price volatility in the carbon market in china abstract china is the world s largest developing country and a carbon dioxide emitter a functional carbon market can effectively reduce carbon emissions this paper uses the markov chain monte carlo stochastic volatility model and the wavelet multi resolution model to analyze the volatility of price returns and the dynamic characteristics of price fluctuations in the carbon pilot markets in hubei shanghai and shenzhen the price movements in these markets are compared to the emissions trading system of the european union eu ets the results show that there is a volatility clustering in the price of carbon trading in hubei shanghai shenzhen and the eu ets china s carbon pilot markets have a deficiency in terms of volatility stability as does the eu ets from a long term perspective china s carbon market lacks a detailed development plan which is vital because the construction of the market system is not yet optimal from a short term view china s carbon market is not active and the participants attitude toward risk is extremely sensitive

measuring the efficiency of china s carbon market a comparison between efficient and fractal market hypotheses abstract in this study variance ratio test and detrended fluctuation analysis are adopted to measure the efficiencies of beijing guangdong hubei shanghai shenzhen tianjin and chongqing seven carbon markets in china the empirical results indicate that on the basis of efficient market hypothesis adopts variance ratio test hubei and guangdong markets are weak efficient beijing shenzhen and shanghai markets are inefficient and the efficiencies of tianjin and chongqing are uncertain under daily returns all seven carbon markets are weak efficient under weekly returns on the basis of fractal market hypothesis hurst exponents are obtained by detrended fluctuation analysis shanghai guangdong and hubei markets are weak efficient the other four markets are inefficient under daily returns beijing and hubei markets are weak efficient and the other five markets are inefficient under weekly returns on the whole the efficiencies of china s carbon markets are generally low combining the empirical results with the reality of china s carbon markets it s proved that the results of fractal market hypothesis are more convincing in comparison to efficient market hypothesis fractal market hypothesis can more effectively measure the efficiency of carbon market

reprint of price and quantity collars for stabilizing emission allowance prices laboratory experiments on the eu ets market stability reserve abstract we report on laboratory experiments with financially motivated participants comparing alternative proposals for managing the time path of emission allowance prices in the face of random firm specific and market level structural shocks market outcome measures such as social surplus and price variability are improved by the use of a price collar auction reserve price and soft price cap comparable performance enhancements are not observed with the implementation of a quantity collar that adjusts auction quantities in response to privately held inventories of unused allowances in some specifications the quantity collar performed worse than no stabilization policy at all the experiment implemented a specific set of structural elements and extrapolation to other settings should be done with caution nevertheless an examination of the observed behavioral patterns and deviations from optimal behavior suggests that a price collar has an important although perhaps not exclusive role to play in constructing an effective market stability policy

china s carbon emissions trading overview challenges and future because china has emerged as the largest greenhouse gas ghg emitter in total annual emissions to accelerate the pace of ghg emission reduction in china is important to the success of global efforts in addressing climate change carbon trading is a market mechanism and key instrument in the mitigation of climate change this paper explores the policy process and development state to date of china s carbon trade market to understand the emergence and development of that market and to understand what barriers are hampering china s carbon trade market development to achieve this goal this paper introduces and analyzes china s status in the international market examines the factors driving carbon market launching by the chinese government and traces the development of mandatory carbon emission trading and voluntary emission trading it is argued that china s carbon trading market is confronted with challenges such as the absence of a functional carbon trading market inaccuracy of the quota allocation an imperfect trading mechanism and lagging legislation at the present stage shortcomings such as having no real time carbon price and dominated spot transactions differentiate china s trade market substantially from a functional system a quick market integration of china s carbon market appears remote it is suggested that specific measures be taken to promote the development of the chinese carbon trading market

region division of china s carbon market based on the provincial municipal carbon intensity abstract the difference of carbon trading prices among emission trading scheme pilots may hinder the unified carbon market that china s government plans to establish in 2017 to achieve this goal this study develops a regional carbon market mode based on the similarity of thirty provinces municipalities carbon intensity by the aid of logarithmic mean divisia index autoregressive and dynamic time warping models according to the dynamic clustering result we divide these provinces municipalities into three sub markets that are the western eastern and central markets furthermore we propose the carbon emission modes corresponding to each sub market namely the energy dependence mode western market sustainable economy mode eastern market and industrial upgrading mode central market briefly we suggest that the unified market should be firstly divided into some sub markets finally we propose some critical routes as well as corresponding managerial implications for establishing such unified market

