exchange rate sensitivity of u s trade flows evidence from industry data 1 introductionin an effort to boost employment a country could stimulate its exports and discourage its imports and thereby improve its trade balance one policy that has received a great deal of attention in the literature is currency devaluation by making exports cheaper and imports expensive devaluation is said to improve the trade balance the only condition required is that the sum of import and export demand price elasticities exceed unity that condition known as the marshall lerner condition is derived under the assumption of perfectly elastic supply of trade most previous studies that attempted to assess the marshall lerner condition relied on price elasticities that were obtained by estimating aggregate import and export demand functions these studies provided mixed conclusions as far as the effectiveness of devaluation or depreciation is concerned examples include houthakker and magee 1969 khan 1974 goldstein and khan 1976 1978 wilson and takacs 1979 haynes and stone 1983a 1983b warner and krienin 1983 bahmani oskooee 1986 1998 and bahmani oskooee and niroomand 1998 the mixed conclusion could be related to aggregation bias when aggregate trade data are employed in import and export demand functions significant price elasticity with one trading partner could be more than offset by an insignificant price elasticity with another trading partner yielding an insignificant price elasticity because of aggregation bias another body of the literature has emerged in recent years that concentrates on using trade data at the bilateral level examples in this latter group include rose and yellen 1989 cushman 1987 1990 summary 1989 marquez 1990 haynes hutchison and mikesell 1986 eaton 1994 bahmani oskooee and brooks 1999 nadenichek 2000 and bahmani oskooee and goswami 2004 except bahmani oskooee and goswami 2004 all other studies in this second group have estimated bilateral trade elasticities between the united states and her major trading partners and concluded that the real bilateral exchange rate is a significant determinant of bilateral trade balance at least in some cases bahmani oskooee and goswami 2004 who considered the bilateral trade flows between japan and her nine major trading partners found that in most cases japanese exports are not sensitive to the real bilateral exchange rate but her imports are these studies as well as those in the first group estimate price elasticities in demand under the assumption that supply is perfectly elastic and then evaluate the marshall lerner condition involving own price coefficients in demand thus evidence in these studies is limited because it assumes perfectly elastic supply of trade for both exports and imports although there is additional room to expand the literature in the second group by considering the experiences of countries other than the united states and japan in this paper we would like to open another avenue of research by investigating the impact of real depreciation of the dollar on imports and exports of 66 american industries a disaggregation by industry rather than by country disaggregation by industry will avoid problems associated with petroleum imports as does disaggregation by country rose and yellen 1989 1 for this purpose in section 2 we outline the import and export demand functions for each commodity group along with the estimation method in section 3 we present the empirical results section 4 provides our summary and conclusion data definitions and sources are cited in an appendix 2 the models and the methodin formulating any import and export demand function it is a common practice to relate the volume of imports and exports to a measure of income and relative prices the main purpose is to obtain estimates of import and export demand elasticities so that we can better judge the effectiveness of currency devaluation in increasing a country s inpayments and reducing outpayments

effluent regulation and long run optimality a regulator faced with free entry of firms is concerned not only with the implications of public policy for the discharges from a representative firm but also with the total pollution observed at the long run market equilibrium the regulator must take into account not only the effects of regulations upon the net marginal returns of the firm but must also consider the total profit of the firm and incentives for entry and exit this paper shows that effluent charges and tradeable effluent permits lead to long run optimality with entry of small firms the difference between firm payments and environmental damages is interpreted as the rent accruing to the environmental resource this result applies only to the competitive case with small polluters the analysis presented here allows a comparison and clarification of the literature on small and large polluters in a multi input framework with social damages dependent upon total effluents effluent charges are shown here to result in socially optimal entry confirming an assertion of baumol and oates 2 p 179 fn 161 and the important result of schulze and d arge 15 by taking average as well as marginal damages into account the effluent charge results in optimal firm scale levels and the correct input mix at the free entry market equilibrium the firm subject to an effluent tax will operate above or below the private minimum efficient scale depending upon whether average external costs exceed or are less than marginal external costs since public policy to reduce effluents is often directed at reducing the effluentgenerating activity some policy recommendations include a tax on the final output of the polluting firm in some theoretical analyses a relation between the output of the firm and the effluent level is identified and a pigouvian output tax is applied this approach should not be followed by policymakers since an output tax does not provide firms with the correct incentives for either input substitution or market entry it is shown that while a lump sum transfer is needed to provide correct entry incentives when a pigouvian output tax is applied no such transfer is needed if the tax is correctly applied to effluents contrary to 5 even if optimal firm scale and i thank the referees for helpful suggestions the support of the national science foundation under grant ses 82 19121 is gratefully acknowledged any errors are my responsibility 103

determinants of united states trade balance with australia this study explores the determinants of the usa s trade balance ne with australia and tests for long run relationships regression results suggest the most important determinant of ne is the price ratio usa relative to australia followed by the lending rate ratio gdp ratio money supply ratio and the real exchange rate which together explain 93 of the variation in ne f tests suggest ne responds to rising and falling exchange rate regimes symmetrically johansen s cointegration test suggests a significant at 1 long run relationship between ne and its determinants based on engle granger import share is and output growth q are cointegrated at 10 if q shocks precede is shocks suggesting a weak long run relationship between them there is a positive long run relationship between ne and the exchange rate er at 5 if er shocks precede ne shocks results based on the error correction model suggest a positive relationship between expected er and ne and reinforce the cointegration results

devaluation and the j curve some evidence from ldcs within the international trade literature it is not uncommon to find arguments about whether devaluation will improve the trade balance it is argued that the flows of goods respond only with time lags to changes in the exchange rate the j curve terrn is used to describe the movement over time of the trade balance it may deteriorate at first and improvement may come later this paper presents a method by which one could detect the existence of the j curve the method is applied to four developing countries the empirical evidence supports the pattern of movemnent described by the j curve a major policy option for a country facing a persistent balance of payments deficit is said to be devaluation of its currency within the international trade literature it is not uncommon to find arguments about whether devaluation will improve the trade balance or the balance of payments for example proponents of the elasticities approach describe the necessary and sufficient conditions for an improvement in the trade balance in terms of elasticities of demand and supply referred to as the marshall lerner condition while there is abundant empirical evidence to suggest that these conditions are indeed met at least for industrial countries there have been circumstances under which 2 devaluation has not been successful for example one might wonder why the u s trade balance deteriorated so much in 1972 despite the devaluation of the dollar in 1971 this unfavorable effect of devaluation on the trade balance is termed the j curve phenomenon received for publication august 23 1984 revision accepted for publication november 26 1984 the university of wisconsin milwaukee i would like to thank two anonymous referees for their valuable comments on the initial draft of this paper 1 proponents of the absorption approach e g alexander 1952 describe how devaluation may change the terms of trade increase production and switch expenditures from foreign to domestic goods thus improving the trade balance international monetarists argue that devaluation reduces the real value of cash balances and or changes the relative price of traded and nontraded goods thus improving both the trade balance and the balance of payments 2 for an cstimate of the elasticities see houthakker and magee 1969 and warner and kreinin 1983 the former study provides the elasticities estimates under fixed exchange rates and the latter under floating rates this content downloaded from 157 55 39 17 on wed 31 aug 2016 04 39 37 utc all use subject to http about jstor org terms

