dynamic adjustment in the us beef market with imports abstract this paper hypothesizes that while there are important qualitative differences in domestic beef and imported beef beef and cattle imports also represent attempts by the us beef processing and wholesale sector to adjust to short run changes in supply and demand dynamic production theory is applied to the problem to test for this adjustment process and presents a production theory approach to meat trade that has previously been included in demand functions the results of this analysis suggest that the method used provides a reasonable and appropriate representation of the import behavior of the us processing and wholesale beef sector

el precio de los terrenos y el valor de sus atributos un enfoque de precios hedonicos o one of the most interesting characteristics in urban plots markets is that differentiated products are traded in integrated markets urban plots are composite goods whose utility for the consumer depends on the utility yield by each one of the characteristics or attributes that compose them the technique used to study the contributions of each one of those characteristics to the market price of urban plots in the city of san miguel of tucuman is the econometric estimation of hedonic equations whose regressors are the attributes of the urban plots it is found that location variables commercial areas and commercial surroundings have the greatest impact on prices on the other hand variables associated with the availability of public utilities are less important it is also found that the price per square meter diminishes as the size of the urban plot increases this is consistent with the results obtained by figueroa and lever for the case of santiago de chile

energy substitution when model selection depends on the focus abstract in contrast to conventional model selection criteria the focused information criterion fic allows for the purpose specific choice of model specifications this accommodates the idea that one kind of model might be highly appropriate for inferences on a particular focus parameter but not for another ever since its development the fic has been increasingly applied in the realm of statistics but this concept appears to be virtually unknown in the literature on energy and production economics using the classical example of the translog cost function and production data for 35 u s industry sectors 1960 2005 this paper provides for an empirical illustration of the fic and demonstrates its usefulness in selecting production models thereby focusing on the ease of substitution between energy and capital versus energy and labor

monetary policy uncertainty and the response of the yield curve to policy shocks this paper studies the non linear response of the term structure of interest rates to monetary policy shocks and presents a new stylized fact we show that uncertainty about monetary policy changes the way the term structure responds to monetary policy a policy tightening leads to a significantly smaller increase in long term bond yields if policy uncertainty is high at the time of the shock we also look at the decomposition of bond yields into expectations about future policy and the term premium the weaker response of yields is driven by the fall in term premia which fall even more if uncertainty about policy is high these findings are robust to the measurement of monetary policy uncertainty the definition of the monetary policy shock and to changing the model specification conditional on a monetary policy shock higher uncertainty about monetary policy tends to make yields of longer maturities relatively more attractive as a consequence investors demand even lower term premia this intuition is supported by long term monetary pol icy disagreement which leads to opposite effects with term premia increasing even more after a policy shock

power competition and the free trader vulgaris competition is taken for granted by neoclassical economics its cause is human nature and its functioning is the result of spontaneous interactions as such it is contrasted with power which is an unnatural restriction on human liberty by contrast marx discusses competition as a coercive mechanism historically competition develops with the development of market relations and what today appears as human nature is part of this process thus it is within competition and not outside of it that marx explains the coercive nature of capitalism his critique shows that competition and power appear to be antithetical because market relations are based on individual freedom however class relations are another essential aspect of capitalism by neglecting these relations neoclassical economists including those of a radical inspiration implicitly espouse the ruling class s viewpoint which they simply translate into rigorous mathematical terms in this sense they are the modern expression of what marx called the vulgar political economy

monetary and fiscal policy under perfect foresight a symmetric two country analysis this paper analyzes the effects of anticipated and unanticipated domestic monetary and fiscal expansions on both the domestic and foreign economies the analysis is based on symmetric behavior which is not only not an unreasonable first approximation but also offers significant analytical advantages specifically it enables the dynamics of the system to be decoupled into a averages and b differences of relevant variables not only does this render the analysis tractable but it also helps provide economic insight one striking aspect is that the differences but not the averages respond to announcements the consequences of this for the dynamic adjustments of the two economies to the various disturbances are discussed at length this abstract was borrowed from another version of this item

the composition of capital inflows when emerging market firms face financing constraints abstract the composition of capital inflows to emerging market economies tends to follow a predictable dynamic pattern across the business cycle in most emerging market economies total inflows are pro cyclical with debt and portfolio equity flowing in first followed later in the expansion by foreign direct investment fdi to understand the dynamic composition of these flows we use a small open economy soe framework to model the composition of capital inflows as the equilibrium outcome of emerging market firms financing decisions we show how costly external financing and fdi search costs generate a state contingent cost of financing such that the cheapest source of financing depends on the phase of the business cycle in this manner the financial frictions are able to explain the interaction between the types of flows and deliver a time varying composition of flows as well as other standard features of emerging market business cycles if as this work suggests flows are an equilibrium outcome of firms financing decisions then volatility of capital inflows is not necessarily bad for an economy furthermore using capital controls to shut down one type of flow and encourage another is certain to have both short and long run welfare implications

