stock market development and low carbon economy the role of innovation and renewable energy abstract we examine the effect of stock market development smd on the low carbon economy lce we consider two channels renewable energy and technological innovation by which this affect occurs we use the cross sectional autoregressive distributed lags cs ardl approach to analyse panel time series data over the period 1980 2016 for european union member countries we demonstrate that smd impedes lce in the long run in contrast technological innovation ti is found to be a driving factor in achieving lce in the long run our results also support the argument that renewable energy consumption and production enhance lce stock market development fosters lce through the channels of renewable energy and technological innovation overall results are robust to the conditions of short and long run homogeneity and the cross sectional dependence in the sample our results pose important policy implications

co2 emissions energy consumption and economic growth in bric countries abstract this paper examines dynamic causal relationships between pollutant emissions energy consumption and output for a panel of bric countries over the period 1971 2005 except for russia 1990 2005 in long run equilibrium energy consumption has a positive and statistically significant impact on emissions while real output exhibits the inverted u shape pattern associated with the environmental kuznets curve ekc hypothesis with the threshold income of 5 393 in logarithms in the short term changes in emissions are driven mostly by the error correction term and short term energy consumption shocks as opposed to short term output shocks for each country short term deviations from the long term equilibrium take from 0 770 years russia to 5 848 years brazil to correct the panel causality results indicate there are energy consumption emissions bidirectional strong causality and energy consumption output bidirectional long run causality along with unidirectional both strong and short run causalities from emissions and energy consumption respectively to output overall in order to reduce emissions and not to adversely affect economic growth increasing both energy supply investment and energy efficiency and stepping up energy conservation policies to reduce unnecessary wastage of energy can be initiated for energy dependent bric countries

is trade good or bad for the environment sorting out the causality we seek to contribute to the debate over globalization and the environment by asking what is the effect of trade on a country s environment for a given level of gdp we take specific account of the endogeneity of trade using exogenous geographic determinants of trade as instrumental variables we find that trade tends to reduce three measures of air pollution statistical significance is high for concentrations of so2 moderate for no2 and lacking for particulate matter although results for other environmental measures are not as encouraging there is little evidence that trade has a detrimental effect on the environment

financial development and environmental quality in uae cointegration with structural breaks abstract this study extends the recent work of shahbaz et al 2014 by implementing recent unit root tests with multiple structural breaks and regime switching cointegration techniques considering for one and two unknown regime shifts to investigate the relationship between carbon dioxide emissions electricity consumption economic growth financial development trade openness and urbanization for the uae over the period spanning from 1975 to 2011 our results confirm the existence of environmental kuznets curve ekc moreover we find an inverted u shaped relationship between financial development and co2 emissions we also find that electricity consumption urbanization and trade openness contribute to improve environmental quality

the toxic intensity of industrial production global patterns trends and trade policy this paper exploits a newly developed data set to investigate recent changes in the international distribution of industrial pollution in particular the authors examine three issues 1 the relationship between the toxic intensity of industrial production and the level of economic development 2 the impact of oecd environmental regulation on global changes in toxic intensity and 3 the relationship between trade policy and the toxic intensity of industrial production in ldc s 10 refs

determinants of emissions growth in oecd countries abstract this paper analyses the sources of growth in energy related greenhouse gas emissions for oecd countries over the period 1982 1997 it employs a decomposition formula that separates out the effects of changes in population economic growth energy intensity of output in aggregate and by sector primary energy use in final energy consumption the share of fossil fuels and the carbon intensity of fossil fuel combustion it is shown that in general growth in emissions depends on how effectively energy use can be changed to offset the effects of economic growth across the oecd as a whole growth in emissions has been mainly due to economic growth both gdp per capita and population growth as well as an increase in primary energy required for final energy consumption offset by falling energy intensities and a declining share of fossil fuels overall the large fall in the energy intensity of oecd economies over 1982 1997 has been driven primarily by falling energy intensities in the services and industry sectors of the usa and the services sector of the european union but these have been offset somewhat by rising energy intensity of services in japan the influence of falling energy intensities and the declining share of fossil fuels weakened in the five year period 1992 1997 resulting in faster emissions growth there were sharp difference between countries with population growth and worsening fuel mix playing a much stronger role in the usa compared to the eu and japan but with the us making much larger reductions in energy use per unit of gdp the analysis suggests that opportunities to reduce emissions are more limited in germany the uk and japan with more opportunities in the usa canada the netherlands and australia

economic development and co2 emissions a nonparametric panel approach we examine the empirical relation between co2 emissions per capita and gdp per capita during the period 1960 1996 using a panel of 100 countries relying on the nonparametric poolability test of baltagi et al baltagi b h hidalgo j li q 1996 a nonparametric test for poolability using panel data journal of econometrics 75 345 367 we find evidence of structural stability of the relationship we then specify a nonparametric panel data model with country specific effects estimation results show that this relationship is upward sloping nonparametric specification tests do not reject monotonicity but do reject the polynomial functional form which leads to the environmental kuznets curve in several studies