the introduction of price signals into land use planning decision making a proposal although directed to the british system of town and country planning this paper has relevance for many oecd countries including some with systems of land use regulation which evolved entirely independently of the british the paper starts by characterising the basic features of the british land use planning system viewed from the resource allocation point of view of an economist a conclusion is that the system explicitly excludes any use of price signals from its decisions the paper then summarises the problems which the exclusion of price information has given rise to because the uk planning system has deliberately constrained the supply of space and space is an attribute of housing which is income elastic in demand rising incomes not only drive rising real house prices but also mean that land prices have risen considerably faster than house prices several housing attributes other than garden space are to a degree substitutes for land but the underlying cause of the inelastic supply of housing in the uk is the constraint on land supply the final section proposes a mechanism which would make use of the information embodied in the price premiums of neighbouring parcels of land zoned for different uses such premiums signal the relative scarcity of land for different uses at each location and should become a material consideration in planning decision making if they were above some threshold this should provide a presumption of development unless maintaining the land in its current use could be shown to be in the public interest if combined with impact fees such a change would not only make housing supply more elastic and the system more transparent but would help to distance land availability decisions from the political process

environmental efficiency measurement and the materials balance condition reconsidered abstract this note takes up a shortcoming of coelli et al s 2007 popular environmental efficiency measure and its extension to economic environmental trade off analysis see van meensel et al 2010 namely that they do not reward emission reductions by pollution control a new environmental efficiency measure that overcomes this issue and similar to coelli et al s efficiency measure is in line with the materials balance principle is proposed and further decomposed into technical environmental efficiency and material and nonmaterial allocative environmental efficiencies the new efficiency measure collapses into coelli et al s efficiency measure if none of the considered decision making units control pollutants a numerical example using data envelopment analysis is provided to further explore the properties of the new efficiency measure

sulfur dioxide control by electric utilities what are the gains from trade title iv of the 1990 clean air act amendments caaa established a market for transferable sulfur dioxide so2 emission allowances among electric utilities this market offers firms facing high marginal abatement costs the opportunity to purchase the right to emit so2 from firms with lower costs and this is expected to yield cost savings compared to a command and control approach to environmental regulation this paper uses econometrically estimated marginal abatement cost functions for power plants affected by title iv of the caaa to evaluate the performance of the so2 allowance market specifically we investigate whether the much heralded fall in the cost of abating so2 compared to original estimates can be attributed to allowance trading we demonstrate that for plants that use low sulfur coal to reduce so2 emissions technical change and the fall in prices of low sulfur coal have lowered marginal abatement cost curves by over 50 percent since 1985 the flexibility to take advantage of these chan

dynamics of the yen dollar real exchange rate and the us japan real trade balance this paper employs cointegration and error correction models to examine the dynamics of the yen dollar real exchange rate and the us japan real trade balance it uses quarterly data from 1973 i 1993 iv the unit root tests reveal non stationarity in both the variables the adf test fails to affirm any long run association between the yen dollar real exchange rate and the us japan real trade balance also there is evidence of bidirectional short run granger causality between these two variables with mutual feedbacks

environmental efficiency and abatement efficiency measurements of china s thermal power industry a data envelopment analysis based materials balance approach abstract appropriate measurement of environmental and emission abatement efficiency is crucial for assisting policy making in line with constructing a more sustainable society the majority of traditional approaches for environmental efficiency measures take pollutant emissions as either undesirable outputs or environmentally determined inputs which suffer a limitation of not satisfying the physical laws that regulate the operation of economic and environmental process in this study we propose a dea based approach which is combined with the materials balance principle mbp that accounts for laws of thermodynamics to jointly evaluate environmental and abatement efficiency this approach is along the line of weak g disposability based modelling but is an extension to existing models that in our approach the identification of possible adjustments on polluting mass bound in inputs and outputs and potential adjustments on abatement of pollutants are all included the overall environmental efficiency measured by this approach is decomposed into the measures of technical efficiency polluting inputs allocative efficiency and polluting and non polluting inputs allocative efficiency with the emphasizing of incorporating pollutant abatement activities accordingly new measures of abatement efficiency are proposed which help to identify the pollutant abatement potential that can be achieved from end of pipe abatement technology promotion associated with polluting input quality promotion and input resources reallocation furthermore several global malmquist productivity indices for identifying the changes on environmental and abatement efficiency are proposed this approach is applied to china s thermal power industry and some empirical results verifying the necessity of introducing the mbp are obtained

the effect of impact fees on the price of new single family housing this paper provides new evidence on the effects of impact fees on housing prices using an inventory of single family housing sale transactions in the 38 cities and towns within king county washington for the period 1991 2000 although the effect of impact fees on housing prices has been examined previously earlier studies have been limited by methodological deficiencies this paper examines the effect of impact fees on new housing and their differential effect on housing price based on the quality of housing and finds that the effect of impact fees on the price of new housing is quite significant and elastic raising new home prices by about 166 per cent of the amount of the fee the increase is 358 per cent for the higher quality homes and is statistically insignificant for the lower quality homes

marginal abatement costs of co2 emissions in the thermal power sector a regional empirical analysis from china abstract quantifying marginal abatement costs of co2 emissions are beneficial to estimate mitigation potentials and costs of china s regional thermal power sector based on the panel data of 30 provinces from 2004 to 2013 this study estimates the technical efficiency reduction potential and marginal abatement costs of co2 emissions from the thermal power sector in china using a parametric quadratic directional output distance function a regression analysis is undertaken to identify the factors that drive marginal abatement costs the main results are 1 the mean value of directional output distance function in china s thermal power sector is 0 0449 indicating that inefficient production of chinese thermal power sector accounts for 4 49 co2 emissions could be mitigated by accumulated 1 22 billion ton in the past ten year which is approximate 4 49 of total co2 emissions 2 the national weighted average marginal abatement costs of co2 emissions are 316 51 yuan ton which is far higher than carbon price in the current ets emission trading system pilots in china implying that carbon price does not inflect supply and demand of carbon allowance 3 the regression results show that the marginal abatement costs positively connect with regional power scale namely a 1 increase in power scale will result in a 13 8 increase technology level coal supply and power structure are negatively correlated with marginal abatement costs namely a 1 increase in technology level coal supply and power structure will result respectively in a 30 41 4 38 and 77 7 decrease

the feasibility of the double dividend hypothesis in a democratic economy the two dividends in the double dividend hypothesis are assumed to be independent this assumption can be misleading when it comes to formulating policy i construct a model where the pollution tax rate is voted for by heterogeneous people in addition to the revenue recycling effect the equilibrium pollution tax rate depends on two opposite forces the tax cutting effect and the profit effect the two forces show that an instrument that exploits a greater revenue recycling effect can cause a more severe environmental deterioration thereby resulting in the infeasibility of the hypothesis the introduction of the interdependence between the two dividends can also mean that non revenue raising instruments are more efficient than revenue raising instruments

denomination composition of trade and trade balance evidence from turkey the currency denominations of a country s exports and imports are not necessarily the same if this is the case then a change in the exchange rate parity among major currencies will affect the trade balance the empirical evidence provided from turkey where exports are mostly denominated in euros and imports are mostly denominated in usd suggests that an appreciation of the euro against the usd would increase the output in the long run appreciate the local currency and improve the trade balance for the 1985 01 2003 07 period