the international monetary system an analysis of alternative regimes abstract this is an exercise in the positive economics of alternative monetary regimes the behavior of output and prices is compared using a stochastic specification which allows asymptotic variances to be obtained without difficulty free floating of exchange rates together with national money supply targets is analyzed first with and without the presence of fads in the exchange rate two alternatives for monetary coordination are then considered first is mckinnon s proposal to fix nominal exchange rates and stabilize aggregate monetary growth or average inflation second is williamson s system of target zones for stable real exchange rates complemented by nominal income targets for fiscal policy

fiscal deficits and relative prices in a growing world economy abstract this paper studies the transmission of fiscal disturbances between countries and the effect of those disturbances on worldwide capital intensity in a context of growth the model developed to address these issues allows for the production of both nontradable and relatively capital intensive tradable goods a central finding is that factor markets can be a major channel for the communication of fiscal policy shocks to world interest rates to private saving decisions and ultimately to global asset supplies and their distribution among countries particular predictions of the model illustrate how changes in public debt ratios and shifts in government spending patterns affect resource allocation and the welfare of various generations both at home and abroad

unconventional monetary policy fiscal side effects and euro area im balances we study the macroeconomic effects of unconventional monetary policy in the euro area using structural vector autoregressions identified with external instruments the instruments are based on the common unexpected variation in euro area sovereign yields for different maturities on policy announcement days we first show that expansionary monetary surprises are effective at lowering public and private interest rates and increasing economic activity consumer prices and inflation expectations we then document that the shocks lead to a rise in primary public expenditures and a widening of internal trade balances

transaction cost economics the natural progression abstract this manuscript provides the nobel laureate s reflections on transaction cost economics the overview section frames governance as the overarching concept and transaction cost economics as the means by which to breathe operational content into governance and organization the vertical integration section identifies efficiency factors associated with determining when a firm produces a good or service to its own needs rather than outsource a discussion of the rudiments of transaction cost analysis is subsequently provided puzzles and challenges that require pushing the logic of efficient governance to completion are examined and followed by concluding remarks

quality adjusted price and quantity indices for pesticides quality adjusted price indices are calculated for pesticides used on major crops in u s agriculture for 1967 92 using hedonic methods pesticide potency hazardous characteristics and persistence in the environment are used as quality characteristics separate hedonic functions are estimated for pesticides by end use crop and major pesticide class price indices are aggregated using chained tornqvist indices adjusted quantity indices are computed using pesticide expenditures the adjusted price index rose steadily reaching in 1992 around 2 5 times the level of 1968 pesticide use at constant quality peaked in 1981 at a level substantially higher than the peak reached by the unadjusted index

the macroeconomic effects of large scale asset purchase programmes the effects of asset purchase programs on macroeconomic variables are likely to be moderate we reach this conclusion after simulating the impact of the federal reserve s second large scale asset purchase program lsap ii in a dsge model enriched with a preferred habitat framework and estimated on u s data our simulations suggest that such a program increases gdp growth by less than half a percentage point although the effect on the level of gdp is very persistent the program s marginal contribution to infl ation is very small one key reason for our fi ndings is that we estimate a small degree of fi nancial market segmentation if we enrich the set of observables with a measure of long term debt the semi elasticity of the risk premium to the amount of debt in privatesector hands is substantially smaller than that reported in the recent empirical literature in this case our baseline estimates of the effects of lsap ii on the macroeconomy decrease by at least a factor of two throughout the analysis a commitment to an extended period at the zero lower bound for nominal interest rates increases the effects of asset purchase programs on gdp growth and infl ation

quantitative easing and the post crisis surge in financial flows to developing countries abstract this paper examines gross financial inflows to developing countries between 2000 and 2013 with a focus on the potential effects of quantitative easing qe policies in the united states and other high income countries we find evidence for potential transmission of qe along observable liquidity portfolio balancing and confidence channels moreover we find that qe had an additional latent effect over and above these observable channels one that survives an array of robustness tests retains its significance across different types of financial flows and which cannot be attributed to changes in expectations or elasticity our baseline estimates place the lower bound of a qe effect at around 5 percent of gross inflows above trend for the average developing economy which is a magnitude comparable to a one standard deviation change along the traditional channels we also find evidence of heterogeneity among different types of flows portfolio especially bond flows tend to be more sensitive than fdi to our measured qe effects

