the ir relevance of real wage rigidity in the new keynesian model with search frictions we explore the role of real wage dynamics in a new keynesian business cycle model with search and matching frictions in the labor market both job creation and destruction are endogenous we show that the model generates counterfactual inflation and labor market dynamics in particular it fails to generate a beveridge curve vacancies and unemployment are positively correlated introducing real wage rigidity leads to a negative correlation and increases the magnitude of labor market flows to more realistic values however inflation dynamics are only weakly affected by real wage rigidity this is because of the presence of labor market frictions which generate long run employment relationships the measure of real marginal cost that is relevant for inflation dynamics via the phillips curve contains a dynamic component that does not necessarily move with real wages

real time density forecasts from bayesian vector autoregressions with stochastic volatility central banks and other forecasters are increasingly interested in various aspects of density forecasts however recent sharp changes in macroeconomic volatility including the great moderation and the more recent sharp rise in volatility associated with increased variation in energy prices and the deep global recession pose significant challenges to density forecasting accordingly this paper examines with real time data density forecasts of u s gdp growth unemployment inflation and the federal funds rate from bayesian vector autoregression bvar models with stochastic volatility the results indicate that adding stochastic volatility to bvars materially improves the real time accuracy of density forecasts this article has supplementary material online

effects of the minimum wage on the employment status of youths an update the large decline in the relative value of the minimum wage during the 1980s makes that period a valuable one for identifying the impact of variation in the minimum wage on youth employment this study produces the robust finding that when the experience of the 1980s is included a 10 percent increase in the minimum wage is estimated to reduce teen employment by less than 1 percent the lower end of the range of previous estimates because this small employment effect is offset by a labor force withdrawal effect the study finds no discernible effect on measured unemployment the study also finds no apparent effect of the minimum wage on the employment of young adults aged 20 24

energy consumption and co2 emissions convergence in european union member countries a tonneau des danaides abstract as the consumption of energy is responsible for approximately 80 of ghg in eu iea 2008 the impact of energy activity on the environment has received increasing attention over the last decades from scholars researchers politicians and society as a whole within eu member countries it is commonly accepted that the design of energy and mitigation policies either at national or at european level require a detailed and integrated investigation of convergence divergence pattern among the participating countries in this paper we examine the distribution dynamics of energy consumption and co2 emissions their intensities as well as the carbonization index in 23 european countries over a forty one year period in particular from 1970 to 2010 for this purpose we used quah s methodology which is based on the dynamics of cross section distributions the main conclusion is that for all the examined variables the hypothesis of convergence patterns for the eu sample is not valid moreover regarding each examined variable different groups of polarization established important differences occur across eu countries according to the climate type with respect to the examined variables our analysis provides strong evidence supporting the fact that national and european energy and mitigation policies should be implemented according to the non convergence paradigm the body of evidence provided by our analysis is of great importance to energy policy makers and for issues related to climate change

time series minimum wage studies a meta analysis time series minimum wage studies a meta analysis author s david card and alan b krueger reviewed work s source the american economic review vol 85 no 2 papers and proceedings of the hundredth and seventh annual meeting of the american economic association washington dc january 6 8 1995 may 1995 pp 238 243 published by american economic association stable url http www jstor org stable 2117925 accessed 04 11 2011 15 46

the last word on the wage curve abstract since 1990 there has been extensive international research on the responsiveness of wages of individuals to changing local labour market conditions for many countries an inverse relationship between wages and local unemployment rates has been found in their book the wage curve blanchflower and oswald argued that the unemployment elasticity of pay is around 0 1 in most countries in a 1995 literature survey card referred to this striking empirical regularity as being close to an empirical law of economics nonetheless reported elasticities do vary even excluding outliers between about 0 5 and 0 1 there is also considerable heterogeneity among wage curve studies in terms of data and model specification this paper carries out meta analytic techniques on a sample of 208 elasticities derived from the literature to uncover the reasons for the differences in empirical results across studies several causes of variation are identified there is also clear evidence of downward publication bias in addition many reported t statistics are biased upwards due to the use of aggregate unemployment rates a maximum likelihood method and a trimming procedure are used to correct for these biases both methods give similar results for our sample an unbiased estimate of the wage curve elasticity at the means of study characteristics is about 0 07

