banking in computable general equilibrium economies abstract in this paper we develop a computable general equilibrium economy that models the banking sector explicitly banks intermediate between households and between the household sector and the government sector households borrow from banks to finance their purchases of houses and they lend to banks to save for retirement banks pool households savings and they purchase interest bearing government debt and non interest bearing reserves we use this structure to answer two sets of questions one normative in nature that evaluates the welfare costs of alternative monetary and tax policies and one positive in nature that studies the real effects of following a procyclical interest rate policy rule

which industry is greener an empirical study of nine industries in oecd countries abstract this study analyzed the relationship between the co2 emissions of different industries and economic growth in oecd countries from 1970 to 2005 we tested an environmental kuznets curve ekc hypothesis and found that total co2 emissions from nine industries show an n shaped trend instead of an inverted u or monotonic increasing trend with increasing income the ekc hypothesis for sector level co2 emissions was supported in the 1 paper pulp and printing industry 2 wood and wood products industry and 3 construction industry we also found that emissions from coal and oil increase with economic growth in the steel and construction industries in addition the non metallic minerals machinery and transport equipment industries tend to have increased emissions from oil and electricity with economic growth finally the ekc turning point and the relationship between gdp per capita and sectoral co2 emissions differ among industries according to the fuel type used therefore environmental policies for co2 reduction must consider these differences in industrial characteristics

international trade and energy intensity during european industrialization 1870 1935 the study was conducted in the research project who did the dirty work energy embodied in european and global trade 1800 1970 funded by the swedish research council 421 2013 1110 vetenskapsradet

network models and financial stability abstract systemic risk is a key concern for central banks charged with safeguarding overall financial stability in this paper we investigate how systemic risk is affected by the structure of the financial system we construct banking systems that are composed of a number of banks that are connected by interbank linkages we then vary the key parameters that define the structure of the financial system including its level of capitalisation the degree to which banks are connected the size of interbank exposures and the degree of concentration of the system and analyse the influence of these parameters on the likelihood of knock on defaults first we find that the better capitalised banks are the more resilient is the banking system against contagious defaults and this effect is non linear second the effect of the degree of connectivity is non monotonic i e initially a small increase in connectivity increases the contagion effect but after a certain threshold value connectivity improves the ability of a banking system to absorb shocks third the size of interbank liabilities tends to increase the risk of knock on default even if banks hold capital against such exposures fourth more concentrated banking systems are shown to be prone to larger systemic risk all else equal in an extension to the main analysis we study how liquidity effects interact with banking structure to produce a greater chance of systemic breakdown we finally consider how the risk of contagion might depend on the degree of asymmetry tiering inherent in the structure of the banking system a number of our results have important implications for public policy which this paper also draws out

baumol s disease and dematerialization of the economy this paper argues that there is reason to be skeptical about the idea that the transition to a service economy will bring about dematerialization of production and consequent environmental improvement this is because the shift to a service economy is an illusion in terms of real production but is instead generated by the fall in the price of manufacturing goods relative to services which is in turn caused by more rapid productivity growth in manufacturing than in services this argument relies on the insights baumol provided on the nature of the service economy and uses swedish long term data on relative sectoral development as an empirical illustration on the other hand the paper argues that there is reason to be cautiously optimistic that structural change may bring about a greening of growth namely the changes in growth patterns sometimes labeled the third industrial revolution which is connected to the emergence of microelectronics swedish co2 emissions show a decline after 1970 which is mainly explained by a politically driven change in the mix of energy carriers but is also related to the stabilization of energy consumption this energy stabilization was caused by slow growth of the economy in conjunction with substantial declines in energy intensity within industrial sectors and an absence of relative growth of the heavy sectors a growth that had marked the economy between 1870 and 1970 microelectronics have contributed to permanently transforming the swedish industrial sector in a lighter direction reducing energy losses in heavy industries and stabilizing household energy consumption so it appears as if there may be some environmental gains from this development that was initiated in the 1970s but not from relatively more production in the service sector

