inflation and reputation in many macroeconomic models with rational expectations optimal policy is time inconsistent and therefore announced policy may not be credible this paper models the government s credibility explicitly using kreps and wilson s analysis time consistent optimal government policy emerges as a sequential equilibrium in a repeated game this policy is at least as good as the inconsistent optimal policy and dominates the consistent policy when reputational effects are ignored thus the analysis resolves the problem of specifying a credible optimal policy in such models the results show why attempts to disinflate may lead to recession even with perfectly flexible prices this abstract was borrowed from another version of this item

the value of commitment in contests and tournaments when observation is costly we study the value of commitment in contests and tournaments when there are costs for the follower to observe the leader s behavior in a contest the follower can pay to observe the leader s effort but cannot observe the effectiveness of that effort in a tournament the follower can pay to observe the effectiveness of the leader s effort but not the effort itself we show that this distinction matters significantly when observation is costly the value of commitment vanishes entirely in sequential and endogenous move contests regardless of the size of the observation cost by contrast in tournaments the value of commitment is preserved completely provided that the observation costs are sufficiently small

inflation and welfare in a monetary economy it is in everyone s private interest to try to get someone else to hold non interest bearing cash and reserves but someone has to hold it all so these efforts must simply cancel out all of us spend several hours per year in this effort and employ thousands of talented and highly trained people to help us these person hours are simply thrown away wasted on a task that should not have to be performed at all

energy consumption real income and temporal causality results from a multi country study based on cointegration and error correction modelling techniques abstract unlike previous studies on the causal relationship between energy consumption and economic growth this paper illustrates how the finding of cointegration i e long term equilibrium relationship between these variables may be used in testing granger causality based on the most recent johansen s multivariate cointegration tests preceded by various unit root or non stationarity tests we test for cointegration between total energy consumption and real income of six asian economies india pakistan malaysia singapore indonesia and the philippines non rejection of cointegration between variables rules out granger non causality and imples at least one way of granger causality either unidirectional or bidirectionial secondly by using a dynamic vector error correction model we then analyse the direction of granger causation and hence the within sample granger exogeneity or endogeneity of each of the variables thirdly the relative strength of the causality is gauged through the dynamic variance decomposition technique by decomposing the total impact of an unanticipated shock to each of the variables beyond the sample period into proportions attributable to shocks in the other variables including its own in the bivariate system results based on these tools of methodology indicate that while all pair wise relationships shared common univariate integrational properties only relationships for three countries india pakistan and indonesia were cointegrated for these countries temporal causality results were mixed with unidirectional causality from energy to income for india exactly the reverse for indonesia and mutual causality for pakistan the vdcs were not inconsistent with these results and provided us with an additional insight as to the relatively more dominant direction of causation in pakistan simple bivariate vector autoregressive models for the three non cointegrated systems did not indicate any direction of causality significantly in either direction

the fragility of commitment we show that the value of commitment in many standard games is frag ile speci cally when the second mover faces a small cost to observe the rst mover s action equilibrium payos are identical to the case where observation is in nitely costly or the rst mover s actions are completely unobservable ap plications of our result include standard stackelberg cournot and dierentiated product bertrand games as well as forms of commitment highlighted in bolton and scharfstein 1990 and bulow geanakoplos and klemperer 1985

does money matter in canada evidence from a vector error correction model this paper investigates the statistical properties of a set of canadian and u s economic time series and uses the data to address the question of the importance of monetary variables in canadian business cycle fluctuations the individual time series are found to contain unit roots but the data reveal the existence of several economically meaningful cointegrating vectors a multivariate vector error correction model is estimated and canadian velocity which appears as an error correction term is significant in the canadian output equation this supports the contention that monetary variables have predictive content for real output copyright 1989 by mit press

the canadian u s exchange rate evidence from a vector autoregression a vector autoregression is used to elicit the empirical facts co ncerning exchange rate movements the author finds 1 the exchange rate relati ve price levels and trade balances are closely related 2 most other lagged v ariables have no perceptible influence in theexchange rate equation 3 exchan ge rate innovations are negativelycorrelated with innovations in output and pri ces positively with innovations in the balance of trade and almost not at all with innovations in money and 4 impulses in money trade balances and govern ment spending are followed by opposing future movements in theexchange rate and the price level taken as a whole the evidence suggests that exchange rate cha nges may be associated with real rather than monetary shocks copyright 1986 by mit press