technological change in u s jet fighter aircraft this paper quantitatively measures technological change in u s jet fighter aircraft from 1944 to the present day using the hedonic pricing approach the technical and performance characteristics of jet fighters have changed dramatically between the time they were first developed at the beginning of the 1940s and the present parallel to this technological change there has been a sharp escalation in costs regarding the new generations of jet fighter aircraft we estimate a measure of price for the performance and technical characteristics of these aircraft embodied technological change in jet fighter airframes is measured using quality adjusted prices although the flyaway cost of jet fighter aircraft has soared on average by about 12 63 per year the quality adjusted aircraft cost has only risen by about 2 6 per year a figure lower than the average observed general inflation rate for the period around 4 this represents an impressive average technological progress ratio of around 10 per year a revealed preferences argument shows that the characteristic most valued by the government is stealth capability followed by advanced avionics

real options delay vs pre emption do industrial characteristics matter this paper presents an empirical study of the channels of influence from uncertainty to fixed investment suggested by real options theory using panel data from the confederation of british industry cbi industrial trends survey we report ols estimates of the impact of uncertainty on investment where the regressors are augmented by cross sectional averages of the dependent variable and of the individual specific regressors as recently suggested by pesaran pesaran m h 2006 estimation and inference in large heterogeneous panels with a multifactor error structure econometrica 74 967 1012 the cross industry pattern of results is checked for consistency with the pattern predicted by real options theory using a specially constructed data set of industrial characteristics we find that irreversibility is able to predict the pattern detected but only when combined with a measure of the information advantage of delay there is also evidence for expansion options effects industries with high r d and advertising intensities tend to have positive uncertainty effects

exchange intervention policy in a multiple country world abstract intervention policy is examined in a three country model employment and output in each country depend upon the domestic currency value of a natural basket of currencies called the sally each country will find it desirable to intervene to stabilize its sally rate if capital movements are more volatile than trade flows this is a natural generalization of well known small country results however in this general equilibrium setting it is clear that such a policy can destabilize employment in another country and lead to retaliation currency unions are also examined and found to have similar spillover problems

the cyclical properties of disaggregated capital flows abstract we analyze the second moment properties of the components of international capital flows and their relationship to business cycle variables output investment and the real interest rate in 22 industrial and emerging countries total inward flows are procyclical with respect to all three macro variables net outward flows are countercyclical with respect to output and investment in most industrial and emerging countries disaggregated inward flows positively comove with output in industrial countries and with investment and the real interest rate in the g7 economies inward foreign direct investment is the only non procyclical type of inward capital flows with respect to output in the developing economies formal statistical tests based on nonparametric bootstrap techniques detect significant variance increases in all g7 countries disaggregated capital flows over exogenous and endogenously estimated breaks

the real exchange rate the capital stock and fiscal policy abstract this paper studies the joint determination of aggregate supply the real exchange rate and the current account in response to changes in government spending in a model where there is no uncertainty in the aggregate but where individuals are uncertain about their lives duration international capital mobility fixes the steady state capital stock and aggregate supply in a small country whereas in a large country the steady state capital stock is endogenous an increase in government spending is more likely to generate a real exchange rate depreciation in a small country since the loss of wealth associated with cumulated current account deficits does not increase rest of the world spending in the case of a large country current account deficits are wealth transfers to the rest of the world and increase foreign spending thus the normal long run response is an increase in the relative price of domestic output

the theoretical structure of producer willingness to pay estimates this article analyzes the theoretical underpinnings of producer willingness to pay wtp for new inputs in addition to conceptualizing the producer wtp function we derive its comparative statics and show how these properties can be used to estimate quantities demanded or supplied and price elasticities we also discuss implications of the comparative statics

the international transmission and effects of fiscal policies in recent years the world economy has been subject to large and unsyncronized changes in fiscal policies high and volatile real rates of tnterest large fluctuations in real exchange rates and significant variations in private sector spending this paper reviews some of the key facts characterizing the effects of fiscal policies during the first half of the 1980s and provides a simple analytical framework suitable for the interpretation of these facts the analytical framework builds on a two country model of the world economy which is applied to the analysis of the transmission and effects of various changes in the time profile of taxes and of government spending generally the predictions of the model concerning the relation among the intercountry patterns of consumption long and short term real rates of interest real exchange rates and fiscal policies are consistent with the stylized facts this abstract was borrowed from another version of this item