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

trust interlinking transactions and credit in the industrial district an essential feature of the industrial district is trust among individuals and firms within it this paper focuses mainly on trust based on investments in building up a good reputation that is a personal capital that can even substitute for collateral in obtaining credit informal credit often linked to other transactions and especially subcontracting is therefore an important way of financing economic development in the industrial district moreover the importance of trust as personal capital gives rise to a double financial intermediation in the industrial district this double intermediation constitutes a device to reduce information problems that are usually responsible for credit rationing c 1994 academic press inc copyright 1994 by oxford university press

personal carbon trading a critical survey part 2 efficiency and effectiveness abstract equity efficiency and effectiveness are three key criteria use to assess environmental policy instruments part 1 of this survey shows that in terms of equity tradable energy quotas teqs a widely discussed personal carbon trading pct scheme cannot be differentiated from cap and dividend c d or cap and share c s hence part 2 explores whether they can be differentiated in terms of efficiency and or effectiveness the paper reviews two studies that compare the efficiency of teqs and c d whilst their estimates of the costs and abatement potential of teqs differ neither study considers that there is a case on efficiency grounds for its implementation the paper goes on to sketch two arguments for the implementation of pct that might nevertheless be made on efficiency grounds and one relating to public acceptability that might be made on effectiveness grounds exploring the various public surveys conducted on the acceptability of pct the paper concludes that support for pct is not obviously greater than for alternative instruments and notes a methodological limitation in the work reviewed the paper concludes that to date the case against implementation of pct is stronger than the case for

macroeconomic implications of conspicuous consumption a sombartian dynamic model this chapter presents a dynamic general equilibrium model in which consumers have status preference i investigate the manner in which capital accumulation is impeded by conspicuous consumption a la corneo and jeanne j public econ 66 55 71 1997a following the literature social norms are given as either bandwagon type or snob type i then show that when the economy is characterized by a bandwagon type social norm capital accumulation exhibits interesting patterns those patterns include for example an oscillating convergence path the rise of the economy feeds its decay through conspicuous consumption and that decay suppresses conspicuous consumption and engenders prosperity as predicted by sombart liebe luxus und kapitalismus reprinted 1967 deutscher taschenbuch verlag munchen 1912

a fuzzy stochastic model for carbon price prediction under the effect of demand related policy in china s carbon market abstract the establishment of china s carbon market has an obvious policy oriented feature and the carbon price is easily affected by demand related policies within a compliance period as prior models cannot help with clear simulation of the volatility of carbon price in china this paper develops a fuzzy stochastic model to predict such price under the effect of demand related policy first we quantify corporate final profit obtained from carbon trading based on different free allowance policies to measure the actual allowance demand in the carbon market second based on such demand we add the fuzzy number in each parameter of a stochastic differential equation and then develop a fuzzy stochastic model that can help to analyse the effect of demand related policy on carbon price in the immature carbon market third by analysing the demand related policy formulated in the second developing phase of the shanghai environment and energy exchange from nov 17 in 2016 through our model we predict the price trend after each demand related policy publication experimental results reveal the accurate fitting effect of the developed model that can help to estimate the supply and demand in the carbon market and evaluate the effectiveness of current carbon trading policy as well further our model can provide a robust theoretical implication for both corporate carbon trading strategies and governmental regulations on carbon demand related policy

carbon emissions trading scheme exploration in china a multi agent based model abstract to develop a low carbon economy china launched seven pilot programs for carbon emissions trading cet in 2011 and plans to establish a nationwide cet mechanism in 2015 this paper formulated a multi agent based model to investigate the impacts of different cet designs in order to find the most appropriate one for china the proposed bottom up model includes all main economic agents in a general equilibrium framework the simulation results indicate that 1 cet would effectively reduce carbon emissions with a certain negative impact on the economy 2 as for allowance allocation the grandfathering rule is relatively moderate while the benchmarking rule is more aggressive 3 as for the carbon price when the price level in the secondary cet market is regulated to be around rmb 40 per metric ton a satisfactory emission mitigation effect can be obtained 4 the penalty rate is suggested to be carefully designed to balance the economy development and mitigation effect and 5 subsidy policy for energy technology improvement can effectively reduce carbon emissions without an additional negative impact on the economy the results also indicate that the proposed novel model is a promising tool for cet policy making and analyses

