do greens drive hummers or hybrids environmental ideology as a determinant of consumer choice this paper uses several california data sets to test for differences in consumption patterns between greens and browns a person s environmentalism is rarely observed in consumer data sets in california a community s share of green party registered voters is a viable proxy for community environmentalism environmentalists are more likely to commute by public transit purchase hybrid vehicles and consume less gasoline than non environmentalists

are policy incentives for solar power effective evidence from residential installations in the northeast abstract state incentives for solar power have grown significantly in the past several years this paper examines the effectiveness of policy incentives to increase residential solar photovoltaic pv capacity we use county level panel data and control for demographic characteristics solar resources and pro environmental preferences results show that among financial incentives rebates have the most impact with an additional 1 per watt rebate increasing annual pv capacity additions by close to 50 factors that affect financial returns to solar pv such as electricity price and solar insolation are also found to be significant results also point to a significant positive relationship between hybrid vehicle sales and residential pv capacity growth indicating the importance of pro environmental preferences as a predictor of solar pv demand back of the envelope calculations suggest that the cost of carbon mitigation through rebates is around 184 per ton of co2

growth effects of recent structural changes in the canadian economy some empirical evidence a structural change marked by deindustrialization servicization in most western economics and the nature and extent of its influence on economic growth continues to be a major topic of interst the paper rests heavily the presumption of the deindustrilization serviciation hypothesis and focusses on the growth implications of such structural changes using canadian data the paper first explores a casual relationship between goods and service sectors by running granger causality tests it then tests an econometric model to quantify the growth effects of changes in both shares and growth rates of the industrial and the manufacturing sectors the findings based on empirical testing of the model over the period 1961 89 suggest that recent structural changes in canada hava had significant negative implications

international transfers the relative price of non traded goods and the current account this paper considers the role of the relative price of non traded goods and the current account in the adjustment of a small open economy to the receipt of an international transfer the paper shows that the economy s macroeconomic adjustment to the transfer depends upon the relative capital intensities of the traded and non traded sectors of the economy as well as on the duration of the transfer the paper provides a new interpretation of france s current account surplus in the 1870s that accompanied the payment of reparations to germany following the franco prussian war and of germany s trade deficit in the 1920s that accompanied reparations payments associated with the first world war

booming sector economic activity in paraguay 1973 86 a case of dutch disease the primary purpose of this study is to investigate the applicability of the dutch disease model as a means of explaining the changing sectoral composition of output for paraguay in the period 1973 86 the consequences of booming sector activity for 1 the distribution of income as it affects wages and 2 the in stability of export earnings for paraguay are examined the dutch disease model predicts that the consequences of booming activity will include a contraction of non booming sector activity as well as a real appreciation of the exchange rate these outcomes are tested in several single and multiple equation estimable models for the case of paraguay

information disclosure policies evidence from the electricity industry i introduction developed nations environmental policies have evolved substantially in the past several decades early pollution control programs involved command and control approaches policies then frequently included pollution charges tradable permits and other market based instruments most recently a third wave of environmental policy has emerged that emphasizes information provision as an integral part of the risk mitigation strategy here government regulation is replaced or augmented by publicly provided information presumed to assist more cost effective private market and legal forces common examples include the toxics release inventory lead paint disclosures drinking water quality notices and eco labels the empirical effects of such programs however remain largely undetermined this paper examines the impact of a prominent mandatory disclosure program on the fuel mix percentages of large electric utility corporations the prominence of mandatory information policies is not restricted to environmental arenas for example developed countries equity markets generally require firm level financial information provision in many countries agricultural goods require country of origin and other health labels domestic colleges and universities are required by law to inform current and prospective students of crime statistics equity data and performance metrics even significant medical errors must now be disclosed to the community there are several potential advantages of information provision policies and theory suggests that disclosure programs may effectively achieve their goals healy and palepu 2001 provided a survey of the evidence in capital markets brouhle and khanna 2007 demonstrated that information provision can improve product quality in the environmental area kennedy laplante and maxwell 1994 arora and gangopadhyay 1995 maxwell lyon and hackett 2000 kirchhoff 2000 and khanna 2001 showed that the provision of information about pollution may correct a market failure improve performance and enhance welfare despite the literature s theoretical findings the empirical effects of disclosure programs remain inconclusive early studies of securities regulation found mixed results see stigler 1964 robbins and werner 1964 and benston 1973 a more recent literature suggested that disclosure programs in financial markets can achieve their desired effects la porta and lopez de silanes 2006 and greenstone oyer and vissing jorensen 2006 found that both market size and market returns were positively influenced by mandatory disclosure programs in product quality settings chipty and witte 1998 established that resource and referral agencies significantly influenced childcare prices but had no impact on the quality of care in contrast jin and leslie 2003 found that mandatory hygiene grade cards positively affected restaurant quality and health outcomes studies of environmental performance yielded similarly mixed results desvousges smith and rink 1992 found that information based programs influenced attitudes favorable to radon testing but testing itself only increased when mass media dissemination was coupled with community based implementation programs konar and cohen 1997 and khanna quimio and bojilova 1998 found that stock movements associated with toxics release inventory tri announcements led to increased abatement and reduced emissions however bui 2005 found that the declines in emissions after tri reporting events may have been attributable to regulation rather than investor pressure bennear and olmstead 2006 found that drinking water quality notices lowered violations for some systems but not others this paper is the first empirical economic study of the impacts of mandatory information provision in the electric utility industry the disclosure programs considered here differ significantly from the tri information programs examined previously

tourism welfare and de industrialization in a small open economy this paper investigates the effects of an expansion of tourism on welfare output and factor prices in the host country using a general equilibrium international trade model in the absence of taxes foreign ownership and distortions an increase in foreign visitors will increase welfare only if the price of nontradables increases factor mobility and foreign ownership tend to reduce the gains from tourism while commodity taxes tend to increase them conditions under which an increase in tourism can lead to deindustrialization are also discussed copyright 1991 by the london school of economics and political science