dynamic effects of monetary policy shocks on macroeconomic volatility we use a simple new keynesian model with firm specific capital non zero steady state inflation long run risks and epstein zin preferences to study the volatility implications of a monetary policy shock an unexpected increase in the policy rate by 150 basis points causes output and inflation volatility to rise around 10 above their steady state standard deviations var based empirical results support the model implications that contractionary shocks increase volatility the volatility effects of the shock are driven by agents concern about the in ability of the monetary authority to reverse deviations from the policy rule and the results are re enforced by the presence of non zero trend inflation

decomposition of aggregate carbon intensity for the manufacturing sector comparison of declining trends from 10 oecd countries for the period 1971 1991 abstract as with total energy consumption or aggregate energy intensity changes in aggregate carbon intensity may also be decomposed or attributed to changes in various components including fuel mix for electricity generation final energy mix sub sectoral economic activity and sub sectoral energy intensities the adaptive weighted divisia rolling base year index specification is applied to total carbon emissions from the manufacturing sector of 10 oecd countries for the period 1971 1991 declines in aggregate carbon intensity for these countries range from 70 and may be primarily attributed to decreases in energy intensity i e increases in the average factor productivity of energy however these declines in aggregate carbon intensity appear to have a complex linkage to increases in energy prices as well as changes in other determinants of gross industrial output

manufacturing energy use in oecd countries decomposition of long term trends abstract in this paper we examine manufacturing energy use in 13 oecd countries over the period 1971 1995 we describe changes in aggregate energy intensity using the adaptive weighting divisia decomposition method we contrast the development in the periods after the oil price shocks of 1973 and 1979 with the period of relatively stable energy prices after the oil price crash of 1986 the results show that manufacturing output grew in most countries pushing up energy use the share of electricity increased in almost every sector while there was a clear trend away from oil and coal towards natural gas changes in the structure of output drove up energy use between 1973 and 1994 in some countries and down in others changes in energy intensities had a profound and downward effect on manufacturing energy use in all countries however contrasting the period after oil prices fell in 1986 with earlier years we see that for most countries the rate of energy intensity decline slowed slightly but did not reverse with falling prices in a few countries efficiency improvements continued to have a strong effect this suggests that even without higher prices improvements of energy efficiency seems to take place

the macroeconomic effects of large scale asset purchase programmes the effects of asset purchase programs on macroeconomic variables are likely to be moderate we reach this conclusion after simulating the impact of the federal reserve s second large scale asset purchase program lsap ii in a dsge model enriched with a preferred habitat framework and estimated on u s data our simulations suggest that such a program increases gdp growth by less than half a percentage point although the effect on the level of gdp is very persistent the program s marginal contribution to infl ation is very small one key reason for our fi ndings is that we estimate a small degree of fi nancial market segmentation if we enrich the set of observables with a measure of long term debt the semi elasticity of the risk premium to the amount of debt in privatesector hands is substantially smaller than that reported in the recent empirical literature in this case our baseline estimates of the effects of lsap ii on the macroeconomy decrease by at least a factor of two throughout the analysis a commitment to an extended period at the zero lower bound for nominal interest rates increases the effects of asset purchase programs on gdp growth and infl ation

converging to a common pattern of energy use in developing and industrialized countries abstract the evolution of the energy intensity paths in the period 1971 to 1992 shows developing and industrialized countries converging to a common pattern of energy use this trend becomes evident when using the gross domestic product of each country expressed in purchasing power parity in constant us dollars developing countries have been reluctant to make commitments under the kyoto protocol as they oppose any measure to reduce greenhouse gas emissions that might constrain their economic development however the use of the energy intensity indicator can be an alternative measure preserving the economic development while reducing greenhouse gas emissions for the fulfillment of the kyoto protocol goals

monetary policy inflation expectations and the price puzzle this article re examines the var evidence on the price puzzle and proposes a new theoretical interpretation using actual data and two identification strategies based on zero restrictions and model consistent sign restrictions we find that the positive response of prices to a monetary policy shock is historically limited to the sub samples that are typically associated with a weak interest rate response to inflation using pseudo data generated by a sticky price model of the us economy we then show that the structural vars are capable of reproducing the price puzzle only when monetary policy is passive the omission in the vars of a variable capturing expected inflation is found to account for the price puzzle observed in simulated and actual data structural vector autoregressions svars are widely used for measuring and understanding the effects of monetary policy innovations on the aggregate economy while most results in the var literature are consistent with economic intuition and macroeconomic theory the typically found positive and significant reaction of the price level on impact to a monetary policy shock is a fact that most monetary models