cost based modelling of optimal emission quota allocation abstract given that a fixed national emission reduction target could be achieved by imposing emission quotas among multiple decision making units under administration a novel nonlinear programming approach is proposed in this paper to obtain an optimal emission quota allocation in a least cost way marginal emission abatement cost curves are simulated based on the environmental performance and marginal emission abatement costs measured in a set of parametric directional output distance functions with multi inputs and multi outputs further the proposed model is applied to empirically investigate the optimal carbon emission quota allocation for china s building construction industry among thirty three provinces in three different regions the results indicate that the relatively developed eastern region in china has higher marginal emission abatement cost and can be imposed with more emission quotas while the central and western regions can undertake more emission reduction approximately 74 million rmb can be saved by implementing the optimal emission allocation proposed in this paper as compared to a uniform emission quota allocation the findings are of great theoretical methodological and practical significance for policymakers and social science researchers in terms of climate change mitigation

carbon trading thickness and market efficiency abstract this note tests for the efficient market hypothesis emh in the market for co 2 emission allowances in phase i and phase ii of the european union emissions trading scheme eu ets as usually is the case in emerging and non competitive markets such as the eu ets trading often not occurs on a frequent basis this has adverse implications for both the gains from permit trade as well as biases the emh tests variance ratio tests are employed to adjust for the thin trading effect the results indicate that phase i the trial and learning period was inefficient whereas the first period under phase ii shows signs of restoring market efficiency

sudden stops the real exchange rate and fiscal sustainability in argentina he fall of convertibility in argentina has stirred a lively discussion aboutthe causes for its collapse several explanations have been offered themost popular one relates to the unsustainable combination of a fixed exchangerate and large fiscal deficits that led to a rapid growth in public debt severe fiscalproblems and eventually a loss of access to credit markets another popularview stresses the impact of devaluation by argentina s major trading partners asan important cause of real exchange rate rer misalignment which reducedprofitability in the tradable sector this in turn slowed down investment and ledthe economy into a protracted recession with the associated deflation being themechanism for easing the rer disequilibrium here a different interpretation of the collapse of convertibility is provided drawing heavily on recent work by calvo et al 2002 this interpretation shareswith the previous views the acknowledgement of fiscal sustainability problemsand rer misalignment however this view places special emphasis on financialconsiderations in particular it is argued that the impact of rer misalignmentwent beyond considerations of trade and competitiveness it played a major rolein the fiscal and financial problems that eventually argentina had to confront moreover fixed exchange rates helped conceal those problems and as a result necessary fiscal measures were postponed thereby intensifying the crisis

on the efficiency of the european carbon market new evidence from phase ii i examine in the period 2008 2011 the efficiency of four carbon dioxide co2 emission allowance futures traded in the intercontinental exchange ice to this end i assess the profitability of trading strategies based on simple technical analysis rules and naive forecasts the results from 2010 onwards are consistent with weak market efficiency in turn this finding suggests that the european carbon market is gradually attaining a state of maturity

wealth seeking reconsidered abstract if individuals are interested in their relative wealth position they engage in contests for wealth this leads to a steady state with overaccumulation in a simple growth model it is shown that if some individuals are engaged in wealth seeking activity but others are not the latter might benefit however wealth seeking is not welfare enhancing under usual assumptions concerning production technology the steady state equilibrium is characterized by a marginal productivity of capital that is below the steady state rate of time preference and by emergence of a class structure

local social capital and entrepreneurship we aim to contribute to the analysis of the role that spacebound social capital plays in local regional entrepreneurship we compare social capital with other forms of capital the conclusion is that in the main social capital can be analyzed in the same way as other capital but it has some important special attributes with these attributes as starting point we sketch an outline model of how the spatially defined producer surplus and consumer surplus form a place surplus and of the role played by social capital in the creation of the producer surplus a rereading of schumpeter shows that he was aware of several aspects of what we denominate entrepreneurship inhibiting and facilitating aspects of social capital finally we discuss some formal economic modeling approaches to the theoretical relationship between social capital and entrepreneurship