immigrant specificity and the relationship between trade and immigration theory and evidence studies routinely document that immigrant employment concentrates in non traded goods sectors and that many immigrants have low inter sectoral mobility we consider these observed characteristics of immigrant employment with regard to the question of how immigration affects a nation s pattern of production and trade we model an economy producing three goods one is non traded domestic labor and capital are domestically mobile but internationally immobile allowing that some new immigrants will become specific to the non traded goods sector the model indicates that the effects of immigration on output and trade depend importantly on the sectoral pattern of employment of both new and existing immigrants empirical investigation in a panel data set of oecd countries supports the model s prediction that immigration raises the output of non traded goods consistent with the model we also find that immigration and trade are complements given its empirical support the model s implications for immigration policy are then discussed

agricultural productivity and structural transformation evidence from brazil we study the eects of the adoption of new agricultural technologies on structural transfor mation to guide empirical work we present a simple model where the eect of agricultural productivity on industrial development depends on the factor bias of technical change we test the predictions of the model by studying the introduction of genetically engineered soybean seeds in brazil which had heterogeneous eects on agricultural productivity across areas with dierent soil and weather characteristics we nd that technical change in soy production was strongly labor saving and lead to industrial growth as predicted by the model

structural adjustment and the construction sector abstract this paper adds a construction sector to a dynamic dependent economy model equipped with consumer tradeables and non tradeables sectors the model is used to study the response of the production structure relative prices and the trade balance to a favorable terms of trade shock under the benchmark assumptions of perfect intersectoral factor mobility a perfect international capital market and no adjustment costs for realistic relative capital intensities the model predicts a boom in the construction and consumer non tradeables sectors a contraction of the tradeables sector and no relative price changes the implications of relaxing those benchmark assumptions are discussed separately

peer effects in the diffusion of solar photovoltaic panels social interaction peer effects are recognized as a potentially important factor in the diffusion of new products in the case of environmentally friendly goods or technologies both marketers and policy makers are interested in the presence of causal peer effects as social spillovers can be used to expedite adoption we provide a methodology for the simple straightforward identification of peer effects with sufficiently rich data avoiding the biases that occur with traditional fixed effects estimation when using the past installed base of consumers in the reference group we study the diffusion of solar photovoltaic panels in california and find that at the average number of owner occupied homes in a zip code an additional installation increases the probability of an adoption in the zip code by 0 78 percentage points our results provide valuable guidance to marketers designing strategies to increase referrals and reduce customer acquisition costs they also provide insights into the diffusion process of environmentally friendly technologies

absorbing a windfall of foreign exchange dutch disease dynamics abstract the permanent income rule is seldom the optimal response to a windfall of foreign exchange such as that from a resource discovery absorptive capacity constraints require domestic investment and investment in structures requires non traded inputs the supply of which is constrained by the initial capital stock this particularly when combined with intra sectoral capital immobility delays adjustment and creates short run dutch disease symptoms as the real exchange rate sharply appreciates and overshoots its long run value optimal revenue management requires investing in the domestic non traded goods sector and a slow build up of consumption accumulation of foreign assets adjusts to accommodate the time paths of domestic consumption and investment

elasticity of substitution and technical efficiency evidence from the us electricity generation abstractthe implications of national or regional energy policies for technical efficiency and environmental outcomes in electricity generation depend on fossil fuel input substitution this study u

the effects of mongolia s booming mining industry on its agricultural sector a test for dutch disease dutch disease occurs when currency strengthening associated with a booming sector of an economy crowds out a lagging trade dependent sector in this study a keynesian style model is specified to deduce hypotheses about how increased foreign direct investment fdi aimed at mongolia s mining sector affects its agricultural sector a key finding is that while econometric results suggest the increased fdi strengthened mongolia s currency its adverse effect on mongolia s trade sensitive agricultural sector is not sufficiently strong to cause the sector to decline although dutch disease was not detected the posited mechanism clearly is important specifically when currency strengthening is ignored the reduced form elasticity of agricultural value added with respect to fdi is 2 7 times larger than when currency strengthening is taken into account 0 103 vs 0 038 also fdi induced currency strengthening causes the keynesian multiplier y g to drop from 2 40 to 2 00 and the fdi multiplier y fdi to drop from 3 05 to 1 89

understanding the reductions in us corn ethanol production costs an experience curve approach the us is currently the world s largest ethanol producer an increasing percentage is used as transportation fuel but debates continue on its costs competitiveness and energy balance in this study technological development of ethanol production and resulting cost reductions are investigated by using the experience curve approach scrutinizing costs of dry grind ethanol production over the timeframe 1980 2005 cost reductions are differentiated between feedstock corn production and industrial ethanol processing corn production costs in the us have declined by 62 over 30 years down to 100 2005 tonne in 2005 while corn production volumes almost doubled since 1975 a progress ratio pr of 0 55 is calculated indicating a 45 cost decline over each doubling in cumulative production higher corn yields and increasing farm sizes are the most important drivers behind this cost decline industrial processing costs of ethanol have declined by 45 since 1983 to below 130 2005 m3 in 2005 excluding costs for corn and capital equivalent to a pr of 0 87 total ethanol production costs including capital and net corn costs have declined approximately 60 from 800 2005 m3 in the early 1980s to 300 2005 m3 in 2005 higher ethanol yields lower energy use and the replacement of beverage alcohol based production technologies have mostly contributed to this substantial cost decline in addition the average size of dry grind ethanol plants increased by 235 since 1990 for the future it is estimated that solely due to technological learning production costs of ethanol may decline 28 44 though this excludes effects of the current rising corn and fossil fuel costs it is also concluded that experience curves are a valuable tool to describe both past and potential future cost reductions in us corn based ethanol production

external disturbances and the independence of monetary policy under the crawling peg in colombia abstract this study examines the impact of external economic disturbances and the independence of monetary policy in colombia a five equation econometric model is estimated the results indicate that external occurrences have had a significant impact on colombian prices and output contrary to the assumptions of the monetary approach to the balance of payments a substantial portion of foreign reserve flows were sterilized and the short run balance of payments offset to domestic credit expansion was less than complete

dutch disease economics and the colombian export boom abstract dutch disease models predict a primary export boom may result in deindustrialization due to an appreciating real exchange rate this paper examines the effects on the colombian economy of large increases in foreign exchange earnings from coffee and illegal drug exports as predicted by dutch disease models the relative price of nontraded goods rose and the real exchange rate appreciated once the boom was over both were slow to return to previous levels nontraded sectors are shown to have increased their growth rates during the boom years while traded goods experienced slower growth non coffee exports also grew more slowly econometric estimation shows that the real exchange rate was sensitive to the price of coffee and fiscal expansion that sectoral production adjusts to the exchange rate and level of absorption as predicted and that non coffee exports respond to changes in the real exchange rate and foreign demand the paper concludes with a discussion of economic policy in response to the export boom