environmental kuznets curves real progress or passing the buck abstract recent research has examined the hypothesis of an environmental kuznets curve ekc the notion that environmental impact increases in the early stages of development followed by declines in the later stages these studies have focused on the relationship between per capita income and a variety of environmental indicators results imply that ekcs may exist for a number of cases however the measures of environmental impact used generally focus on production processes and reflect environmental impacts that are local in nature and for which abatement is relatively inexpensive in terms of monetary costs and or lifestyle changes significantly more consumption based measures such co2 emissions and municipal waste for which impacts are relatively easy to externalize or costly to control show no tendency to decline with increasing per capita income by considering consumption and trade patterns the author re examines the concept of the ekc and proposes the use of alternative consumption based measures of environmental impact the author speculates that what appear to be improvements in environmental quality may in reality be indicators of increased ability of consumers in wealthy nations to distance themselves from the environmental degradation associated with their consumption

does financial development increase energy consumption the role of industrialization and urbanization in tunisia this paper assesses the relationship among energy consumption financial development economic growth industrialization and urbanization in tunisia from 1971 to 2008 the autoregressive distributed lag bounds testing approach to cointegration and granger causality tests is employed for the analysis the result confirms the existence of long run relationship among energy consumption economic growth financial development industrialization and urbanization in tunisia long run bidirectional causalities are found between financial development and energy consumption financial development and industrialization and industrialization and energy consumption hence sound and developed financial system that can attract investors boost the stock market and improve the efficiency of economic activities should be encouraged in the country nevertheless promoting industrialization and urbanization can never be left out from the process of development we add light to policy makers with the role of financial development industrialization and urbanization in the process of economic development

economic growth co2 emissions and energy consumption what causes what and where abstract this paper applies panel vector autoregression pvar along with a system generalized method of moment system gmm to examine the dynamic causal relationship between economic growth carbon emissions and energy consumption for 116 countries over the period 1990 2014 using multivariate model the empirical results from this study have established key relationships which have important policy implications first at the global and regional levels economic growth does not cause energy consumption second with the exception of the global and caribbean latin america economic growth has no causal impact on carbon emissions however economic growth has a negative impact on carbon emissions at the global level and the caribbean latin america third carbon emissions positively cause economic growth fourth energy consumption positively causes economic growth in sub saharan africa while it negatively causes economic growth at the global middle east and north africa mena asia pacific and caribbean latin america fifth energy consumption positively causes carbon emissions in mena but causes carbon emissions negatively in sub saharan africa and caribbean latin america lastly with the exception of mena and the global sample carbon emissions do not cause energy consumption the impulse response function shows evidence of environmental kuznets curve at the global scale and sub saharan africa the policy implications of this paper are discussed

money bonds and foreign exchange in the theory of finance capital markets provide securities which allow the ownership of productive assets to be allocated among investors according to their willingness to bear risk in exchange for return and independently of their tastes for the productive services provided by the assets this paper uses the theory of finance to study the role of money as a productive asset and the transformation of money into a portfolio asset true to its purpose the capital market provides securities nominal bonds that allow an allocation of the current services of the money supply according to its current productivity and without regard for its future purchasing power risk and an allocation of the future purchasing power risk of the money supply according to the willingness of investors to bear this risk in exchange for return and without regard for investor needs for the future transactions services of money in open

stoking the fires co2 emissions and economic growth abstract we examine the relationship between economic development and carbon dioxide emissions a greenhouse gas central to global warming predictions estimates derived from global panel data suggest a diminishing marginal propensity to emit mpe carbon dioxide as gdp per capita rises despite this global carbon dioxide emissions growth will continue at 1 8 percent per annum for the foreseeable future a result that is not sensitive to average output growth instead emissions growth continues because output and population will grow most rapidly in lower income nations with high mpes this latter feature emphasizes the distributional consequences of policies to reduce emissions

explaining the absence of international factor price convergence abstract as capital markets have become integrated factor prices have not converged as expected this paper provides an explanation the key observation is that non specific output risks are borne by capital making international portfolio diversification a dominant strategy capital market integration can elicit many patterns of factor price response under this circumstance factor prices will move in parallel if countries are identical when countries differ factor prices may diverge or even have their relative sizes reversed the integration of capital markets affects welfare through changes in risk and in overall returns to savings welfare need not improve

bounded rationality and market fluctuations abstract in a model of a competitive market each firm in each period faces a planning problem caused by random changes in circumstances due to bounded rationality a firm is unable to compute costlessly and exactly its optimal output instead the firm approximates optimal output through a decision making process called a deliberation technology this technology involves a rule of thumb a costly deliberation mechanism and a random deliberation error the issue addressed by the model is how bounded rationality affects market fluctuations the first glance intuition is that fluctuations will increase since deliberation error is an added disturbance to the market however the actual effect is much more complicated and might go either way

expectation calculation and macroeconomic dynamics the authors establish a framework wherein agents make expectation revision decisions subject to a specified calculation technology and preferences over forecast errors the technology endows agents with correctly specified economic models but the cost of expectation calculation using these models leads to gradual and incomplete adjustment to long run rational expectation equilibrium the rational expectations hypothesis emerges as a special case of the equilibrium paths obtained in the authors framework in a natural rate model of monetary policy calculation technology gives rise to long run nonneutrality and hysteresis effects and incomplete adjustment of forecast rules causes output fluctuations to be amplified copyright 1992 by american economic association

financial development and energy consumption in central and eastern european frontier economies this study examines the impact of financial development on energy consumption in a sample of 9 central and eastern european frontier economies several different measures of financial development are examined including bank related variables and stock market variables the empirical results obtained from dynamic panel demand models show a positive and statistically significant relationship between financial development and energy consumption when financial development is measured using banking variables like deposit money bank assets to gdp financial system deposits to gdp or liquid liabilities to gdp of the three stock market variables investigated only one stock market turnover has a positive and statistically significant impact on energy consumption both short run and long run elasticities are presented the implications of these results for energy policy are discussed