does international harmonization of environmental policy instruments make economic sense harmonization of the instruments used in environmental policy has beenconsidered necessary to guarantee fair competition in internationalmarkets we examine the economic costs of harmonizing paper recyclingstandards in countries where the urgency of the waste disposal problemsdiffer using data of seven european countries we estimate thetechnologically feasible input combinations of pulp and waste paper forpaper production short term effects of two environmental policy measures minimum content requirement and utilization rate target are analyzed bytranslating the two administrative instruments into taxes and subsidies weshow that the shadow costs of the harmonization vary considerably betweencountries the difference in the domestic availability of waste may explainthe variation and a modification of the policy measures to incorporate thisaspect is suggested

assessing the impact of environmental charges a partial general equilibrium model of the forest sector this paper provides a theoretical and empirical analysis of how environmental charges affect a particular sector of the economy our approach allows a simple comparison of how partial and general equilibrium results may differ

international business cycles world region and country specific factors the paper investigates the common dynamic properties of business cycle fluctuations across countries regions and the world we employ a bayesian dynamic latent factor model to estimate common components in macroeconomic aggregates output consumption and investment in a 60 country sample covering seven regions of the world the results indicate that a common world factor is an important source of volatility for aggregates in most countries providing evidence for a world business cycle we find that region specific factors play only a minor role in explaining fluctuations in economic activity we also document similarities and differences across regions countries and aggregates jel f41 e32 c11 c32

global transmission channels for international bank lending in the 2007 09 financial crisist abstract during a financial crisis credit provision by international banks may be affected by three global channels changes in willingness to lend from increased economic uncertainty in funding availability from interbank liquidity markets and in solvency from weakened balance sheets in this paper we examine the extent to which each channel affected bank lending in developing countries during the global financial crisis of 2007 09 we find evidence that the liquidity and uncertainty channels were important although lending sensitivity to these channels remained unchanged during the crisis we also find heterogeneity in the lending behavior of european versus u s banks

international transmission of monetary and fiscal policy abstract this paper analyzes the effects of monetary and fiscal expansion on the multiple economies in a dornbusch model and a yaari blanchard model unlike previous literature the paper incorporates union and explicitly solves the n country models the effects of monetary and fiscal expansion outside the union are quite similar to the previous results based on the two country models however the effects of expansion inside the union induce a different dynamic path after the policy changes furthermore the number of union members changes the fluctuations of various endogenous variables

overreaction in capital flows to emerging markets booms and sudden stops this paper applies the overreaction hypothesis of de bont and thaler de bont w thaler r 1985 does stock market overreact journal of finance 40 3 793 805 developed for stock price behavior to capital flows to emerging markets we find that a surge in capital flows or what we call a capital boom can predict future sharp contractions in capital flows or sudden stops we use a large list of possible economic fundamentals as control variables and the results show that the best predictor of a sudden stop is a preceding capital boom moreover the probability of a country undergoing a sudden stop increases considerably with the length of the boom this probability more than doubles when the boom is three years old and rises by three to four times when the boom lasts for four years these results are interesting for two reasons in the first place they contradict previous studies that emphasize worsening fundamentals as the ultimate cause of a sudden stop second they are of policy interest because of the enormous negative impacts that sudden stops have on the real economy

fiscal policy anticipated switches in methods of finance and the effects on the economy this paper develops a full employment constant population macroeconomic model with forward looking consumers that have finite horizons the model is designed to analyze the effects on the economy of a current bond financed cut in taxes or an increase in government expenditures when the resulting deficits are anticipated to be closed by a mixture of tax finance and money finance in the future the model implies that deficits and real interest rates may not be positively correlated contrary to popular views and that deficits and inflation may exhibit a variety of patterns depending on how the deficits are expected to be closed in the future copyright 1990 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

do central bank liquidity facilities affect interbank lending rates in response to the global financial crisis that started in august 2007 central banks provided extraordinary amounts of liquidity to the financial system to investigate the effect of central bank liquidity facilities on term interbank lending rates near the start of the crisis we estimate a six factor arbitrage free model of u s treasury yields financial corporate bond yields and term interbank rates this model can account for fluctuations in the term structure of credit and liquidity spreads observed in the data a significant shift in model estimates after the announcement of the liquidity facilities suggests that these central bank actions did help lower the liquidity premium in term interbank rates