resource curse or not a question of appropriability this thesis presents three self contained essays focusing on empirical questions in growth and development economics each article addresses specific questions on why countries perform differently in particular i analyse the effect of democracy on economic development the relationship between natural resources and growth and the efficiency of foreign development assistance in the first essay democracy consolidation and growth i analyse the effect of democracy on economic growth in this context i argue that an important aspect to consider is how consolidated political systems are put simply i find that it is not only a question of how democratic countries are but also how long they have been democratic in other words economic performance tends to improve with the duration of uninterrupted democracy the performance of autocracies on the other hand tends to deteriorate over time however for newly established political systems there seems to be a cost of being democratic this implies that democracies only bear their fruit after some time the analysis has important policy implications to overcome initial straits international assistance focused on democratic consolidation may be important and a very good investment in fostering long run development the second essay resource curse or not a question of appropriability together with anne boschini and jesper roine is concerned with the relation between natural resources and economic development for most laymen as well as for most economists it would seem reasonable that countries richly endowed in natural resources also benefit from this wealth however a large literature has found a systematic negative effect of natural resource abundance on economic growth we suggest that this so called resource curse is not determined by resource endowments alone but rather by the interaction between the type of resources a country possesses and the quality of institutions in the country this combination of factors determines what we call the appropriability of a resource the concept of appropriability captures the likelihood of natural resources leading to rentseeking corruption or conflicts which in turn will harm economic development our results suggest that if institutions are good enough the curse may be turned into a blessing this may explain why some countries such as norway and botswana tend to benefit from their resources while others such as angola and sierra leone do not the third and final essay of this thesis foreign sectoral aid fungibility growth and poverty reduction is a contribution to the aid efficiency literature which is concerned with the question of whether aid helps or hinders economic development foreign development assistance is often targeted on specific public expenditure sectors if this aid is not used in the sector for which it was granted e g health education it is said to be fungible and donors may end up financing something completely different from what they intended e g military expenditures the major concern about sectoral fungibility is that the alternative use of aid may be less productive or less socially useful however measuring fungibility is not sufficient to determine whether foreign sectoral aid fungibility is actually harmful what is important is how the funds treated as fungible are used the essay starts by obtaining estimates of fungibility for 57 countries the results suggest that sectoral aid is indeed largely treated as fungible by recipient countries next to assess the economic and health effects of fungibility these estimates are incorporated into an empirical model of aid and growth as well as into a model of aid and infant mortality altogether i find no evidence of more fungible sectoral aid leading to worse performance

business cycles in an oil economy abstract the recent oil price fall has created concern among policy makers regarding the consequences of terms of trade shocks for resource rich countries this concern is not a minor one the world s commodity exporters combined are responsible for 15 20 of global value added we develop and estimate a two country new keynesian model in order to quantify the importance of oil price shocks for norway a large prototype petroleum exporter domestic supply chains link mainland non oil norway to the off shore oil industry while fiscal authorities accumulate income in a sovereign wealth fund oil prices and the international business cycle are jointly determined abroad these features allow us to disentangle the structural sources of oil price fluctuations and how they affect mainland norway the estimated model provides three key results first oil price movements represent an important source of macroeconomic volatility in mainland norway second while no two shocks cause the same dynamics conventional trade channels make an economically less significant difference for the transmission of global shocks to the oil exporter than to oil importers third the domestic oil industry s supply chain is an important transmission mechanism for oil price movements while the prevailing fiscal regime provides substantial protection against external shocks

the effects of oil price shocks on the iranian economy abstract the iranian economy is highly vulnerable to oil price fluctuations this paper analyzes the dynamic relationship between oil price shocks and major macroeconomic variables in iran by applying a var approach the study points out the asymmetric effects of oil price shocks for instance positive as well as negative oil price shocks significantly increase inflation we find a strong positive relationship between positive oil price changes and industrial output growth unexpectedly we can only identify a marginal impact of oil price fluctuations on real government expenditures furthermore we observe the dutch disease syndrome through significant real effective exchange rate appreciation

the economic effects of windfall gains in export earnings 1975 1978 abstract this paper reviews the effects of recent dramatic increases in beverage prices 1975 1978 on a sample of countries that are highly dependent on these commodities in most countries the increase in producer prices was restricted allowing substantial sums to accrue to the central government and the commodity organizations the countercyclical impact of fiscal policy was often limited by the rise in development spending this policy stance and the lack of monetary restraint contributed to a substantial rise in imports consequently in many of the sample countries the external reserve position in 1978 was little better than before the windfall gain

optimal dutch disease growth models of the dutch disease such as those of krugman 1987 matsuyama 1992 sachs and warner 1995 and gylfason et al 1999 explain why resource abundance may reduce growth however the literature also raises a new question if the use of resource wealth hurts productivity growth how should such wealth be optimally managed this question forms the topic of the present paper in which we extend the growth literature on the dutch disease from a positive to a normative setting we show that the assumptions in the previous literature imply that the optimal share of national wealth consumed in each period needs to be adjusted down however some dutch disease is always optimal thus lower growth in resource abundant countries may not be a problem in itself but may be part of an optimal growth path the optimal spending path of the resource wealth may be increasing or decreasing over time and we discuss why this is the case

policy adjustments to the oil boom and their evaluation the dutch disease in indonesia abstract this paper analyzes the effects of two policy adjustments namely exchange rate devaluation and the accumulation of budget surpluses to the oil export boom in indonesia by using a simple simulation model our results indicate that exchange rate adjustment had a significant impact on expansion of tradable sectors especially the manufacturing sector by reversing the real exchange rate while officially maintaining the balanced budget principle the government exercised delicate operations whereby the budget surpluses were covertly accumulated as government deposits such operations were executed as a necessary demand management policy to ensure that the effect of devaluation was persistent these policy adjustments were consistent from a macroeconomic management point of view and have contributed to avoiding the dutch disease that indonesia otherwise might have suffered because of its oil bonanza