trade ecologically unequal exchange and colonial legacy the case of france and its former colonies 1962 2015 abstract the role of trade in global environmental change is receiving increasing attention and there is a lively debate about ecologically unequal exchange eue little is known however about the role of colonial legacy for the evolution of physical trade patterns this study provides empirical evidence on the basis of a systematic evaluation of global trade data we quantify in physical and monetary terms the development of trade relations between france its former colonies and the rest the world from the immediate post colonial period until 2015 we use a set of physical trade indicators including physical trade balance and terms of trade to analyse differences in trade patterns and eue the results indicate that colonial ties were very strong in the 1960s but thereafter quickly diminished we find strong evidence for eue between france and its former colonies in the post colonial period and that the colonial factor explains eue between centre and peripheries better than income differences until the 1970s in recent decades colonial legacy increasingly vanished our findings corroborate that socio political factors and in particular colonial legacy play an important role for eue relations and that they deserve more attention in quantitative empirical research on trade

slow recoveries any role for corporate leverage abstract this paper examines whether financial conditions of the non financial corporate sector can explain why the recovery from recessions in the united states is slower since the mid 1980s leverage by the corporate sector has increased significantly since the financial deregulation of the mid 1980s empirical evidence shows that slow recoveries are associated with a significant drop in the growth rates of investment and bank loans and with a surge in the growth rates of corporate bonds in an estimated dynamic stochastic general equilibrium model with a financial accelerator counterfactual experiments based on estimates of two samples 1965 1983 and 1984 2007 show that the non financial corporate indebtedness affects only marginally the speed of the recovery in the two samples

housing markets consumption and financial liberalisation in the major economies abstract this paper analyses the implications of relaxing credit restrictions in housing finance markets a theoretical model of the interaction of financial and housing markets and forward looking agents is developed the effects of financial liberalisation in the model are analysed and evidence from the u s a and u k on the impact of easing credit restrictions is presented estimates are also made of the degree to which credit restrictions may bind on households in those countries where the range of mortgage products on offer is still more limited than in the u k and u s a simulations are undertaken to gauge the effect on consumption saving and bequests of wealth of possible future convergence in national systems of housing finance

long term changes in social metabolism and land use in czechoslovakia 1830 2000 an energy transition under changing political regimes abstract industrialisation goes along with sweeping changes in society s interrelations with its environment the transition from an agrarian to an industrial society leads to fundamentally new patterns in social metabolism a process which has been described as socio metabolic transition this paper investigates this transition for the case of the current czech and slovak republics and presents a dataset on the development of key variables related to social metabolism during the last 170 years the dataset includes time series data on the extraction of biomass and fossil fuels energy consumption and land use combining data on bohemia and moravia 1830 1915 with data on czechoslovakia 1918 1992 and the czech and slovak republics 1993 2002 the study covers a period of consecutive political and institutional changes it includes the feudal regime of the late period of the habsburg empire and its disintegration with wwi the short period of the czechoslovak republic in the interwar period the era of a planned economy under a communist regime the collapse of this regime and the subsequent turn towards a market economy and european integration in the 1990s the period was characterized by economic and physical growth it saw a doubling of population and a growth in gdp by a factor 20 domestic energy consumption dec increased by a factor 10 and the share of biomass in dec declined from more than 98 to less than 20 all in all the observed changes closely resemble the characteristic path of the socio metabolic transition as observed in other western european economies major political and economic changes did not result in fundamental alterations of the socio metabolic transition until the mid 20th century the communist era 1945 1989 was characterized by rapid physical growth and changes in the energy and land use system very similar to those of other western european economies in the same period however leading to dec values substantially higher than those of other european countries at around 300 gj cap in the mid 1980s the disturbances caused by the velvet revolution resulted in short term turbulences in social metabolism and structural adaptations and around the year 2000 the czech and slovak republics show biophysical features very similar to those of other western european countries

leverage and the financial accelerator in a liquidity trap we show that the financial accelerator may be very large in a liquidity trap we study a sticky price model with real estate and a financial friction specified as a collateral constraint expectations can lead the economy to a self fulfilling liquidity trap equilibrium where the lower bound on the nominal interest rate binds we model these equilibria as stochastic sunspots as in the great depression a liquidity trap entails house price depreciation and potentially large output losses higher leverage implies much larger output losses but at the same time rules out the existence of short lived liquidity traps