international transmission of u s monetary policy shocks evidence from stock prices this paper analyzes intraday changes in firm level equity prices around interest rate announcements to assess the transmission of u s monetary policy to the global economy we document that foreign firms on average are roughly as sensitive to u s monetary policy as u s firms although we also find considerable cross sectional variation across firms in particular foreign stocks in cyclically sensitive industries show stronger responses to interest rate surprises consistent with a demand channel of policy transmission in addition transmission of u s policy appears to be stronger to economies with fixed exchange rates evidence for a credit channel is weaker

hot money accounting labels and the permanence of capital flows to developing countries an empirical investigation using maximum likelihood kalman filtering techniques and non parametric variance ratio statistics we gauge the relative importance of permanent and temporary components of capital flows to latin american and asian developing countries over the period 1988 1997 for the broad categories of flows in the capital account equity flows ef bond flows bf official flows of commercial bank credit bc and foreign direct investment fdi we find relatively low permanent components in ef bf and of while commercial bc flows appear to contain quite large permanent components and fdi flows are almost entirely permanent these results have a natural interpretation and clear policy implications

current account dynamics in a finite horizon model abstract this paper examines the response of the current account in a small open economy to a permanent change in the price of imported intermediate goods to do so it extends blanchard s 1985 open economy model to incorporate the capital stock with adjustment costs a la hayashi 1982 a price increase in imported intermediate goods can be viewed as a combination of transfer payments abroad and capital taxation the former effect leads to a current account deficit and the latter leads to a current account surplus the overall effect depends on the relative magnitude of these effects

the impact of large scale asset purchases on the s p 500 index long term interest rates and unemployment after the bankruptcy of lehman brothers in september 2008 and the financial panic that ensued the federal reserve moved rapidly to reduce the federal funds rate to 25 it was quickly judged that additional measures were needed to stabilize the us economy beginning in december 2008 the federal reserve bank initiated three rounds of unconventional monetary policies known as quantitative easing qe these policies were intended to reduce long term interest rates when the short term federal funds rates had reached the zero lower bound and could not become negative it was argued that the lowering of longer term interest rates would help the stock market and thus the wealth of consumers this article carefully investigates three hypotheses qe impacting long term interest rates qe impacting the stock market and qe impacting unemployment using a markov regime switching methodology we conclude that qe has contributed significantly to increases in the stock market but less significantly to long term inter

the response of interest rates to us and uk quantitative easing we analyse declines in government bond yields following announcements by the federal reserve and the bank of england of plans to buy longer term debt using dynamic term structure models we decompose us and uk yields into expectations about future short term interest rates and term premiums we find that declines in us yields mainly reflected lower expectations of future short term interest rates while declines in uk yields appeared to reflect reduced term premiums thus the relative importance of the signalling and portfolio balance channels of quantitative easing may depend on market institutional structures and central bank communication policies

term premia and inflation uncertainty empirical evidence from an international panel dataset comment term premia implied by maximum likelihood estimates of affine term structure models are misleading because of small sample bias we show that accounting for this bias alters the conclusions about the trend cycle and macroeconomic determinants of the term premia estimated in wright 2011 his term premium estimates are essentially acyclical and often just parallel the secular trend in longterm interest rates in contrast bias corrected term premia show pronounced countercyclical behavior consistent with theoretical and empirical arguments about movements in risk premia jel e31 e43 e52 g12 h63 in an important recent paper wright 2011 presents a new international interest rate dataset and estimates term premia in far ahead forward rates using an affine gaussian dynamic term structure model dtsm as well as a survey based method he then relates these empirical term premia to macroeconomic conditions notably inflation uncertainty in particular he shows that the marked secular decline in estimated forward term premia across countries is correlated with decreases in measures of uncertainty around forecasts of future inflation in this comment we demonstrate that his model based term premium estimates are distorted by smallsample bias in the estimated model parameters accounting for this bias changes the behavior of the resulting term premium estimates in terms of their trend and cyclical behavior in an affine gaussian dtsm bond yields are determined by a small number of risk factors and the dynamic evolution of these risk factors follows a gaussian vector autoregression var if the risk factors in such a model are observable and if the model is maximally flexible i e if it has no parameter restrictions beyond those required for identification we know from joslin singleton and zhu 2011 that the maximum likelihood estimates of the var parameters can be found by

