the adjustment cost model of the firm duality and productive efficiency we present the theoretical foundation for an adjustment cost technology that supports the intertemporal production decision making behavior using the directional distance function dynamic input efficiency measures are developed that can separate out the impact of variable and dynamic factors inefficiency levels an approach to implement this theory in a nonparametric fashion is developed and applied to an unbalanced panel of dutch glasshouse firms the application finds overuse of all variable inputs and overcapitalization of installations the overall dynamic efficiency gain of 16 remains possible with allocative inefficiencies indicating underinvestment in structures and installations a comparison of static and dynamic efficiency measures finds that the static overall cost inefficiency is overestimated with technical inefficiency being overstated and allocative inefficiency being understated

dynamics of productivity taking into consideration the impact of energy consumption and environmental degradation abstract this study deals with the nonparametric frontier analysis in the case of the eu 28 countries for a period spanning from 1993 to 2015 it provides statistical inference about the radial output based measure of technical efficiency under the assumption of constant returns to scale crs and it performs scale analysis that allows determining the nature of scale inefficiency of each data point furthermore an order approach is developed for determining partial frontiers both traditional malmquist luenberger and bootstrapped malmquist productivity indexes between 1993 and 2015 are constructed analysis of productivity change by decomposing the total factor productivity index into efficiency change and technical change is performed showing respectively whether productivity gains derive mainly from improvements in efficiency or are mostly the result of technological progress in this sense the results can provide european policy makers with an improved understanding of the process of technological and efficiency change helping them to improve the design of their environmental and energy policies

profit incentives and technical efficiency in the production of nursing home care in recent years nursing home care expenditures have approached one percent of gnp their growth is a major contributor to the escalating costs of health care in this article the authors analyze a sample of nursing homes from wisconsin to determine the characteristics of the efficiently operated nursing homes data envelopment analysis is used to calculate efficiency scores for the various nursing homes in the sample the authors then use regression analysis to investigate the determinants of efficiency holding constant the characteristics of the output they find that for profit firms have significantly higher efficiency scores copyright 1989 by mit press

technical and environmental efficiencies and best management practices in agriculture an input distance function idf is estimated to empirically evaluate and analyse the technical and environmental efficiencies of 210 farms located in the chaudiere watershed quebec where water quality problems are particularly acute because of the production of undesirable outputs that are jointly produced with agricultural products the true idf is approximated by a flexible translog functional form estimated using a full information maximum likelihood method technical and environmental efficiencies are disaggregated across farms and account for spatial variations our results show that there is a significant correlation between the two efficiencies the idf is used to compute the cumulative malmquist productivity index and the fisher index the two indices are used to measure changes in technology profitability efficiency and productivity in response to the adoption of two selected best management practices bmps whose objective is to reduce water pollution we found significant differences acro

measuring technical and environmental efficiency in a state contingent technology most developed countries support farming activities through policies that are tailored to meet their specific social economic and environmental objectives economic and environmental efficiency have recently become relevant targets of most of these policies whose sound implementation can be enhanced by monitoring farm performance from a multidimensional perspective this paper proposes farm level technical and environmental efficiency measures that recognize the stochastic conditions in which production takes place a state contingent framework is used to model production uncertainty an implementable representation of the technology is developed using data envelopment analysis the application focuses on a sample of catalan arable crop farms results suggest that technical efficiency is slightly lower in bad than in good growing conditions nitrogen pollution can decrease substantially more under good than bad growing conditions

measuring hospital performance a non parametric approach abstract in this paper a technique for assessing the relative performance of firms is introduced and applied to a sample of hospitals in california hospitals are compared on the basis of their relative technical efficiency the reference technology is constructed from observed outputs and inputs including physicians using programming techniques and efficiency is assessed relative to the frontier of the technology using measures similar to those suggested by farrell the technique used here imposes no prespecified functional form allows for multiple outputs and inputs allowing for differences in case mix and yields information on the productive performance of individual hospitals this technique can also be used to determine whether different types of hospitals use different technologies our results although illustrative rather than definitive suggest that ownership affects efficiency as measured here public and nfp hospitals have different best practice frontiers and public hospitals appear to use relatively fewer resources these results could reflect differences in quality of care by ownership

some models for estimating technical and scale inefficiencies in data envelopment analysis in management contexts mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best in this capacity mathematical programming serves as a planning aid to management data envelopment analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments however they may have been planned or executed mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities the ccr ratio form introduced by charnes cooper and rhodes as part of their data envelopment analysis approach comprehends both technical and scale inefficiencies via the optimal value of the ratio form as obtained directly from the data without requiring a priori specification of weights and or explicit delineation of assumed functional forms of relations between inputs and outputs a separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of dea directly on observational data technical inefficiencies are identified with failures to achieve best possible output levels and or usage of excessive amounts of inputs methods for identifying and correcting the magnitudes of these inefficiencies as supplied in prior work are illustrated in the present paper a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing constant or decreasing returns to scale in multiple input and multiple output situations the results are discussed and related not only to classical single output economics but also to more modern versions of economics which are identified with contestable market theories

income distribution political instability and investment abstract this paper successfully tests on a sample of 71 countries for the period 1960 85 the following hypotheses income inequality by fuelling social discontent increases sociopolitical instability the latter by creating uncertainty in the politico economic environment reduces investment as a consequence income inequality and investment are inversely related since investment is a primary engine of growth this paper identifies a channel for an inverse relationship between income inequality and growth we measure socio political instability with indices which capture the occurrence of more or less violent phenomena of political unrest and we test our hypotheses by estimating a two equation model in which the endogenous variables are investment and an index of socio political instability our results are robust to sensitivity analysis on the specification of the model and the measure of political instability and are unchanged when the model is estimated using robust regression techniques

the economic costs of environmental regulation in u s dairy farming a directional distance function approach analyses of the costs of regulating greenhouse gas emissions from dairy production which could be used to assess the effectiveness of alternative policy measures is a missing link in the literature this article addresses this gap by establishing the economic impact associated with a hypothetical greenhouse gas environmental regulatory regime across major dairy producing counties in the united states in doing so the article makes three important contributions to the literature first it develops a comprehensive pollution index based on environmental protection agency methodologies which contrasts with previous studies that rely on partial measures based only on surplus nitrogen stemming from the over application of fertilizer second the article uses a directional output distance function an approach that has not been employed previously to evaluate polluting technologies in the u s dairy sector third the article incorporates a four way error approach that accounts for unobserved county heterogeneity time invariant persistent technical efficiency time varying transient technical efficiency and a random error the results indicate that regulating greenhouse gas emissions from dairy farming would induce a 5 percentage point increase in average technical efficiency in addition the economic costs of implementing this hypothetical regulatory framework exhibit significant spatial variation across counties in the united states