fiscal policy and the term structure of interest rates an intertemporal optimizing analysis the effects of government expenditure on the dynamic evolution of the term structure of interest rates are analyzed in an infinite horizon intertemporal optimizing macroeconomic framework three types of disturbances are discussed unanticipated and anticipated permanent increases and a temporary decrease in the case of anticipated future and temporary disturbances the lead time in the former and the duration in the latter are critical determinants of the dynamics for a very temporary shock the short term and long term rates will diverge in the short run while most of the analysis focuses on infinitesimally short and infinitely long bonds the dynamics of the entire yield curve are also considered copyright 1992 by ohio state university press

short term and long term interest rates in a monetary model of a small open economy abstract this paper analyzes the effects of both anticipated and unanticipated monetary and fiscal disturbances on the dynamic behavior of a monetary model of a small open economy it focuses on the adjustment of the short term and long term interest rates and the divergence of their transitional paths particularly in anticipation of these disturbances the analysis demonstrates how anticipation of a future policy change can generate perverse short run behavior the essential reason for the divergence between the short and long rates is that the latter is dominated by long term expectations while the former is primarily determined by current influences

energy consumption financial development and economic growth in india new evidence from a nonlinear and asymmetric analysis this paper investigates the asymmetric relationship between energy consumption and economic growth by incorporating financial development capital and labour into a production function covering the indian economy from 1960q1 2015q4 the nonlinear autoregressive distributed lag bounds testing approach is applied to examine the asymmetric cointegration between the variables an asymmetric causality test is also employed to examine the causal association between the considered variables the results indicate cointegration between the variables in the presence of asymmetries the asymmetric causality results show that only negative shocks in energy consumption have impacts on economic growth in the same vein only negative shocks in financial development have impacts on economic growth by contrast symmetrically capital formation causes economic growth finally over the study period a neutral effect exists between the labour force and economic growth in india the implications of these results for growth policies in india are also discussed

energy use efficiency in the indian manufacturing sector an interstate analysis abstract this paper approaches the measurement of energy efficiency from a production theoretic framework and uses data envelopment analysis to measure energy efficiency in the indian manufacturing sector using data from the annual survey of industries for the years 1998 99 through 2003 04 the study compares the energy efficiency in manufacturing across states based on several models the results show considerable variation in energy efficiency across states comparing the results across our models we find that the relative pricing of energy does not provide the appropriate incentives for energy conservation a second stage regression analysis reveals that states with a larger share of manufacturing output in energy intensive industries have lower energy efficiency also higher quality labor force associates with higher energy efficiency finally the power sector reforms have not yet had any significant impact on achieving energy efficiency

the value of commitment in stackelberg games with observation costs abstract we study stackelberg games in which the follower faces a cost for observing the leader s action we show that irrespective of the size of the cost the leader s value of commitment is lost completely in all pure strategy equilibria however there also exists a mixed strategy equilibrium that fully preserves the first mover advantage in this type of equilibrium the probability that the follower looks at the leader s action is independent of the cost of looking

price dispersion in the lab and on the internet theory and evidence price dispersion is ubiquitous in settings that closely approximate textbook bertrand competition we show that only a little bounded rationality among sellers is needed to rationalize such dispersion a variety of statistical tests based on datasets from two independent laboratory experiments and structural estimates of the parameters of our models suggest that bounded rationality based theories of price dispersion organize the data remarkably well evidence is also presented to suggest that the models are consistent with data from a leading internet price comparison site

atheoretical macroeconometrics a critique abstract the spurious nature of the restrictions used to identify many macroeconometric models has led some researchers to advocate a style of econometric inquiry that is less dependent on prior theoretical restrictions of the sort that were central to the approach of the cowles commission this development which we call atheoretical macroeconometrics is summarized and evaluated in the current paper it is contrasted with an updated version of the cowles commission approach we conclude that while some of the exercises of atheoretical macroeconometrics are valid those that have attracted the most attention and appear the most innovative exogeneity testing impulse response analysis and policy analysis using estimated vector autoregressions are based on incorrect analysis