bilateral j curve between india and her trading partners india a land of over one billion people and one of the newly emerging industrial powers in the world is going through a slow but steady metamorphism for centuries india has played a major role in the international trade it was not uncommon to see her ships carrying silk and spices across the arabian seas and bringing back machine made textile invasions of india first by mughals and latter by the british through the east india company were all trade oriented india s presence in the world trade is relatively small at this time but is gaining momentum after independence in 1947 india for a brief period experimented with socialism the five year plans were mainly focused towards building infrastructure and development of small scale agriculture based industries the industrial development even though extremely important for growth played a secondary role the foreign investment was encouraged but only in the selected sectors of the economy however threat of nationalization a large bureaucracy corruption lack of understanding of the indian business practices and the requirement that a major share holder must be an indian national discouraged foreign capital investment in india during 1991 1992 india adopted a policy of trade liberalization to attract foreign capital and to encourage non resident indians to invest in their home country government of india established a separate unit within the home ministry whose main function was to expedite processing of applications india also relaxed the requirement that a major partner be an indian national india provided export subsidies to the exporters in terms of cash as well as foreign exchange so that they could import machines and raw materials exports responded to the trade liberalization and increased from 44 041 crores of rupees in 1991 1992 to 141 603 crores in 1998 1999 where one crore is equivalent to ten million in us dollar terms at a current exchange rate of 42 48 rupees per dollar this translates to an increase from 10 37 billion to 33 34 billion over eight years india also anticipates that through a major increase in the information technology mainly software industry her exports will increase to 90 billion by 2005 the trade liberalization has been accompanied by changes in the monetary policies the inflation rate has been reduced from about 12 to 9 per year the interest rates have declined from 14 to 10 and the exchange rate has been allowed to respond to market forces as a result from 1991 1992 to 1998 1999 the rupee has declined from 19 62 rupees per dollar to 42 48 rupees per dollar by december 2000 rupee had further devalued to 46 25 per dollar with a hope that it will further boost india s exports and improve her trade balance however the impact of currency depreciation on the trade balance is not instantaneous indeed there is ample evidence in the literature that after currency depreciation the trade balance worsens in the short run before improving in the long run since this pattern of movement of the trade balance over time resembles the letter j magee 1973 labelled it the j curve phenomenon magee argued that after devaluation contracts that are in transit at old exchange rates dominate the short run response of the trade balance over time new contracts at new prices begin to exert their favourable impact at this stage elasticities may increase leading to an eventual improvement in the trade balance of course the delayed response could also be due to lags in the process of increasing the production of exportables junz and rhomberg 1973 have identified five lags namely recognition lags decision lags delivery lags replacement lags and production lags only after the realization of these lags the trade balance could improve early studies that tried to investigate the impact of currency depreciation on the trade balance relied upon estimating the marshall lerner condition the condition

the black market exchange rate vs the official rate in testing ppp which rate fosters the adjustment process abstract in testing the purchasing power parity theory ppp researchers hardly pay attention to the speed with which the exchange rate adjusts to a change in relative prices in this paper we show that the speed of adjustment is faster when the black market exchange rate is used in testing the ppp as compared to the official exchange rate this could be another reason as to why central banks should unify the two rates

capitalization and the theory of local public finance the tiebout literature is incomplete this paper argues because it has not fully accounted for the capitalization of local fiscal variables into house values the paper explains why capitalization arises why it persists in long run equilibrium how it affects both residential location and the outcome of local voting and why it interferes with the efficiency of a system of local governments the analysis which is based on the main tiebout assumptions plus a property tax combines a model of household bids in a housing market with a median voter model of local public service determination

emissions trading and profitability the swedish pulp and paper industry the purpose of this paper is to develop models with and without potential emissions trading and to compare industry profits under the two regimes the model in which emissions trading is permitted is a nonparametric industry frontier model in the spirit of fare et al 1992 it is relative to this model that industry profit is computed this profit is compared to the profit without emissions trading to give an estimate of the potential gains that can be realised by allowing for emissions trading the model which is applied to data for the swedish pulp and paper industry suggests that this industry would have had up to 6 1 higher profits in 1989 1990 if emissions trading had been used instead of individual permits to achieve the same total emissions target currently there is no permit trading in this industry so our results only model the potential gains that can be made

is water policy limiting residential growth evidence from california rapid population growth and increasing water costs have led western states to condition development on long term water availability using original survey data this paper examines the effects of water screening policies on california s housing supply from 1994 to 2003 panel regressions indicate that these policies significantly slowed housing growth however impact fees based on the costs of residential water connections do not have this effect and may constitute a preferred policy to enhance the social efficiency of screening policies regulators should encourage the adoption of conservation oriented water rates which are associated with significant savings in residential water use

does smart growth matter to public finance this paper addresses four fundamental questions about the relationship between smart growth a fiscally motivated anti sprawl policy movement and public finance do low density spatially extensive land use patterns cost more to support if so how large an influence does sprawl actually have how does the influence differ among types of spending and how does it compare with the influence of other relevant factors the analysis which is based on the entire continental us and uses a series of spatial econometric models to evaluate one aggregate total direct and nine disaggregate education fire protection housing and community development libraries parks and recreation police protection roadways sewerage and solid waste disposal measures of spending provides the most detailed evidence to date of how sprawl affects the vast sum of revenue that local governments spend every year

emissions trading and abatement cost savings an estimation of china s thermal power industry this study evaluates the efficiency advantage of a market based emission permit trading policy instrument over a command and control policy instrument in the case of china s thermal power industry we estimate the unrealized gains achievable through emission permit trading with an optimization frontier analysis these unrealized gains include potential recoveries of electricity generation through eliminating spatial and temporal regulatory rigidity on emission permit trading the results of an ex post estimation during 2006 and 2010 indicate a potential gain of 8 48 increase in electricity generation if both the intra and inter period regulatory rigidities on co2 emission permits trading had been eliminated in addition if the permit trading systems for three air pollutions co2 so2 and nox had been completely integrated a positive net synergy effect of 1 43 increase in electricity generation could have been secured the unrealized gains identified in this study provide supports for establishing a nationwide emission permit trading system in china

how will the chinese national carbon emissions trading scheme work the assessment of regional potential gains abstract the implementation of a national emissions trading scheme ets in china is likely to have an important effect on potential regional gains this study proposes a unified analytical framework for anticipating such gains in 2020 and estimates the key factors involved using data envelopment analysis based models the results indicate that 1 when the value of the marginal abatement cost is higher than the carbon price no regions will have an incentive to reduce emissions by technological improvements the only source of direct potential gains is from the amounts of carbon quota 2 as carbon price increases from cny 10 to 4000 per ton the indirect potential gains will increase because the strategies for carbon reduction are technological innovation or limit economic activities however jiangsu and shanghai will suffer potential losses even though the price is high because they have no more carbon reduction potential 3 most central provinces will have potential gains when the carbon price is lower in ets while regions rich in fossil energy sources will suffer potential losses however a middle price interval of cny 1000 2000 ton is more rational because it helps motivate market transactions and benefits low carbon technological innovations

strategic control of growth in a system of cities abstract this paper provides an analysis of the supply restriction model of growth controls growth controls in such a model harm consumers while enriching landowners and they will only be adopted if landowners have political power in the model this power is manifested in the city government s use of a social welfare that takes both landlord and consumer welfare into account since cities cannot be small if the supply restriction inherent in growth controls is to have an impact strategic interactions must be considered in the analysis of city choices a general model is presented and an extended example based on leontief preferences is then considered comparative static analysis of nash equilibria in the leontief case shows that perturbations of preferences or other characteristics of a single city can have important spillover effects that alter the choices of all cities in the region