do economic financial and institutional developments matter for environmental degradation evidence from transitional economies abstract several studies have examined the relationship between environmental degradation and economic growth however most of them did not take into account financial developments and institutional quality moreover stern stern d 2004 the rise and fall of the environmental kuznets curve world development 32 8 1419 1439 noted that there are important econometric weaknesses in the earlier studies such as endogeneity heteroscedasticity omitted variables etc the purpose of this paper is to fill this gap in the literature by investigating the linkage between not only economic development and environmental quality but also financial development and institutional quality we employ the standard reduced form modelling approach to control for country specific unobserved heterogeneity and gmm estimation to control for endogeneity our study considers 24 transition economies and panel data for 1993 2004 our results support the ekc hypothesis while confirming the importance of both institutional quality and financial development for environmental performance we also found that financial liberalization may be harmful for environmental quality if it is not accomplished in a strong institutional framework

imperfectly rational choice rationality as the result of a costly activity abstract in identifying characteristics of people and of their choices that determine their degree of rationality the nature and incidence of imperfect rationality this paper suggests that there are often observable criteria by which to judge the applicability of the rational choice model to a particular market or choice situation clearer understanding will cut both ways bringing more of non economic behavior into the productive domain of rational choice analysis while at the same time showing economic and non economic behavior that is badly modeled by the assumption of rational decision makers

does financial development mitigate carbon emissions evidence from heterogeneous financial economies abstract in this paper we investigate the impact of financial market development on carbon emission intensity taking into account the various stages of financial development among countries utilising the instrumental variable generalised method of moment approach and a comprehensive panel dataset of a total of 83 countries over the period 1980 2015 we show that the overall financial market development and its sub measures such as financial market depth and efficiency reduce carbon emission intensity in the developed and emerging financial economies however an opposing effect is found in the frontier financial economies for standalone financial economies the results show that the overall financial market development and its sub indicators have no direct impact on carbon emission intensity finally the non linear and the moderating effects of financial market development on carbon emission intensity differ across countries at different stages of financial development the policy implications are also discussed

co2 emissions and financial development in an emerging economy an augmented var approach abstract this paper explores the influence of economic and financial development on carbon emissions in a small emerging economy the study employs ardl approach to investigate the long run relationship between carbon emissions and a set of economic and financial variables an error correction model ecm to capture the short run dynamics granger causality in an augmented var framework to check the causality direction and variance decomposition based on an estimated vector error correction model vecm to determine the relative contributions of economic and financial variables to the evolution of per capita carbon emissions the periods considered were the full sample 1971 2011 and a reduced sample sub period 1988 2011 that corresponded to greater liberalization and financial sector development the financial variables played a role in emission mitigation only in the latter period where greater degree of liberalization and financial sector development occurred even then the relative magnitude of emissions mitigation attributable to financial variables was much smaller compared to the emissions raising impact of rising per capita incomes this underscores the need for adopting other mitigation policies for reducing carbon footprints in those emerging economies where a sufficient degree of financial deepening and financial sector development has not yet taken place

the currency denomination of long term debt in the canadian corporate sector an empirical analysis abstract a portfolio model explaining the allocation of long term debt between canadian dollar and us dollar denominated bonds is proposed and implemented the role of anticipated exchange rate changes and the specification of the adjustment process is emphasized the empirical results are consistent with the hypothesis that corporations alter their pattern of debt outstanding to issue more liabilities with the lower expected service cost these results are consistent with imperfect substitutability between canadian and us dollar denominated long term bonds the results also indicate significant difficulties inherent in estimating portfolio models of the issue of corporate bonds

the impact of growth energy and financial development on the environment in china a cointegration analysis this article aims to investigate the impact of financial development economic growth and energy consumption on environmental pollution in china from 1953 to 2006 using the autoregressive distributed lag ardl bounds testing procedure the main objective is to examine the long run equilibrium relationship between financial development and environmental pollution the results of the analysis reveal a negative sign for the coefficient of financial development suggesting that financial development in china has not taken place at the expense of environmental pollution on the contrary it is found that financial development has led to a decrease in environmental pollution it is concluded that carbon emissions are mainly determined by income energy consumption and trade openness in the long run moreover the findings confirm the existence of an environmental kuznets curve in the case of china

financial development environmental quality trade and economic growth what causes what in mena countries this paper examines the relationship between financial development co2 emissions trade and economic growth using simultaneous equation panel data models for a panel of 12 mena countries over the period 1990 2011 our results indicate that there is evidence of bidirectional causality between co2 emissions and economic growth economic growth and trade openness are interrelated i e bidirectional causality feedback hypothesis is validated between trade openness and financial development neutrality hypothesis is identified between co2 emissions and financial development unidirectional causality running from financial development to economic growth and from trade openness to co2 emissions is identified our empirical results also verified the existence of environmental kuznets curve these empirical insights are of particular interest to policymakers as they help build sound economic policies to sustain economic development and to improve the environmental quality