measuring ecological efficiency with data envelopment analysis dea abstract the measurement of ecological efficiency provides some important information for the companies environmental management ecological efficiency is usually measured by comparing environmental performance indicators data envelopment analysis dea shows a high potential to support such comparisons as no explicit weights are needed to aggregate the indicators in general dea assumes that inputs and outputs are goods but from an ecological perspective also bads have to be considered in the literature bads are treated in different and sometimes arbitrarily chosen ways this article aims at the systematic derivation of ecologically extended dea models starting from the assumptions of dea in production theory and activity analysis a generalisation of basic dea models is derived by incorporating a multi dimensional value function f extended preference structures can be considered by different specifications of f e g specifications for ecologically motivated applications of dea

multilateral productivity comparisons with undesirable outputs in a recent paper in this journal caves christensen and diewert i982 hereafter ccd derive what they term multilateral superlative indexes for use in the comparison of output input and productivity across economic entities the indexes derived are distinguished both by transitivity and by a high degree of characteristicity a term introduced by dreschler i 973 to refer to the degree to which the weights used in a comparison are specific to the observations being compared though the indexes are presented with the application to multicountry comparisons of output input and productivity foremost in mind the authors note that they may be useful in a number of other contexts as well i e firms and industries time series and pooled time series and cross section all of the applications mentioned or implied however have this in common they involve the comparison of productive entities all of whose outputs are sold for positive prices this is not surprising of course since most products with which economists are concerned possess this characteristic however it does render incomplete or potentially misleading the comparison of productive entities which produce significant amounts of undesirable outputs such as water and air pollution since the list of such entities is rather long and includes industries critical to many national and regional economies e g chemicals paper petroleum refining copper and steel the omission of this factor from consideration may be a matter of some importance 2 consider for example a comparison of the productivity of the steel industries

efficiency and environmental regulation this paper proposes an extension of the enhancedefficiency indices of fare grosskopf lovell andpasurka 1989 that considers undesirable outputsasymmetrically by assuming that firms can freelydispose of some undesirable productions but areduction of other bad outputs generates a cost interms of desirable outputs this methodologicalapproach is used to analyse the relative efficiency ofa sample of spanish producers of wooden goods andfurnishings whose production process generates fourdifferent wastes we obtain efficiency indices thatserve to measure the impact on firm performance inseveral scenarios related to environmental regulationsaimed to reduce the production of wastes whenenvironmental regulations are assumed it is foundthat firms would have to sacrifice important amountsof potential desirable output in order to reallocateinputs into waste reduction secondly we find thatfirms associated with a technological institute aswell as firms located at a marshallian type industrialdistrict are likely to be less affected byregulations

is the household demand for in home services sensitive to tax reductions the french case our paper examines the impact of tax reductions on the demand for services in the home for that purpose we estimate a structural model of demand for such services by using household individual data collected by insee paris in 1996 in this model the net hourly wage paid to the domestic employee the household preferences for consumption of in home services and the decision to take advantage of the tax reduction are considered as endogenous variables estimation of the econometric model uses the fact that some households are observed to consume domestic services and to take advantage of the tax reduction while others either consume such services but do not take advantage of the tax reduction or do not consume these services at all its identification relies on an exclusion restriction resulting from the tax credit schedule results show that the probability of consuming in home services increases with age and income a 10 increase in the tax reduction would increase from 45 9 to 50 8 the proportion of households benefiting from the tax reduction among those who consume paid in home services moreover 13 5 of households who do not actually consume such services would do so after the 10 increase in the tax reduction these simulated variations would mainly concern high income households

industrial eco efficiency in china a provincial quantification using three stage data envelopment analysis abstract the coordinated development of industrialization and the ecological environment is vital to achieve ecological civilization in china integratively considering the economy energy and resources and environment this study aims to measure the industrial eco efficiency of 30 provinces autonomous regions and municipalities in china between 2005 and 2013 a three stage data envelopment analysis dea modeling approach is adopted to eliminate interference of the external environment and statistical noise with industrial eco efficiency measurement the results show that regional industrial eco efficiency in china is affected by the factors of the environmental regulation technological innovation level of economic development and industrial structure after eliminating the impacts of external environment and statistical noise china s national average industrial eco efficiency declines by 30 between 2005 and 2013 the industrial eco efficiency of the 30 provinces increases but at different rates of growth the variation of overall regional industrial eco efficiency is primarily caused by scale efficiency furthermore all the 30 provinces are classified into four groups to interpret the causes of variation and differences of regional industrial eco efficiency in general the management and technology level and the economy of scale of industries should be improved simultaneously even though specific opportunities for industrial eco efficiency improvement vary across provinces in china

dynamic data envelopment analysis modeling intertemporal behavior of a firm in the presence of productive inefficiencies abstract this study extends data envelopment analysis dea to a dynamic framework our dynamic dea not only provides a measure of dynamic productive efficiency but can also be used as a nonparametric alternative to the econometric modeling of the intertemporal behavior of a firm

cost and efficiency in nursing homes a stochastic frontier approach abstract the average level of cost inefficiency in new york nursing homes is estimated at 29 based on a two year panel of 164 skilled nursing facilities and 443 combination skilled and health related facilities the stochastic frontier cost function is fit to the data utilizing the composed error model wherein statistical noise and allocative and technical inefficiency are jointly estimated there is no change in efficiency between 1987 and 1990 and it does not vary between for profit and not for profit homes excessive managerial and supervisory personnel and diseconomies of size are linked to inefficient operation chronic excess demand is suggested as a cause of the high level of inefficiency

privatization in eastern europe irreversibility and critical mass effects abstract this paper proposes a model to shed light on two important policy features of privatization in central and eastern europe the idea of a necessary critical mass of privatization on one hand and the great difficulties encountered in the actual privatization process on the other the model incorporates a positive externality related to the size of the private sector multiple equilibria may arise for political and economic reasons policies of free distribution are analysed with the model they may eliminate the danger of policy reversals due to excess unemployment but may at the same time increase the relative cost of restructuring leading in some cases to pareto inferior outcomes