economic theory and climate change policy our willingness to embrace climate change policies depends on our perception of their benefits and costs evaluation of these costs and benefits requires careful economic analysis yet the standard tools for such assessment computable general equilibrium cge models are inadequate on several grounds their underlying theory suffers from well known logical difficulties in general their equilibria may be neither unique stable nor efficient moreover real world phenomena such as increasing returns to scale learning and technological innovation are neglected in cge models these phenomena make the resulting equilibria in the models inefficient in the real world they can lock society into sub optimal technology choices they introduce uncertainty and path dependence annihilating the concept of a single efficient allocation produced by the unfettered market yet conventional economics assesses the cost of policies solely on the basis of their departure from a purportedly efficient equilibrium ignoring deeper structural changes that are often decisive in practice new socio economic theories and models are emerging that allow for bounded rationality the limiting and enabling character of institutions technological change and the complexities and uncertainties in economic evolution meanwhile existing models should be modified to better reflect real world phenomena and to abandon unfounded assumptions about the inherent inefficiencies of government intervention in the market

the impact of the volatility of monetary policy shocks this paper studies the impact of the volatility of monetary policy using a structural vector auroregression svar model enriched along two dimensions first it allows for time varying variance of monetary policy shocks via a stochastic volatility specification second it allows a dynamic interaction between the level of the endogenous variables in the var and the time varying volatility the analysis establishes that the nominal interest rate output growth and inflation fall in reaction to an increase in the volatility of monetary policy the analysis also develops a dynamic stochastic general equilibrium model enriched with stochastic volatility to monetary policy that generates similar responses and provides a theoretical underpinning of these findings

minimum wages and the demand for labor i formulate measures of the effective minimum wage based on broad definitions of the labor costs that face employers and use these measures in reestimating some simple equations relating the relative employment of youths and adults to the u s minimum wage using aggregate data for 1954 78 i then ground the model more closely in the theory of factor demand first by adding the relative wages of youths and adults to the equation describing their relative employment and then by specifying a complete system of demand equations for these two types of labor teen employment responds quite robustly to changes in the effective minimum in these specifications with an elasticity of 0 1 a translog cost function defined over young workers adults and capital shows that the effective minimum wage reduces employers ability to substitute other factors for young workers using both sets of results i find that a subminimum wage for youths would have increased their employment with at most a small loss of jobs among adults this abstract was borrowed from another version of this item

carbon intensity and economic development 1962 1991 a brief exploration of the environmental kuznets curve the relationship between national carbon dioxide emissions intensity co2 emitted per unit of gross domestic product and level of economic development has changed from essentially linear in 1962 to strongly curvilinear in 1991 the inverted u curve reached statistical significance briefly in the early 1970s and increasingly since 1982 this is the result not of groups of countries passing through stages of development but of efficiency improvements in a small number of wealthy countries combined with worse performance in poor and middle income countries the curvilinear relation is deepening and is likely to persist due to constraints on poorer countries in the world economy

impacts of growth and structural change on co2 emissions of developing countries abstract carbon dioxide emissions the most significant greenhouse gas are growing at more rapid rates in developing economies relative to advanced economies this paper estimates the effects of the growth of gdp changes in industrial structure fuel mixes and energy efficiency on the carbon dioxide emissions of nine developing countries using a decomposition model policy implications for reducing emissions in the light of the findings are discussed

unemployment fears and deflationary spirals the interaction of incomplete markets and sticky nominal wages is shown to magnify business cycles even though these two features in isolation dampen them during recessions fears of unemployment stir up precautionary sentiments which induces agents to save more the additional savings may be used as investments in both a productive asset equity and an unproductive asset money but even a small rise in money demand has important consequences the desire to hold money puts deflationary pressure on the economy which provided that nominal wages are sticky increases wage costs and reduces firm profits lower profits repress the desire to save in equity which increases the fear of unemployment and so on this is a powerful mechanism which causes the model to behave differently from both its complete markets version and a version with incomplete markets but without aggregate uncertainty in contrast to previous results in the literature agents uniformly prefer non trivial levels of unemployment insurance