the myths and facts of energy efficiency abstract the debate about how much energy efficiency is socially desirable and what is the best way to finance and implement energy conservation measures has reached a critical junction in many countries the arguments have passed the stage of whether more energy efficiency is possible or desirable and are centred around how much and how best to implement them this is a survey article which attempts to shed some light on several critical issues in this debate first it distinguishes between what is technically possible v what is economically desirable in energy efficiency improvements second it looks at some of the alleged causes of social under investment in energy efficiency and identifies ways to reduce or eliminate them third it addresses the question of who is best equipped to implement energy efficiency improvements and how one may go about promoting it finally the paper addresses critical financing and equity questions

dutch disease government policy and import demand in nigeria the effects of sectoral changes and government policies on import demand in nigeria are examined in the context of the oil shocks of the 1970s and 1980s a two equation model is estimated to determine real import demand and the real exchange rate the results show that import demand increased significantly in response to the boom induced squeeze on the agricultural sector furthermore by inducing and sustaining real exchange rate overvaluation expansionary government policies contributed to higher import demand even after the collapse in oil prices

the nexus between oil price and russia s real exchange rate better paths via unconditional vs conditional analysis abstract instead of analyzing the causality between two time series unconditional analysis as it is usually done the present study deals with the nexus between oil price and russia s real exchange rate conditioning upon potential control variables at well specified horizons and on a frequency by frequency basis this research accounts also for the possible transient linkages and signal discontinuities a major finding of this paper is deeply suggestive of a sharp causality running from oil price to real exchange rate in lower frequencies this implies that russia should better tackle with turbulence triggered by oil price and continue to reduce its energy dependency via drastic and proactive measures the economic and fiscal initiatives of putin administration may help to cope with sudden shocks to lessen the great oil dependence and to build confidence needed for economic recovery while our research does not say much about the routes through which oil price may affect differently real exchange rate it clearly indicates the presence of short term relationship conditional to gdp government expenditures terms of trade and productivity differential the conditional analysis and signal detection appear as meaningful exercises to find new insights into the focal issue

solar pv where the sun doesn t shine estimating the economic impacts of support schemes for residential pv with detailed net demand profiling abstract countries with low irradiation and solar pv adoption rates are increasingly considering policy support for solar pv although consumer electricity demand and solar generation profiles are often mismatched this paper presents a methodology for policymakers in such conditions to examine more precisely the financial performance of residential solar pv from the consumer perspective as part of an ex ante policy assessment we model a range of prospective policy scenarios and compare policy mechanisms that compensate homeowners for generation those that reduce their upfront costs and those that assist with financing using ireland as a case study the results confirm the intuitive notion that more generous financial remuneration schemes provide quicker payback however we observe that in low irradiance regions there is little difference between upfront grants and feed in tariffs to accelerate payback timeframes we also show the importance of retail tariff structure in consumer payback for solar pv systems with one part tariffs generating shorter paybacks than two part tariff structures although the latter is more likely to secure revenue for electricity infrastructure investment drawing from this analysis the paper proposes some options for the design of policy supports and tariff structures to deliver a sustainable residential renewable electricity system in low irradiance regions

carbon geography the political economy of congressional support for legislation intended to mitigate greenhouse gas production over the last 5 years the u s congress has voted on several pieces of legislation intended to sharply reduce the nation s greenhouse gas emissions given that climate change is a world public bad standard economic logic would predict that the united states would free ride and wait for other nations to reduce their emissions within the congress there are clear patterns to who votes in favor of mitigating greenhouse gas emissions this paper presents a political economy analysis of the determinants of pro green votes on such legislation conservatives consistently vote against such legislation controlling for a representative s ideology representatives from richer districts and districts with a lower per capita carbon dioxide footprint are more likely to vote in favor of climate change mitigation legislation representatives from districts where industrial emissions represent a larger share of greenhouse gas emissions are more likely to vote no jel q54 q58 r50

the dutch disease a disease after all many third world oil producers are encountering serious problems in building up a diversified export base while west european oil and gas producers netherlands united kingdom are suffering a decline in their traded goods manufacturing sector induced by real wage pressures it is becoming increasingly clear that high but temporary oil revenues may be somewhat ora mixed blessing the quip of the economist notwithstanding the mechanism behind this unbalance is clear enough part of the oil revenues is spent on non traded goods which leads to a real appreciation i e a rise in the relative price of non traded goods in terms of traded goods this in turn draws resources out of the non oil traded sector into the non traded goods producing sector corden and neary 1982 van wijnbergen 1980 one may say that this is an efficient response to the increase in income from oil production the united kingdom mexico egypt simply should move into oil derived industries and non traded goods and forget about their manufacturing sector until oil reserves are exhausted however many developing countries are hesitant to take this advice after all the post world war ii success stories in economic development involve without exception countries that promoted their traded goods sector aggressively moreover it is a well established stylised fact that technological progress is faster in the traded non sheltered sectors of an economy than in the non traded sector balassa 1964 is an early reference considering the hypothesis that technological progress rather than taking place exogenously with the passage of time is a function of accumulated experience the concern of countries like egypt mexico or indonesia is much easier to understand since solow 1957 and denison 1962 it is known that capital accumulation explain only a small part of economic growth if most of economic growth is caused by learning by doing induced technologica

genuine savings and sustainability genuine savings gs has emerged as the leading economic indicator of sustainable economic development at the country level it derives from the literatures on weak sustainability wealth accounting and national income accounting we discuss the theoretical underpinnings of gs focusing on the relationship between changes in a nation s extended capital stock and the future path of consumption the indicator has entered widespread use propelled by the world bank s publications despite its varying performance as a predictor for future consumption notwithstanding the extensive body of literature reviewed promising future research avenues are identified

commodity price volatility with endogenous natural resources abstract natural resource reserves are exogenous in models of small commodity exporters changes in the stock of reserves play no role in the macroeconomy including in business cycle volatility trade dynamics or exchange rate volatility we consider richer supply dynamics and model exploration and depletion we show that an endogenous supply of reserves is important for capturing the stylised facts associated with commodity price shocks including a commodity currency the crowding out of non commodity activity dutch disease and a volatile business cycle we also consider how exploration and depletion affect the ranking of optimal monetary and taxation policies when natural resource reserves are held fixed monetary policy is an efficient tool for stabilising the effects of commodity price shocks however when exploration and depletion are accounted for using interest rates to stabilise the effects of commodity price changes becomes inefficient using taxes on the resource sector specifically an ad valorem royalty remains efficient