the efficiency of nursing home chains data envelopment analysis is used to estimate technical efficiency in for profit independent and for profit chain nursing homes the empirical findings suggestceteris paribus that significant mult

carbon dioxide emissions allocation a review carbon dioxide co2 emissions allocation plays a fundamental role in determining reduction responsibility at economy level or emission permits at firm level past decades have seen the development and applications of various methods for co2 emissions allocation this paper provides a literature review of co2 emissions allocation with emphasis on the evolution of allocation methods used it begins with a summary of the most popular allocation principles and criteria that lay a foundation for the development of allocation methods we then classify the existing allocation methods into four groups namely indicator optimization game theoretic and hybrid approaches the main features and findings of past studies are identified and summarized while the fairness principle prevails in earlier studies the efficiency principle has been found to receive increasing attention recently we also present a comparison of the empirical results based on ten popular indicator methods to show how indicator choice affects the allocation results issues related to selecting appropriate methods in co2 emissions allocation are finally discussed further research may be carried out to strike a balance between fairness and efficiency so that the allocation results become more widely acceptable and economically feasible

a literature study for dea applied to energy and environment abstract this study systematically summarizes previous research efforts on data envelopment analysis dea applied to energy and environment in the past four decades including concepts and methodologies on dea environmental assessment industrial developments are very important for all nations in terms of their economic prosperities a problem is that the development produces various pollutions on air water and other types of contaminations all of which are usually associated with our health problems and climate changes thus it is necessary for us to consider how to make a balance between economic success and pollution mitigation to maintain a high level of social sustainability in the world it is widely considered that dea is one of the methodologies to examine the level of sustainability this study examines a recent research trend on dea applications from 1980s to 2010s nowadays many researchers have paid serious attention on how to combat various difficulties in the areas of energy and environment as a result the number of articles on dea applications on energy and environment has dramatically increased particularly after 2000s however it is true that dea has strengths and drawbacks in the applications therefore it is very important for us to carefully use dea for guiding large policy issues and business strategies such as the global warming and climate change an underlying premise of this study is that technology innovation in engineering and natural science may solve various problems by linking it with political and managerial efforts the use of dea provides a methodological linkage among them so enhancing the practicality in mitigating problems due to climate change and environmental pollutions this literature study along with a summary on conceptual and methodological developments provides us with guidelines for our future research works on dea on energy and environment issues

alternative measures of environmental technology structure in dea an application abstract the nonparametric data envelopment analysis dea literature on environmental efficiency ee considers handling undesirable outputs in two alternative ways either in their original forms with the assumption that these are weakly disposable or in various translated forms with the assumption that these are strongly disposable choosing a particular approach implies adoption of a particular distinct treatment of undesirable outputs and hence yields a distinct set of ee estimates to explore the effects of the interplay between choice of ee measure and specific treatment of undesirable outputs this paper attempts to generate all possible output oriented ee measures based on these two alternative approaches furthermore guided by the argument that slacks are important in identifying properly the efficiency behavior of firms it proposes two new alternative slacks based formulations of ee one based on the range directional model and the other on the generalized proportional distance function model using a confected data set of ten firms and a real life data set of 22 oecd countries our empirical analysis reveals that first ee scores are influenced not only by the choice of disposability assumption for undesirable outputs but also by the way these are treated in various translated forms second the choice of any particular treatment of undesirable outputs plays no role in influencing the rankings of firms and third our two new alternative ee formulations are at the least viable alternatives to existing ee measures in ranking firms according to their eco efficiency behavior

the distributional effects of emissions taxation in brazil and their implications for climate policy abstract the emission of greenhouse gases ghg generated by human activity is a major cause of global warming and climate change there is considerable debate about the choice of the best mechanism to reduce emissions under a climate policy the aim of this paper is to measure the impact of a policy of taxing ghg emissions on the brazilian economy as a whole and on different household groups based on income levels in 2009 the following databases were used supply and use tables household budget survey national household sample survey and emissions data from the brazilian ministry of science and technology and innovation a price system from a national input output model that incorporates the intensity of ghg emissions is used as well as a consumption vector broken down into ten representative households with different income levels the main results indicate that this taxation system was slightly regressive and had a small negative impact on output there were however significant emissions reductions

does ecological economics have a future contradiction and reinvention in the age of climate change abstract this paper addresses the role of neoclassical methodologies in ecological economics and the contradictions these methodologies pose to the field s critical founding principles we first consider robert costanza s treatment of nicholas stern s global deal and then survey climate change related articles published in this journal over the past five years this survey reveals how mainstream neoclassical methodologies dominate discourse and do so by marginalizing more critical political economy analyses this situation imperils the field s founding vision of a no growth steady state it also fails to address the related growth dynamics of capitalism without such a critical treatment the field s formal embrace of methodological pluralism actually entails an ideological empiricism that renders ecological economics theoretically incoherent this situation undermines the field s historical promise as an alternative economic paradigm ecological economics now faces a problematic future its survival in a form faithful to its founding vision will require an explicit choice to address its internal contradictions and reinvent itself in ways relevant to our contemporary context without such a choice ecological economics will likely succumb to an implicit acceptance of the hegemony of mainstream economic methodologies and their pro growth imperatives

technical efficiency and impact of environmental regulations in farrow to finish swine production in taiwan this article demonstrates how technical efficiency and the impact of environmental regulations of taiwanese farrow to finish swine production can be estimated in the presence of undesirable outputs the issue of measuring technical efficiencies while considering undesirable outputs has been addressed by past studies but the proper method of including undesirable outputs has always been a subject of debate this article develops a data envelopment analysis dea based model that includes undesirable outputs the technologies of desirable output production and undesirable output control are considered simultaneously this allows one to transform undesirable output into desirable output whereby a traditional shephard distance function can be used to measure technical efficiencies an approach to measuring the impacts due to environmental regulations is then derived empirical results show that larger farms are more technically efficient than small sized farms but no clear conclusions can be reached for the measures of regulatory impact among farms with different sizes on average the sample farms incurred an opportunity cost due to environmental regulations equivalent to 9 8 of market value opportunity costs rise with efficiency