research on the efficiency of carbon trading market in china abstract in 2014 china proposed medium and long term low carbon development goals in china u s joint statement on climate change that the emission of carbon dioxide would reach its peak and the proportion of non fossil energy accounted for the primary energy consumption would increase to 20 in 2030 in order to achieve these goals the unified carbon emission trading system should be put into effect by 2017 the implementation of the unified carbon emission trading system depends on the effectiveness of the current carbon trading market in china on the basis of the effective market theory and fair game model the unit root test and the run test are developed to analyze the carbon emission market of four representative cities in china the results show that 1 the carbon trading market in china has only achieved weak efficiency while the semi strong efficiency and the strong efficiency have not been reached 2 with the expansion of the market scale the increase of trading volume the carbon trading market would converge from the state of inefficiency to weak form efficiency gradually and the carbon trading market in china shows signs of restoring market efficiency

case study on initial allocation of shanghai carbon emission trading based on shapley value abstract carbon emission trading is an effective measure to reduce greenhouse gas emissions worldwide china has publicized plans to initiate the demonstration of carbon emission trading in seven regions as of 2013 initial allocation is fundamental but it proposes difficulty in the mechanism design of the carbon emission trading system benchmark grandfathering and the shapley value have been employed to simulate a specific case which consists of the initial allocation of carbon emission allowances of three power plants in shanghai china the results of the shapley value are regarded as a theoretical equitable reference the results of benchmark are similar to those of the shapley value however it is apparent that the allocation regarding grandfathering is inequitable considering other factors we proposed the following at the introduction of experimental stage free allocation pertaining to grandfathering can be adopted meanwhile benchmark should be prepared and adopted at the appropriate time furthermore a portion of the initial allowances can be reserved for auction and this portion for auction will escalate to the extent of 100 upon entering the formal stage in addition the tiered price mechanism and the subsidy policy are also suggested

catalysts for price discovery in the european union emissions trading system abstract we provide the first evidence on catalysts for price discovery in the european union emissions trading system specifically by employing high frequency data across a wide range of fungible securities we find that trading costs are a more important determinant of price discovery than either the implicit provision of leverage in securities such as futures and options or the existence of market segmentation moreover securities with low trading costs display greater price discovery than those with high trading costs

carbon emission permit price volatility reduction through financial options we develop a stylized model to investigate the impact of financial options on reducing carbon permit price volatility under a cap and trade system the existence of an option market provides a mechanism to hedge the uncertainty of future spot prices and is a stimulus for investment in carbon emission abatement technologies we show that both the spot price level and the price volatility of carbon permits can be reduced via the trading of financial options while achieving the emission reduction target we also show that introducing financial options in a banking environment offers more flexibility to risk management in carbon permit trading

market efficiency in the european carbon markets in this paper we study the relationship between futures and spot prices in the european carbon markets from the cost of carry hypothesis the aim is to investigate the extent of efficiency market the three main european markets bluenext eex and ecx are analyzed during phase ii covering the period from march 13 2009 to january 17 2012 futures contracts are found to be cointegrated with spot prices and interest rates for several maturities in the three co2 markets results are similar when structural breaks are taken into account according to individual and joint tests the cost of carry model is rejected for all maturities and co2 markets implying that neither contract is priced according to the cost of carry model the absence of the cost of carry relationship can be interpreted as an indicator of market inefficiency and may bring arbitrage opportunities in the co2 market

allowance price drivers in the first phase of the eu ets abstract in the first phase of the eu emissions trading scheme eu ets the price per ton of co 2 initially rose to over 30 the price then collapsed to essentially zero by mid 2007 by deriving a structural model of the allowance price under the assumption of efficient markets i examine the extent to which this variation in price can be explained by marginal abatement costs i then gradually relax the model by allowing for delayed adjustment of price to fundamentals as well as by introducing lagged lhs variables the pattern of results suggests that while prices were not initially driven by marginal abatement costs this inefficiency was largely corrected after the accounting of 2005 emissions in april 2006

the impacts of liquidity dynamics on emissions allowances price different evidence from china s emissions trading pilots abstract the liquidities of china s emissions trading markets have significant impacts on emissions allowances price movement and pricing efficiency liquidity measures on illiquidity ratio and trade values indicate hubei emissions allowances hbea product has the highest liquidity shenzhen allowances sza and guangdong emissions allowances gdea products have the higher liquidity than beijing emissions allowances bea and shanghai emissions allowances shea products while tianjin emissions allowances tjea product has the lowest market liquidity in considered china s emissions trading pilots the dynamics of the illiquidity ratios for all selected emissions allowances products are negatively related with emissions allowances returns and trade volumes for bea tjea sza and hbea products are also negatively related with emissions allowances returns the dynamics of daily illiquidity ratios and trade based liquidity in beijing tianjin guangdong shenzhen hubei emissions pilots have significant volatility clustering impacts on the variances of regional emissions allowances returns previous market shocks of overnight and intraday price variations have the more persistent influences on the gdea returns than hbea returns reflecting greater inter day price ranges clustering effect

