom up abatement cost curve is not included using the data for the swiss economy we demonstrate two techniques of representing an abatement function explicitly in a computable general equilibrium model a traditional and a hybrid discrete technology modeling approach the results suggest that the current climate policy in switzerland will not be able to move the economy towards the required 10 co2 reduction both approaches provide virtually the same results when the calibration process is precisely executed which contradicts the results of previous studies

a climate change policy induced shift from innovations in carbon energy production to carbon energy savings abstract we develop an endogenous growth model with capital labor and carbon energy as production factors and three technology variables that measure accumulated innovations for carbon energy production carbon energy savings and neutral growth all markets are complete and perfect except for research for which we assume that the marginal social benefits exceed the marginal private benefits by factor four the model constants are calibrated so that the model reproduces the relevant global trends over the 1970 2000 period the model contains a simple climate module and is used to assess the impact of induced technological change itc for a policy that aims at a maximum level of atmospheric co2 concentration 450 ppmv itc is shown to reduce the required carbon tax by more than a factor 2 and to reduce costs of such a policy by half when we do not constrain aggregate r d expenditures to benchmark levels costs are further reduced numerical simulations show that knowledge accumulation shifts from energy production to energy saving technology we discuss reasons for differences between our results and earlier results reported in the literature

carbon taxes a drop in the ocean or a drop that erodes the stone the effect of carbon taxes on technological change abstract we develop an economic partial equilibrium model for energy supply and demand with capital and labor as production factors and endogenous technological change through learning by research and learning by doing our model can reproduce the learning curve typical for bottom up energy system models the model also produces an endogenous s curved transition from fossil fuel energy sources to carbon free energy sources over the coming two centuries we use the model to study carbon taxes effects on fossil fuel and carbon free energy use and carbon dioxide emissions it is shown that without induced technological change carbon taxes have a modest effect on emissions while with induced technological change they accelerate the substitution of carbon free energy for fossil fuels substantially

endogenous technological change in climate change modelling this article investigates the impact on optimal co2 abatement and carbon tax levels of introducing endogenous technological change in a macroeconomic model of climate change we analyse technological change as a function of cumulative capacity as incorporated recently in energy systems models our calculations confirm that including endogenous innovation implies earlier emission reduction to meet atmospheric carbon concentration constraints however the effect is stronger than suggested in the literature moreover the development of non fossil energy technologies constitutes the most important opportunity for emission reductions optimal carbon tax levels reducing fossil energy use are lower than usually advocated