carbon efficiency of us colleges and universities a nonparametric assessment abstractunder the american college and university presidents climate commitment acupcc institutes of higher education have pledged to pursue a goal of carbon neutrality we utilize emissions reported under the acupcc agreement and a nonparametric data envelopment analysis approach in order to evaluate the relative performance of signatories to the agreement in terms of producing teaching and research with the least greenhouse gas emissions we find that while many signatory institutions are now producing their desirable outputs relatively efficiently in terms of carbon emissions there still exists considerable variation in efficiency and potential for improvement results of a second stage efficiency change analysis shows evidence of both movement towards the efficiency frontier since signing and some movement of the frontier itself though this evidence comes primarily from teaching focused institutions

sugar beet for bioethanol production an approach based on environmental agricultural outputs abstract the eu imports both bioethanol and the raw material needed to produce it thirty percent of bioethanol is produced from sugar beets in the eu however sugar beet cultivated area and yields have fallen due to the 2006 sugar regime reform given the potential uncertainty about the future for sugar beet farmers biofuels may represent an alternative market this paper analyses potential contribution to the efficiency in terms of environmental output of the sugar beet crop both when production is oriented toward bioethanol and regarding the use of input an empirical application is performed in spain by data envelopment analysis dea the results show that 4 of farms have full technical efficiency while the rest have an average efficiency of 55 9 the figures show that inputs can be reduced over 40 and also show the low average level of input use efficiency in addition it cannot be said that there is a relationship between efficiency and farm scale the consideration of aspects such as the environmental advantages of using sugar beet production for bioethanol can open new lines of action to support this crop in the eu in addition boosting sugar beet production may reduce potential dependency on importation

non parametric productivity analysis with undesirable outputs an application to the canadian pulp and paper industry this article extends the chavas cox approach to non parametric analysis by incorporating undesirable outputs to provide a more complete representation of the production technology inner and outer non parametric technology bounds are constructed the methods are illustrated with application to time series data for the canadian pulp and paper industry conventional measures that ignore changes in pollutant outputs underestimate true productivity growth further there is a large gap between estimates generated with reference to inner and outer bounds to the technology suggesting that researchers need to be aware of the limitations of results derived from analyses relying only on dea methods copyright 2001 oxford university press

why are stabilizations delayed when a stabilization has significant distributional implications e g tax increases to eliminate a large budget deficit socioeconomic groups may attempt to shift the burden of stabilization onto other groups the process leading to stabilization becomes a war of attrition each group attempting to wait the others out and stabilization occurring only when one group concedes and bears a disproportionate share of the burden the authors solve for the expected time of stabilization in a model of rational delay and relate it to several political and economic variables they motivate this approach and its results by comparison to historical and current episodes copyright 1991 by american economic association

non compensatory non linear composite indicators for ranking countries a defensible setting composite indicators or indexes are very common in economic and business statistics for benchmarking the mutual and relative progress of countries in a variety of policy domains such as industrial competitiveness sustainable development globalization and innovation the proliferation of the production of composite indicators by all the major international organizations is a clear symptom of their political importance and operational relevance in policy making as a consequence improvements in the way these indicators are constructed and used seem to be a very important research issue from both the theoretical and operational points of view this article aims at contributing to the improvement of the overall quality of composite indicators or indexes by looking at one of their technical weaknesses that is the aggregation convention used for their construction for this aim we build upon concepts coming from multi criteria decision analysis measurement theory and social choice we start from the

an alternative approach to monetary aggregation in dea this paper proposes a set of alternative dea based money indices that are proved to be both theoretically and empirically competing monetary aggregates since they perform as good as the divisia aggregates based on all the results concerning causality forecasting and money demand we conclude that dea money aggregates prove to be at least competing alternatives to the divisia aggregates and hence suggest that these new aggregates may be considered along with the existing weighted monetary aggregates like the divisia ones given the inherent benefit of the doubt weighting mechanism underlying the dea models where the optimal weight assigned by dea to each monetary asset reflects the ongoing financial innovation and the reserve bank of india s policy priority in the distribution of total liquidity we feel that the dea money indices can truly capture the liquidity better with ongoing financial innovations in the economy

intertemporal speculation shortages and the political economy of price reform price controls often focus on commodities that are storable and can thus be used in intertemporal speculation second opposition to dismantling of controls is often based on claims of low supply response and greatly bolstered if a strong supply response fails to materialise this is especially relevant in eastern europe where experience with markets is limited we show the difficulties that these two factors create for gradual decontrol of prices we endogenise the probability of a collapse of the reform programme and show that such endogeneity in the presence of intertemporal speculation leads to a strong case against gradualism the smaller the initial price increase the lower the observed supply elasticity and the greater the probability that the programme of reform will be abandoned this implies that the policy that makes most sense from a microeconomic point of view decontrol immediately is also advisable from a macroeconomic point of view credibility problems which are at the core of the transitional output losses that characterise most stabilisation programmes will be much less under a cold turkey approach and so will therefore transitional unemployment

measuring macroeconomic performance in the oecd a comparison of european and non european countries abstract we study the macroeconomic performance of 19 oecd countries over the period 1970 1990 performance is defined in terms of the ability of a country s macroeconomic managers to provide four services to their citizens a high level of real gdp per capita a low rate of inflation a low rate of unemployment and a favorable trade balance we use linear programming techniques to construct a best practice macroeconomic performance frontier and to measure the performance of each country in each year relative to the frontier we then add two environmental disamenities carbon and nitrogen emissions to the service list and repeat the analysis to see if the performance rankings change throughout the analysis emphasis is placed on a comparison of the performance of 14 european oecd countries with that of five non european oecd countries we find that performance rankings do change and that the relative performance of the european countries declines when the environmental disamenities are added to the service list

the virtues of gradualism and legitimacy in the transition to a market economy this paper presents a simplified model of sectoral restructuring in eastern europe a move towards allocative efficiency is desired by the reform minded government but the shift to higher productivity which such efficiency requires would lead to massive layoffs and labour reallocation in the transition period we look at the impact of political constraints unanimity and or majority worker approval on reform proposals when the government faces a heterogeneous workforce holding private information on relative outside opportunities when the budgetary consequences of exit compensations are so important as to make partial reforms preferable to full reforms gradualism emerges as the optimum in a dynamic context without government commitment it is also shown that under democratic majority rule a government in control of the agenda of reforms can win majority approval for plans which end up hurting majority interests intertemporally by threatening to switch majorities in future reform proposals this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item