the term structure of interest rates in a dsge model with recursive preferences abstract a dynamic stochastic general equilibrium dsge model in which households have epstein and zin recursive preferences is solved with perturbation the parameters governing preferences and technology are estimated by maximum likelihood using macroeconomic data and the term structure of interest rates the estimates imply a large risk aversion an elasticity of intertemporal substitution higher than one and substantial adjustment costs furthermore the paper identifies the tensions within the model by estimating it on subsets of these data the analysis concludes by pointing out potential extensions that may improve the model s fit

the optimal inflation rate in new keynesian models should central banks raise their inflation targets in light of the zero lower bound we study the effects of positive steady state inflation in new keynesian models subject to the zero bound on interest rates we derive the utility based welfare loss function taking into account the effects of positive steady state inflation and solve for the optimal level of inflation in the model for plausible calibrations with costly but infrequent episodes at the zero lower bound the optimal inflation rate is low typically less than two percent even after considering a variety of extensions including optimal stabilization policy price indexation endogenous and statedependent price stickiness capital formation model uncertainty and downward nominal wage rigidities on the normative side price level targeting delivers large welfare gains and a very low optimal inflation rate consistent with price stability these results suggest that raising the inflation target is too blunt an instrument to efficiently reduce the severe costs of zero bound episodes

the laffer curve revisited abstract laffer curves for the us the eu 14 and individual european countries are compared using a neoclassical growth model featuring constant frisch elasticity cfe preferences new tax rate data is provided the us can maximally increase tax revenues by 30 with labor taxes and 6 with capital taxes we obtain 8 and 1 for the eu 14 there 54 of a labor tax cut and 79 of a capital tax cut are self financing the consumption tax laffer curve does not peak endogenous growth and human capital accumulation affect the results quantitatively household heterogeneity may not be important while transition matters greatly

has monetary policy become more effective we investigate the implications of changes in the structure of the u s economy for monetary policy effectiveness estimating a vector autoregression over the pre and post 1980 periods we provide evidence of a reduced effect of monetary policy shocks in the latter period we estimate a structural model that replicates well the economy s response in both periods and perform counterfactual experiments to determine the source of the change in the monetary transmission mechanism and in the economy s volatility we find that by responding more strongly to inflation expectations monetary policy has stabilized the economy more effectively in the post 1980 period

employment effects of two northwest minimum wage initiatives i introduction the impact of a minimum wage on employment has long been of interest to economists such as stigler 1946 because it provides a relatively direct test of a conventional theoretical prediction that a binding increase in the minimum wage should reduce employment among low skilled workers although this theoretical prediction has not gone unchallenged as in lester 1946 early empirical work summarized in brown gilroy and kohen 1983 confirmed theoretical predictions using aggregate time series data for young workers which indicated that a minimum wage has a small negative employment effect by 1990 there was general consensus in the profession that minimum wage laws reduced employment among teenage and low wage workers albeit by a small amount ehrenberg 1995 and others have argued that subsequent empirical evidence provides less confidence in both the conventional view that the minimum wage lowers teenage or low skilled employment and that neoclassical theory can account for the relationship between them for example card and krueger 1995 show in a 30 study meta analysis that past time series results are sensitive to the specification and suggest that when appropriately specified the minimum wage has had no significant effects on employment over the last 25 yr alternatively neumark and wascher 1998 find negative employment effects of the minimum wage consistent with structural change using time series data and specifications that do not suffer from the biases present in earlier work cross sectional studies as in currie and fallick 1996 burkhauser couch and wittenburg 2000 and neumark and wascher 2001 also find mixed evidence of employment effects on low wage workers due to the minimum wage thus traditional empirical assessments of the minimum wage yield mixed evidence on the employment impact of the minimum wage the natural experiment methodology was introduced as an alternative to the cross sectional and time series approaches and exploits both the time series wage variation before and after the treatment of a minimum wage increase and the cross sectional wage variation between the treatment state and a control state that did not experience a change in the minimum wage for example card and krueger 1994 analyzed employment growth in 410 fast food restaurants in new jersey and pennsylvania before and after the 1992 minimum wage increase in new jersey from 4 25 to 5 05 they find no evidence linking the increase in the minimum wage to reduced employment in fast food restaurants both when comparing new jersey with pennsylvania and when comparing impacted versus nonimpacted restaurants in new jersey neumark and wascher 2000 reexamine the impact of the 1992 new jersey minimum wage increase using payroll data for hours worked by fast food employees and bureau of labor statistics bls eating and drinking employment data and find that the minimum wage significantly reduced employment in new jersey versus pennsylvania thus even studies that apply similar natural experiment techniques and data for a given minimum wage treatment as in katz and krueger 1992 deere murphy and welch 1995 kim and taylor 1995 and card and krueger 2000 can yield different conclusions regarding its employment effect our empirical analysis exploits a unique natural experiment initiated by oregon and washington voter initiatives that raised the minimum wage over three successive years 1997 1999 in oregon and 1999 2001 in washington by approximately 37 in both states following prior work we focus on the eating and drinking industry sic 58 which is a low wage industry that has been extensively studied in prior work due to an expectation of a binding minimum wage bls wage data available between 1997 and 2001 indicate that the successive minimum wage increases become increasingly binding for most but not all eating and drinking jobs at the lower end of the wage distribution