do customer information programs reduce household electricity demand the irish program abstract we study empirically the effectiveness of a customer information program to decrease energy demand by increasing efficient electricity use this demand side management dsm program aims at reducing the lack of information on the customers side that is documented in related literature we study the irish dsm program which is particularly well suited to investigate this issue as strategic behavior is ruled out in this setting for both customers and suppliers on the customers side because information programs allow only for a limited substitution of own effort on the producers side because the specificity of the irish case left no room for strategic behavior we find that providing customers with information reduced overall electricity demand by roughly 7 as well as reducing demand fluctuations over the year further we find that the dsm program had a larger impact upon long run demand with consumers short run demand behavior not being changed significantly

electricity as a traded good abstract electric power has traditionally been classified as a non traded good produced and consumed within the country of origin more recently electricity has been traded across national borders and in certain cases viz bhutan has been the dominant export in other situations it is used to repay debts owed to neighboring countries this paper investigates the role of electricity as the primary export analyzes its valuation and then goes on to evaluate the impact on the terms of trade we conclude that in the medium term the electric power exporting economy would be better off developing its manufacturing sector to diversify its exposure and to protect its trade interests the case of bhutanese hydro electricity exports to india is studied and the change in trade advantage with every increase in power tariff is ascertained it is found that a 1 26 annual increase in non food consumer prices is correlated with a 1 increase in electricity export tariff while the causality from electric power tariff to indian manufactures prices is not established statistically a change in manufactures prices feeding back into consumer prices in bhutan is statistically significant suggestions are offered for bhutan to reduce dependence on indian imports and to diversify its export market exposure

external disturbances domestic policy responses and debt accumulation in nigeria abstract this paper provides a case study of the link between external shocks domestic policy responses and external debt accumulation in nigeria the indonesian experience during 1970 1989 is provided as a contrast for policy comparison a significant part of the increase in external debt in the two countries corresponds to financing of capital flight after 1981 current account deficits assumed greater importance in the accumulation of external debt the growth in external debt was caused in part by adverse external conditions the results of this study show that the nigerian debt crisis was exacerbated by inappropriate policy responses indonesia avoided a crisis by applying prudent real exchange rate management and fiscal restraint

industrial policy and exchange rate scepticism the aim of the present paper is to put in historical perspective the development thinking on the relationship between industrial and exchange rate policies the first section focuses on the thought of the so called pioneers of development economics specifically their preference for protectionism and their belated recognition that an exchange rate policy could act as a substitute to it in the second one we analyze the exchange rate skepticism that arises out of the theories that identify a foreign constraint to growth in addition to the one revealed by the pioneers the third section briefly complements the previous discussion with reference to macroeconomic formulations that allow for short run contractionary effects of a devaluation reinforcing the skepticism in question in the fourth section we discuss the revival of development thinking in the 1980s and its discussion about east asian trajectories a literature that placed great emphasis on industrial policy finally in the fifth section we discuss the new historical facts and the new development macroeconomics models that are putting an end to exchange rate skepticism

south african manufacturing industries catching up or falling behind this article argues that intra industry trade with developed countries is an important source of technology transfer south africa has an industrial structure that is suited to such trade but high costs and weak social capacity to assimilate new technology therefore reintegration into the world economy is likely to reinforce dependence on resource intensive industries in the short run this need not adversely affect economic growth but unless the quality and quantity of education and training are improved the prospects for rebuilding the technological capacity and catch up with oecd countries are bleak

the narrow moving band the dutch disease and the competitive consequences of mrs thatcher notes on trade in the presence of dynamic scale economies abstract this paper presents a model of trade in which comparative advantage instead of being determined by underlying attributes of countries evolves over time through learning by doing in this model arbitrary patterns of specialization once established tend to become entrenched over time the model sheds light on three widely held views that do not make sense in more conventional models first is the view that temporary protection of selected sectors can permanently alter the pattern of comparative advantage in the protecting country s favor second is the view that seemingly favorable developments such as the discovery of exportable natural resources may lead to a permanent loss of other sectors and reduce welfare in the long run third is the possibility that a temporary overvaluation of a currency due to tight money can lead to a permanent loss of competitiveness in some sectors

aid the real exchange rate and why policy matters the cases of morocco and tunisia abstractevery form of foreign exchange inflow including aid can potentially cause real exchange rate appreciation with adverse consequences for the production of tradables dutch disease whether it does so depends on the policy response to the inflow this paper investigates the issue for morocco and tunisia over 1980 2009 we find that aid led to a real appreciation in morocco but had no effect on tunisia s real exchange rate this confirms the importance of the macroeconomic framework in which aid is provided and the key role for infrastructure and other supply side improvements in determining the final real economy impact of aid and other inflows

booming sector and de industrialisation in a small open economy this paper presents a theoretical analysis of the dutch disease the phenomenon whereby a boom in one traded goods sector squeezes porfitability in other traded goods sectors both by directly bi

the varieties of resource experience natural resource export structures and the political economy of economic growth many oil mineral and plantation crop based economies experienced a substantial deceleration in growth following the commodity boom and bust of the 1970s and early 1980s this article illustrates how countries dependent on point source natural resources those extracted from a narrow geographic or economic base such as oil and minerals and plantation crops are predisposed to heightened economic and social divisions and weakened institutional capacity this in turn impedes their ability to respond effectively to shocks which previous studies have shown to be essential for sustaining rising levels of prosperity analysis of data on classifications of export structure controlling for a wide array of other potential determinants of governance shows that point source and coffee and cocoa exporting countries do relatively poorly across an array of governance indicators these governance effects are not associated simply with being a natural resource exporter countries with natural resource exports that are diffuse relying primarily on livestock and agricultural produce from small family farms do not show the same strong effects and have had more robust growth recoveries