requiem for the representative consumer aggregate implications of microeconomic consumption behavior macroeconomists pursuing microfoundations for aggregate consumption have generally adopted one of two approaches either to model microeconomic consumption behavior carefully and then to aggregate or to thoroughly understand the behavior of a representative consumer in general equilibrium then to introduce microeconomic risk and heterogeneity the broad conclusion from the bottom up approach has been that precautionary saving and microeconomic heterogeneity can profoundly change behavior stephen p zeldes 1989 angus s deaton 1991 christopher d carroll 1992 the broad conclusion from the top down approach has been that precautionary saving is of little importance in determining the aggregate capital stock s rao aiyagari 1994 per krusell and anthony a smith 1998 leading some economists to conclude that heterogeneity is unimportant for macroeconomic purposes this paper shows that while general equilibrium effects do imply that the aggregate magnitude of precautionary saving is modest nevertheless when a model with uninsurable idiosyncratic risk is modified so that it can match the key micro facts it produces behavior very different in important respects from that produced by the representative agent economy this leads to the conclusion that for many purposes the representative consumer model should be abandoned in favor of a model which matches key microeconomic facts this abstract was borrowed from another version of this item

dynamical macroprudential stress testing using network theory the increasing frequency and scope of nancial crises have made global nancial stability one of the major concerns of economic policy and decision makers this has led to the understanding that nancial and banking supervision has to be thought of as a systemic task focusing on the interdependent relations among the institutions using network theory we develop a dynamic model that uses a bipartite network of banks and their assets to analyze the system s sensitivity to external shocks in individual asset classes and to evaluate the presence of features underlying the system that could lead to contagion as a case study we apply the model to stress test the venezuelan banking system from 1998 to 2013 the introduced model was able to capture monthly changes in the structure of the system and the sensitivity of bank portfolios to dierent external shock scenarios and to identify systemic vulnerabilities and their time evolution the model provides new tools for policy makers and supervision agencies to use for macroprudential dynamical stress testing

aggregation and the role of energy in the economy methods for investigating the role of energy in the economy involve aggregating different energy flows a variety of methods have been proposed but none has received universal acceptance this paper shows that the method of aggregation has crucial effects on the results of the analysis we review the principal assumptions and methods for aggregating energy flows the basic heat equivalents approach economic approaches using prices or marginal product for aggregation emergy analysis and thermodynamic approaches such as exergy we argue that economic approaches such as the index or marginal product method are superior because they account for differences in quality among fuels we apply various economic approaches in three case studies in the us economy in the first we account for energy quality to assess changes in the energy surplus delivered by the extraction of fossil fuels from 1954 to 1992 the second and third case studies examine the importance of energy quality in evaluating the relation between energy use and gdp first a quality adjusted index of energy consumption is used in an econometric analysis of the causal relation between energy use and gdp from 1947 to 1996 second we account for energy quality in an econometric analysis of the factors that determine changes in the energy gdp ratio from 1947 to 1996 without adjusting for energy quality the results imply that the energy surplus from petroleum extraction is increasing that changes in gdp drive changes in energy use and that gdp has been decoupled from between aggregate energy use all of these conclusions are reversed when we account for changes in energy quality 2000 elsevier science b v all rights reserved

investment behavior observable expectations and internal funds we use earnings forecasts from securities analysts to construct a new measure of the neoclassical fundamentals that drive investment spending we find that investment responds significantly to our new measure of fundamentals but is insensitive to cash flow even for firms typically thought to be liquidity constrained these results have two key implications first fundamentals may be more important for investment spending than would be suggested by the results to date from investment q models second the positive cash flow effects obtained in such models may reflect a failure to control properly for fundamentals rather than the presence of financial constraints jel d92 e22