multivariate granger causality between electricity consumption exports and gdp evidence from a panel of middle eastern countries this paper examines the causal relationship between electricity consumption exports and gross domestic product gdp for a panel of middle eastern countries we find that for the panel as a whole there are statistically significant feedback effects between these variables a 1 per cent increase in electricity consumption increases gdp by 0 04 per cent a 1 per cent increase in exports increases gdp by 0 17 per cent and a 1 per cent increase in gdp generates a 0 95 per cent increase in electricity consumption the policy implications are that for the panel as a whole these countries should invest in electricity infrastructure and step up electricity conservation policies to avoid a reduction in electricity consumption adversely affecting economic growth further policy implications are that for the panel as a whole promoting exports particularly non oil exports is a means to promote economic growth and that expansion of exports can be realized without having adverse effects on energy conservation policies

monetary policy in a cash in advance economy employment capital accumulation and the term structure of interest rates in this paper we study the effects of monetary policies on employment capital accumulation consumption and the term structure of interest rates in a cash in advance economy where money is required for consumption expenditures monetary policy involves targeting the inflation rate the detailed dynamics of the model are fully worked out as no numerical analysis is involved we are able to identify very clearly the different channels through which monetary policy will impinge on the important macroeconomic variables the model is also used to discuss the great canadian

the effects of government expenditure on the term structure of interest rates most formal macroeconomic models treat all assets as being of common maturity typically this is assumed to be either extremely infinitesimally short a short term bill or infinitely long a perpetuity in reality of course there is a whole spectrum of assets in existence having varying times to maturity moreover different agents in the markets are concerned with rates of return extending over different time horizons participants in asset markets can typically adjust their portfolios virtually instantaneously so that some short run rate of return is appropriate as an argument of the relevant asset demand functions on the other hand investors in physical equipment are typically locked into some longterm financial arrangement in which case it is some long term rate that is the appropriate argument of the investment function provided that the financial markets operate efficiently arbitrage by participants in the asset markets will bring the instantaneous rates of return on assets of varying maturities into equality l in this paper we introduce both a short rate and a long rate into a simple dynamic macroeconomic model the framework we employ is the familiar blinder solow 1973 model it is shown how through arbitrage the current long rate at any point

the economic consequences of debilitating illness the case of multiple sclerosis the economic consequences of debilitating illness are defined and then estimated for one such illness multiple sclerosis economic losses are defined as the consumption losses to the affected household because of illness these losses are measured as the change in earnings of all family members plus the increase in gross not out of pocket medical costs earnings models are specified and estimated and gross medical costs calculated for multiple sclerosis the average annual loss to the multiple sclerosis household is 5 336 per year in 1976 dollars the estimated aggregate decline in consumption for the year 1976 was 0 656 billion lifetime costs discounting by 0 06 total 207 200 per multiple sclerosis household and 25 50 billion for society as a whole for the current 1976 pool of multiple sclerosis patients and 30 45 billion for all future multiple sclerosis patients copyright 1987 by mit press

energy and economic growth in the usa a multivariate approach abstract this paper examines the causal relationship between gdp and energy use for the period 1947 90 in the usa the relationship between energy use and economic growth has been examined by both biophysical and neoclassical economists in particular several studies have tested for the presence of a causal relationship in the granger sense between energy use and economic growth however these tests do not allow a direct test of the relative explanatory powers of the neoclassical and biophysical models a multivariate adaptation of the test vector autoregression var does allow such a test a var of gdp energy use capital stock and employment is estimated and granger tests for causal relationships between the variables are carried out although there is no evidence that gross energy use granger causes gdp a measure of final energy use adjusted for changing fuel composition does granger cause gdp

causality between energy consumption and output growth in the indian cement industry an application of the panel vector error correction model vecm abstract the aim of this paper is to examine the existence and direction of the causal relationship between energy consumption and output growth in the indian cement industry for the period 1979 80 to 2004 05 the most recently developed panel unit root a heterogeneous panel cointegration and panel based error correction model is applied within a multivariate framework the empirical results confirm a positive long run cointegrated relationship between output and energy consumption when heterogeneous state effects are taken into account we also found a long run bi directional relationship between energy consumption and output growth in the indian cement industry for the study period implying that an increase in energy consumption directly affects the growth of this sector and that growth stimulates further energy consumption these empirical findings imply that energy consumption and output are jointly determined and affect each other the empirical evidence also suggests the implementation of energy conservation policies oriented toward improving energy use efficiency to avoid any negative impacts of the conservation policies on the growth of this industry