endogenous growth with a limited fossil fuel extraction capacity campbell 1980 and following authors have discussed a limited resource extraction capacity as an augmentation of the well known hotelling model we integrate a limited extraction capacity and related investments in the endogenous growth model of tsur and zemel 2005 to study its effect on economic development the capacity constraint gives rise to three effects on the one hand higher energy costs and the reallocation of production towards capacity investments decrease production available for consumption research and or capital investments energy costs and reallocation effect on the other hand research investments may increase which boosts available production research effect depending on the capital endowment and the strength of the effects long run consumption may be boosted or depressed in particular the capacity constraint may render everlasting consumption growth non optimal in a resource rich economy furthermore we find that capacity investments may be postponed to later points in time if the capital endowment is high

economic environment and agricultural development the importance of macroeconomic policy abstract this article explores the ways in which the macroeconomic balance of the economy and related policies impinge on agriculture in developing countries and considers implications for the design of policies it argues that the extent of macroeconomic balance and the quality of the policies influencing that balance to a large extent define the scope for effective agricultural policies the avoidance of severe balance of payments deficits and rapid inflation are seen as a necessary condition for the promotion of agricultural growth they also have an important influence on the nature and range of agricultural policy options available to governments

coffee money and inflation in colombia abstract the purpose of this paper is to analyse the relationship between coffee money inflation and international competitiveness in colombia the basic hypothesis being investigated is that higher lower prices of coffee will tend to result through the accumulation of international reserves in higher lower inflation in turn this higher inflation will generate for a given rate of devaluation of the nominal exchange rate a reduction of the real exchange rate with the consequent loss of competitiveness in the non coffee tradable goods sector a dutch disease type of model is developed to discuss analytically the relationship between coffee prices money creation and competitiveness in the short and long run empirical results for 1952 1980 are presented these results support the hypothesis that there has been a positive relationship between the price of coffee money creation and inflation in colombia

the short run impact of fluctuating primary commodity prices on three developing economies columbia ivory coast and kenya abstract computable general equilibrium models are used to study the short run impact of fluctuating primary commodity prices on the economies of columbia ivory coast and kenya the results indicate that these economies are destabilized by primary commodity price fluctuations unless governments act to hold real domestic absorption constant to achieve this however would require foreign exchange reserves in excess of the level normally available to these governments for the purpose of stabilizing domestic economic activity

commodity currencies and the real exchange rate abstract this paper shows that a change in the terms of trade of a commodity exporting country could cause the relative price of nontraded goods to rise or fall depending on the strength of income and substitution effects

the effects of a natural gas boom on employment and income in colorado texas and wyoming improvements in technology have made it profitable to tap unconventional gas reservoirs in relatively impermeable shale and sandstone deposits which are spread throughout the u s mostly in rural areas proponents of gas drilling point to the activity s local economic benefits yet no empirical studies have systematically documented the magnitude or distribution of economic gains i estimate these gains for counties in colorado texas and wyoming three states where natural gas production expanded substantially since the late 1990s i find that a large increase in the value of gas production caused modest increases in employment wage and salary income and median household income the results suggest that each million dollars in gas production created 2 35 jobs in the county of production which led to an annualized increase in employment that was 1 5 of the pre boom level for the average gas boom county comparisons show that ex ante estimates of the number of jobs created by developing the fayetteville and marcellus shale gas formations may have been too large

understanding the solar home price premium electricity generation and green social status this study uses a large sample of homes in the san diego area and sacramento california area to provide some of the first capitalization estimates of the sales value of homes with solar panels relative to comparable homes without solar panels although the residential solar home market continues to grow there is little direct evidence on the market capitalization effect using both hedonics and a repeat sales index approach we find that solar panels are capitalized at roughly a 3 5 premium this premium is larger in communities with a greater share of college graduates and of registered prius hybrid vehicles

boom goes the price giant resource discoveries and real exchange rate appreciation we estimate the effect of giant oil and gas discoveries on bilateral real exchange rates the size and plausibly exogenous timing of such discoveries make them ideal for identifying the effects of an anticipated resource boom on prices we find that a giant discovery with the value of a country s gdp increases the real exchange rate by 14 within 10 years following the discovery the appreciation is nearly exclusively driven by an appreciation of the prices of non tradable goods we show that these empirical results are qualitatively and quantitatively in line with a calibrated model with forward looking behaviour and dutch disease dynamics

oil and women a re examination abstract in a seminal article ross 2008 reports a negative correlation between oil production and women s representation in the labour force and politics across countries this article re examines these relationships exploiting variations in oil endowments to address endogeneity concerns we confirm that oil production causes decline in women s representation additionally we show that consistent with dutch disease effects oil production decreases women s employment in the traded sector however it also leads to an increase in women s employment in the nontraded sector we explore some social consequences of oil production and show that it results in women marrying earlier and having more children

dutch disease and the mitigation effect of migration evidence from canadian provinces this article evaluates whether immigration can mitigate the dutch disease effects associated with booms in natural resource sectors we derive predicted changes in the size of the non tradable sector from a small general equilibrium model a la obstfeld rogoff using data for canadian provinces we find evidence that aggregate immigration mitigates the increase in the size of the non tradable sector in booming regions the mitigation effect is due mostly to interprovincial migration and temporary foreign workers there is no evidence of such an effect for permanent international immigration interprovincial migration also results in a spreading effect of dutch disease from booming to non booming provinces

state renewable energy electricity policies an empirical evaluation of effectiveness over the past decade state governments have emerged as us energy policy leaders across the country states are adopting policy instruments aimed at carbon mitigation and renewable energy deployment one of the most prevalent and innovative policy instruments is a renewable portfolio standard rps which seeks to increase the share of renewable energy electrification in the electricity market this analysis evaluates the effectiveness of state energy programs with an empirical investigation of the linkage between state rps policy implementation and the percentage of renewable energy electricity generation across states we use a variant of a standard fixed effects model referred to as a fixed effects vector decomposition with state level data from 1998 to 2006 results indicate that rps implementation is not a significant predictor of the percentage of renewable energy generation out of the total generation mix yet for each additional year that a state has an rps policy they are found to increase the total amount of renewable energy generation these findings reveal a potentially significant shortcoming of rps policies political institutions natural resource endowments deregulation gross state product per capita electricity use per person electricity price and the presence of regional rps policies are also found to be significantly related to renewable energy deployment