a literature based multi criteria evaluation of the eu ets abstract this article reviews the existing literature on the european union emission trading scheme eu ets focusing on empirical ex post research since the end of the first period 2007 the literature is presented through a multi criteria evaluation concerning environmental effectiveness despite over allocation during the first period abatement is estimated between 2 5 and 5 trade driven carbon leakage was not observed even if long term economic models predict divergent leakage estimates for certain at risk sectors the abatement target was likely to be below an economically efficient level but was reached in a fairly cost effective way even if free allocation gave rise to several distortional effects equity concerns were manifold and constitute a major drawback to the policy finally institutional feasibility can be considered positive in that the eu ets passed the european legislative process unlike the previously proposed eu wide carbon tax

governance of co2 markets lessons from the eu ets the european emissions trading scheme eu ets is the centerpiece of europe s climate policy the system has been undermined variously by the weakness of its regulation an undesirable overlap with other public policies and the far reaching economic and financial crisis that caused the market price of allowances to plunge this article attempts to identify the conditions for making the coming years of the eu ets a success it draws historical lessons from the eight years the scheme has been in operation and then presents the various interventions by the public authorities currently under discussion in order to revive the market finally the article proposes to draw lessons from monetary policy by outlining what might be the mandate of an independent carbon market authority with responsibility for the dynamic management of the supply of allowances and whose main mission would be to ensure the optimal linkage between the different temporal horizons of the climate strategy this article could provide important lessons for schemes developing in the rest of the world especially in south korea or in china

emissions trading in china emerging experiences and international lessons grants by the robert bosch foundation under the program sustainable partners partners for sustainability the australian research council and the australian government supported different parts of the project

are all tastes constant and identical abstract george stigler and gary becker have attempted to eliminate the concepts of changing preferences and varying preferences across individuals from economic theory by postulating a household production function hpf stigler and becker reinterpret changing tastes as changes in the constraints used to produce utility from commodities the postulated changes in the hpf however are no less arbitrary than assertions of changing or different preferences and add no explanatory power furthermore problems of addiction taste change and weakness of will do not fit the constant tastes praradigm very well the stigler becker approach also involves infinite regress problems a change in the demand for x can be interpreted as an increase in x s ability to produce z where z is the true object of desire but how are we to explain a change in the demand for z

carbon trading in a socialist market economy can china make a difference a global carbon trading system has gained shape since several major asia pacific economies declared their participation as the largest national source of greenhouse gases china is probably the most prominent newcomer pilot emission trading schemes are being introduced in this country with prospects for developing into a national scheme the initiative is primarily motivated by expected economic benefits rather than environmental commitments viability is uncertain due to the absence of a liberal political economic system as we know in the western world the theory of carbon trading is being tested in an unusual place with huge implications both practically and theoretically

the economic impact of china s indc distinguishing the roles of the renewable energy quota and the carbon market abstract this study contributes to the existing literature on economic impacts assessment of china s intended nationally determined contributions indc by 2030 a dynamic computable general equilibrium cge model of china that incorporates the technological details of the electricity sector is used in this study two main policy choices including the renewable quota and the carbon market are modeled to distinguish different pathways to indc targets results show several important findings first the total economic cost required to achieve china s indc targets ranges from 0 11 to 0 43 of gdp by 2030 second energy sectors such as the coal mining and electric power sectors are the most affected by china s indc in terms of both sectoral production and price this study further indicates that the implementation of a national carbon market is efficient in reducing the compliance costs of indc targets while the deployment of renewable power helps to create employment opportunities and reduce permit prices in the carbon market in addition the results of a cost benefit analysis suggest that the hidden health benefits of china s indc can offset approximately 42 1 162 3 of the compliance costs even based on the most conservative estimates

against parsimony three easy ways of complicating some categories of economic discourse economics as a science of human behavior has been grounded in a remarkably parsimonious postulate that of the self interested isolated individual who chooses freely and rationally between alternative courses of action after computing their prospective costs and benefits in recent decades a group of economists has shown considerable industry and ingenuity in applying this way of interpreting the social world to a series of ostensibly noneconomic phenomena from crime to the family and from collective action to democracy the economic or rational actor approach has yielded some important insights but its onward sweep has also revealed some of its intrinsic weaknesses as a result it has become possible to mount a critique which ironically can be carried all the way back to the heartland of the would be conquering discipline that the economic approach presents us with too simpleminded an account of even such fundamental economic processes as consumption and production is the basic thesis of the present paper this abstract was borrowed from another version of this item