the relationship between energy and gnp further results this paper reexamines the casuality between gnp and energy consumption by using updated us data for the period 1947 1979 as a secondary contribution we investigate the causal relationship between energy consumption and employment applying sims technique we find no causal relationship between gnp and energy consumption we find further that there is a slight unidirectional flow running from employment to energy consumption economic interpretations of the empirical results are also presented

dynamic behavior of capital accumulation in a cash in advance model abstract this paper analyzes the dynamic behavior of capital accumulation in stockman s cash in advance model if the cash in advance constraint applies only to consumption then money is superneutral along the transition path as well as in the long run alternatively if the cash in advance constraint applies to gross investment as well as consumption then a permanent increase in the rate of monetary growth reduces the steady state capital stock the effect on the speed of adjustment depends on the sign of a certain simple function of the parameters of preferences and technology

energy consumption and economic growth the case of oil exporting countries this paper examines the causal relationship between the per capita energy consumption and the per capita gdp in a panel of 11 selected oil exporting countries by using panel unit root tests and panel cointegration analysis the results show a unidirectional strong causality from economic growth to energy consumption for the oil exporting countries the findings have practical policy implications for decision makers in the area of macroeconomic planning in most major oil exporting countries government policies keep domestic prices bellow free market level resulting in high levels of domestic energy consumption the results imply that the energy conservation through reforming energy price policies has no damaging repercussions on economic growth for this group of countries

the causal relationship between electricity consumption and economic growth in the asean countries abstract this paper investigates the causal relationship between electricity consumption and economic growth among the association of south east asian nations asean 4 members namely indonesia malaysia singapore and thailand using modern time series techniques for the period 1971 2002 the results indicate that there is a bi directional causality between electricity consumption and economic growth in malaysia and singapore this means that an increase in electricity consumption directly affects economic growth and that economic growth also stimulates further electricity consumption in the two countries however uni directional causality runs from economic growth to electricity consumption in indonesia and thailand without any feedback effect thus electricity conservation policies can be initiated without deteriorating economic side effects in the two countries

causality between energy consumption and economic growth in india a note on conflicting results abstract this note examines the different direction of causal relation between energy consumption and economic growth in india applying engle granger cointegration approach combined with the standard granger causality test on indian data for the period 1950 1996 we find that bi directional causality exists between energy consumption and economic growth further we apply johansen multivariate cointegration technique on the different set of variables the same direction of causality exists between energy consumption and economic growth this is different from the results obtained in earlier studies

aggregate demand and interest rates a macroeconomic approach to the term structure this paper develops a model in which the term structure of interest rates obtains as an equilibrium outcome of the interactions of firms households and rationally informed speculators exogenous disturbances whose impact effects fall only in the market for short term bonds generate equilibrium movements in the yield on long term bonds and the level of investment spending in the case of risk averse speculators a purely transitory unanticipated shock to the money supply generates a long distributed lag effect on the level of aggregate demand

an experimental study of commitment in stackelberg games with observation costs abstract we report on experiments examining the value of commitment in stackelberg games where the follower chooses whether to pay some cost to perfectly observe the leader s action vardy games econ behav 2004 shows that in the unique pure strategy subgame perfect equilibrium of this game the value of commitment is lost completely however there exists a mixed strategy subgame perfect equilibrium where the value of commitment is fully preserved in the data the value of commitment is largely preserved when the cost of looking is small while it is lost when the cost is large nevertheless for small observation costs equilibrium behavior is clearly rejected instead subjects persistently play non equilibrium strategies in which the probability of the follower choosing to observe the leader s action is a decreasing function of the observation cost

output the stock market and interest rates this paper develops a simple model of the determination of output the stock market and the term structure of interest rates the model is an extension of the is lm model and borrows from it the assumption that output is determined by aggregate demand and that the price level can only adjust over time to its equilibrium value however whereas the is lm emphasizes the interaction between the interest rate and output this model emphasizes the interaction between asset values and output asset values rather than the interest rate are the main determinants of aggregate demand and output current and anticipated output and income are in turn the main determinants of asset values it is this interaction that the model intends to capture its goal is to characterize the joint response of asset values and output to changes in the environment such as changes or announcement of changes in monetary and fiscal policy as the above brief description makes clear anticipations are central to the story the assumption made in this paper will be one of rational expectations the paper is organized as follows section i describes the model and sections ii iv characterize the behavior of the economy under the extreme but convenient assumption that prices are fixed forever sections v and vi extend the analysis to the case where prices adjust over time to their equilibrium value