adoption of residential solar power under uncertainty implications for renewable energy incentives abstract many incentives at the state and federal level exist for household adoption of renewable energy like solar photovoltaic pv panels despite generous financial incentives the adoption rate is low we use the option value framework which takes into account the benefit of delaying investment in response to uncertainty to examine the decision by households to invest in solar pv using a simulation model we determine optimal adoption times critical values of discounted benefits and adoption rates over time for solar pv investments using data from massachusetts we find that the option value multiplier is 1 6 which implies that the discounted value of benefits from solar pv needs to exceed installation cost by 60 for investment to occur without any policies median adoption time is eight years longer under the option value decision rule compared to the net present value decision rule where households equate discounted benefits to installation cost rebates and other financial incentives decrease adoption time but their effect is attenuated if households apply the option value decision rule to solar pv investments results suggest that policies that reduce the uncertainty in returns from solar pv investments would be most effective at incentivizing adoption

state distributed pv policies can low cost to government policies have a market impact this analysis examines the use of state policy as a tool to support the development of distributed generation photovoltaic pv markets the focus is on low cost market opening policies instead of various forms of government subsidies aimed at reducing installation costs the ideas tested in this work are 1 low cost market opening policies can be effective in facilitating pv market growth without subsidizing projects and 2 policies can be made more effective if states and localities stage their enactment in a particular order the policies selected for evaluation emerge from a policy stacking theory outlined in doris 2012 nrel cp 7a30 54801 golden co national renewable energy laboratory a cross section econometric analysis that takes into account the quality of interconnection standards net metering standards renewable portfolio standards rps rps set asides and a non policy determinant population explains about 70 of the variation in newly installed pv capacity across states and indicates that all of the selected policies are significant nonparametric statistical tests confirm the regression results qualitative evidence is also presented indicating that effective policy ordering starts with improving interconnection standards closely followed by improvements in net metering standards and eventually strengthened by the enactment of an rps and set asides

international redistribution of income summary how do international policies on aid trade and factor movements affect the international distribution of income we calculate the impact by world decile of the actual level of aid flows and the effect on income of merchandise trade restrictions by high income countries we find that aid s distributional impact is equality enhancing extremely small in terms of changes in inequality measures but of some importance for the lowest decile of the distribution we also find that some of this impact is counteracted by lost potential income in the lower deciles from merchandise trade barriers imposed by high income countries

conspicuous conservation the prius halo and willingness to pay for environmental bona fides abstract this paper develops a theory of conspicuous conservation a phenomenon related to conspicuous consumption in which individuals seek status through displays of austerity amid growing concern about environmental protection we identify a statistically and economically significant conspicuous conservation effect in vehicle purchase decisions and estimate a mean willingness to pay for the green signal provided by the distinctively designed toyota prius in the range of 430 4200 depending upon the owner s location results are related to the growing literature on green markets and suggest that policy should target less conspicuous conservation investments that will be under provided relative to those that confer a status benefit

resource boom wages and unemployment theory and evidence from the norwegian petroleum experience the effects of norwegian petroleum activities on nominal wages and the rate of unemployment are analyzed in this paper the theoretical model is based on standard theory of segmented labor markets increased nominal wages in the petroleum sector will unambiguously increase the wage level and the rate of unemployment increased petroleum employment will under realistic assumptions also raise the wage level the effect on the rate of unemployment in this case is ambiguous the empirical model is embedded in reduced forms of the theoretical model and the estimated parameters are consistent with the theoretical results

external shocks and adjustment in a mineral dependent economy a short run model for zambia abstract standard dutch disease analyses would suggest that mineral price declines reverse the effects of mineral booms in particular that the real depreciation caused by the fall in export prices helps revive the traded sectors notably manufacturing zambia s experience however shows that the sectoral impacts of external shocks are much more complex to investigate the tradeoffs inherent in economic adjustment policies including those currently advocated by the international monetary fund imf we use a multisector general equilibrium model the study shows that policies even those directed at a specific sector have indirect but not necessarily benign effects on the rest of the country

macro policy responses to natural resource windfalls and the crash in commodity prices policy prescriptions for managing natural resource windfalls are based on the permanent income hypothesis none of the windfall is invested at home and saving in an intergenerational swf is dictated by smoothing consumption across different generations furthermore with dutch disease effects the optimal response is to intertemporally smooth the real exchange rate smooth public and private consumption and limit sharp fluctuations in the intersectoral allocation of production factors we show that these prescriptions need to be modified for the following reasons first to cope with volatile commodity prices precautionary buffers should be put in a stabilisation fund second with imperfect access to capital markets the windfall must be used to curb capital scarcity invest domestically and bring consumption forward third with real wage rigidity consumption must also be brought forward to mitigate transient unemployment fourth the real exchange rate has to temporarily appreciate to signal the need to invest in the domestic economy to gradually improve the ability to absorb the extra spending from the windfall fifth with finite lives the timing of handing back the windfall to the private sector matters and consumption and the real exchange rate will be volatile finally with nominal wage rigidity we show that a taylor rule is a better short run response to a crash in commodity prices than a nominal exchange rate peg

wind power development in the united states abstract this paper analyzes the drivers of wind power development in the united states focusing on government renewable energy incentives and access to the electricity grid the effects of wind capacity electricity transmission line coverage and grid regulation as well as state and federal subsidies from 1998 to 2007 are estimated via random effects tobit probit and ordinary least squares instrumental variables regression the results indicate that the federal production tax credit state level sales tax credit and production incentives play an important role in promoting wind power in addition higher wind power penetration levels can be achieved by bringing more parts of the electricity transmission grid under independent system operator regulation this paper concludes that state and federal government policies play a significant role in wind power development both by providing financial support and by improving physical and procedural access to the electricity grid

natural disasters and labor markets abstract while it is clear that natural disasters have serious welfare consequences for affected populations less is known about how local labor markets in low income countries adjust to such large shocks combining data from the indonesia family life survey the desinventar database the u s geological survey and district level employment indicators this paper explores how a large earthquake in indonesia affected labor market outcomes in particular the evolution of wages across sectors i find that the earthquake had a positive effect on wage growth for workers who were employed in the agricultural sector at baseline i propose two mechanisms for this result a higher growth rate of the price of rice and a downward shift in the supply of workers in the agricultural sector i show that evidence mainly supports the latter labor shifted out of the agricultural sector into the construction sector raising the marginal product of labor in agriculture