modelling winners and losers in contingent valuation of public goods appropriate welfare measures and econometric analysis contingent valuation is now the most widely used method for valuing non marketed goods in cost benefit analysis yet despite the fact that many externalities manifest themselves as costs to some and benefits to others most studies restrict willingness to pay to being non negative this can result in significant errors in policymaking this paper examines the importance of this explores appropriate welfare measures for assessing losses and gains demonstrates how these can be elicited explicitly highlights the sensitivity of the results of such studies to the econometric specification employed and suggests ways of dealing with it finally the implica tions for policy are examined assessment including passive use values this technique has become the most widely used method for placing values on non marketed goods this paper examines some outstanding issues in relation to the validity of the method as a basis for policy making in particular most studies ignore the fact that many externalities manifest themselves as costs to some and benefits to others in addition the results of contingent valuation studies are often quite sensitive to the econometric specification assumed the significance of these issues is examined techniques for their resolution are outlined and the implications for public policy are highlighted the importance for economists of the debate on the validity of contingent valuation was emphasised in a series of papers from a symposium on the contingent valuation method cvm published in the journal of economic perspectives in 1994 in his paper portney 1994 predicted that whether the economics profession liked it or not the cvm would inevitably play a role in public policy formulation and therefore it was important that economists be aware of the controversies and have their say on the topic portney s prediction was correct and contingent valuation has become a routine approach to valuing environmental goods with hundreds of studies being produced each year 1 the cvm places a value on a change in the provision of a public good by asking households in a survey how much they are willing to pay for the change or the minimum compensation they would require if the change were not to happen the role that contingent valuation studies play in public policy is

an empirical estimation of the price effects of development impact fees empirical analysis of the price of vacant lots sold in three toronto suburban municipalities during the 1977 86 period shows that development impact fees directly increased lot prices by approximately 1 2 times the size of the fee the extent of the increase was related to city growth rates in general the faster the rate of growth the lower was the price effect of development impact fees the effects of growth however were not consistent across the three municipalities as one municipality appeared to be lowering its fees in response to reductions in growth rates the policy environment within which fees are implemented and the way fees are adjusted appear to influence their effect on lot prices the estimated model also suggests that increases in expected future construction costs reduce current lot prices general increases in the consumers shelter costs tend to inflate the price of vacant lots the expectation of future increases in the cost of land development whether it is due to increases in ma

the exchange rate and the balance of trade the turkish experience in this article we examine the responsiveness of turkey s trade balance to devaluation accompanied by trade liberalisation our results show that the trade balance was responsive to changes in the exchange rate that were brought about by the economic reforms introduced in the 1980s suggesting that exchange rate policy was able to create and maintain a satisfactory balance of trade position in the 1980s and early 1990s

the twin deficits phenomenon evidence from greece this paper explores the relationship between budget and trade deficits in a small open economy using annual data the purpose of the paper is to test empirically the validity and rationale of the keynesian proposition conventional view and the ricardian equivalence hypothesis the econometric methodology is based on cointegration analysis error correction modelling and granger trivariate causality the ecm empirical findings suggest that budget deficit has short and long run positive and significant causal effects on trade deficit

on the theory of growth controls numerous empirical studies have examined the effect of growth controls on housing prices these studies have used many different techniques ranging from hedonic price model estimation to paired comparisons but have all come to the same conclusion growth controls raise the price of housing in theory there are both demand and supply side explanations which need not be mutually exclusive for these observed price differences on the supply side housing caps zoning restrictions limitations on the amount of developable land and other forms of growth control may reduce the supply of housing over time this in turn may produce scarcity effects which manifest as shifts or other changes in the housing supply curve and attendant price increases on the demand side to the extent that growth controls may reduce or internalize expected negative externalities and or congestion costs associated with growth controls may also produce amenity effects such amenity effects manifest as changes in the demand curve and likewise may be capitalized in land values and wages e g the price of a house rises as commute time falls

designing development planning charges settlement patterns cost recovery and public facilities there is a large body of literature that discusses the control of settlement patterns using traditional planning instruments whilst there is some theoretical literature discussing the use of development charges to influence settlement patterns by addressing market failure there is limited literature examining how such charging is implemented in practice this paper presents the theoretical basis for development charging based on the pigouvian tradition and discusses how these charges can be calibrated it identifies the potential for second best approaches including hypothecation of revenues this approach is distinguished from infrastructure charging which is a cost recovery instrument the irish system of infrastructure charging is assessed as a means of exploring how current instrument design could be improved to align with policy aspirations using the lessons that theory provides

environmental and wider implications of political impediments to environmental tax reform abstract the most common notion of environmental tax reform etr is the use of the revenue from environmental taxes to reduce distortionary labour taxes the petras project 1 has shown that there are a number of social and political impediments to implementing such reform this paper firstly outlines some of the environmental and economic implications of environmental taxes generally it goes on to explore three broad approaches to etr based on the allocation of the tax revenues and explores the environmental and economic implications of each approach and the likelihood of political and social acceptance particular attention is paid to reducing regressive impacts and impacts on competitiveness it is concluded that some combination of earmarking a proportion of revenues to environmental projects and diverting rest to reduce labour taxes is probably the best approach in light of the results of the project the balance should depend upon local labour market and macroeconomic conditions the extent to which environmental projects are already funded and the extent of government failure i e the problems of resource allocation that occur as a result of government intervention in markets funding should only be provided to environmental projects if it can be shown that in themselves they are economically efficient in addition it is most important that a proportion of the funds be used to ameliorate any regressive impacts it is also important to bear in mind that hypothecation or recycling of revenue is not the same as a tax shift which is a reform of the entire system so some of these approaches may take away from the integrity of etr the paper concludes with some of the initiatives that are likely to be necessary to facilitate social and political acceptance of this approach to etr

the j curve a literature review due to lag structure currency devaluation is said to worsen the trade balance first and improve it later resulting in a pattern that resemble the letter j hence the j curve phenomenon since its introduction by magee in 1973 brooking papers on economic activity 1 pp 303 25 a large number of studies have attempted to test the phenomenon using different techniques and different model specifications the results are at best ambiguous and deserve to be collected together for the future generation of researchers and graduate students this paper fills such a vacuum in the literature by reviewing the j curve related empirical papers

is there a j curve abstract if the response of the value of the trade balance to movements in the real exchange rate is described by a j curve then a real depreciation initially worsens a balance of trade deficit only improving it over time this paper investigates whether a j curve can be detected in the last twenty five years of american data no statistically reliable evidence of a stable j curve is detected the model is checked extensively to support this finding

toward a new conception of the environment competitiveness relationship accepting a fixed trade off between environmental regulation and competitiveness unnecessarily raises costs and slows down environmental progress studies finding high environmental compliance costs have traditionally focused on static cost impacts ignoring any offsetting productivity benefits from innovation they typically overestimated compliance costs neglected innovation offsets and disregarded the affected industry s initial competitiveness rather than simply adding to cost properly crafted environmental standards can trigger innovation offsets allowing companies to improve their resource productivity shifting the debate from pollution control to pollution prevention was a step forward it is now necessary to make the next step and focus on resource productivity

income effects on the trade balance in small open economies the objective is to determine the causes of the countercyclicality of the trade balance in five small open economies namely austria france italy spain and switzerland in order to investigate the role of permanent and temporary changes in income in the determination of the trade balance blanchard quah variance decomposition procedure is applied the results of analysis support the conclusion that transitory income shocks are major reasons for the change in the trade balance and that negative correlation between the trade balance and income is primarily due to transitory shocks thus these results are more consistent with intertemporal models with the dichotomous view in which the aggregate demand shocks are responsible for cyclical variations in the trade balance and income and aggregate supply is responsible for the long run growth of the economy

