the hyperinflation model of money demand revisited in this paper we propose a test of the hyperinflation model of money demand which is valid under any assumption concerning agents expectations subject only to the restriction that forecasting errors are stationary it is also demonstrated that highly efficient parameter estimates can be obtained and restrictions on them tested under the same weak assumption finally it is shown how these first stage estimates can be utilized to test the stronger assumption of rational expectations the arguments are illustrated by analysis of the classic data on european hyperinflations previously analyzed by cagan 1956 barro 1970 and abel dornbusch huizinga and marcus 1979 copyright 1991 by ohio state university press

optimal inflation tax under precommitment theory and evidence the authors develop and test the orthogonality conditions implied by a dynamic model of the inflation tax a distinguishing feature of the analysis is that the welfare loss from inflation the money demand function and the time path of inflation are jointly derived from first principles of government and private sector intertemporal optimization quarterly data for argentina brazil and israel are used in implementing the model although the overidentifying restrictions of the model are not rejected in most cases there are several data points characterized by higher rates of inflation than the optimal rates under precommitment copyright 1992 by american economic association

to value or not to value that is not the question abstract should we reject money when we value nature like most environmentalists ecological economists are increasingly divided on this question synthesizing political ecology with ecological economics we argue that this way of framing the question is limited we propose a reformulation of the question into when and how to value with money and under what conditions we recommend four criteria for a sound choice environmental improvement distributive justice and equality maintenance of plural value articulating institutions and confronting commodification under neo liberalism we call for due attention to the socio political context within which a valuation is placed and the political goals it serves the relevance of this framework is demonstrated by applying it to three practical cases pollution damages water pricing and payments for ecosystem services

global patterns of metal extractivism 1950 2010 providing the bones for the industrial society s skeleton during the second half of the 20th century mining expanded globally and must be considered one of the dominant forms of human intervention into the environment metals are strategically important resources for industrialized and industrializing societies in 2010 the five brics countries brazil the russian federation india china and south africa consumed 54 of the metals mined globally the analysis of material flow data offers a biophysical perspective on mining as a resource frontier and allows for the identification of patterns in global metals extraction and trade since 1950 metal extraction has shifted from the early industrializing countries into the emerging economies in 2010 only 6 of metals mined stemmed from europe or north america while 76 were extracted in four countries australia china india and brazil in the countries hosting large scale mining operations socio ecological pressure ensues the so called extractivist development path is common high rates of metal deposit depletion mean that today s metal extractors and exporters may depend on imports of metal from anthropogenic deposits stocks in buildings infrastructure and durable products in the future the extractivist path and the shifting of metals from natural to anthropogenic deposits are both associated with potential for conflict

unobserved rational expectations and the german hyperinflation with endogenous money supply a kalman filtering technique is employed to test the convergent expectation hypothesis in the great german hyperinflation when the money supply is endogenously determined after converting the model structure to a state space form the parameters are estimated via minimization of a gaussian likelihood function the result is then used in a filter smoother combination to yield smoothed estimates of the state variable associated with the arbitrary constant of the rational expectations solution bo th para metric and nonparametric tests lead us to reject the null hypothesis of convergent expectations copyright 1987 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

intertemporal dimensions of international economic adjustment evidence from the franco prussian war indemnity few topics in international economics have generated the intense and persistent interest that surrounds analysis of the transfer problem in large part this reflects continuing fascination with the political and economic consequences of the victorious allies attempts to extract war reparations from germany after the first world war for economists interest in this episode is surely increased by the clear analytical parallel between international transfer payments and other payments obligations and in particular international debt service see e g arminio fraga 1986 more generally the economics of effecting an international transfer are immediately relevant for a broad range of questions in international economics including in particular the economics of devaluation and by extension the economics of alternative exchange rate regimes careful study of the macroeconomic consequences of episodes in which transfers were made would therefore provide important evidence on a much wider variety of issues than war reparations alone the problem is that few such episodes exist the world war i reparations are of little use here because transfers were not in any real sense made from germany to the allies rather the reverse the lending booms studied by frank w taussig jacob viner and others are of more use but are suspect because the lending was clearly associated with a goods market disturbance in the recipient countries there is thus an element of endogeneity in these transfers which makes it unclear whether observed economic fluctuations during the period of transfer are due to the transfer itself or to the goods market disturbance that induced the international flow of resources this paper studies some aspects of one of the few major economically exogenous international transfers in modern economic history the war indemnity that followed the franco prussian war of 1870 1871 this immense indemnity was demanded by and from an economy that was relatively unscathed by the war itself and the transfer was actually paid in this and other respects the franco prussian reparations seem to provide radically different economic and political lessons than those that have been drawn from the 1920 s 1 the focus here is on some intertemporal dimensions of international transfers these were somewhat neglected by the static theoretical discussions that eventually sorted out theoretical aspects of the keynes ohlin debate though contemporary analysis never lost sight of their importance see e g james w angell 1930