environment and development theory and international evidence the environmental effects of economic development have significant implications for a wide array of policy questions facing both low and high income countries today internationally agricultural research centers are considering how to incorporate sustainability issues into their research agendas while international lending institutions are taking a close look at the environmental consequences of industrial projects domestically the north american free trade agreement has brought the relationship between economic development and environmental quality to the forefront of u s public policy debate it is surprising that despite the postwar growth of development economics the genesis of environmental economics and the fusion of ideas from both fields into the theme of sustainable development economists have not made much progress in describing the impacts of long term economic growth on environmental quality yet a vigorous public debate has arisen between individuals who maintain that environmental degradation is a necessary outcome of economic growth and those who believe that economic growth and environmental quality go hand in hand this debate was highlighted at the 1992 united nations conference on environment and development in rio de janeiro in part this debate hinges on the properties of the aggregate demand for and supply of environmental quality if the income elasticity of demand for environmental quality or amenities is high then the increased prosperity engendered by economic growth could lead to significantly higher demand for environmental quality proponents of economic growth believe this demand will translate into a higher realized level of quality as both public and private institutions and organi

home bias in open economy financial macroeconomics standard theory would predict that investors hold a well diversified portfolio of equities across the world but despite the process of financial globalization investors still hold a disproportionate share of local equities in their portfolio the equity home bias french and poterba 1991 we review the various explanations of this puzzling phenomenon in the context of recent developments in macroeconomic modelling that have allowed to incorporate sophisticated international portfolio choices in standard two country general equilibrium models we refer to this literature as open economy financial macroeconomics we focus on three broad classes of explanations i hedging motives in frictionless financial markets real exchange rate and non tradable income risk ii asset trade costs in international financial markets such as transaction costs differences in tax treatments between national and foreign assets iii informational frictions and behavioural biases these recent developments raise the need for new portfolio facts beyond the equity home bias and we will present some new evidence on cross border asset holdings across different types of assets equities bonds and bank lending we also present some new micro data on institutional holdings of equity at the fund level these data should inform macroeconomic modelling of the open economy and a growing literature of models of delegated investment

optimal currency diversification for a class of risk averse international investors abstract in the framework of continuous time finance theory this paper derives the dynamic optimal consumption and portfolio rules for a risk averse international investor who consumes in fixed proportions goods produced in n different countries and holds the respective n currencies restricting the processes generating n currency prices and exchange rates to follow brownian motion optimal portfolios of eight major currencies are presented showing substantial departures from the expenditure shares and from purchasing power parity thus even under infinite risk aversion investors consuming only one good would hold a diversified currency portfolio

a near rational model of the business cycle with wage and price inertia this paper presents a model in which insignificantly suboptimal behavior causes aggregate demand shocks to have significant real effects the individual loss to agents with inertial price wage behavior is second order in terms of the parameter describing the shock while the effect on real economic variables is first order thus significant changes in business activity can be generated by anticipated money supply changes provided that some agents are willing to engage in nonmaximizing behavior which results in small losses

international asset pricing with time varying risk premia abstract recent empirical evidence that forward exchange rates are biased predictors of future spot rates can also be interpreted as evidence against the hypothesis of a constant risk premium consequently reconciliation of this evidence with efficient international capital markets requires the existence of time varying risk premia this paper modifies kouri s 1977 asset pricing model to allow time varying exected returns on assets eliminates the assumption of a risk free real asset and derives the characteristics of the risk premia in the forward market as well as the equilibrium yield relationships among the equities and riskless nominal bonds of all countries

the effect of urbanization on co2 emissions in emerging economies the theories of ecological modernization and urban environmental transition both recognize that urbanization can have positive and negative impacts on the natural environment with the net effect being hard to determine a priori this study uses recently developed panel regression techniques that allow for heterogeneous slope coefficients and cross section dependence to model the impact that urbanization has on co2 emissions for a panel of emerging economies the estimated contemporaneous coefficients on the energy intensity and affluence variables are positive statistically significant and fairly similar across different estimation techniques by comparison the estimated contemporaneous coefficient on the urbanization variable is sensitive to the estimation technique in most specifications the estimated coefficient on the urbanization variable is positive but statistically insignificant the implications of these results for sustainable development policy are discussed

costly optimization an experiment abstract an experimental technique is developed and used to examine how human subjects make choices when optimization is costly the total cost of making a choice is defined to include two parts 1 the direct cost of making the decision and 2 the indirect cost of making a choice that is not best among the available alternatives the total cost of choice for subjects in the experimental economy ranged from 15 to 42 percent of the economy s resources the hypothesis that agents are rational on average was strongly rejected while the hypothesis that agents are rational in the long run fared better

rewards experience and decision costs in first price auctions consistent with a model of asymmetric risk aversion subjects in first price auctions consistently bid above the risk neutral nash prediction it has been argued that this is due to low opportunity cost of deviating from the risk neutral bid we increase opportunity cost and payoff levels by factors of 0 1 5 10 and 20 from the normal levels generating payoffs up to 250 for risk neutral subjects and observe an insignificant increase in the slope of individual bid functions the rmse of bids declines significantly this is consistent with a reward decision cost model of bidding behavior

monetary rewards and decision cost in experimental economics a survey of thirty one experimental studies which report data on the comparative effects of monetary rewards and opportunity cost shows 1 several studies in which increased rewards shift the central tendency of the data toward the predictions of rational models 2 in virtually all cases rewards reduce the variance of the data around the predicted outcome this is consistent with a model in which rewards are balanced against decision cost in agent behavior and explicates the argument that when rational models fail it can be attributed to low opportunity cost of deviations from the rational prediction