modeling undesirable factors in efficiency evaluation abstract data envelopment analysis dea measures the relative efficiency of decision making units dmus with multiple performance factors which are grouped into outputs and inputs once the efficient frontier is determined inefficient dmus can improve their performance to reach the efficient frontier by either increasing their current output levels or decreasing their current input levels however both desirable good and undesirable bad factors may be present for example if inefficiency exists in production processes where final products are manufactured with a production of wastes and pollutants the outputs of wastes and pollutants are undesirable and should be reduced to improve the performance using the classification invariance property we show that the standard dea model can be used to improve the performance via increasing the desirable outputs and decreasing the undesirable outputs the method can also be applied to situations when some inputs need to be increased to improve the performance the linearity and convexity of dea are preserved through our proposal

pollution taxation and strategic behaviour abstract this paper proposes a pollution tax to be imposed on the victim and the injurer to discourage strategic moves by the victim to exploit the injurer an uniformed regulator induces an optimal emission of pollution by choosing an appropriate stochastic tax

assessing the relative merits of development charges and transferable development rights in an uncertain world traditionally regulatory instruments have been used to achieve planning objectives however emerging market based policy instruments such as transferable development rights a quantity based app

multilateral productivity comparisons when some outputs are undesirable a nonparametric approach multilateral productivity comparisons of firms producing multiple outputs some of which are undesirable are obtained by making two modifications to the standard farrell approach to efficiency measurement the restriction that production technology satisfy strong disposability of outputs is relaxed to allow for the fact that undesirable outputs may be freely disposable and the efficiency measures are modified to allow for an asymmetric treatment of desirable and undesirable outputs performance measures that satisfy these requirements are calculated as solutions to programming problems the methodology is applied to a sample of mills producing paper and pollutants

do devaluations improve the trade balance the evidence revisited do devaluations improve the trade balance the evidence revisited this paper reexamines the effectiveness of devaluation in trade balance adjustment the question is addressed in a framework which improves the previous empirical literature in several respects the evidence indicates that devaluations have been a successful tool in inducing trade balance adjustment in particular nominal devaluations are found to result in significant real devaluations that last for at least three years and the real devaluation induces significant trade flows that are distributed over a two to three year period the evidence comes from two different samples 1953 73 and 1975 84 involving twenty seven countries and sixty devaluation episodes 1 introduction do devaluations affect real magnitudes in particular the trade balance a devaluation may effect the trade balance through two channels devaluation of the real exchange rate and a direct effect on domestic absorption the traditional approach stresses the first channel a nominal devaluation is assumed to change the real exchange rate a relative price and thus improve competitiveness in turn if relative prices the terms of trade in a two country two good model affect the trade balance devaluation will be successful in the sense of improving the trade balance ceteris paribus the absorption effect becomes the sole or most important channel in the monetary approach in a world in which all goods and assets are perfect substitutes prices are exogenously given for the small country and wages and prices are flexible in both nominal and real terms a devaluation increases the price level by the same percentage the increase in the price level reduces real balances and thus domestic absorption dornbusch 1973 883 has argued that if such a real balance effect is not present then it might stand to reason that the effects of devaluation are negligible not that there must be other powerful avenues through which it exerts its effects emphasis added the controversy over the effects of devaluation on the trade balance arises because according to frenkel and johnson 1976 42 the monetary approach rejects the emphasis given to the role of relative prices in the analysis of devaluation global monetarists argue that neither of the links in the chain postulated by the traditional approach is likely to hold in practice see laffer 1977 the major disagreement centers on the question of the effectiveness of nominal devaluation to affect the real exchange rate and the importance of the latter in influencing trade flows theoretical arguments have not settled the issue the question is as strongly debated today as it was forty years ago see for example branson 1983 katseli 1983 kaldor 1983 nashashibi 1983 and mckinnon 1981 nor does it seem that the available empirical evidence leads to a consistent answer the best known studies cooper 1971 laffer 1977 salant 1977 miles 1979 gylfason and risager 1984 reach contradictory conclusions 1 cooper and gylfason and risager find that devaluations improve the trade balance or current account while laffer and miles conclude exactly the opposite salant finds that devaluations improve the trade balance but not as often as the overall balance of payments in the face of such diverse findings frenkel 1984 suggests that a reexamination of the issue would be useful indeed himarios 1985 shows that a close examination of miles s widely quoted study reveals serious deficiencies that once addressed lead to opposite results this paper provides new evidence concerning the effectiveness of devaluation in trade balance adjustment the approach differs from past studies in several respects it differs from cooper s laffer s and salant s studies in that it accounts for the effects of other variables that affect the trade balance

domestic energy efficiency in ireland correcting market failure if the bene ts of domestic energy e ciency are so great why are they not reaped in actuality and what can be done about it this paper deals with these crucial questions it is based on the ndings of a recent comprehensive study evaluating the costs labour and materials and bene ts energy cost savings environmental bene ts including reductions in emissions of co 2 n o x s o 2 and pm 10 comfort gains and mortality and morbidity impacts to irish society of bringing the entire housing stock up to the latest building regulations the reasons for the lack of take up of energy conservation measures are discussed the paper formulates policy proposals to address the impediments to e ective action in the market for domestic energy e ciency the various policy instruments available to overcome these barriers are outlined past performance citing speci c exemplars both from abroad and from experience in ireland is reported the nal section suggests a mix of policy instruments to assist the realisation of the potential bene ts of the energy conservation programme the principal initiatives recommended include the provision of a combination of grants to low income households and a clear state led information campaign explaining the bene ts of conserving energy to the householder 2000 elsevier science ltd all rights reserved

carbon taxes with exemptions in an open economy a general equilibrium analysis of the german tax initiative abstract sectoral exemptions from environmental regulation are applied in many countries to avoid adverse adjustment effects in specific industries the problem with exemptions is that they can make environmental policy more costly our paper analyzes the welfare costs of exemptions in environmental policy together with the issue of unilateral carbon taxes in an open economy several countries within the eu have introduced or contemplated unilateral taxes to reduce anthropogenic co2emissions taxes which are unilaterally imposed in an open economy can have significant impacts on production and employment of energy and export intensive industries to save jobs by maintaining international competitiveness most co2taxation schemes include exemptions for energy and export intensive industries as a compromise between environmental objectives and employment in these sectors this paper shows that such compromises are costly as the tax base narrows the dead weight loss increases our calculations illustrate this point in the framework of a static general equilibrium model for west germany calibrated to 1990 data we evaluate the excess costs of exemptions as a means of saving jobs in specific industries relative to an alternative instrument a uniform carbon tax cum wage subsidy which achieves an identical level of national emissions and employment at a fraction of the cost

urban growth controls transitional dynamics of development fees and growth boundaries abstract this paper investigates how development fees and urban growth boundaries affect urban development when the short run construction supply function is upward sloped i e convex development costs whereas the policies are equivalent in the traditional static model dynamic analysis reveals important differences out of the steady state in particular the development fee that is efficient in the steady state is also dynamically efficient in contrast the long run efficient urban growth boundary generates inefficiently fast development out of the steady state the results are robust with or without location rents and perfect or myopic foresight assumptions

clubs local public goods and transportation models a synthesis abstract clubs local public goods and transportation models are analyzed within a unified model the emphasis is on the derivation of optimal allocation pricing and the size of the sharing group we derive the conditions under which optimal prices will yield surplus or deficit as well as those under which competitive provision will be efficient given heterogeneous tastes we prove that segregation according to tastes is generally efficient although several cases where this result does not hold are also discussed we show that the existing literature is unnecessarily restrictive and that the unified approach suggested here considerably extends the existing analysis of clubs local public goods and the transportation problems