renewable energy and politics a systematic review and new evidence abstract this paper reviews the literature in the intersection of renewable energies and politics adopting a multidisciplinary social sciences perspective we begin by analyzing the recent literature dealing with renewable energies and politics illustrating the analysis with bibliometric data the search protocol revealed 853 contributions dated from 1998 then we focus on the 186 contributions approached from a social sciences perspective establishing a taxonomy to classify the contributions into the main issues covered we identify contributions dealing with governance with public acceptance with markets and prices and with political or policy determinants of renewable energies in an empirical application we show that more democratic countries tend to invest more in renewable energies taking into account other determinants e g income energy dependence pollution emissions of this investment

on the unprofitability of utility demand side conservation programmes abstract this paper analyses the economic prospects of demand side conservation programmes the essence of various proposals is that conservation measures should be a part of least cost planning at least if marginal production costs are high and consumers decisions are distorted market failures the weakness of this literature is that it assumes that the consumers remain passive when the utilities invest in conservation this paper remedies this deficiency and considers strategic interactions between consumers and a public utility stackelberg equilibria it will be shown that strategic interactions render unprofitable demand side conservation programmes that appear profitable by conventional criteria the reason is that rational consumers will respond strategically to the prevalence of utility sponsored conservation programmes by minimizing their own expenses for energy efficiency

energy conservation nudges and environmentalist ideology evidence from a randomized residential electricity field experiment nudges are being widely promoted to encourage energy conservation we show that while the electricity conservation nudge of providing feedback to households on own and peers home electricity usage works with liberals it can backfire with conservatives our regression estimates predict that a democratic household that pays for electricity from renewable sources that donates to environmental groups and that lives in a liberal neighborhood reduces its consumption by 3 percent in response to this nudge a republican household that does not pay for electricity from renewable sources and that does not donate to environmental groups increases its consumption by 1 percent

oil windfalls and export diversification in oil producing countries evidence from oil booms abstract this paper examines the factors behind export diversification in oil countries specifically we investigate the impact of oil booms on export diversification through an empirical framework the paper finds that economy s export structure before the oil boom determines whether oil windfalls might affect the diversification process thus an oil boom negatively affects export diversification only if countries initially exhibit low levels of diversification in countries with a high level of diversification before the boom an oil boom has no impact on diversification these results are based on a large sample of 134 countries and are robust to various sensitivity analyses they are corroborated with data from the manufacturing sector which show that oil booms only reduce diversification in countries with a small manufacturing sector prior to the boom

natural resources democracy and corruption we study how natural resources can feed corruption and how this effect depends on the quality of the democratic institutions our game theoretic model predicts that resource rents lead to an increase in corruption if the quality of the democratic institutions is relatively poor but not otherwise we use panel data covering the period 1980 to 2004 and 124 countries to test this theoretical prediction our estimates confirm that the relationship between resource rents and corruption depends on the quality of the democratic institutions our main results hold when we control for the effects of income time varying common shocks regional fixed effects and various additional covariates they are also robust across different samples and to the use of various alternative measures of natural resources democracy and corruption

macroeconomic policy in an oil exporting economy with foreign exchange controls the sudden and sharp increases in oil prices during the past decade and the discovery and extraction of oil in the north sea have recently contributed to a renewal of interest in the macroeconomic problems of oil exporting countries in general and those of industrialized and semi industrialized oilexporting countries such as the uk and mexico in particular the economic implications of the north sea oil revenues for the british economy have been hotly debated by forsyth and kay 1980 1981 worswick 1980 barker 1981 corden 1981 and byatt et al 1982 the effects of oil and gas revenues on the economies of canada mexico the netherlands norway and the uk have also been the subject of analysis and discussion in barker and brailovsky 1981 despite their important contribution these studies fall short of formulating a comprehensive theoretical framework for the study of macroeconomic policy in oil exporting countries in general the resurgence of interest in the macroeconomics of oil exporting economies and the lack of a satisfactory theoretical framework emphasize the need for the explicit introduction of an oil sector into macroeconomic models of the open economy the more recent studies by buiter and purvis 1983 eastwood and venables 1982 corden and neary 1982 and neary and purvis 1982 have gone some way towards meeting this need but they are better suited to the study of macroeconomic policy in developed oil exporting countries such as the united kingdom where highly developed financial markets already exist 1 without exception all these studies assume that the economy under consideration operates with a floating exchange rate and that the private capital is internationally mobile they also invariably ignore the short term and the long term financial repercussions of changes in oil income that operate via the government budget constraint and the asset position of the private sector these assumptions are however inappropriate for most oil exporting countries in the middle east africa and latin america the purpose of this paper is to examine the short run and long run macroeconomic consequences of an increase in oil revenues in an oil exporting country characterized by strict foreign exchange controls on private capital flows we attempt to do this in the context of a keynesian underemployment model of the type analysed for example by turnovsky and kaspura 1974 branson 1976 and argy and salop 1979 but with domestic prices set according to a mark up rule along the lines advocated for example by fetherston and godley 1978 1981 unlike argy and salop but in line with other recent contributions to the macroeconomic theory of open economies the present paper explicitly allows for the existence of the government budget constraint and analyses the macroeconomic effects of changes in oil revenues both in the short run when

the rebound effect for space heating empirical evidence from austria abstract the major focus of this paper is to investigate the magnitude of the rebound effect for space heating in austria different approaches are applied and compared the most important result of this investigation is that despite the fact that all approaches applied have their weaknesses and some results were not highly significant the final outcomes of the different approaches show quite good coincidence they provide evidence of a rebound effect between 20 and 30 the most important conclusions for energy policy makers are i standards with respect to building codes are very important tools to increase the thermal quality of new buildings ii due to prevailing low energy prices a triggering tool which may be rebates or loans has to be implemented to increase the efficiency of the building stock

taxing tourism and subsidizing non tourism a welfare enhancing solution to dutch disease abstract using a combined analysis of a general equilibrium and a partial equilibrium this study models the impacts of a combined policy tool based on taxing tourism and subsidizing non tourism in a tourism dependent destination the results suggest that such a policy tool while widely discussed in economics literature may not be suitable for a tourism destination as it might have adverse effects on local welfare