international spillovers of quantitative easing abstract this paper develops a two country model with asset market segmentation to investigate the effects of quantitative easing implemented by the major central banks on a typical small open economy that follows independent monetary policy the model is able to replicate the key empirical facts on emerging countries response to large scale asset purchases conducted abroad including inflow of capital to local sovereign bond markets an increase in international comovement of term premia and change in the responsiveness of the exchange rate to interest rate differentials according to our simulations quantitative easing abroad boosts domestic demand in the small economy but undermines its international competitiveness and depresses aggregate output at least in the short run this is in contrast to conventional monetary easing in the large economy which has positive spillovers to output in other countries we also find that limiting quantitative easing spillovers might require policies that affect directly international capital flows like purchasing assets by the small economy s central bank

mode locking and international business cycle transmission abstract we investigate international business cycle synchronization business cycles in many countries have a tendency to synchronize with one another in what appears to be a world business cycle yet researchers find that trade and capital linkages are not strong enough for one country to drive business cycles in another country how is this world business cycle formed this study suggests that the world business cycle results from a mode locking phenomenon a nonlinear process by which weak coupling between oscillating systems tends to synchronize oscillations in the systems simulations and econometric analyses are performed to attempt to verify this hypothesis

estimating substitution and expansion effects using a profit function framework this study reports a first attempt to derive all the relevant information with respect to the structure of production of an industry using knowledge of only a profit function using estimates of a profit function for canadian agriculture a procedure to separate substitution and expansion effects for both inputs and outputs was implemented information concerning net input and output substitution and complementarity possibilities were obtained the most important empirical results suggest that the hypothesis of nonjoint production of crop and animal outputs in canadian agriculture cannot be rejected and that hired and operator labor are complements rather than substitutes

expectation and duration at the effective lower bound abstract with risk averse arbitrageurs and an effective lower bound elb on nominal rates nonlinear interactions among short rate expectations bond supply and term premia emerge in equilibrium these interactions which are absent from affine models help explain the observed behavior of the yield curve near the elb including evidence about unconventional monetary policy the impact of both short rate expectations and bond supply are attenuated at the elb however in simulations of the post crisis experience in the u s shocks to investors duration risk exposures have much smaller effects than shocks to the anticipated path of short rates the latter shocks matter in part because of the reduction in interest rate volatility associated with a longer expected stay at the elb a novel channel of unconventional policy

judging agricultural policies a survey this survey provides a structured picture of 40 years of literature which uses welfare economic tools to judge agricultural policy challenges and developments of normative agricultural policy analysis are discussed in an easily accessible graphical framework it is shown how the literature has gone from examining a very small discrete set of simple policies to a much broader often continuous set of policies that combine policy instruments simultaneously the importance of the pareto criterion used to explore the limits of how government can affect welfare is revealed moreover given the importance of the objective of income redistribution in agricultural policy agricultural economists have often departed from the purely efficiency oriented tradition in economics it is shown that they have tried to incorporate equity considerations by either adding these criteria as constraints to the social welfare function or directly incorporating these criteria in the functional form of the social welfare function

increasing forest conservation in norway consequences for timber and forest products markets this paper analyses the impacts on timber and forest products markets of increasing forest conservation in norway a partial equilibrium forest sector model is applied to analyse effects on roundwood and forest products prices quantities and trade of four alternative conservation extents these alternatives are based on a recent biological analysis of the conservation needs in order to protect biodiversity in norway roundwood prices are projected to increase moderately when conservation increases domestically only since the norwegian forest industry substitutes imported fibre for domestic the impacts on roundwood prices are more substantial if also norway s forest products trading partners increase the forest conservation if forest owners voluntarily conserve forests subject to an economic compensation which currently is the most likely policy in norway the model results imply that forest owners on average are better off with increased conservation domestic sawnwood production is projected to reduce when assuming increasing forest conservation while the production level in the pulp and paper industry is almost unaffected in the short run finally increasing demand for forest products as a result of environmental good will may increase roundwood prices and harvest levels in unaffected forest areas significantly

anticipations of monetary policy in financial markets in recent years financial markets appear better able to anticipate federal open market committee fomc policy changes beginning in the late 1980s and early 1990s longer term interest rates and futures rates have tended to incorporate movements in the federal funds rate several months in advance in contrast to the largely contemporaneous response typically observed before that time after identifying these emerging trends the paper parses the enhanced predictability into a component that can be attributed to the autoregressive behavior of the funds rate and a nonautoregressive component the paper considers institutional developments in fomc policy making that may have contributed to each of these components including gradualism in adjusting the federal funds rate target and transparency regarding the setting of the target and future policy intentions