testing for rational bubbles with exogenous or endogenous fundamentals the german hyperinflation once more abstract the presence of rational price bubbles during the german hyperinflation is tested under two different structural assumptions on the money process if the money supply is constrained to be exogenous to the current inflation rate the hypothesis of no bubble can be rejected however this is no longer found to be true when a feedback rule from inflation to money creation is allowed the analysis contradicts previous results presented in the literature

the limits of monetization in valuing the environment a reply to gsottbauer et al we welcome the attention of gsottbauer logar and van den bergh thereinafter glv to our contribution however their critique misrepresents what our article was trying to do so it merits a response our article offered a framework for assessing the conditions under which one may or may not engage with processes that value nature in money terms glv argue that first we confuse monetary valuation methods with pricing policies and that most of what we have to say may be relevant for the latter but not for the former second they argue that the assessment criteria we propose are either obvious or unconvincing third they contend that the examples we give to illustrate the applicability of our criteria are not representative and finally they suggest that our concern with whether a particular monetary valuation study or pricing policy contributes to enclosures and neo liberalism is ideological an

the god of the mountain and godavarman net present value indigenous territorial rights and sacredness in a bauxite mining conflict in india abstract this article provides an environmental and institutional history of the highly politicized and contested process of setting a net present value npv for forests in india in a context of increasing conflicts over land for development conservation and indigenous rights decision making documents in the supreme court and in one specific case of a bauxite mining conflict involving vedanta in the niyamgiri hills are studied to come to conclusions about how economic valuation of forests has moved through the political process we argue that establishing npv for forests is neither conducive to conservation nor to environmental justice for the following three reasons the technical and political process of setting prices deepens and reproduces structural inequalities with negative distributive effects npv encourages economistic decision making procedures that exclude participation finally npv does not recognize or take into account cultural difference or plural values we thus conclude that economic valuation of forest products and services has not managed to save forests in india and is not an effective or viable strategy for expressing the value of forests or for environmental conservation and environmental justice activism

transferring environmental value estimates issues and alternatives abstract environmental value transfer needs to be understood in the context of scientific information use in general this provides a different perspective upon the reasons why benefit transfer in particular appears so controversial and raises concerns over the limited types of validity testing being undertaken by those supporting such applications as ecosystem services valuation another key issue which we emphasise is the unintentional challenge to standard economic theory raised by the models used to conduct value transfers existing value transfer practice reveals the need for a more inclusive approach if environmental values are to be addressed we argue that there are robust alternative means for including multiple environmental values in decision processes these cannot be dismissed out of hand and analysts should be expanding their understanding of the available approaches which include attitude and norm measures multi criteria analysis and participatory deliberative institutions

does the lucas critique apply during hyperinflation empirical evidence from four hyperinflationary episodes farmer review of economic studies 58 321 32 1991 suggests that in a model in which there are multiple rational expectations equilibria agents may find it useful to coordinate their expectations in a unique rational expectations equilibrium which is supported by a self fulfilling forecast rule having the property of being immune to the lucas critique in this paper farmer s hypothesis is tested using data from hyperinflationary episodes it is believed that those episodes are suitable for testing this hypothesis because an agent who lives in a hyperinflationary environment usually faces frequent changes in policy regime the agent may thus choose a selffulfilling forecast rule which is immune to the lucas critique as a way of hedging against unanticipated policy regime switches the empirical results show mixed evidence on farmer s hypothesis during the hyperinflationary episodes studied