dynamic pollution adjusted inefficiency under the by production of bad outputs abstract this article extends the by production model to the dynamic context of adjustment costs associated with investment the empirical application focuses on panel data of french suckler cow farms over the period 1978 2014 considering emissions of greenhouse gases as bad output the paper estimates input and output specific technical inefficiency scores in the dynamic context and compares them with efficiency measures from the conventional static context our results reveal significant differences between inefficiency scores derived from the static and the dynamic frameworks for all variables except meat production the good output the inefficiency score is lower in the dynamic context than in the static context

multilateral productivity comparisons when some outputs are undesirable a nonparametric approach multilateral productivity comparisons of firms producing multiple outputs some of which are undesirable are obtained by making two modifications to the standard farrell approach to efficiency measurement the restriction that production technology satisfy strong disposability of outputs is relaxed to allow for the fact that undesirable outputs may be freely disposable and the efficiency measures are modified to allow for an asymmetric treatment of desirable and undesirable outputs performance measures that satisfy these requirements are calculated as solutions to programming problems the methodology is applied to a sample of mills producing paper and pollutants

do exogenous shocks better leverage the benefits of technological change in the staged elimination of differential environmental regulations evidence from china s cement industry before and after the 2008 great sichuan earthquake abstract technological modernization is crucial for productivity and environmental management and has profound implications for china where both overproduction and industrial pollution are serious issues this study reports empirical results for existing cement plants in sichuan province in china capturing changes in productivity and environmental performance between 2007 and 2010 during this time period as the moratorium period of differential environmental regulations came to an end certain existing plants modernized their production processes after the great sichuan earthquake in 2008 using primary data and the directional distant function approach this study investigates the financial and environmental benefits of technological modernization by examining improvements in productivity and environmental performance we find that the decision to modernize by changing the production process from conventional vertical shaft kilns vsks to modern dry rotary kilns as part of a cleaner production strategy yields significant savings in pollution abatement costs without compromising production efficiency we compare this modernization strategy to a reference strategy whereby firms continued to use vsk technology and invested in end of pipe technology to satisfy stricter environmental regulations we find that the environmental benefits of technological modernization are approximately three times greater than the non environmental financial benefits when environmental benefits are considered the payback period is significantly reduced going from 8 97 years to 2 26 years

data envelopment analysis on a relaxed set of assumptions data envelopment analysis is a procedure for evaluation of the relative efficiency of units in a production system dea involves construction of composite units as convex combinations of other units inputs and outputs under various conditions related to returns to scale the assumption of convexity is inconsistent with increasing returns to scale and not implied by constant or non increasing returns to scale an alternative dea approach which does not invoke the assumption of a convex production possibility set is developed in this paper it is implemented in two stages stage one is concerned with the spanning of isoquants and stage two with an evaluation of the position of an observed input output combination compared to the isoquants both stages involve linear programming techniques solely

nursing home care in the netherlands a nonparametric efficiency analysis abstract this paper analyzes the technical efficiency of dutch nursing homes with respect to the use of labor inputs by means of data envelopment analysis dea in addition the determinants of the efficiency scores are investigated using censored regression analysis special attention is paid to checking the robustness of the results to using different versions of dea and to the econometric specification of the censored regression models fifty percent of the nursing homes are fully efficient according to the theoretically preferred frontier with constant or decreasing returns to scale there is some evidence of a trade off between labor input efficiency and the quality of care

data envelopment analysis of different climate policy scenarios abstract recent developments in the political scientific and economic debate on climate change suggest that it is of critical importance to develop new approaches able to compare policy scenarios for their environmental effectiveness their distributive effects their enforceability their costs and many other dimensions this paper discusses a quantitative methodology to assess the relative performance of different climate policy scenarios when accounting for their long term economic social and environmental impacts the proposed procedure is based on data envelopment analysis here employed in evaluating the relative efficiency of eleven global climate policy scenarios the methodology provides a promising comparison framework it can be seen as a way of setting some basic guidelines to frame further debates and negotiations and can be flexibly adopted and modified by decision makers to obtain relevant information for policy design three major findings emerge from this analysis i stringent climate policies can outperform less ambitious proposals if all sustainability dimensions are taken into account ii a carefully chosen burden sharing rule is able to bring together climate stabilisation and equity considerations and iii the most inefficient strategy results from the failure to negotiate a post 2012 global climate agreement

productivity measurement in radial dea models with a single constant input abstract we consider productivity measurement based on radial dea models with a single constant input we show that in this case the malmquist and the hicks moorsteen productivity indices coincide and are multiplicatively complete the choice of orientation of the malmquist index for the measurement of productivity change does not matter and there is a unique decomposition of productivity change containing two independent sources namely technical efficiency change and technical change technical change decomposes in an infinite number of ways into a radial magnitude effect and an output bias effect we also show that the aggregate productivity index is given by the geometric mean between any two periods of the simple arithmetic averages of the individual contemporaneous and mixed period distance functions

dynamic environmental performance analysis a malmquist index approach abstract this article presents a general framework for dynamic environmental performance analysis by generalizing the approach proposed by kuosmanen and kortelainen kuosmanen t kortelainen m 2005 measuring eco efficiency of production with data envelopment analysis journal of industrial ecology 9 4 59 72 from a static to a dynamic setting for this purpose we construct an environmental performance index epi by applying frontier efficiency techniques and a malmquist index approach compared to other dynamic environmental productivity and efficiency analysis approaches based on these methods our approach builds on the standard definition of eco efficiency as it is presented in the ecological economics literature recognizing the importance to analyze the sources of environmental performance changes we show how changes in overall environmental performance can be decomposed into changes in relative eco efficiency and shifts in environmental technology respectively we apply the presented technique at the macro level to dynamic environmental performance analysis of 20 member states of the european union in 1990 2003 according to the results environmental technical change mostly explains the improvement in overall environmental performance while relative eco efficiency change has been minor for most countries during the sample period

understanding economic policy reform one of the eventual consequences of the global debt crisis was a wave of market oriented economic reforms this paper discusses the state of our knowledge on the political economy of this process why were inefficient and often unsustainable policies maintained for so long why are so many governments reforming now after decades of adherence to policies of an opposite kind have the reformers internalized the correct lessons from the east asian experience finally are there any helpful rules for reformers to follow in guiding their policies through complicated political terrain

using data envelopment analysis to assess macroeconomic policy performance it is common practice to summarize the macroeconomic performance of countries in terms of the four well known dimensions captured by the magic diamond of the oecd this study provides a comparison of several synthetic indicators that merge the four separate indicators into one single statistic these indicators are inspired by data envelopment analysis dea based models which allow for unequal weighting of the different economic objectives the calculated weights then act as proxies for the true policy priorities comparison of the models focuses on the underlying assumptions as well as on the empirical results they generate