accounting for externalities and disposability a directional economic environmental distance function abstract the existence of positive and negative externalities ought to be considered in a productivity analysis in order to obtain unbiased measures of efficiency in this research we present an additive style data envelopment analysis model that considers the production of both negative and positive externalities and permits a limited increase in input utilisation where relevant the directional economic environmental distance deed function is a unified approach based on a linear program that evaluates the relative inefficiency of the units under examination with respect to a unique reference technology we discuss the impact of disposability assumptions in depth and demonstrate how different versions of the deed model improve on models presented in the literature to date

the net benefits of incentive based regulation a case study of environmental standard setting economists interested in environmental safety and health regulation have long argued that decentralized incentive based or ib policies are more efficient than centralized command and control or cac approaches see charles schultze 1977 for instance these arguments generally have been based on the assumption that ib policies will accomplish the same goals as their cac counterparts but at less cost to society however some of those touting ib policies have overlooked an important point environmental workplace or even productsafety standards typically take the form of maximum permissible concentrations of harmful substances so that compliance only requires that all monitoring points or samples register readings below these critical levels for this reason ib policies typically assign a shadow price of zero to improvements that exceed the standard s while more crude cac policies generally result in overcontrol beyond the standards if there is no value to this overcontrol cac policies will not improve at all on ib approaches and will indeed be more expensive if however reduced concentrations below the level of the standards bring with them further improvements in health or the environment cac approaches will produce greater benefits than ib approaches thus a fair comparison between the two necessitates that any additional benefits associated with cac policies be offset against the cost advantages enjoyed by their ib counterparts although this possibility has been recognized by others scott atkinson and t h tietenberg 1982 for instance it is little appreciated and its empirical significance has never been ascertained that is our purpose here we do so by developing data on the costs and benefits of controlling a common air pollutant total suspended particulates or tsp in baltimore by comparing the tsp levels likely under both ib and cac approaches we are able to estimate the marginal costs and benefits associated with a variety of alternative air quality standards which take the form of maximum permissible concentrations this in turn allows us to determine the net benefits arising from the two kinds of regimes in the next section we present a simple conceptual framework for our analysis section ii describes the estimation of the costs and benefits of our hypothesized air pollution controls in baltimore section iii presents our somewhat surprising findings and section iv discusses those findings and their potential significance for regulation in the real world

tradable permits and unrealized gains from trade with the advent of tradable permit programs for bad outputs e g so2 emissions concerns arose over whether the theoretical gains from trade would be realized we will employ a methodology that calculates the potential gains accruing to coal fired electric power plants from implementing a tradable permit program the magnitude of the potential gains in a plant s kilowatt hour output from a tradable permit program relative to its observed production provides insights into the existence of intertemporal allocative inefficiencies and spatial allocative inefficiencies after the implementation of a tradable permit program

housing investment in the united states a supply determined model of housing investment is estimated from quarterly data over the 1963 83 period the model is built on dynamic marginal cost pricing considerations and allows short and long run supply elasticities to differ these are estimated as 1 0 and 3 0 respectively but most of the long run response occurs within 1 year rapid adjustment speed and the sizable long run elasticity of supply are important factors in understanding the volatility of housing investment the data also suggest some anomalies in the expected present value theory of asset pricing for housing capital

trade flows relative prices and effective exchange rates a var on ethiopian data the dynamic response of trade flows to price and effective exchange rate changes is examined via var using quarerly data from ethiopia for the period 1973 i 1985 iv the results show one way granger causality running from prices and exchange rates to imports and exports without significant feedback imports and exports exhibit similar response patterns to unexpected changes in relative prices and exchange rates the responses of imports and exports are larger and the adjustment takes longer when relative prices rather than exchange rates caused a change in international prices in the long run changes in prices account for a larger percentage of the forecast error variances in imports and exports than exchange rate changes it is shown that devaluation may have an initial adverse effect on the trade balance

trade liberalization and industrial growth in pakistan a cointegration analysis using the framework of an endogenous growth model this study empirically analyses the relationship between trade policies and industrial growth in pakistan during the period 1973 1995 the cointegration and error correction modelling approaches have been applied the empirical results suggest that there exists a unique long run relationship among the aggregate growth function of industrial value added and its major determinants of the real capital stock the labour force real exports the import tariff collection rate and the secondary school enrolment ratio the short term dynamic behaviour of pakistan s growth function of industrial value added has been investigated by estimating an error correction model in which the error correction term has been found to be correctly signed and statistically significant

the intensity and timing of investment the case of land the authors model the decision to replace durable capital when intensity is variable decisions of this type include land redevelopment decisions where the density of residential or commercial development is a choice variable as well as capital replacement decisions where capacity is variable the authors provide a general yet simple formation of the problem using an optimal stopping framework they characterize the value of the project the timing of investment and the intensity of development the authors show that intensity interacts in important ways with timing taxes and project values the ability to vary intensity raises hurdle rents and delays development decisions copyright 1994 by american economic association

the zero emission certificates a novel co2 pollution reduction instrument applied to the electricity market abstract today several instruments exist to decrease air pollution the paper discusses pollution taxes emission trading permits and green certificates applied to reduce the co 2 emissions in the electricity sector it then investigates how the different mechanisms behind these three instruments can possibly be combined the proposed approach is to introduce the concept of zero emission certificates zec zec are confirming actual emission reductions achieved by electricity producers as compared to a well defined baseline producers can trade zec on a market to achieve least cost efficiency in their reduction efforts distributors can themselves produce an additional contribution to emission reductions by decreasing the final demand i e by producing zero emission mwh in this way the electricity market is approached from both the supply and the demand sides the paper uses system dynamics to validate the approach it shows why it is in the interest of all operators to make the largest possible reduction efforts as long as they are compatible with economic efficiency

the size of human capital externalities cross country evidence human capital accumulation is usually held to generate positive externalities however the empirical evidence on human capital externalities has been scarce and inconclusive the missing evidence appears to be caused by misleading comparisons between private and social rates of return by incorrect interpretations of regression coefficients or by an inappropriate level of aggregation our own estimates point to relatively robust empirical evidence for a human capital externality that is about twice as large as a benchmark estimate which is derived from a standard parameterization of a simple growth model we ponder a possible causal link from human capital to social capital in the context of alternative views of long run development and argue that the grand transition view paldam 2002 is compatible with the existence of a large human capital externality