on non uniqueness in rational expectations models an attempt at perspective abstract many macroeconomic models involving rational expectations give rise to an infinity of solution paths even when the models are linear in all variables some writers have suggested that this non uniqueness constitutes a serious weakness for the rational expectations hypothesis one purpose of the present paper is to argue that the non uniqueness in question is not properly attributable to the rationality hypothesis but instead is a general feature of dynamic models involving expectations it is also argued that there typically exists in a very wide class of linear rational expectations models a single solution that excludes bubble or bootstrap effects one that occur only because they are arbitrarily expected to occur a systematic procedure for obtaining solutions free from such effects is introduced and discussed in addition this procedure is used to interpret and reconsider several prominent examples with solution multiplicities including ones developed by fischer black and john b taylor

the german hyperinflation and the demand for money revisited this paper shows that a remarkably well defined demand for real balances exists for the german hyperinflation episode including the final months which have previously been considered as outliers the authors econometric analysis exploits the theory of cointegration given the obvious nonstationarity of the data further they consider two likely sources of misspecification income variability and the necessity to distinguish between the high inflation and hyperinflation episodes copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

cointegration and cagan s model of hyperinflation under rational expectations when money and prices are integrated of order two philip cagan s 1956 model of hyperinflation will give rise to two different levels of cointegration in most of the literature on the german hyperinflation one of these cointegrating relationships has been ruled out a priori by assuming that velocity shocks follow a random walk using data from the german hyperinflation the author finds this assumption to be unjustified based on a straightforward extension of the cointegrated var approach suggested by john y campbell and robert j shiller 1987 a method to evaluate the cagan model under rational expectations and no bubbles is proposed and implemented to the german data copyright 1993 by ohio state university press

employment in the british coal industry a test of the labour demand model the authors test the conventional model of labor demand against the alternative that bargaining takes place over both wages and employme nt for a time series cross section data set covering the british coal industry they note the difficulty of identifying the contract curve under the alternative hypothesis and suggest the use of variables affecting the union and management status quo points as instruments for the endogenous wage they find that outside variables such as benefits and manufacturing wages are important in determining the level of employment thus rejecting the labor demand model copyright 1988 by royal economic society

resistance to mining a review abstract this academic review of more than 200 articles books and reports sheds light to why and how do communities resist mining and how do their forms of resistance change over time the literature reveals that local communities react not only to perceived environmental impacts but also to their lack of representation and participation in decisions concerning their development path lack of monetary compensation and distrust with the mining company and the state several authors explore the objectives and discourses of these movements that range from compensation and market embedded demands to the articulation of post material values and the emergence of socio ecological alternatives cross scalar alliances have emerged as a crucial factor in the formation of discourses and strategies local narratives and alternatives are being combined with global discourses on rights to clean water to take decisions indigenous rights and environmental justice cross scalar alliances have also allowed local groups to increase their knowledge about the projects give them visibility and comprehend and act against their weak position in the global commodity chain these alliances have also contributed to the emergence or consolidation of a diverse set of resistance strategies such as legal court cases activist scientist collaborations and local referendums or consultas at community level to reject mining projects this review also explores the response of the state and the mining companies to these conflicts exploring responses such as regulatory changes or corporate social responsibility programs

aggregation and deliberation in valuing environmental public goods starting from a distinction between kantian principle based and utilitarian preference based approaches in political theory this essay argues that we may understand normative judgments individuals make about policy to express principled views of the public interest or purpose not private preferences about their own consumption opportunities these judgments in other words state opinions about what we ought to do as a society rather than report preferences about what i want as a utility maximizer this essay then argues that contingent valuation can take into account these kinds of judgments which dominate public discourse about the environment only if it moves toward a deliberative discursive jury like research method emphasizing informed discussion leading toward a consensus based on an argument about the public interest

india s biophysical economy 1961 2008 sustainability in a national and global context india s economic growth in the last decade has raised several concerns in terms of its present and future resource demands for materials and energy while per capita resource consumption is still extremely modest but on the rise its sheer population qualifies india as a fast growing giant with material and energy throughput that is growing rapidly if such national and local trends continue the challenges for regional national as well as global sustainability are immense in terms of future resource availability social conflicts pressure on land and ecosystems and atmospheric emissions using the concepts of social metabolism and material flow analysis this paper presents an original study quantifying resource use trajectories for india from 1961 up to 2008 we argue for india s need to grow in order to be able to provide a reasonable material standard of living for its vast population to this end the challenge is in avoiding the precarious path so far followed by industrialised countries in europe and asia but to opt for a regime shift towards sustainability in terms of resource use by building on a host of promising examples and taking opportunities of existing niches to make india a trendsetter