between ostrom and nordhaus the research landscape of sustainability economics abstract we survey the emerging research area of sustainability economics through a quantitative full text analysis of peer reviewed journal publications from 1987 to 2013 to identify relevant contributions we draw on existing definitions of sustainability economics for a keyword based identification strategy a combined focus on a the human nature relationship b the long term uncertain future c normative orientation towards sustainability and d economic analysis our analysis of a random subsample of 343 relevant papers reveals that i sustainability economics is a rapidly developing research area ii while theoretical contributions shaped the area in earlier years applied work now constitutes the largest share of contributions iii the research landscape can be clustered into eleven research clusters these range from participatory governance of social ecological systems associated with the work of elinor ostrom to questions of intertemporal allocation and distribution applied to climate economics associated with the work of william nordhaus iv the research area is broad in scope and heterogeneous and there is relatively little interaction between important clusters v relevant contributions are published in more than 100 journals ten journals publish half of all contributions led by ecological economics and 40 appear in non economics journals underscoring the importance of interdisciplinary dialogue

assessing dynamic inefficiency of the spanish construction sector pre and post financial crisis this paper undertakes the full decomposition of dynamic cost inefficiency into technical scale and allocative inefficiency based on the dynamic directional distance function the empirical application estimates dynamic inefficiency in the spanish construction industry before and during the current financial crisis over the period 2001 2009 static inefficiency measures are biased in a context of a significant economic crisis with large investments and disinvestments as they do not account for costs in the adjustment of quasi fixed factors allocative inefficiency is smaller while technical inefficiency is larger when using the dynamic compared to the static framework results further indicate that overall dynamic cost inefficiency is very high with technical inefficiency being the largest component followed by allocative and scale inefficiency moreover overall dynamic cost inefficiency is significantly larger before the beginning of the financial crisis than during the financial crisis larger firms are less technically and scale inefficient than smaller firms on average but have more problems in choosing the mix of inputs that minimizes their long term costs firms that went bankrupt on average have a higher overall dynamic cost inefficiency and scale inefficiency than continuing firms

credibility real interest rates and the optimal speed of trade liberalization abstract this paper investigates the effects of imperfectly credible trade liberalization programs on welfare and the allocation of resources we present a rational expectations model in which a government with limited access to international borrowing will abort a liberalization program if hard currency reserves are depleted too quickly the liberalization s lack of perfect credibility acts as a distortion which becomes rationally intensified under the typical first best policy of immediate liberalization a more gradual lowering of trade barriers leads to higher welfare and a greater probability that the program succeeds we derive the optimal speed of liberalization and the endogenous level of credibility

measuring the effect of economic growth on countries environmental efficiency a conditional directional distance function approach using a recently developed probabilistic approach of a conditional directional distance function we measure the effect of economic growth on countries environmental efficiency in carbon dioxide emissions for a sample of 99 countries over the period of 1980 2010 our approach directly accounts for the exogenous factors influencing countries environmental production therefore we do not impose the separability condition on the estimated environmental efficiencies when examining the entire sample as well as the sample of developed countries our results reveal an inverted u shaped relationship between countries gdp per capita and environmental efficiency however when examining the relationship for the sample of developing countries the results reveal an n shaped form moreover our results show that countries ratifying the kyoto protocol tend to have higher efficiency scores implying that their mitigation activity is less costly

a study of optimal weights restriction in data envelopment analysis data envelopment analysis dea is a mathematical programming approach to assessing relative efficiencies within a group of decision making units dmus an important outcome of such an analysis is a set of virtual multipliers or weights accorded to each input or output factor taken into account due to the factor weight flexibility of the dea model a dmu may assign very low factor weight scores to some of its unfavourable inputs or outputs and appear as efficient thus producing nonsensical results in some cases this study focuses on this shortcoming to integrate an optimal weights restriction model and absolute restriction method to restricting weight flexibility in dea so that the evaluation result can be more realistic and finally takes the garbage clearance of each district in kaohsiung city in taiwan as an example for the illustration

trade liberalization credibility and self fulfilling failures abstract this paper addresses the question of whether there may be a self fulfilling aspect to the failure of liberalization attempts when it is widely known the government will abandon the reform if the central bank suffers an unacceptably large loss in reserves i derive the conditions for both sustained reform and a self fulfilling failure to be equilibrium outcomes under certain well defined conditions liberalization is most likely to succeed when the capital account is open

dea environmental assessment in time horizon radial approach for malmquist index measurement on petroleum companies abstract the climate change and various pollutions have been influencing our societies and economies the environmental assessment to be discussed in this study is increasingly important because it serves as an initial step toward pollution prevention corporate leaders policy makers researchers and individuals who are interested in environmental protection have been paying attention to the assessment so that they can prepare policy suggestions on the global warming and climate change as a methodology for the assessment this study proposes a use of data environment analysis dea in a time horizon most of data sets on the climate change are sampled in a time series where the performance of organizations fluctuates every moment in applying the dea environmental assessment to such a data set it is necessary for us to classify outputs into desirable e g oil production and undesirable e g co 2 emission categories because all organizations usually produce not only desirable but also undesirable outputs as a result of their economic activities to unify the two different types of outputs this study incorporates the concept of natural and managerial disposability into the computational framework of dea and extends them into a time horizon for the research purpose this study incorporates malmquist index into the proposed dea environmental assessment to examine an occurrence of a frontier shift among multiple periods the frontier shift indicates a technology progress and or managerial innovation during an observed period the index is further separated into four subcomponents in a time horizon these subcomponents are differently expressed under the natural and managerial disposability thus eight different subcomponents on the malmquist index are proposed to measure the frontier shift as an application this study uses the proposed dea approach to examine whether the frontier shift due to technology progress occurs or not in the petroleum industry from 2005 to 2009 our empirical study finds that the industry has not exhibited any major frontier shift under natural disposability but showing a considerable frontier shift under managerial disposability in other words the petroleum firms have improved their environmental performance by eco technology to reduce an amount of co 2 emission during the observed annual periods