the rise and decline of mancur olson s view of the rise and decline of nations author affiliation j barkley rosser jr department of economics msc 0204 james madison university harrisonburg va 22807 usa rosserjb jmu edu acknowledgment the author thanks roger r betancourt and thomas c schelling for providing either useful comments or materials and dennis coates and jac c heckelman for careful editing of earlier drafts of this paper the author is responsible for any remaining errors or misinterpretations 1 introductionalthough the first book by mancur lloyd olson jr 1the logic of collective action 1965 has been cited more often and can be viewed as more fundamentally innovative at the theoretical level its successor the rise and decline of nations 1982 has been more widely translated and is arguably the magnum opus of his career the grand application of his earlier ideas to the world and history at large 2 the earlier work laid out the problems that groups have in their collective goals as they grow larger with a greater disjuncture arising between the interests of the individual and of the collective group in the final chapter of this work he suggested that his argument could lead to an overturning of the orthodox theory of pressure groups that saw them as a positive force for democracy and efficiency luce 1924 commons 1950 special interest groups representing small numbers of firms in oligopolistic industries could support monopolistic or protectionist legislation such legislation could damage the broader economy especially groups unable to organize themselves that would then have to suffer in silence although olson rarely used the term this argument can be seen as foreshadowing the later theory of rent seeking and in his later works he more openly recognized the affinity of his ideas with the public choice school of thought 3although olson added a number of arguments two crucial innovations appear in rise and decline that underlie its central thesis one is the distinction between distributional coalitions which are seen as leading to outcomes inimical to economic growth and encompassing coalitions which are seen as potentially aiding economic growth in a society because of their greater size the latter are seen as having trouble organizing themselves and achieving influence although they might have a better chance of doing so in a smaller and more homogeneous society such as sweden olson s other innovation was his argument that over time a stable democracy will tend to create more and more distributional coalitions whose political power will accumulate thus gradually impeding the economic growth of the society this becomes the key to his most famous argument in rise and decline he especially focused on the post world war ii performance of germany and japan compared with the united kingdom he argued that the defeat of germany and japan in the war led to the overthrow of the power of narrow special interest groups that impeded growth whereas in the united kingdom such groups reached a peak of power that was responsible for the relatively weak performance of the british economy he emphasized that this was not a sudden development but that after leading the world in economic growth during the industrial revolution during the long eighteenth century 1688 1834 britain began to fall behind in the mid 19th century compared with such rising powers as germany and the united states this deceleration and relative decline only worsening in the aftermath of world war ii although he discussed a variety of other examples this was the book s central inspiring case of course even as rise and decline was being published the united kingdom began to undergo a substantial political and economic transformation during the period of rule by margaret thatcher that triggered a global movement to privatization and marketization even though britain was not invaded and did not experience a violently revolutionary upheaval

dynamics of the trade balance and the terms of trade the j curve the authors provide a theoretical interpretation of two features of international data the countercyclical movements in net exports and the tendency for the trade balance to be negatively correlated with current and future movements in terms of trade but positively correlated with past movements they document the same properties in a two country stochastic growth model in which trade fluctuations reflect in large part the dynamics of capital formation the authors find that their general equilibrium perspective is essential the relation between the trade balance and the terms of trade depends critically on the source of fluctuations copyright 1994 by american economic association

the potential estimation and factor analysis of china s energy conservation on thermal power industry new huadu business school research fund national social science foundation of china 12zd059 ministry of education 10gbj013

is there a long run relation between the trade balance and the real effective exchange rate of ldcs abstract using quarterly data over 1973 1988 period the cointegration analysis is used and it is shown that the trade balance and the real effective exchange rate of some ldcs are cointegrated in the long run this approach is argued to be a close substitute for testing the marshall lerner condition

a future for carbon taxes abstract carbon taxes have been frequently advocated as a cost effective instrument for reducing emissions however in the practice of environmental policies only six countries have implemented taxes based on the carbon content of the energy products in this paper we evaluate carbon taxes with regard to their competitiveness distributional and environmental impacts the evidence shows that carbon taxes may be an interesting policy option and that their main negative impacts may be compensated through the design of the tax and the use of the generated fiscal revenues

examining the drivers of total factor productivity change with an illustrative example of 14 eu countries abstract based on the different models developed by korhonen and luptacik korhonen p luptacik m 2004 eco efficiency analysis of power plants an extension of data envelopment analysis european journal of operational research 154 437 46 this contribution centers on the development of an intertemporal comparison in order to analyze eco efficiency change over time in this setup two model variants by korhonen and luptacik 2004 are used in order to provide deeper insights concerning the driving forces for the change in the eco efficiency which bias in technical change can be observed is it more input saving or pollution reducing for illustration purposes the proposed approach is used to analyze the performance of 14 countries of the european union for the period 1995 2004 an average eco productivity growth of 22 is observed the estimated contribution of improved use of input is 20 and that of reduced relation of greenhouse gas emissions is 23 therefore it is concluded that on average the eco productivity growth is more driven by improved environmental conditions

the shadow prices of co2 and so2 for chinese coal fired power plants a partial frontier approach abstract shadow prices are widely employed in guiding environmental policies this paper contributes to the literature by developing a novel partial frontier approach for estimating shadow prices the proposed method is advanced in handling outliers and provides a precise estimation of the marginal rate of substitution along the production frontier to cope with the different disposability characteristics of undesirable emissions so2 is treated as an environmental input that is strongly disposable because most different undesirable outputs are jointly reduced this study is the first to use directional derivatives instead of partial derivatives and proposes a new separation method that separates individual directional shadow price from the cost of joint reduction of multiple undesirable outputs we apply the proposed method to a sample of 93 coal fired power plants covering six years the estimated average shadow prices of co2 and so2 are 69 tonne and 2525 tonne under the newly developed partial frontiers when assuming some undesirable output to be strongly disposable both shadow prices fall 20 32 tonne and 1018 23 tonne the present paper suggests the estimated shadow prices will be much different across different levels of disposability the cost of joint reduction is calculated as 91 05 unit given the current production level which leads to a directional shadow price for the two undesirable outputs of 91 32 tonne and 1250 06 tonne the estimated shadow prices for both undesirable outputs dispersed widely under the partial frontiers spatial distribution of estimated shadow prices shows that coastal provinces and municipalities have higher co2 shadow prices but lower so2 shadow prices whereas the northeast provinces are the opposite the co2 shadow price is comparatively stable over the study period while the so2 shadow price fluctuates policy implications are discussed

infrastructure financing and urban development abstract historically additions to public infrastructure necessitated by urban growth have been financed under a cost sharing approach in the last several decades however financing of growth has increasingly relied on land use exactions where new residents pay for the cost of incremental infrastructure despite the emergence of a formal growth control literature there has been virtually no formal analysis of the connection between infrastructure financing and urban development to provide such an analysis this paper investigates three different schemes for financing incremental infrastructure within an urban growth model the analysis compares an impact fee scheme to two types of cost sharing schemes deriving the effects on urban growth and land values of switching to the impact fee scheme the efficient financing scheme is also identified

equity in infrastructure finance when are impact fees justified to the extent that impact fee financing of infrastructure replaces the property tax it shifts payment from owners of existing property to parties associated with newly devel oping property rapid growth in a community is often cited as justification for this shift a model of intergenerational equity is proposed based on benefit principle taxation and capitalization of tax costs and infrastructure benefits the study concludes that rapid growth per se need not bur den existing property owners unfairly unantici pated rapid growth on the other hand can lead to excess tax burdens on existing residents that may appropriately be mitigated through impact fees jel r11

why do cities use supply side strategies to mitigate traffic congestion externalities abstract for traffic congestion arising from sprawl planners prefer supply side strategies over the demand side strategies recommended by economists our model provides a rationale why wealth induced congestion increases a planner s social discount rate which decreases future costs of supply side solutions

spatial patterns of residential development abstract a simple dynamic model of residential development with durable housing where all households are identical and all developers have perfect foresight is studied it is shown that unlike the case of static models it is quite possible that house size decreases and thus population density increases with distance from the city center and that the house rent curve has positive gradient in certain area

the efficient production of external economies does independent market adjustment always lead to a less than pareto optimal supply of goods when there are external economies the traditional pigovian conclusion that it did has recently been rejected by some eminent economists this rejection began with a contribution in this review by james buchanan and milton kafoglis who produced examples in which independent market adjustment apparently provided optimal or even supra optimal supplies of goods with external economies and thus found the orthodox pigovian conclusion unsatisfactory their finding has been accepted by many economists including william baumol who attempted in a subsequent communication in this journal to provide a formal general explanation of their result this note will show that buchanan and kafoglis failed to call attention to the major theoretical point