anticipated inflation and the capital stock in a cash in advance economy abstract an economy is constructed in which the steady state capital stock is inversely related to the rate of inflation as a result that is directly opposite the usual conclusion

industry level production functions and energy use in 12 eu countries abstract in the eu context industrial sectors have significantly reduced their energy consumption in the last decade despite significant disparities existing across industry branches comparative studies focused on the effect of energy use in the production growth of the different industry branches are limited and not related to the eu countries this study undertakes a production growth approach to analyze the effect of energy use in different industry branches through the estimation of translog production functions based on data from 12 eu countries during the 2000 2014 period in addition two sub periods are studied to evaluate if industrial energy efficiency has been improving through time specifically from 2007 findings confirm the existence of different behavior patterns with respect to energy use in the considered sectors and from one sub period to another as a result policy measures should be sector specific since no general production energy use patterns can be obtained

renewable energy consumption and economic growth evidence from a panel of oecd countries abstract this study examines the relationship between renewable energy consumption and economic growth for a panel of twenty oecd countries over the period 1985 2005 within a multivariate framework given the relatively short span of the time series data a panel cointegration and error correction model is employed to infer the causal relationship the heterogeneous panel cointegration test reveals a long run equilibrium relationship between real gdp renewable energy consumption real gross fixed capital formation and the labor force with the respective coefficients positive and statistically significant the granger causality results indicate bidirectional causality between renewable energy consumption and economic growth in both the short and long run

literature survey on the relationships between energy environment and economic growth abstract the aim of this study is to exhibit an exhaustive survey which is related to the great flight of the literature of energy environment growth nexus at the individual and regional scale studies covering the period from 1978 to 2014 the survey takes into consideration the sample country region etc periods covering econometric strategies and conclusions our survey is based on the causality direction among i the energy use variables electricity nuclear renewable and non renewable and output growth ii between economic growth and environment and between the three variables at the same time globally these surveys provide paradoxical and not conclusive results which energy consumption can boost economic growth through the productivity enhancement and it can boost also the environmental damages through the enhancement of pollutant emissions our survey sheds more the lights on the energy environment growth literature by giving an extensive listing 1978 2014 of these causal linkages among the energy use variables environment and economic growth for both individual and collective cases there is a unanimous consensus about the importance of dealing with such dynamic relationship which is seems to be a cornerstone element in setting any ambition strategies energy ecological and economics

an international literature survey on energy economic growth nexus evidence from country specific studies in this paper an extensive review of the rapidly growing in the literature on the nexus between economic growth and four types of energy consumption total energy consumption electricity consumption nuclear consumption and renewable consumption the various hypotheses associated with the causal interaction between these variables along with a survey of the empirical literature are also discussed the survey focuses on country coverage periods modeling techniques and empirical conclusions a general observation from these studies that results are found to be sensitive to methodology and type of energy considered the empirical results for the specific countries surveyed show that i for energy consumption growth nexus 29 supported the growth hypothesis 27 the feedback hypothesis 23 the conservation hypothesis and 21 the neutrality hypothesis ii for the electricity consumption growth nexus 40 supported the growth hypothesis 33 the feedback hypothesis and 27 conservation hypothesis iii for the nuclear consumption growth nexus 60 supported the neutrality hypothesis and 40 the growth hypothesis and iv for the renewable consumption growth nexus 40 supported the neutrality hypothesis 40 the conservation hypothesis and 20 the growth hypothesis these mixed results may be attributed to the different used data selected variables and econometric approaches undertaken