estimating bilateral exposures in the german interbank market is there a danger of contagion abstract credit risk associated with interbank lending may lead to domino effects where the failure of one bank results in the failure of other banks not directly affected by the initial shock recent work in economic theory shows that this risk of contagion depends on the precise pattern of interbank linkages we use balance sheet information to estimate a matrix of bilateral credit relationships for the german banking system and test whether the breakdown of a single bank can lead to contagion we find that in the absence of a safety net there is considerable scope for contagion that could affect a large proportion of the banking system the financial safety net in this case institutional guarantees for saving banks and cooperative banks considerably reduces but does not eliminate the danger of contagion even so the failure of a single bank could lead to the breakdown of up to 15 of the banking system in terms of assets

the physical economy of france 1830 2015 the history of a parasite abstract this article explores long term trends and patterns of material use in france for a 185 year period it is the first long term study of material flows for france with national and yearly data for most of the period based on a material flow analysis mfa that is fully consistent with current standards of economy wide mfas and covers domestic extraction imports and exports of materials we investigated the evolution of the french metabolism from industrialization to financialized capitalism over the whole period there is a 9 fold increase in domestic material consumption an expansion of material use per capita and a spectacular addition of abiotic resources fossil fuels and minerals to biotic materials using a world ecology framework we exhibit a specific metabolic path that of a state benefiting from successive world systems for its economic development through massive material imports

trade off analysis between embodied energy exports and employment creation in china moving towards sustainable consumption in china must factor in the drivers of production china s domestic energy demand is affected not only by domestic demand but also by foreign trade the accounting of energy embodied in china s international trade has attracted much attention in recent years in fact embodied energy imports exports are a part of the normal pattern of economic phenomena occurring through international trade with exports of embodied energy contributing significantly to china s economic development this research suggest that china s net embodied energy exports remained relatively stable before 2002 and then increased dramatically from 73 mtoe in 2002 to 502 mtoe by 2007 with an average annual growth rate of 47 2 over that period the total employment creation reliant on these exports is 191 3 million people including direct employment of 44 1 million people and indirect employment of 147 2 million people in 2007 and the total employment creation increased quickly between 2002 and 2007 with an average annual growth rate of 9 1 the share of employment created by exports in china s total employment increased from 16 5 in 1997 to 18 6 in 2002 and a more dramatic increase can be observed in 2007 of 28 1 the exports oriented sectors in china are energy intensive from the perspective of embodied energy consumption and the energy intensive exports are located in nearly the same sectors as the labor intensive exports china will find it difficult to sustain the trade off in costs due to unemployment if it wishes to reduce embodied energy exports china needs to exercise patience and long term reform to change the current development model because of its large economy and population base

a network analysis of the italian overnight money market the objective of this paper is to analyse the network topology of the italian segment of the european overnight money market through methods of statistical mechanics applied to complex networks we investigate differences in the activities of banks of different sizes and the evolution of their connectivity structure over the maintenance period the main purpose of the analysis is to establish the potential implications of the current institutional arrangements on the stability of the banking system and to assess the efficiency of the interbank market in terms of absence of speculative and preferential trading relationships

optimal financial crises empirical evidence suggests that banking panics are related to the business cycle and are not simply the result of sunspots panics occur when depositors perceive that the returns on bank assets are going to be unusually low we develop a simple model of this in this setting bank runs can be first best efficient they allow efficient risk sharing between early and late withdrawing depositors and they allow banks to hold efficient portfolios however if costly runs or markets for risky assets are introduced central bank intervention of the right kind can lead to a pareto improvement in welfare from the earliest times banks have been plagued by the problem of bank runs in which many or all of the bank s depositors attempt to withdraw their funds simultaneously because banks issue liquid liabilities in the form of deposit contracts but invest in illiquid assets in the form of loans they are vulnerable to runs that can lead to closure and liquidation a financial crisis or banking panic occurs when depositors at many or all of the banks in a region or a country attempt to withdraw their funds simultaneously prior to the twentieth century banking panics occurred frequently in europe and the united states panics were generally regarded as a bad thing and the development of central banks to eliminate panics and ensure financial stability has been an important feature of the history of financial systems it has been a long and involved process the first cerntral bank the bank of sweden was established more than 300 years ago the bank of england played an especially important role in the development of effective stabilization policies in the eighteenth and nineteenth centuries by the end of the nineteenth century banking panics had been eliminated in europe the last true panic in england was the overend gurney company crisis of 1866