efficiency assessment of primary care providers a conditional nonparametric approach this paper uses a fully nonparametric approach to estimate efficiency measures for primary care units incorporating the effect of exogenous environmental factors this methodology allows us to account for different types of variables continuous and discrete describing the main characteristics of patients served by those providers in addition we use an extension of this nonparametric approach to deal with the presence of undesirable outputs in data represented by the rates of hospitalization for ambulatory care sensitive condition acsc the empirical results show that all the exogenous variables considered have a significant and negative effect on efficiency estimates

the optimal speed of transition a general equilibrium analysis we present a benchmark model for the optimal speed of transition from a state owned to a private market economy based on the consumption savings decision in a closed economy we abstract from frictions to focus on the macroeconomic conditions for accumulation of private capital and closure or restructuring of state owned enterprises it is shown that hard budget constraints compensate for too slow speed of enterprise closure but that an excess speed of closure may slow down transition because of output contraction effects this will especially be the case if such a deviation occurs at early stages of transition

effects of pro growth policies on employment evidence of regional disparities the main objective of our research is to study the direct impact of pro growth economic policies on employment creation globally and regionally as evidence has countered policy makers expectation

regional concentration and efficiency in mexican manufacturing abstract this paper explores the link between industrial location concentration and economic efficiency in mexican manufacturing using a linear programming approach the authors calculate indices of overall technical allocative and scale efficiency for mexican manufacturing industries by state to test whether in 1985 those regions with high levels of industrial concentration were suffering from the costs of congestion the evidence suggests that at least at the aggregate level there continued to be a positive relationship between industry concentration and efficiency in production there is also evidence that overall efficiency was related to scale efficiency although highly industrialized regions on the production frontier often operated at inefficient scales in particular the most concentrated regions the federal district the state of mexico jalisco and nuevo leon consistently display decreasing returns to scale indicating that the process of industrial concentration may be leading to diseconomies of scale finally an econometric analysis suggests that scale urbanization and agglomeration economies are positively related to overall and technical efficiency at the regional level while foreign ownership is negatively related agglomeration economies at the industry level were not significant the paper also makes a methodological contribution it is the first application of a distance function production methodology to measuring regional efficiency in a developing country it demonstrates how to conduct distance function efficiency analysis using the newly developed gams mathematical programming environment these tools should be of considerable interest to applied microeconomists

asymmetric adjustment of dynamic factors at the firm level presents a study which addressed the deficiencies of previous studies the specification and estimation in the modeling of asymmetry and zero gross investment in the agricultural industry reference to previous studies on asymmetry information on the standard dual model results of the study

economic reform and dynamic political constraints in this paper we examine the impact of political constraints on economic reform plans with special reference to the transition from centrally planned to market economies we analyse the problem of an agenda setting reform minded government facing a bureaucracy or industrial sector for which allocative efficiency requires redundancies and an increase in work intensity the government also tries to minimize the rents conceded to its heterogeneous workforce we examine two types of political constraints unanimity rule and majority rule both in a one period and a two period horizon the main results are the following first of all we show how adverse selection and time consistency may generate the widely observed feature of gradualism as an ingredient of an optimal reform second under a majority rule it is shown to be possible for the government to obtain a majority vote for a reform scheme that intertemporally hurts majority interests indeed the government can improve rent extraction through the strategic use of the threat of future proposals the group which expects to be in the minority tomorrow may accept concessions while its votes can be used to extract rents from another group these results suggest that in a dynamic context democratic constraints should not be overestimated as an obstacle against efficiency enhancing economic reforms the results of this paper may throw some light on the political economy of current reforms in eastern europe governments and political decision makers in general always face political constraints when elaborating reform proposals they know that the need to overcome potential opposition from various groups of the population constrains proposals for change political constraints vary depending on the specific institutional structure of society and are clearly different under a military dictatorship than under a parliamentary democracy the role of political constraints seems particularly important in eastern europe today where new democratic governments face the huge task of achieving the transition to a market economy while the introduction of democracy may have removed some important obstacles to economic change namely the veto power of a powerful nomenclatura under communist one party rule fears are expressed that it could potentially jeopardize economic reforms which may during the transition period hurt a majority of the population what can economic theory tell us about optimal economic reform under political constraints this paper starts addressing this ambitious question by looking at structural reform focusing on a restructuring of economic sectors which requires massive redundancies and a significant rise in labour productivity our model illustrates the case of planning

estimating dynamic dual models under nonstatic expectations in this paper we derive a system of equations depicting agents dynamic decision rules under nonstatic price expectations based on the adjustment cost model of the firm the integrability conditions which can serve to guide the specification of flexible functional forms are established a two stage econometric model permitting empirical examination of both the expectations formation process and the dynamic structure of the industry is estimated using two different data series for u s production agriculture the estimation results suggest evidence of the presence of nonstatic price expectations in dynamic dual models for u s production agriculture

speed of adjustment and self fulfilling failure of economic reform abstract an economic reform programme where inefficient public labour is laid off is considered the immediate effect is a lowering of wages and increased profitability in the private modern sector over time as capital accumulates in the modern sector wages and production increases big bang reform generates a sharp transitory drop in wages while gradual reform gives a more modest decline in the presence of a subsistence wage constraint popular resistance can cause the cancellation of big bang reform two arguments for gradualism can in that case be made first a more gradual reform requires a less abrupt drop in the wage and will therefore be feasible second the initial wage drop will be stronger if a cancellation of reform is expected and since cancellation is dependent on the severity of the initial wage drop multiple equilibria occurs the existence of multiple equilibria is dependent on the speed of reform sufficiently gradual programmes have a unique successful equilibrium

the role of the reference technology in measuring productive efficiency after a twenty year lull the measurement of productive efficiency is enjoying a revival in particular the index of efficiency developed by debreu i95i and later utilised by farrell i957 has received considerable attention these measures have been used fairly extensively in empirical work in both the operations research and economic literature these types of indexes have also appeared in the growing literature on testing for regularity conditions in production e g in afriat i972 diewert and parkan i983 and varian 1984 since the farrell type measure is the focus in this paper a brief review is useful in the farrell framework overall efficiency oe can be decomposed into two multiplicative components allocative efficiency ae and technical efficiency te

competitiveness and productivity a case study of italian firms the purpose of this article is to obtain a synthetic measure of the multi dimensional concept of firm competitiveness and to analyse the role of different factors such as productivity firm size and cluster of industries for determining firm competitiveness in italy an adequate firm specific data set is constructed from balance sheets by using imputation methods for handling missing values the synthetic measure of competitiveness is obtained using a data envelopment analysis dea approach then a tobit model is considered to measure the influence of different factors on the measured competitiveness the results obtained are very interesting and coherent with the characteristics of the italian firms