methodological proposal for territorial distribution of the percentage reduction in gross inland energy consumption according to the eu energy policy strategic goal abstract a 20 reduction in the consumption of energy is one of the main goals of the european union s eu 20 20 20 energy strategy but the uniform application of this overall goal to all of the countries is neither fair nor equitable as it does not take into consideration the characteristics of the energy system in each member state this article therefore proposes a nonlinear distribution methodology with objective dynamic goals for reducing gross inland energy consumption according to the context and characteristics of each member state we hope it will open discussion on how these overall goals can be weighted then we analyse the situation of the energy indicators related to energy efficiency in the reference year 2005 used by the eu for reaching its goal of reducing the gross inland consumption by 20 by 2020 and its progress from 1996 to 2007 finally the methodology proposed is applied to the year 2020 on the nuts0 territorial level that is to members of the eu according to the eurostat nomenclature of territorial units for statistics nuts weighting is done based on energy intensity per capita gross inland consumption and per capita energy intensity in two scenarios the eu 15 and eu 27

is the time series evidence on minimum wage effects contaminated by publication bias i introduction economists often express concern that the journal review process has the unintended effect of biasing published empirical results towards the rejection of economic null hypotheses in favor of statistically significant results that are consistent with economists priors or predictions in other disciplines meta analyses of published papers generally focusing on clinical trials provide some evidence consistent with a bias towards publication of significant results see for example berlin et al 1989 under the reasonable presumption that the parameter of interest such as the effect of a drug should be constant across studies 1 in economics however the parameters of statistical models are more likely to vary across samples especially when the samples cover different time periods because of changed behavior e g lucas 1976 model misspecification or measurement changes the possibility of parameter instability makes it difficult to apply standard meta analysis techniques to the economics literature because these techniques draw inferences regarding publication bias from changes in estimates across samples 2 in this paper we suggest a method of testing the null hypothesis of no publication bias when parameters are changing in particular if there is a specification that is plausibly free of selective specification search then that specification can be used as a benchmark with which to compare changes in estimates across the published studies a statistical test for whether the changes in estimates across the published studies are significantly different from those for the benchmark specification estimated over different sample periods can then be used to assess the evidence of publication bias in the published studies under consideration we apply our approach to the question of whether there is evidence of publication bias in the time series literature on the employment effects of the minimum wage we choose this application for three reasons first the economic impact of the minimum wage is an important issue for policy second widespread interest in this question has generated sufficient research to make the application of meta analysis techniques feasible third it is the topic of one of the rare applications of meta analysis in economics card and krueger 1995a b we show that when we recognize the special complexities associated with meta analysis of studies using time series data the evidence that the minimum wage literature is contaminated by publication bias is much weaker ii evidence of publication bias the approach used by card and krueger to test for publication bias in the minimum wage literature is relatively straightforward first in the absence of publication bias and if parameters are stable then estimated t statistics for employment effects of minimum wages should rise as the sample period is extended more precisely the log of the absolute t ratios should rise one for one with the log of the square root of the degrees of freedom this is closely related to the approach of berlin et al 1989 who test for publication bias in research from clinical trials by asking whether the estimated magnitudes of the effects in published studies are negatively related to sample sizes the intuition is that if only significant results get published the estimated effect will be bigger when it is based on a smaller sample second a tendency for published t statistics for employment effects to be clustered around two can be interpreted as an indication of publication bias using these techniques card and krueger report evidence that is consistent with publication bias in the minimum wage literature focusing on the existing time series studies that use quarterly data they first report that a regression of the log of the absolute t statistics for the estimated minimum wage effects from these studies on the log of the square root of the degrees of freedom yields a negative coefficient estimate rather than the positive coefficient of one implied by the null hypothesis of no publication bias