house prices borrowing constraints and monetary policy in the business cycle i develop a general equilibrium model with sticky prices credit constraints nominal loans and asset prices changes in asset prices modify agents borrowing capacity through collateral value changes in nominal prices affect real repayments through debt deflation monetary policy shocks move asset and nominal prices in the same direction and are amplified and propagated over time the financial accelerator is not constant across shocks nominal debt stabilises supply shocks making the economy less volatile when the central bank controls the interest rate i discuss the role of equity debt indexation and household and firm leverage in the propagation mechanism finally i find that monetary policy should not target asset prices as a means of reducing output and inflation volatility

food regimes and their trade links a socio ecological perspective abstract the concept of food regimes has become a prominent theory in political economy we here provide socio ecological underpinning of the food regimes theory and thereby connect it closer to an ecological economics perspective we quantify physical trade with main agricultural commodities between world regions from the mid 19th century to 2016 and ask how trade patterns relate to issues of resource use in particular to land use soil fertility and the energetic basis of agriculture agricultural exports rose from a few million t yr around 1870 to 1 4 billion t yr in 2016 growth in trade and production did not follow a continuous trend periods of accelerated growth alternating with phases of relative stability can be distinguished rather than directed modernization we observe shifts in unequal relations of power physical exchange and environmental pressure between changing centers and peripheries the periods of growth in trade match with the periodization of food regimes we find that regime shifts are closely related to changes in societies energy metabolism in the resource base of agricultural production and also to agro ecological crisis our analysis emphasizes that food regimes not only reflect changes in power relations in the world system but also changes in societies natural relations

energy intensity developments in 40 major economies structural change or technology improvement this study analyzes energy intensity trends and drivers in 40 major economies using the wiod database a novel harmonized and consistent dataset of input output table time series accompanied by environmental satellite data we use logarithmic mean divisia index decomposition to 1 study trends in global energy intensity between 1995 and 2007 2 attribute efficiency changes to either changes in technology or changes in the structure of the economy and 3 highlight sectoral and regional differences we first show that heterogeneity within each sector across countries is high these general trends within the sectors are dominated by large economies first and foremost the united states in most cases heterogeneity is lower within each country across the different sectors regarding changes of energy intensity at the country level improvements between 1995 and 2007 are largely attributable to technological change while structural change is less important in most countries notable exceptions are japan the united states australia taiwan mexico and brazil where a change in the industry mix was the main driver behind the observed energy intensity reduction

growth in global materials use gdp and population during the 20th century the growing industrial metabolism is a major driver of global environmental change we present an assessment of the global use of materials since the beginning of the 20th century based on the conceptual and methodological principles of material flow accounting mfa on the grounds of published statistical data data compilations and estimation procedures for material flows not covered by international statistical sources we compiled a quantitative estimate of annual global extraction of biomass fossil energy carriers metal ores industrial minerals and construction minerals for the period 1900 to 2005 this period covers important phases of global industrialisation and economic growth the paper analyses the observed changes in the overall size and composition of global material flows in relation to the global economy population growth and primary energy consumption we show that during the last century global materials use increased 8 fold humanity currently uses almost 60 billion tons gt of materials per year in particular the period after wwii was characterized by rapid physical growth driven by both population and economic growth within this period there was a shift from the dominance of renewable biomass towards mineral materials materials use increased at a slower pace than the global economy but faster than world population as a consequence material intensity i e the amount of materials required per unit of gdp declined while materials use per capita doubled from 4 6 to 10 3 t cap yr the main material groups show different trajectories while biomass use hardly keeps up with population growth the mineral fractions grow at a rapid pace we show that increases in material productivity are mostly due to the slow growth of biomass use while they are much less pronounced for the mineral fractions so far there is no evidence that growth of global materials use is slowing down or might eventually decline and our results indicate that an increase in material productivity is a general feature of economic development