exploring the relationship between agricultural electricity consumption and output new evidence from turkish regional data abstract this study investigates the relationship between agricultural electricity consumption and agricultural output for a panel of 12 regions of turkey for the period 1995 2013 in order to reveal the possible heterogeneity between regions empirical analyses are conducted for the whole panel data and two sub groups within the panel data namely coastal regions and non coastal regions the results from several panel unit root tests indicate that electricity consumption and output are stationary process at their levels for overall panel and the two specific groups by using the ols with regional fixed effects this study finds that coefficient estimate of electricity consumption on output is statistically significant and positive for overall regions coastal regions and non coastal regions in addition the results from the dumitrescu hurlin granger causality test show that there is unidirectional causality running from agricultural output to electricity consumption for non coastal regions and there is bidirectional causality between agricultural electricity consumption and output for overall panel and coastal regions findings and policy implications are further discussed

fiscal policy and the term structure abstract this paper investigates the empirical association between deficits in interest rates it extends the results in plosser 1982 to include the more recent experience the association between a measure of ex ante real rates and deficits is also considered the results largely corroborate the previous results first little or no association between real or nominal interest rates and deficits is found second output and to a lesser extent military spending are found to have a significant association with interest rates

electricity consumption and economic growth in india abstract this paper tries to examine the granger causality between electricity consumption per capita and gross domestic product gdp per capita for india using annual data covering the period 1950 51 to 1996 97 phillips perron tests reveal that both the series after logarithmic transformation are non stationary and individually integrated of order one this study finds the absence of long run equilibrium relationship among the variables but there exists unidirectional granger causality running from economic growth to electricity consumption without any feedback effect so electricity conservation policies can be initiated without deteriorating economic side effects

energy efficiency policy impact in india case study of investment in industrial energy efficiency the objective of this paper is to identify the effectiveness of energy policy and capital investment in energy efficiency technologies in the industrial sector in india indian energy policies relating to industrial energy efficiency over the past 25 years are briefly reviewed and a comparison study of these energy efficiency policies and strategies in india and china has been carried out interviews were conducted with a number of government policy making institutions and a national industrial development bank the accounts of 26 industrial enterprises which applied and used a loan of the asian development bank were audited for data collection field visits to seven industrial entrepreneurs were undertaken in a case study methodologies used in this study include documentation cross country reviews on energy policies questionnaire design and distribution in the industrial sector and on site auditing of energy efficiency technologies this paper concludes that current energy policies and strategies in india need further improvement to promote energy efficiency investment and energy efficiency technology development in the industrial sector this paper will interest those policy makers and industrial entrepreneurs who are willing to finance energy efficiency projects and improve energy efficiency in the industrial sector

the relationship between energy consumption energy prices and economic growth time series evidence from asian developing countries this paper estimates the causal relationships between energy consumption and income for india indonesia the philippines and thailand using cointegration and error correction modelling techniques the results indicate that in the short run unidirectional granger causality runs from energy to income for india and indonesia while bidirectional granger causality runs from energy to income for thailand and the philippines in the case of thailand and the philippines energy income and prices are mutually causal the study results do not support the view that energy and income are neutral with respect to each other with the exception of indonesia and india where neutrality is observed in the short run c 2000 elsevier science b v all rights reserved jel classifications c22 q43 q48

cointegration and dynamic time series models abstract this paper provides a survey of some of the recent developments in the field of econometric modelling with cointegrated time series in particular we describe the testing and estimation procedures which have become increasingly popular in the recent applied literature in addition to the two stage procedure proposed by engle and granger we consider extensions to the modelling of dynamic models with cointegrated variables such as the estimation of models with multiple cointegration vectors simultaneous systems models with seasonally integrated and cointegrated variables furthermore we illustrate the practical application of the techniques describes in the paper by means of a tutorial data set

energy consumption and economic growth in central america evidence from a panel cointegration and error correction model abstract this study examines the relationship between energy consumption and economic growth for six central american countries over the period 1980 2004 within a multivariate framework given the relatively short span of the time series data a panel cointegration and error correction model is employed to infer the causal relationship based on the heterogeneous panel cointegration test by pedroni pedroni p 1999 critical values for cointegration tests in heterogeneous panels with multiple regressors oxford bulletin of economics and statistics 61 653 670 pedroni p 2004 panel cointegration asymptotic and finite sample properties of pooled time series tests with an application to the ppp hypothesis new results econometric theory 20 597 627 cointegration is present between real gdp energy consumption the labor force and real gross fixed capital formation with the respective coefficients positive and statistically significant the granger causality results indicate the presence of both short run and long run causality from energy consumption to economic growth which supports the growth hypothesis