the minimum wage and teenage employment a reanalysis with attention to serial correlation and seasonality we examine the effects of minimum wage legislation in canada over the period 1975 93 for teenagers we find that a 10 increase in the minimum wage is associated with roughly a 2 5 decrease in employment we also find that this result is driven by low

transparency expectations anchoring and inflation target abstract in various speeches former fed chairman ben bernanke contrasted the proposal of setting a higher inflation target by claiming that it could unanchor inflation expectations a standard new keynesian framework with learning supports this claim both asymptotically because a higher inflation target shrinks the e stability region when a central bank follows a taylor rule and in the transition phase because a higher inflation target slows down the speed of convergence of expectations transparency helps anchoring expectations however the importance of being transparent diminishes with the level of the inflation target finally the higher the inflation target the more policy should respond to inflation and the less to output to guarantee e stability hence a policy that increases both the inflation target and the monetary policy response to output would be reckless

richer and cleaner a study on carbon dioxide emissions in developing countries abstract the climate change debate has drawn attention to the problem of greenhouse gases emissions into the atmosphere one of the most important issues in the policy debate is the role that should be played by developing countries in joining the commitment of developed countries to reduce ghg emissions and particularly co2 emissions this debate calls into play the relationship between energy consumption co2 emissions and economic development in this paper we use a panel data model for 110 world countries to estimate the relationship between co2 emissions and gdp and to produce emission forecast the paper contains three major results i the empirical relationship between carbon dioxide and income is well described by non linear gamma and weibull specifications as opposed to more usual linear and log linear functional forms ii our single equation reduced form model is comparable in terms of forecasted emissions with other more complex less data driven models iii despite the decreasing marginal propensity to pollute our forecasts show that future global emissions will rise the average world growth of co2 emissions between 2000 and 2020 is about 2 2 yr while that of non annex 1 countries is posted at 3 3 yr

fourier quantile unit root test for the integrational properties of clean energy consumption in emerging economies abstract since the adoption of the kyoto protocol in 1997 and its entry into force in 2005 as well its aftermath such as the doha amendment and paris agreement national policies have become more conscious of the usage of clean energy mostly the different forms of renewable energy and nuclear energy ratifying countries and signatories had committed themselves to binding targets for the reduction of greenhouse emissions by 8 with respect to 1990 levels until 2012 also based on the particular contribution to global emissions from each country this paper examines the integrational properties of clean energy consumption from eight emerging economies which are also high greenhouse gas emitters the empirical results show that the clean energy consumption is stationarity for brazil and philippines by using a quantile unit root test without smooth breaks koenker and xiao 2004 however after capturing the smooth breaks bahmani oskooee et al 2018 we find the clean energy consumption of china pakistan and thailand are stationary the time varying deterministic trend with smooth breaks is more fitted to the path of clean energy consumption in comparison to the deterministic trend without smooth breaks the paper suggests economic insights useful for policy making

a meta analytic assessment of the effect of immigration on wages in our increasingly interconnected and open world international migration is becoming an important socio economic phenomenon for many countries since the early 1980s many studies have been undertaken of the impact of immigration on host labour markets borjas 2003 noted that the estimated effect of immigration on the wage of native workers varies widely from study to study and sometimes even within the same study in addition these effects cluster around zero such a small effect is a rather surprising outcome given that in a closed competitive labour market an increase in labour supply may be expected to exert a downward pressure on wages we revisit this issue by applying meta analytic techniques to a set of eighteen papers which altogether generated 348 estimates of the percentage change in the wage of a native worker with respect to a one percentage point increase in the ratio of immigrants over native workers while many studies in our database employ us data estimates are also obtained from germany the netherlands france norway austria israel and australia our analysis shows that results vary across countries and are inter alia related to the type of modelling approach technical issues such as publication bias and quality of the estimates are addressed as well