non exclusive conventions and social coordination we study the long run outcome when communities with different conventions interact we introduce the notion of non exclusive conventions to model the idea that by incurring some additional costs agents can remain flexible and hence coordinate their activities more successfully we show that if these costs of flexibility are low high and interaction is local then the pareto efficient risk dominant convention prevails in both communities at intermediate cost levels the conventions coexist we also show that the importance of relative size of the two communities varies across interaction structures journal of economic literature classification

co2 gdp and ret an aggregate economic equilibrium analysis for turkey there is a worldwide interest in renewable electricity technologies rets due to growing concerns about global warming and climate change as an eu candidate country whose energy demand increases exponentially turkey inevitably shares this common interest on ret this study using an aggregate economic equilibrium model explores the economic costs of different policy measures to mitigate co2 emissions in turkey the model combines energy demands capital requirements and labor inputs at a constant elasticity of substitution under an economy wide nested production function growing energy demand triggered by economic growth is met by increased supply and initiates new capacity additions investment into ret is encouraged via the incorporation of a endogenous technological learning through which the ret cost declines as a function of cumulative capacity and b a willingness to pay wtp function which imposes the wtp of consumers as a lower bound on ret installation the wtp equation is obtained as a function of consumer income categories based on data gathered from a pilot survey in which the contingent valuation methodology was employed the impacts of various emission reduction scenarios on gdp growth and ret diffusion are explored as expected ret penetration is accelerated under faster technological learning and higher wtp conditions it is found that stabilizing co2 emissions to year 2005 levels causes economic losses amounting to 17 and 23 of gdp in the years 2020 and 2030 respectively

economic growth trade and energy implications for the environmental kuznets curve abstract the environmental kuznets curve ekc hypothesis asserts that pollution follows an inverted u path with respect to economic growth the ekc has been explained in terms of structural changes in the composition of economic output and increased environmental regulation at higher income levels while some authors have incorporated the impact of trade policy orientation on the ekc the impact of the actual movement between countries of goods that embody pollution has not been considered this paper attempts to econometrically quantify the effect using pooled cross country and time series data the ekc hypothesis is examined with respect to commercial energy consumption the source of many serious environmental problems it was found that while both industrializing and industrialized countries have added to their energy requirements by exporting manufactured goods the growth has been substantially higher in the former at the same time industrialized countries have been able to reduce their energy requirements by importing manufactured goods exports of manufactured goods by industrialized countries has thus been an important factor in generating the upward sloping portion of the ekc and imports by industrialized countries have contributed to the downward slope

does the private sector help or hurt the environment evidence from carbon dioxide pollution in developing countries abstract how does the nature of enterprise ownership affect the environment in an economy conventional wisdom and theoretical conjectures are split on this important question in this paper we estimate a reduced form random effects model using data from 44 developing countries over nine years 1987 95 to study for any systematic empirical relationship between the relative level of private sector involvement in an economy and the environmental performance of the economy in terms of its emission of industrial carbon dioxide we control for both observed and unobserved crosscountry heterogeneity along various institutional and structural dimensions such as the scope of financial market industrial sector composition and level of foreign direct investment the regression results indicate that the higher the degree of private sector involvement in a developing economy the lower is its environmental degradation in addition its environmental degradation is likely to be further reduced in presence of a well functioning domestic capital market and through increased participation by developed economies in its private sector development

disclosure of environmental violations and the stock market in the republic of korea for almost 20 years the ministry of environment of the republic of korea has published on a monthly basis a list of enterprises that fail to comply with national environmental laws and regulations in this paper the authors examine the reaction of investors to the publication of these lists and show that enterprises appearing on these lists have experienced a significant decline in their market valuation firms in developing countries are often said to have no incentives to invest in pollution control because they typically face weak monitoring and enforcement of environmental regulations the findings of the authors however indicate that the inability of formal institutions to control pollution through fines and penalties may not be as serious an impediment to pollution control as is generally argued environmental regulators in developing countries could harness market forces by introducing structured programs to release firm specific information about environmental performance

a new database on the structure and development of the financial sector this article introduces a new database of indicators of financial structure and financial development across countries and over time the database is unique in that it combines a wide variety of indicators that measure the size activity and efficiency of financial intermediaries and markets it improves on previous efforts by presenting data on the public share of commercial banks introducing indicators of the size and activity of nonbank financial institutions and constructing measures of the size of bond and primary equity markets this article introduces a new database the first to provide comprehensive measures of the development structure and performance of the financial sector this database is the first to define and construct indicators of the size and activity of nonbank financial intermediaries such as insurance companies pension funds and non deposit money banks it is also the first to include indicators of the size of primary equity markets and primary and secondary bond markets in constructing the database authors carefully deflate measures and match stock and flow variables

does urbanization lead to less energy use and lower co2 emissions a cross country analysis despite the relationship between urbanization energy use and co2 emissions has been extensively studied in recent years little attention has been paid to differences in development stages or income levels most previous studies have implicitly assumed that the impact of urbanization is homogenous for all countries this assumption can be questionable as there are many characteristic differences among countries of different levels of affluence this paper investigates empirically the effects of urbanization on energy use and co2 emissions with consideration of the different development stages using the stochastic impacts by regression on population affluence and technology stirpat model and a balanced panel dataset of 99 countries over the period 1975 2005 the findings suggest that the impact of urbanization on energy use and emissions varies across the stages of development surprisingly urbanization decreases energy use in the low income group while it increases energy use in the middle and high income groups the impact of urbanization on emissions is positive for all the income groups but it is more pronounced in the middle income group than in the other income groups these novel findings not only help advance the existing literature but also can be of special interest to policy makers and urban planners