reconstructing and stress testing credit networks abstract financial networks are an important source of systemic risk but often only partial network information is available in this paper we use data on bank firm credit relationships in japan and conduct a horse race between different network reconstruction methods in terms of their ability to reproduce the actual credit networks we then compare the different reconstruction methods in terms of their implied levels of systemic risk based on a standard model of price mediated contagion we find that the observed credit network displays relatively high levels of systemic risk compared with most reconstruction methods lastly we explore whether different policies can improve the robustness of the system

the credit view old and new recent writings in the so called credit view focus on binding finance constraints of macroeconomic activity which arise from the incomplete substitutability of bank credit and from changes in borrowers net worth they criticize the standard approaches in the money view for not taking full account of the observable effects of monetary restrictions on real activity in this paper the new credit view is contrasted with older macroeconomic theories that placed special emphasis on the banks systemic potential to expand credit beyond planned saving the comparative discussion of the underlying arguments about bank behaviour about the non neutrality of credit money and about the transmission of monetary policy impulses reveals some shortcomings in the new view history helps moreover to set the conventional confrontations of the credit view and the money view in perspective jel classification b22 e32 e44 e51 e52

fiscal policy in an expectations driven liquidity trap we study the effects of fiscal policy interventions in a liquidity trap in a model with nominal rigidities and an interest rate rule in a liquidity trap caused by a self fulfilling state of low confidence higher government spending has deflationary effects that reduce the spending multiplier when the zero lower bound is binding instead cuts in marginal labor tax rates are inflationary and become more expansionary when the zero lower bound is binding these findings contradict popular views about the effects of fiscal policy in a liquidity trap

the effect of short selling and borrowing on market prices and traders behavior this paper studies the influence of allowing borrowing and short selling on market prices and traders forecasts in an experimental asset market we verify although not statistically significantly so that borrowing tends to increase asset overvaluation and price orecasts while short selling tends to reduce these measures we also show that a number of results on beliefs traders types cognitive sophistication and earnings obtained in earlier experimental studies in which borrowing and short selling are not possible generalize to markets with borrowing and short sales

the modest environmental relief resulting from the transition to the service economy a service transition is supposed to lead to the decline of energy intensity energy gdp we argue that this interpretation is overly optimistic because the shift to a service economy is somewhat of an illusion in terms of real production several recent studies of structural effects on energy intensity have made the error of using sector shares in current prices combined with gdp in constant prices which is inconsistent and ignores the different behaviour of prices across sectors we use the more correct method of sector shares in constant prices and make an attempt to single out the effect from the real service transition by using two complementary methods shift share analyses in current and constant prices and logarithmic mean divisia index lmdi for 10 developed and 3 emerging economies a service transition is rather modest in real terms the major driver of the decline in energy intensity rests within the manufacturing sector meanwhile the transition to a service sector had a small downward impact on energy intensity in 7 of the developed countries and no impact in the others for emerging economies like brazil mexico and india it is the residential sector that drives energy intensity down because of the declining share of this sector as the formal economy grows and as a consequence of switching to more efficient fuels less

stability analysis of financial contagion due to overlapping portfolios abstract common asset holdings are widely believed to have been the primary vector of contagion in the recent financial crisis we develop a network approach to the amplification of financial contagion due to the combination of overlapping portfolios and leverage and we show how it can be understood in terms of a generalized branching process this can be used to compute the stability for any particular configuration of portfolios by studying a stylized model we estimate the circumstances under which systemic instabilities are likely to occur as a function of parameters such as leverage market crowding diversification and market impact although diversification may be good for individual institutions it can create dangerous systemic effects and as a result financial contagion gets worse with too much diversification there is a critical threshold for leverage below it financial networks are always stable and above it the unstable region grows as leverage increases note that our model assumes passive portfolio management during a crisis however we show that dynamic deleveraging during a crisis can amplify instabilities the financial system exhibits robust yet fragile behavior with regions of the parameter space where contagion is rare but catastrophic whenever it occurs our model and methods of analysis can be calibrated to real data and provide simple yet powerful tools for macroprudential stress testing