how china s current carbon trading policy affects carbon price an investigation of the shanghai emission trading scheme pilot abstract to better establish a unified carbon market in china this study evaluates the effect of current carbon trading policy and further investigates the relationship between such policy that is published during the second phase of shanghai environment and energy exchange seee and shanghai emission allowance shea price we aim to analyze whether these policies can improve the operation efficiency of current carbon market by the mean reversion test cox ingersoll ross cir model and event study method we first analyze the potential price discovery function of shea products thereby describing the transmission channel of current policy to shea price then we examine the effect of carbon policies published in different periods on their corresponding shea price by the auto correlation test and cir simulation we find that 3 4 of all auto correlation values are less than 0 after apr 2017 and the minimum cumulative error is 31 3792 under the supply and demand channel these findings imply that shea price has the discovery function at the middle and end of trading period and the current policy affects shea price through its effect on the fundamentals of supply and demand further more than 60 of all r values r value that reflects the response of price to policy are less than 1 which implies that the published policy will improves future shea price accordingly we argue that seee belongs to a policy oriented market and the change of carbon price is closely related to emission allocation policies in this case china s government should further push forward the smooth operation of current carbon market by the aid of incentive policy in the coming period

keeping one step ahead of the joneses status the distribution of wealth and long run growth assuming that the utility of each agent depends on its relative wealth position in the society this chapter constructs an endogenous growth model it is shown that even if the subjective discount rates differ across agents there exists a unique balanced growth equilibrium in which each agent owns a positive share of the world wealth it is also shown that if the agents are identical then an increase in savings incentives always raises the long run growth rate but if they are heterogeneous then an increase in savings incentives may lower the long run growth rate

argentina s currency board collapse weak policy or bad luck two basic views can be discerned in post mortems of argentina s currency board 1 that weak fiscal policy was fundamentally to blame and 2 that the peso had become too severely overvalued for the peg to survive this paper evaluates the evidence for these rival interpretations the real effective exchange rate index did not indicate massive overvaluation but this index does not capture the effects on the equilibrium rate of the sudden stop in capital flows to emerging markets after 1998 it also understates the amount of adjustment required for argentina to reach the equilibrium rate because neighbour countries dollar exchange rates were held up by argentina s overvaluation as is indicated by their depreciation in 2002 argentina was particularly vulnerable to the sudden stop because of the extreme volatility of its portfolio inflows fiscal policy simulations suggest that even with a substantially improved primary balance from 1994 onwards loss of investor confidence would still have triggered unsustainable debt dynamics once the recession began to bite after 1998 the stagnation of output and prices in argentina created a yawning gap between the interest rate on debt and the rate of growth of nominal gdp had the currency been floated in say 1995 the real devaluation of the peso would still have pushed up the debt gdp ratio but higher output would have left greater scope for addressing this by running a sizeable primary surplus moreover the more gradual depreciation under floating might have allowed the economy to adjust to higher debt service payments without resort to default the imf has criticised itself for not pressing for tighter fiscal policy in the 1990s a more fundamental criticism would be that it was seduced by the bipolar model into complacency about adjustment to real shocks and forgetting the teachings of optimum currency area theory

chinese companies awareness and perceptions of the emissions trading scheme ets evidence from a national survey in china abstract china announced the launch of a national emissions trading scheme ets in 2017 however companies appear show little enthusiasm for participation in the ets in china this paper identifies the factors affecting companies awareness and perceptions of ets by conducting a national survey based on an online questionnaire from may to november 2015 in seven carbon trading pilots the results indicate that companies attitudes towards the ets are positively influenced by government regulations and policy public relations management and estimated economic benefit of these public relations management is the decisive factor and estimated economic benefit is confirmed to be a relatively weak predictor a company s environmental and energy strategy exerts insignificant effects on its preference for the ets although the sampled companies are very willing to save energy and reduce emissions there exists an inverted u shape relationship between a company s level of mitigation technologies and its attitudes towards the ets the carbon price fails to stimulate companies to upgrade mitigation technologies the majority of companies treat participation in the ets only as a means of improving ties with governments as well as of earning a good social reputation rather than as a cost effective mechanism to mitigate greenhouse gas emissions