monetary policy bond returns and debt dynamics abstract using the government s intertemporal budget constraint we quantify the contribution of returns paid on the u s government s debt portfolio to the evolution of the debt to gdp ratio we show that announcements of unconventional monetary policy measures by the federal reserve between 2008 iv and 2012 as a part of macroeconomic stabilization were associated with a sizable increase in returns and debt to gdp ratios and contributed to fiscal imbalances we use the federal reserve s portfolio composition as a proxy for unconventional monetary policy measures and show that it is significantly related to future bond returns and fiscal balances

limited attention interaction and the gradual adjustment of a firm s decisions a person cannot make many decisions at a time but an organization needs millions of interrelated decisions we incorporate this idea into a standard theory of production two assumptions are emphasized an agent cannot optimize more than one input at a time and there is interaction among inputs when a firm alternates its attention the demand for inputs gradually adjusts to the static optimal level when a firm optimally allocates its attention this adjustment may not occur we investigate the conditions under which the adjustment takes place the results are applied to a standard investment theory the derived investment capital ratio is independent of firm size and imperfectly correlated with tobin s q

a critical assessment of transaction cost theory and governance of public services with special reference to water and sanitation this is a pre copyedited author produced version of an article accepted for publication in cambridge journal of economics following peer review the version of record hulya dagdeviren and simon a robertson a critical assessment of transaction cost theory and governance of public services with special reference to water and sanitation cambridge journal of economics vol 40 6 1707 1724 january 2016 is available online at https doi org 10 1093 cje bev079

the practice of econometrics classic and contemporary provides hands on experience of econometrics with estimation and inference each chapter begins with a discussion of economic theory underlying the application

welfare measurement in single and multimarket models theory and application this paper provides an analysis of tax reforms along the multimarket welfare measurement techniques suggested by just et al 1982 a key purpose of our analysis is to shed light on the approximating features of partial equilibrium models how well does a single market model approximate consumer and producer surplus changes under multiple price changes we derive a result on the difference between single and multimarket welfare measurement showing how the difference boils down to a set of key parameters prior information about these parameters allows the investigator to make a judgment on the appropriateness of a partial equilibrium approach we use our approach to analyze a proposal put forward by the swedish commission of environmental charges regarding chlorine emissions from the swedish pulp paper industry we estimate a multi market model and calculate the implied surplus changes

the financial market impact of uk quantitative easing after outlining some of the monetary developments associated with quantitative easing qe we measure the impact of the uk s initial 2009 10 qe programme on bonds and other assets first we use a macro nance yield curve both to create a counterfactual path for bond yields and to estimate the impact of qe directly second we analyse the impact of individual qe operations on a range of asset prices we nd that qe signi cantly lowered government bond yields through the portfolio balance

inflation expectations and risk premiums in an arbitrage free model of nominal and real bond yields differences between yields on comparable maturity u s treasury nominal and real debt the so called breakeven inflation bei rates are widely used indicators of inflation expectations however better measures of inflation expectations could be obtained by subtracting inflation risk premiums from the bei rates we provide such decompositions using an estimated affine arbitrage free model of the term structure that captures the pricing of both nominal and real treasury securities our empirical results suggest that long term inflation expectations have been well anchored over the past few years and inflation risk premiums although volatile have been close to zero on average

the effectiveness of alternative monetary policy tools in a zero lower bound environment this paper reviews alternative options for monetary policy when the shortterm interest rate is at the zero lower bound and develops new empirical estimates of the effects of the maturity structure of publicly held debt on the term structure of interest rates we use a model of risk averse arbitrageurs to develop measures of how the maturity structure of debt held by the public might affect the pricing of level slope and curvature term structure risk we find that these treasury factors historically were quite helpful for predicting both yields and excess returns over 1990 2007 the historical correlations are consistent with the claim that if in december 2006 the fed were to have sold off all its treasury holdings of less than 1 year maturity about 400 billion and use the proceeds to retire treasury debt from the long end this might have resulted in a 14 basis point drop in the 10 year rate and an 11 basis point increase in the 6 month rate we also develop a description of how the dynamic behavior of the term structure of interest rates changed after hitting the zero lower bound in 2009 our estimates imply that at the zero lower bound such a maturity swap would have the same effects as buying 400 billion in long term maturities outright with newly created reserves and could reduce the 10 year rate by 13 basis points without raising short term yields

a note on the application of the restricted generalised leontief profit function abstract the conditions for a restricted generalised leontief profit function to fulfil the requirements of profit functions are explored a specification is proposed in which homogeneity of degree 1 in the fixed inputs is nested in the non homogeneous case