permanent income liquidity and expenditure on automobiles evidence from panel data several recent papers have tested the permanent income cum rational expectations hypothesis using data on nondurable or semidurable consumption we show how this approach can be extended to the case of durables an application to panel data on automobile expenditures reveals no evidence against the permanent income hypothesis this result is unchanged in subsamples segregated by family holdings of liquid assets

the nature of co2 emission kuznets curve this paper reveals that co2 emission kuznets curve merely reflects the peak theory of energy intensity the situation of real energy use should be used as a fundamental stone for both energy and environmental policy making

the taylor rule and optimal monetary policy where it denotes the fed s operating target for the federal funds rate pt is the inflation rate measured by the gdp deflator yt is the log of real gdp and y t is the log of potential output identified empirically with a linear trend the rule has since been subject to considerable attention both as an account of actual policy in the united states and elsewhere and as a prescription for desirable policy taylor argues for the rule s normative significance both on the basis of simulations and on the ground that it describes u s policy in a period in which monetary policy is widely judged to have been unusually successful taylor 1999 suggesting that the rule is worth adopting as a principle of behavior here i wish to consider to what extent this prescription resembles the sort of policy that economic theory would recommend i consider the question in the context of a simple but widely used optimizing model of the monetary transmission mechanism which allows one to reach clear conclusions about economic welfare the model is highly stylized but incorporates important features of more realistic models and allows me to make several points that are of more general validity out of concern for the robustness of the conclusions reached the analysis here addresses only broad qualitative features of the taylor rule and attempts to identify features of a desirable policy rule that are likely to hold under a variety of model specifications

contracts and money why are contracts not fully indexed in a setting in which fully indexed contracts are feasible we find that when price level data are gathered with delay these contracts are not renegotiation proof the contracts that replace them entail a lower level of welfare for the parties to that contract they also imply that real variables respond to nominal shocks

analysis of banks systemic risk contribution and contagion determinants through the leave one out approach abstract in this paper we develop an in depth analysis of the systemic risk and contagion determinants through the differential effects of excluding one bank on the banking system the measure allows for splitting the contribution of individual banks into systemic risk as the sum of two components the stand alone bank risk and the contagion risk and measuring the role of assets riskiness capitalization and interconnectedness as determinants of each of the two components results show that the variables determining the stand alone risk component are different from those determining the contagion risk component so that a bank which is relatively safe with respect to stand alone risk can be an important contagion vehicle or vice versa results also show that crisis severity significantly affects results so that the severity of different crises results in different weights for the input variables and different contributions for the banks considered these results add highly significant information for macroprudential regulation not only from the cross sectional point of view but also with reference to the time dimension

changes in the united kingdom s natural relations in terms of society s metabolism and land use from 1850 to the present day abstract in this paper we present our understanding of how society and nature have interacted in the course of history in terms of society s metabolic interchange with the biophysical environment presenting a theoretical model we begin by focusing on the interface between society and nature society s natural relations as conceptualized by the idea of metabolism which draws upon marxist theory complemented by a systems approach the concept of metabolism portrays society as a system which has to establish and maintain a permanent throughput of energy and matter to produce and maintain society s material components the amount of resource flow is operationalized by using material and energy flow accounting methods empirically these methods are applied to the uk s economy in a time series approach from 1850 to the present day we discuss different aggregates of inputs such as domestic material extraction foreign trade of materials energy input and additionally give an account of land use change obviously these changing natural relations are linked to socio economic activities hence we make a first attempt to discuss different periods of socio economic development by drawing from a regulation approach and try to link them to physical indicators such as direct material and energy input and domestic material consumption dmc thereby we hope to contribute to a historical understanding of socio economically driven environmental change within the framework of ecological economics

stock market wealth and consumption this paper explores the link between changes in the aggregate value of corporate stock and changes in consumer spending it presents data on the distribution of corporate stock ownership based on the 1998 survey of consumer finances it also uses time series evidence on the comovement of stock market wealth and various categories of consumer spending to calibrate the wealth effect it concludes that in the year after a change in stock market values consumer spending is likely to rise by between one and two cents for each dollar increase in the value of corporate stock