biases in technical efficiency scores caused by intra input aggregation mathematical analysis and a dea application using simulated data in data envelopment analysis dea applications involving multiple inputs and outputs inputs are aggregated into the total amounts of each type of input for example if input types labour and capital are used to produce multiple outputs the total amount of labour used to produce all outputs is treated as one aggregated input and the total amount of capital as another resources are not disaggregated into input variables measuring the amount of labour used to produce the first output the amount of labour used to produce the second output the amount of labour used to produce the third output and so on for both labour and capital it is shown that such intra input aggregation causes downward bias in reported technical efficiency scores with variations in bias unrelated to true technical efficiency therefore with few exceptions any technical efficiency comparisons among dmus are invalid the presence of intra input aggregation bias is demonstrated mathematically simulation is used to exhibit it

productivity growth technical progress and efficiency change in industrialized countries this paper analyzes productivity growth in 17 oecd countries over the period 1979 1988 a nonparametric programming method activity analysis is used to compute malmquist productivity indexes these are decomposed into two component measures namely technical change and efficiency change we find that u s productivity growth is slightly higher than average all of which is due to technical change japan s productivity growth is the highest in the sample with almost half due to efficiency change jel c43 d24 in this paper we apply recently developed

environmental cost benefit analysis of alternative timing strategies in greenhouse gas abatement a data envelopment analysis approach assessing the benefits of climate policies is complicated due to ancillary benefits abatement of greenhouse gases also reduces local air pollution the timing of the abatement measures influences both the economic costs and ancillary benefits this paper conducts efficiency analysis of ten alternative timing strategies taking into account the ancillary benefits we apply the approach by kuosmanen and kortelainen valuing environmental factors in cost benefit analysis using data envelopment analysis ecological economics 62 2007 56 65 which does not require prior valuation of the environmental impacts the assessment is based on synthetic data from a dynamic applied general equilibrium model calibrated to the netherlands our assessment shows that if one is only interested in ghg abatement at the lowest economic cost then equal reduction of ghgs over time is preferred if society is willing to pay a premium for higher ancillary benefits an early mid intensive reduction strategy is optimal

valuing environmental factors in cost benefit analysis using data envelopment analysis abstract environmental cost benefit analysis ecba is used for the social evaluation of investment projects and policies that involve significant environmental impacts economic valuation of environmental impacts forms one of the critical steps of ecba we develop a new method for this purpose which does not require price estimation for environmental impacts using stated or revealed preference methods our approach is based on data envelopment analysis dea which is modified to ecba by using absolute shadow prices instead of relative prices we also discuss how the method can be used for sensitive analysis in ecba we illustrate the method by means of a hypothetical numerical example

an activity analysis model of the environmental performance of firms application to fossil fuel fired electric utilities the productivity of firms when some outputs pollution are undesirable has been studied in the literature for some time in this paper we introduce an environmental performance indicator based on the decomposition of overall factor productivity into a pollution index and an input output efficiency index this indicator is compared to the more conventional jaggi and freedman 1992 model results are given for illustrative purposes using data from u s fossil fuel fired electric utilities the rankings of the utilities obtained with the two models show significant divergence which is due to the different ways in which the undesirable outputs are dealt with as well as due to the different possible tradeoffs between the pollutants released into the atmosphere and the resources used as inputs

an economic approach to environmental indices abstract this study uses the directional output distance function from economic productivity theory as an alternative approach to environmental index construction we use the directional output distance function to aggregate multiple environmental objectives into one measure of environmental performance we apply this method to a set of watershed data and compare our results to the existing u s environmental protection agency epa index values when modeling the same set of objectives the directional output distance function and the existing epa index yield similar measures of environmental performance we discuss the mathematical properties of both indices using the axioms of economic index theory and explore the possible advantages to our approach the mathematical properties of the directional output distance function are well established and this approach provides a nonparametric way to aggregate individual characteristics this advances the standard use of a priori weighted summation and circumvents the often contentious selection of index weights

slacks based efficiency measures for modeling environmental performance we develop two slacks based efficiency measures for modeling environmental performance on the basis of environmental dea technology of the two measures one is a composite index with a higher discriminating power for modeling economic environmental performance and the other can be used to estimate the impacts of environmental regulations we apply the proposed measures to model the co2 emissions of 30 oecd countries from 1998 to 2002 and present the results obtained

economic value of greenhouse gases and nitrogen surpluses society vs farmers valuation abstract livestock supply must challenge the growth of final demand in the developing countries this challenge has to take into account its ecological effects since the dairy and livestock sectors are clearly pointed out as human activities which contribute significantly to environmental deterioration therefore livestock activity models have to include desirable and undesirable outputs simultaneously using this perspective we implement a data envelopment analysis model to evaluate shadow prices of outputs under contradictory objectives between the society and the farmers we show that farmers are able to reduce pollution significantly if society accepts to balance farmers opportunity cost finally we observe that initial levels of the co 2 tax implemented in european countries are in line with farmers valuation while the current level of the co 2 tax tends to reach the value of pollution targeted by the society

how not to measure sustainable value and how one might abstract sustainability is a complex multidimensional concept that entails economic environmental and social aspects the sustainable value sv method developed by f figge and t hahn ecol econ 48 2004 173 187 is one of the most promising attempts to measure sustainability performance of firms sv measures corporate contributions to sustainability by valuing resource use based on the opportunity cost which must be estimated this paper critically examines figge and hahn s estimator for opportunity cost and shows that the proposed estimator rests on a number of strong unrealistic assumptions evidence from monte carlo simulations conducted by authors shows that the proposed estimator performs very poorly even under ideal conditions having identified shortcomings in the sv method we review some econometric approaches with a proven statistical foundation which might be usefully applied in the present context

capital accumulation unemployment and self fulfilling failure of economic reform abstract i consider fiscal reform and the consequences of expectations about reform cancellation the reform implies reduced taxes and the laying off of employees in an inefficient public sector if the resulting unemployment level declines sufficiently fast the reform is completed on the other hand if high unemployment levels prevail for too long the reform is cancelled cancellation affects the return on capital negatively hence expectations about cancellation will depress capital accumulation and increase the level of unemployment as a result multiple rational expectation equilibria may arise where expectations about cancellation prove self fulfilling the modelling framework is leontief technology in combination with ramsey optimization that exhibits simple and attractive algebra