environmental kuznets curve and financial development in pakistan abstract in this study we analyzed the effects of financial development per capita real income the square of per capita real income per capita energy consumption and openness on per capita co 2 emissions for pakistan during 1972 2013 the bound f test for cointegration yielded evidence of a long term relationship among these variables the results confirm the existence of an environmental kuznets curve in pakistan for both the short and long term this finding indicates that at the initial stage of development the level of co 2 increases with income and after some threshold level of income this relationship may change from positive to negative as more efficient infrastructure and energy efficient technology are implemented during the development process of the country the findings of this study also reveal a significantly positive sign for the coefficient of financial development suggesting that financial development has occurred at the expense of environmental quality the results further indicate that the key contributing factors to carbon emissions in pakistan are income energy consumption and financial development in addition the openness variable has no significant influence on carbon emission in either the short or long term

industrial ownership and environmental performance evidence from china the authors explore the differences in pollution control performance of industries with different types of ownership in china state owned soe collectively or community owned coe privately owned poe companies with foreign direct investment fdi and joint ventures about 1 000 industrial firms in three provinces of china were surveyed and detailed 1999 firm level information was obtained the authors analyzed the differences between firms in receiving and reacting to environmental regulatory enforcement community pressure environmental services as well as in the firm s internal environmental management among the different types of ownership the authors also conducted econometric analyses on the determinants of pollution discharge performance the results show that foreign direct investment and collectively owned enterprises have better environmental performances in terms of water pollution discharge intensity while state owned enterprises and privately owned enterprises in china are the worst performers the results also suggest that collectively owned enterprises in china do internalize environmental externalities

the impact of environmental management on firm performance environmental management has the potential to play a pivotal role in the financial performance of the firm many individuals suggest that profitability is hurt by the higher production costs of environmental management initiatives while others cite anecdotal evidence of increased profitability a theoretical model is proposed that links strong environmental management to improved perceived future financial performance as measured by stock market performance the linkage to firm performance is tested empirically using financial event methodology and archival data of firm level environmental and financial performance significant positive returns were measured for strong environmental management as indicated by environmental performance awards and significant negative returns were measured for weak environmental management as indicated by environmental crises the implicit financial market valuation of these events also was estimated cross sectional analysis of the environmental award events revealed differences for first time awards and between industries first time award announcements were associated with greater increases in market valuation although smaller increases were observed for firms in environmentally dirty industries possibly indicative of market skepticism this linkage between environmental management and financial performance can be used by both researchers and practitioners as one measure of the benefits experienced by industry leaders and as one criterion against which to measure investment alternatives

international capital flows abstract the surge in international asset trade since the early 1990s has lead to renewed interest in models with international portfolio choice we develop the implications of portfolio choice for both gross and net international capital flows in the context of a simple two country dynamic stochastic general equilibrium dsge model we focus on the time variation in portfolio allocation following shocks and resulting capital flows endogenous time variation in expected returns and risk which are the key determinants of portfolio choice affect capital flows in often subtle ways the model is consistent with a broad range of empirical evidence an additional contribution of the paper is to overcome the technical difficulty of solving dsge models with portfolio choice by developing a broadly applicable solution method

capital market liberalization economic growth and instability summary this paper reviews briefly the arguments for capital market liberalization and identifies their theoretical and empirical weaknesses this provides the foundations for the argument for intervention in short term capital flows the paper concludes with a brief discussion of the various ways in which such interventions may be implemented 2000 elsevier science ltd all rights reserved

environmental degradation in france the effects of fdi financial development and energy innovations abstract this paper explores the determinants of carbon emissions in france by accounting for the significant role played by foreign direct investment fdi financial development economic growth energy consumption and energy research innovations in influencing co 2 emissions function in this endeavour we employ the novel sor shahbaz et al 2017 unit root test on french time series data over the period 1955 2016 to examine the order of integration in the presence of sharp and smooth structural breaks in the variables we also apply the bootstrapping bounds testing approach recently developed by mcnown et al 2018 to investigate the presence of cointegration and the empirical findings underscore the presence of cointegration among the time series moreover we find that fdi has a positive impact while energy research innovations have a negative impact on french carbon emissions financial development lowers carbon emissions thereby improving the french environmental quality fdi degrades the environment and thus supports the pollution haven hypothesis in france similarly financial development suggests that financial stability is a required condition for improving environmental quality so are energy research innovations contrarily energy consumption is positively linked with carbon emissions however the relationship between economic growth and co 2 emissions is an inverted u which is a validation of the environmental kuznets curve ekc

rules of thumb in games abstract a steady state random matching game model is proposed in which rules of thumb which assign strategies to individual games are the units of choice for individuals costs which reflect complexity or difficulty of use are associated with the rules independently of the games in which they are employed a population equilibrium is a distribution of rules across the population of players such that no individual has an incentive to change rules given the current distribution examples illustrate the concept and existence is demonstrated