how to improve the market efficiency of carbon trading a perspective of china abstract emissions trading scheme ets is one of the effective measures to realize energy conservation and emission reduction in order to set up a nationwide carbon emissions trading mechanism seven ets pilots have been launched in china firstly based on empirical investigation and research of seven pilots this paper analyzed the market efficiency of ets pilots from four aspects carbon price trading volume market liquidity and information transparency the result showed that the market efficiency of ets pilots is not satisfactory in spite of the fact that system designs of ets have achieved preliminary result then the reason for low market efficiency of ets pilots was discussed from some factors such as institutional arrangements market participants the supply and demand etc finally this paper puts forward some policy suggestions to improve the market efficiency of china s carbon trading market

understanding volatility dynamics in the eu ets market abstract we study the short term price behavior of phase 2 eu emission allowances we model returns and volatility dynamics and we demonstrate that a standard armax garch framework is inadequate for this modeling and that the gaussianity assumption is rejected due to a number of outliers to improve the fitness of the model we combine the underlying price process with an additive stochastic jump process we improve the model s performance by introducing a time varying jump probability that is explained by two variables the daily relative change in the volume of transactions and the european commission s announcements regarding the supply of permits we show that i sharp increases in volume have led to increased volatility during the april 2005 december 2007 period but not for the period beginning in january 2008 and ii announcements induce jumps in the process that tend to increase volatility across both periods thus authorities face a trade off between disseminating information effectively and promoting market stability

advancing the experiment to reality perspectives on shanghai pilot carbon emissions trading scheme shanghai as the most advanced mega city in china has launched a pilot carbon emission trading scheme sh ets that is designed to achieve a compromise between the domestic context in shanghai and a need for national policy appeal this paper gives an overview of the latest progress of the sh ets and sheds some light on the features of key design components such as the threshold for inclusion sector coverage cap setting allowance allocation and the monitoring reporting and verification mrv system based on a concern that manipulative principles and economic dynamics may lead to uncertainties and ultimately influence the emission reduction effect of the scheme this paper conducts an evaluation of potential uncertainties such as those caused by changes in patterns of economic growth strategic trading activities related to the bankable allowances carbon leakage risks and insufficient mrv capabilities to advance the experiment to reality this paper suggests some changes are made to the pilot which include adjusting the allowance allocation principles to facilitate change in the domestic energy structure improving the disclosure of emission data to guarantee information symmetry gauging the carbon leakage risks to strengthen compliance and introducing risk management for non regulated players and derivatives products

rationality and the market for human blood abstract this paper presents a theoretical model of blood supply illustrating an argument advanced by titmuss that it is better to rely on voluntary donation than on the market to obtain whole human blood for transfusion the model incorporates a social custom in the manner of akerlof which causes different equilibria to occur depending on whether the custom of giving blood prevails or not since preferences differ across equilibria the pareto criteria cannot be used to compare them several other possible criteria are proposed but these criteria imply that some preferences are more rational or are preferable to other preferences

the spirit of capitalism and stock market prices in existing theory wealth is no more valuable than its implied consumption rewards in reality investors acquire wealth not just for its implied consumption but for the resulting social status max m weber 1958 refers to this desire for wealth as the spirit of capitalism the authors examine both analytically and empirically implications of weber s hypothesis for consumption savings and stock prices when investors care about relative social status propensity to consume and risk taking behavior will depend on social standards and stock prices will be volatile the spirit of capitalism seems to be a driving force behind stock market volatility and economic growth copyright 1996 by american economic association

futures trading with information asymmetry and otc predominance another look at the volume volatility relations in the european carbon markets this paper constitutes the first exercise of analysing the european carbon market efficiency from a double perspective combining both nature of execution venues screen vs otc trading and their volatility liquidity relations using a bivariate asymmetric gjr garch model we first document that otc exchange traded trading volume shows consistent bi uni directional granger causality to our volatility estimates consistent with greater responsiveness of the otc exchange traded market to changes in market wide idiosyncratic risks second we report significant contemporaneous and lagged positive causality of otc derivatives volume on spot futures volatility confirming that the sequential information arrival hypothesis siah applies third we find that the one way causality from otc to futures volumes is mainly driven by heterogeneous investor beliefs trading volume provides an indication on how private information is dispersed and held at different levels rather than proxying information signal itself after rejecting execution venues substitutability we advocate for systematic clearing and netting of otc positions through a unique clearing house and reporting rules to identify speculation in line with mifid art 59 proposals