the j curve evidence from commodity trade between uk and china in testing the short run j curve effect and the long run effects of currency depreciation on the trade balance many researchers have used either trade data between one country and the rest of the world or between one country and another trading partner both groups are said to suffer from aggregation bias to reduce the bias in this article we consider trade data between one country the us and her trading partner china disaggregated by commodity we use imports and exports of 88 industries 2 digit and 3 digit classifications and cointegration analysis to show that the trade balance of at least 34 of the industries react favourably to real depreciation of the dollar the j curve effect is detected in 22 industries furthermore most of these industries that are sensitive to currency depreciation are durable commodity groupings

the fundamentals of land prices and urban growth abstract in a very simple model in which capital is durable and landowners have perfect foresight the price of urban land has four additive components the value of agricultural land rent the cost of conversion the value of accessibility and the value of expected future rent increases a growth premium in rapidly growing cities the growth premium may easily account for half of the average price of land and may create a large gap between the price of land at the boundary minus conversion cost and the value of agricultural land rent

the dynamic linkage effect between energy and emissions allowances price for regional emissions trading scheme pilots in china abstract china s emissions trading scheme cets pilots are emerging and fragmented markets these emissions allowances markets may exhibit a different fundamental price process from the european union s eu and the united states us emissions trading scheme ets the dynamic linkage effects between energy and emissions allowances prices are investigated for regional ets pilots in china using cointegration techniques the empirical results confirm that in the long run coal oil and natural gas prices are the main determinant factors of regional emissions allowances prices except for the second phase beijing ets pilots however their long run cointegration relationships in the beijing and shanghai pilots are not exactly in line with the guangdong and hubei pilots in the short run the changes in oil and natural gas prices in the second phase beijing ets pilot the natural gas prices in the shanghai ets pilot and the coal prices in the hubei ets pilot are found to have significant effects on regional emissions allowances prices in china finally regional energy pricing inefficiency regional emissions trading market overreaction and their inefficient fundaments may provide major obstacles in reducing the effectiveness of the fossil energy price pass through to emissions allowances prices in regional ets pilots

do you not like pigou or do you not understand him tax aversion and revenue recycling in the lab tax aversion reduces the likelihood that price rationing can be a politically viable tool for environmental protection we examine the case of the classic pigouvian tax to control a negative externality and consider how recycling the revenues labeling of the tax and information about its purpose affects the support for taxation we test the support for taxation within a single price market experiment in which purchases by some buyers impose external costs on others observing behavior consistent with tax aversion we also find that recycling the revenues to more narrowly targeted groups seems to increase support for taxation in the absence of narrow revenue recycling labeling a pigouvian instrument as a tax may significantly lower the likelihood of voter support

nominal and real effective exchange rates of middle eastern countries and their trade performance indexes of real and nominal effective exchange rates that are published by the imf are mostly for industrial countries none of the middle eastern countries have received any attention on this regard this paper tries to close the gap by constructing such indexes for 11 middle eastern countries over 1971 i 1994 iv period as an application long run response of their trade balance to devaluation is also investigated

self protection strategic interactions and the relative endogeneity of disease risks self protection is a key behavior that influences infectious disease risks spillovers in disease protection create different types of strategic interactions under certain conditions multiple nash equilibria may arise with the possibility of coordination failure involving excessively low self protection in which case individuals expectations of others efforts determine which outcome arises in prior studies assumed technical relations between self protection and infection probabilities drove the strategic interactions we demonstrate that strategic relations can be endogenously determined and depend on the relative endogeneity of risk rer defined here as the degree to which individuals can take control of their own risks in a strategic setting the potential for coordination failure may arise when rer is sufficiently small whereas larger levels of rer may eliminate this possibility to ensure larger levels of self protection we find that imposing a behaviorally dependent indemnity may increase rer to eliminate the possibility of coordination failure we apply our analysis to the problem of livestock disease and illustrate the theory using a numerical example of the 2001 united kingdom foot and mouth disease epidemic

silver bullet or trojan horse the effects of inclusionary zoning on local housing markets in the united states many local governments are adopting inclusionary zoning iz as a means of producing affordable housing without direct public subsidies in this paper panel data on iz in the san francisco metropolitan area and suburban boston are used to analyse how much affordable housing the programmes produce and how iz affects the prices and production of market rate housing the amount of affordable housing produced under iz has been modest and depends primarily on how long iz has been in place results from suburban boston suggest that iz has contributed to increased housing prices and lower rates of production during periods of regional house price appreciation in the san francisco area iz also appears to increase housing prices in times of regional price appreciation but to decrease prices during cooler regional markets there is no evidence of a statistically significant effect of iz on new housing development in the bay area

antidumping decisions and macroeconomic variables in the usa this paper investigates the macroeconomic factors that explain antidumping decisions in the us international trade commission johansen s cointegration test results show that there is a long run equilibrium relationship between growth of the percentage of affirmative antidumping decisions and trade balance the error correction model shows that there is a causality running from the latter to the former growth of the percentage of affirmative antidumping decisions is revealed to cause slowdown in economic growth partisan characteristics are observed in the commissioners antidumping decisions

on the impact of trade openness on growth further evidence from oecd countries this study attempts to examine empirically the implications of the degree of openness for total and individual factor productivity growth in a group of 19 oecd countries over the last three decades the study combines both time series and cross sectional data the model employed is a generalization of the commonly used growth accounting model based on the concept of an aggregate production function in which the rate of economic growth is a function of capital and labour accumulation and total factor productivity it is explicitly assumed that total factor productivity depends in turn upon the rate of export expansion the model is then estimated using the random coefficients approach while results generally indicate that the relative importance of trade openness on economic growth varies significantly across countries they also indicate that the role of capital and labour accumulation in fostering economic growth varies with the degree of openness cross sectionally as well as across time

the j curve malaysia versus her major trading partners currency depreciation is said to worsen the trade balance before improving it hence the j curve phenomenon since introduction of cointegration and error correction modelling researchers have tried to distinguish the short run effects of currency depreciation from its long run effects a few studies that have investigated the experience of malaysia have relied upon aggregate trade data and have found no strong support for a significant relation between the real value of the ringgit and the malaysian trade balance in this article we disaggregate the data by country and consider malaysia s bilateral trade balance with her 14 largest trading partners using bound testing approach to cointegration and error correction modelling we provide some support for the j curve hypothesis

estimation of j curves united states and canada delayed reactions to exchange rate changes in trade on current account balances are known to exist in both the united states and canada a model has been constructed to estimate relative price effects for trade with major partners in order to determine the quantitative magnitudes and relevant time delays for both countries adjustments in trade accounts there is a distinct tendency for balances to worsen when exchange depreciation first occurs and then to improve after several quarters have passed there is also a tendency for the balances to worsen again the u s and canadian time profiles of adjustment are found to be similar

the user pays system in the provision of urban infrastructure effectiveness and equity criteria a variety of means are currently used throughout the world to finance urban infrastructure in new areas and many countries have attempted to apply alternative and innovative methods to address this issue since 1985 iran has employed a direct user pays system to finance urban infrastructure in new areas questions surrounding effectiveness and equity in the user pays system result in some conflicting issues this paper examines the implications of the user pays system in terms of effectiveness and equity considerations using the experience of iran the primary foci are first to expand the discussion on financial aspects of infrastructure provision and secondly to understand and explain the implications of the user pays system for infrastructure provision based on an empirical analysis