the impact of financial development on energy consumption in emerging economies abstract financial development is often cited as a very important driver of economic growth in emerging economies and it is thus likely that financial development affects energy demand this study uses generalized method of moments estimation techniques to examine the impact of financial development on energy consumption in a sample of emerging countries several different measures of financial development are examined using a panel data set on 22 emerging countries covering the period 1990 2006 the empirical results show a positive and statistically significant relationship between financial development and energy consumption when financial development is measured using stock market variables like stock market capitalization to gdp stock market value traded to gdp and stock market turnover the implications of these results for energy policy are discussed

economic growth energy and environmental kuznets curve the aim of this study is to investigate the relationship between income and carbon dioxide co2 emissions in the context of the environmental kuznets curve ekc which posits the existence of an inverted u shape relationship between environmental degradation and economic development for this purpose two empirical models are examined for both models the relationship between per capita income and per capita co2 emissions and the relationship among per capita income per capita energy use and per capita co2 emissions are analyzed respectively between 1980 and 2010 using the panel data estimation techniques with the application of driscoll kraay standard errors yet for the first model data are analyzed for 26 oecd countries with high income levels while for the second model data are examined for 52 emerging countries the results of both models show that n shape and an inverted n shape relationship for cubic functional form are observed thus the results do not support the ekc hypothesis which implies that environmental degradation cannot be solved automatically by economic growth

financial stability energy consumption and environmental quality evidence from south asian economies abstract a few studies are found on the relationship between financial instability energy consumption and environmental quality in energy economics literature the current study is an endeavor to fill this gap by investigating the relationship between financial stability economic growth energy consumption and carbon dioxide co 2 emissions in south asian countries over the period 1980 2012 using a multivariate framework bounds test for cointegration and granger causality approach are employed for the empirical analysis estimated results suggest that all variables are non stationary and cointegrated the results show that financial stability improves environmental quality while the increase in economic growth energy consumption and population density are detrimental for environment quality in the long run the results also support the environmental kuznets curve ekc hypothesis which assumes an inverted u shaped path between income and environmental quality moreover the study found the evidence of unidirectional causality running from financial stability to co 2 emissions in two countries i e pakistan and sri lanka the findings of this study open up new insight for policy makers to design a comprehensive financial economic and energy supply policies to minimize the detrimental impact of environmental pollution

does higher economic and financial development lead to environmental degradation evidence from bric countries abstract a vast number of studies addressed the environmental degradation and economic development but not financial development moreover as argued by stern 2004 the rise and fall of the environmental kuznets curve world development 32 1419 1439 they present important econometric weaknesses using standard reduced form modeling approach and controlling for country specific unobserved heterogeneity we investigate the linkage between not only economic development and environmental quality but also the financial development panel data over period 1992 2004 is used we find that both economic and financial development are determinants of the environmental quality in bric economies we show that higher degree of economic and financial development decreases the environmental degradation our analysis suggests that financial liberalization and openness are essential factors for the co 2 reduction the adoption of policies directed to financial openness and liberalization to attract higher levels of r d related foreign direct investment might reduce the environmental degradation in countries under consideration in addition the robustness check trough the inclusion of us and japan does not alter our main findings

financial development and environmental quality the way forward the present paper re examines the asymmetric impact of financial development on environmental quality in pakistan for the period 1985q1 to 2014q4 a comprehensive index of financial development is generated using bank and stock market based financial development indicators the results show that inefficient use of energy adversely affects the environmental quality this suggests adoption of energy efficient technology at both production and consumption levels these technologies would be helpful to improve environmental quality enhance the productivity in long run and save energy bank based financial development also impedes the environment the government should encourage lenders to ease the funding for energy sector and allocate financial resources for environment friendly businesses rather than wasting them in consumer financing

reducing carbon emissions the role of renewable energy and democracy abstract the global economy continues to witness a consistent increase in carbon emissions making it difficult to achieve the paris agreement on climate change to inform policies to mitigate carbon emissions it is crucial to understand the factors that influence it while there is a vast literature on the impact of economic growth on carbon emissions empirical research on the impact of democracy and renewable energy on environmental quality in developing countries remains limited therefore the goal of this paper was to examine the impact of democracy and renewable energy on carbon emissions for 46 sub saharan african countries using unbalanced data for the period of 1980 2015 using an instrumental variable generalised method of the moment the study found that democracy and renewable energy reduce carbon emissions additionally foreign direct investment trade openness population and economic growth were the forces behind carbon emissions in sub saharan africa however when democracy is accounted for economic growth turns to reduce carbon emissions no evidence of environmental kuznets curve was found the results further indicated that the impact of urbanization on carbon emissions is indeterminate these results are robust when alternative econometric estimation techniques were used the study further demonstrated that the level of economic development matters when assessing the impact of these variables on carbon emissions the study therefore recommends that democracy and investment in renewable energy should be given priority on africa agenda to mitigate climate change

r d investment strategy for climate change abstract the economic costs of stabilizing greenhouse gas concentrations over the coming century depend critically on the development of new technologies in the energy sector our research and development r d investment strategy is the control variable for technology availability this paper proposes an analytic framework for determining optimal r d investment allocation and presents some numerical results to demonstrate the implementation of the methodology the value of technological advance in three targeted areas fossil based generation renewables and carbon capture and storage is represented by the increase in expected welfare in the presence of an emissions policy constraint of initially uncertain stringency r d expenditure increases the probability of advance optimal investment is determined by its relationship with success probability which is assumed to exhibit decreasing returns to scale relative to the value of success while the numerical results are speculative the paper offers insights into the nature of an optimal technology strategy for addressing climate change