debt restructuring and economic recovery analysing the argentine swap when argentine sovereign default in december 2001 led to a collapse of the peso the burden of dollar debt became demonstrably unsustainable but it was not clear what restructuring was feasible nor when eventually in 2005 after a delay of more than three years a super majority of creditors accepted a swap that essentially involved the pesification of dollar liabilities with the imf not playing its customary role in arranging a swap we consider whether a bilateral bargaining approach can help explain the final settlement and the delay in achieving it we find that the swap broadly corresponds to a bargaining outcome where substantial delay occurred for both political and economic reasons even after political legitimacy was assured by general elections negotiators seeking a sustainable outcome at a time of deep recession profound currency under valuation and high sovereign spreads realised it was better to wait before settling other factors discussed include the definition of sustainability criteria the effect of inter creditor conflict and the role of third parties in promoting good faith bargaining we suggest that while these issues need further investigation there are institutional changes that could make them less problematic

it takes two to cheat an experiment on derived trust abstract social life offers innumerable instances in which trust decisions involve multiple agents of particular interest is the case when a breach of trust is not profitable if carried out in isolation but requires an agreement among agents in such situations the pattern of behaviors is richer than in dyadic games because even opportunistic trustees who would breach trust when alone may act trustworthily based on what they believe to be the predominant course of action anticipating this trusters may be more inclined to trust we dub these motivations derived trustworthiness and derived trust to capture them we design a collective trust game and study it by means of a laboratory experiment we report that overall levels of trustworthiness are almost thirty percentage points higher when derived motivations are present and this generates also higher levels of trust in our set up the effects of derived trustworthiness are comparable in size to positive reciprocity and more important than concerns for equality

veblen effects in a theory of conspicuous consumption the authors examine conditions under which veblen effects arise from the desire to achieve social status by signaling wealth through conspicuous consumption while veblen effects cannot ordinarily arise when preferences satisfy a single crossing property they may emerge when this property fails in that case budget brands are priced at marginal cost while luxury brands though not intrinsically superior are sold at higher prices to consumers seeking to advertise wealth luxury brands earn strictly positive profits under conditions that would with standard formulations of preferences yield marginal cost pricing the authors explore factors that induce veblen effects and they investigate policy implications copyright 1996 by american economic association

towards a national ets in china cap setting and model mechanisms abstract china is moving from regional emissions trading schemes etss to a nation wide ets although a larger ets will be more efficient the literature warns that it could make net permit selling regions worse off we use a cge model to simulate the linking of two provincial etss namely those of hubei and guangdong our simulations suggest a trade off between efficiency and equity as the richer regions typified by guangdong will benefit from linking but the poorer regions typified by hubei may lose this is because poorer provinces in china tend to be more emissions intensive and therefore likely to face a carbon price rise upon linking the costs of which may be only partially offset by trading if indeed trading is permitted we show this and explain why it is the case by improving on the stylized model suggested by adams and parmenter 2013 following atkinson 1970 we find that worsened equity from linking may dominate improved efficiency thus reducing aggregated welfare we advise more generous caps to be given to more emissions intensive and less developed regions if so as suggest our simulation results a pareto improvement could be attainable

improving the liquidity of china s carbon market insight from the effect of carbon price transmission under the policy release abstract through a series of policies release the trading system of china s carbon market is being improved but its current liquidity is still low to improve market liquidity this paper analyzes the relation between the release of policy related to carbon market operations and the volatility of carbon price thus arranging an optimal adjustment scheme for government s policy making through the jump test and logit regression we investigate historical policies and prices of 7 emission trading scheme pilots in china to explore the impact of policy release on carbon price and then quantify the effectiveness of these policies empirical results indicate that in the short term new policies can rapidly lead to a large volatility of carbon price but it can also reduce the abnormal volatility with the spread of price information further the demand stimulus policies promote a positive volatility of carbon price in the long term the insufficient demands for carbon emissions quota raise the disappearance of market dividends caused by the policy release and lead to an excessive call back of carbon price thus increasing mid and long term risks in carbon markets additionally china s macro environment policy can stabilize carbon price and thus an effective tool for improving the liquidity of carbon markets is developing demand stimulus policies