the interest rate effects of government bond purchases away from the lower bound abstract i analyze the recent experience of unconventional monetary policy in sweden to study the interest rate transmission mechanisms of government bond purchases when interest rates are away from the lower bound using dynamic term structure models and event study regressions i find that government bond purchases have important portfolio balance and signaling effects the signaling channel operates mainly by lowering short rate expectations in the intermediate segment of the yield curve while the portfolio balance channel is effective in lowering longer maturity term premia in addition i find that target interest rate policy and government bond purchases operate in different segments of the yield curve this suggests that a combination of the two policies can be used to lower interest rates across the whole maturity spectrum making monetary policy more expansionary

examining economic organization through the lens of contract the lens of contract approach to the study of economic organization is partly complementary but also partly rival to the orthodox lens of choice specifically whereas the latter focuses on simple market exchange the lens of contract is predominantly concerned with the complex contracts among the major differences is that non standard and unfamiliar contractual practices and organizational structures that orthodoxy interprets as manifestations of monopoly are often perceived to serve economizing purposes under the lens of contract a major reason for these and other differences is that orthodoxy is dismissive of organization theory whereas organization theory provides conceptual foundations for the lens of contract copyright 2003 oxford university press

why doesn t capital flow from rich to poor countries an empirical investigation we examine the empirical role of difierent explanations for the lack of ows of capital from rich to poor countries the lucas paradox the theoretical explanations include difierences in fundamentals across countries and capital market imperfections we show that during 1970i2000 low institutional quality is the leading explanation for example improving peru s institutional quality to australia s level implies a quadrupling of foreign investment recent studies emphasize the role of institutions for achieving higher levels of income but remain silent on the speciflc mechanisms our results indicate that foreign investment might be a channel through which institutions afiect long run development

a spatial panel data approach to estimating u s state level energy emissions we take advantage of a long panel data set to estimate the relationship between u s state level carbon dioxide co2 emissions economic activity and other factors we specify a reduced form energy demand model to account for energy consumption activities that drive energy related emissions we contribute to the literature by exploring several spatial panel data models to account for spatial dependence between states estimation results and rigorous diagnostic analysis suggest that 1 economic distance plays a role in intra and inter state co2 emissions and 2 there are statistically significant positive economic spillovers and negative price spillovers to state level emissions

announcements of ecb unconventional programs implications for the sovereign spreads of stressed euro area countries abstract this paper studies the effects of ecb communications about unconventional monetary policy operations on the sovereign spreads of greece ireland italy portugal and spain relative to germany between 2008 and 2012 more than fifty events concerning non standard operations are identified and classified with respect to the specific ecb program the empirical results suggest that the ecb announcements about unconventional monetary policies substantially reduced long term government bond yield spreads relative to german counterparts in all countries except greece particularly among the different types of measures news about the securities markets programme strongly affected the perceived sovereign risk of the five stressed euro area countries while the announcements of the outright monetary transactions seem to have a significant impact only in italy and spain

quantitative easing and unconventional monetary policy an introduction this article assesses the impact of quantitative easing and other unconventional monetary policies followed by central banks in the wake of the financial crisis that began in 2007 we consider the implications of theoretical models for the effectiveness of asset purchases and look at the evidence from a range of empirical studies we also provide an overview of the contributions of the other articles in this feature

estimating nominal interest rate expectations overnight indexed swaps and the term structure abstract no arbitrage dynamic term structure models dtsms have regularly been used to estimate interest rate expectations and term premia but are beset by empirical challenges i propose augmenting dtsms with overnight indexed swap ois rates to better estimate the decomposition along the term structure at daily frequencies a gaussian affine dtsm augmented with 3 to 24 month ois rates generates estimates of us expectations that closely correspond to survey implied measures out to a 10 year horizon and are more stable across sub samples compared to existing models in addition i provide narrative evidence in the form of an event study around us unconventional monetary policy announcements to further exemplify the benefits from ois augmentation

assessing the economy wide effects of quantitative easing this article examines the macroeconomic impact of the first round of quantitative easing qe by the bank of england we attempt to quantify the effects of these purchases by focusing on the impact of lower long term interest rates on the wider economy we use three different models to estimate the impact of qe on output and inflation a large bayesian vector autoregression var a change point structural var and a time varying parameter var our estimates suggest that qe may have had a peak effect on the level of real gdp of around and a peak effect on annual cpi inflation of about points