allocation of co2 emission permits economic incentives for emission reductions in developing countries the economic impacts on developing regions following a global cap and trade system for carbon dioxide are assessed through the use of an energy economy systems model both an equal per capita allocation and a contraction and convergence allocation with convergence of the per capita emissions by 2050 are shown to offer economic incentive for africa india and probably also latin america to accept binding emissions commitments under a 450 ppm carbon dioxide stabilization scenario the gain for latin america is mainly a result of increased export revenues from sales of bio fuels as a result of the climate policy it is on the other hand unlikely that these allocation approaches would offer an economic incentive for china to join the regime because of its high economic growth present higher per capita emissions than india and africa and more costly mitigation options than latin america a more stringent allocation for developing countries such as contraction with convergence of the per capita emissions by the end of this century is estimated to generate reduced net gains or increased net losses for the developing regions though africa is still expected to gain

the optimal currency composition of external debt theory and applications to mexico and brazil the changes in exchange rates interest rates and commodity prices during the past decades have had large impacts on developing countries many developing countries have limited access to already incomplete international long term hedging markets thus the question arises whether the currency composition of external debt can be used to minimize exposures to external price risk using a utility maximizing framework this article shows that by choosing the optimal currency composition a country can indeed manage its external exposure the optimal risk minimizing currency composition depends on the relation between export receipts and the costs of borrowings in each currency and on the relations among the costs of borrowings in different currencies a simple methodology can be used to derive the optimal shares of individual currencies and is applied to mexico and brazil the results show that mexico and brazil could have lowered their external exposure to a limited degree by continuously alternating the currency composition of their debts the low correlations between the costs of borrowings and export and import prices make the currency composition of debt a very imperfect hedging tool and it is likely that hedging instruments directly linked to prices are preferable

the effects of financial development economic growth coal consumption and trade openness on co2 emissions in south africa abstract this paper explores the effects of financial development economic growth coal consumption and trade openness on environmental performance using time series data over the period 1965 2008 in case of south africa the ardl bounds testing approach to cointegration has been used to test the long run relationship among the variables while short run dynamics have been investigated by applying error correction method ecm the unit root properties of the variables are examined by applying saikkonen and lutkepohl 2002 econometric theory 18 313 348 structural break unit root test our findings confirmed long run relationship among the variables results showed that a rise in economic growth increases energy emissions while financial development reduces it coal consumption has significant contribution to deteriorate environment in south african economy trade openness improves environmental quality by reducing the growth of energy pollutants our empirical results also verified the existence of environmental kuznets curve this paper opens up new insights for south african economy to sustain economic growth by controlling environment from degrdation through efficient use of energy

rational choice under an imperfect ability to choose we consider an individual who lacks the information processing capacity required for a direct comparison of all feasible allocations instead of finding at once a best allocation the individual myopically adjusts his current allocation toward higher utility the individual makes adjustment errors inversely proportional to his ability to choose we compare the stationary state of this process with the standard model we see how an imperfect ability to choose modifies both positive and normative predictions of the standard model and how the standard model can be obtained from our more general one as the special case corresponding to perfect ability jel d 11

is there an environmental kuznets curve for sulfur abstract most existing estimates of the environmental kuznets curve ekc for sulfur which use samples of mainly high income countries indicate a maximum emissions turning point at middle to lower high income levels of gdp per capita we use a larger and more globally representative sample than previous sulfur ekc studies we find that sulfur emissions per capita are a monotonic function of income per capita when we use a global sample and an inverted u shape function of income when we use a sample of high income countries a model estimated in first differences results in a monotonic ekc when estimated with both high income and global samples reductions in emissions are time related rather than income related

the origin of predictable dynamic behavior abstract nonlinear dynamic theory implies optimal decisions often behave like random chaos such random target motion is impossible for imperfect agents to follow without error however they can still gradually approach the optimal target if and only if they partially adjust toward its perceived location so as to induce their behavior to converge to an equilibrium reducing dynamic errors through partial adjustment thereby induces a stable regularity in behavior that otherwise may never evolve this result agrees with the stability properties observed in experimental markets including cobweb auction and asset markets whose dynamics before reaching equilibrium exhibit adaptive rather than rational expectations

the impact of financial development on carbon emissions an empirical analysis in china given the complexity between china s financial development and carbon emissions this paper uses some econometric techniques including cointegration theory granger causality test variance decomposition etc to explore the influence of financial development on carbon emissions results indicate that first china s financial development acts as an important driver for carbon emissions increase which should be taken into account when carbon emissions demand is projected second the influence of financial intermediation scale on carbon emissions outweighs that of other financial development indicators but its efficiency s influence appears by far weaker although it may cause the change of carbon emissions statistically third china s stock market scale has relatively larger influence on carbon emissions but the influence of its efficiency is very limited this to some extent reflects the relatively lower liquidity in china s stock markets finally among financial development indicators china s fdi exerts the least influence on the change of carbon emissions due to its relatively smaller volume compared with gdp but it is mainly utilized in carbon intensive sectors now therefore with the increase of china s fdi in the future many efforts should be made to adapt its utilizing directions and play its positive role in promoting low carbon development