the lucas critique policy invariance and multiple equilibria the lucas critique of econometric policy evaluation argues that the parameters of econometric models are subject to theoretical cross equation restrictions which follow from the fact that the endogenous variables of the models are chosen optimally by forward looking agents in this paper i argue that these facts alone are insufficient to generate such restrictions i present an example of a model in which there exist multiple stationary rational expectations equilibria one of which is supported by a process invariant forecast rule immunity to the lucas critique is proposed as a selection criterion in models with multiple equilibria

the tragedy of bird scaring abstract this paper examines crop raids by birds in semi arid kenya highlighting the importance of bird scaring as a barrier to the greater adoption of drought resilient high value traditional crops hvtcs in the region using survey data from tharaka nithi county we find 100 of millet and sorghum farmers in the study area scare birds from their plot devoting 43 66 of all labour time to this activity when these crops are grown in monocrop plots and 24 47 of labour time in plots where millet and sorghum are grown in combination with other crops this labour allocation is in stark contrast to farmers of all other crops who dedicate almost no time to bird scaring individually scaring birds from their plot farmers achieve a momentary pareto optimal perpetuating a ripple effect whereby the negative cost of birds are continuously shifted from one farmer to the next we systematically examine this cost shifting behaviour as an externality theoretically applying environmental and resource economics ere policy prescriptions for externality internalisation ere however with its focus on self interest rational actors and technological interventions falls short to present effective solutions to this so called externality farmers in the region can address crop raids by birds through collective coordinated action at this scale the negative cost of pests is deliberately distributed across all receptors leading to long term community wide social wellbeing improvements

intervention policy and mean reversion in exchange rate target zones the swedish the intervention policy of the swedish central bank is studied using daily intervention data for the late 1 980s in contrast to the first generation of target zone models we find that the interventions occur all over the exchange rate band and almost every day based on this evidence we estimate an exchange rate target zone model with intra marginal interventions the results go a long way towards explaining the well established hump shaped exchange rate distribution and lack of non linearities

the evolution of preferences why sovereign preferences may not lead to sustainable policies and what to do about it abstract the conventional economic paradigm assumes that tastes and preferences are exogenous to the economic system and that the economic problem consists of optimally satisfying those preferences tastes and preferences usually do not change rapidly and in the short term this assumption makes sense sustainability is an inherently long term problem and in the long run it does not make sense to assume tastes and preferences are fixed and given if preferences are expected to change over time and under the influence of education advertising changing cultural assumptions etc the old assumption of consumer sovereignty is not adequate different criteria of optimality are needed how preferences change how they relate to the goal of sustainability and how they can or should be actively influenced to satisfy the new criteria needs to be determined ecological economics has emphasized the three rank ordered goals of ecological sustainability fair distribution and allocative efficiency this paper examines how preferences evolve and change over time and the implications of this for developing policies that meet these three goals in democratic societies

was the money demand during the german hyperinflation time varying two versions of cagan s model are estimated to analyse whether or not the money supply was endogenous during the german hyperinflation the first version is the original version of cagan s model with rational expectations the second version which is called the alternative version builds on cagan s model by considering that the semi elasticity of the demand for money is a time varying parameter the estimation results for both models support the hypothesis that the alternative version provides a better fit to the german hyperinflation data than the original version and that the money supply was endogenous

solving estimating and testing a nonlinear stochastic equilibrium model with an example of the asset returns and inflation relationship abstract this paper describes a method for solving estimating and testing a fully specified nonlinear stochastic equilibrium model by simulation a nonlinear stochastic asset pricing model with production and money is formulated which aims to explain observed empirical relations between inflation and asset returns complete solution paths to the equilibrium model are generated through a backwards mapping method the parameters of the model are estimated by simulation taking account of the broad range of dynamics of the model and overidentifying restrictions of the model are tested by extending gmm procedures

testing the canonical model of exchange rates with unobservable fundamentals in this paper the authors test the asset market approach or canonical model of exchange rates they treat exchange rate fundamentals as unobservable the empirical results do not reject the canonical model and therefore the embedded rational expectations assumption in sharp contrast with previous empirical evidence the authors also find evidence of feedback from the exchange rate to fundamentals which is normally omitted in the theoretical literature copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association