trend inflation indexation and inflation persistence in the new keynesian phillips curve purely forward looking versions of the new keynesian phillips curve nkpc generate too little inflation persistence some authors add ad hoc backward looking terms to address this shortcoming we hypothesize that inflation per sistence results mainly from variation in the long run trend component of inflation which we attribute to shifts in monetary policy we derive a version of the nkpc that incorporates a time varying inflation trend and examine whether it explains the dynamics of inflation when drift in trend inflation is taken into account a purely forward looking version of the model fits the data well and there is no need for backward looking components jel e12 e31 e52 in this paper we consider the extent to which guillermo calvo s 1983 model of nominal price rigidities can explain inflation dynamics without relying on arbitrary backward looking terms in its baseline formulation the calvo model leads to a purely forward looking new keynesian

job uncertainty and deep recessions abstract we study a model where households are subject to uninsurable unemployment risk price setting is subject to nominal rigidities and the labor market is characterized by matching frictions and inflexible wages higher risk of job loss and worsening job finding prospects during unemployment depress goods demand because of a precautionary savings motive lower goods demand reduces job vacancies and the job finding rate producing an amplification mechanism due to endogenous countercyclical income risk amplification derives from the combination of incomplete financial markets and frictional goods and labor markets the model can account for key features of the great recession

the macroeconomics of trend inflation most macroeconomic models for monetary policy analysis are approximated around a zero inflation steady state but most central banks target an inflation rate of about 2 percent many economists have recently proposed even higher inflation targets to reduce the incidence of the zero lower bound constraint on monetary policy in this survey we show that the conduct of monetary policy should be analyzed by appropriately accounting for the positive trend inflation targeted by policymakers we first review empirical research on the evolution and dynamics of u s trend inflation and some proposed new measures to assess the volatility and persistence of trend based inflation gaps we then construct a generalized new keynesian model that accounts for a positive trend inflation in this model an increase in trend inflation is associated with a more volatile and unstable economy and tends to destabilize inflation expectations this analysis offers a note of caution regarding recent proposals to address the existing zero lower bound problem by raising the long run inflation target jel e12 e31 e32 e52 e58

estimating energy conservation patterns of greek households abstract this paper develops an empirical model to investigate the main determinants of household energy conservation patterns in greece employing cross section data in the empirical analysis household energy conserving choices models are employed using a discrete and a latent trait variable respectively as a dependent variable the results show that socio economic variables such as consumers income and family size are suitable to explain differences towards energy conservation preferences in addition the results suggest that electricity expenditures and age of the respondent are negatively associated with the number of energy conserving actions that a consumer is willing to adopt finally other variables such as environmental information feedback and consciousness of energy problems are characteristics of the energy saver consumer by evaluating consumer s decision making process with regards to energy conservation measures we are able to formulate and propose an effective energy conservation framework for greece an energy policy framework is among the main prerequisites not only to achieve sustainable development but also to maintain consumers quality of life

the role of automatic stabilizers in the u s business cycle most countries have automatic rules in their tax and transfer systems that are partly intended to stabilize economic uctuations this paper measures how eective they are at lowering the volatility of u s economic activity we identify seven potential stabilizers in the data and include four theoretical channels through which they may operate in a business cycle model calibrated to the u s data the model is used to compare the volatility of output in the data with counterfactuals where some or all of the stabilizers are shut down our rst nding is that proportional taxes like sales property and corporate income taxes contribute little to stabilization our second

the international transmission of volatility shocks an empirical analysis this paper proposes an empirical model which can be used to estimate the international transmission of volatility shocks using this model we estimate that a one standard deviation increase in the volatility of the shock to us real gdp leads to a decline in uk gdp of 1 relative to trend and a 0 7 increase in uk cpi relative to trend at the two year horizon using a nonlinear open economy dsge model we find that these empirical estimates are consistent with the response to a perturbation to the volatility of foreign supply type shocks while an increase in the volatility of demand shocks has a negligible impact

the stochastic volatility in mean model with time varying parameters an application to inflation modeling this article generalizes the popular stochastic volatility in mean model to allow for time varying parameters in the conditional mean the estimation of this extension is nontrival since the volatility appears in both the conditional mean and the conditional variance and its coefficient in the former is time varying we develop an efficient markov chain monte carlo algorithm based on band and sparse matrix algorithms instead of the kalman filter to estimate this more general variant the methodology is illustrated with an application that involves u s u k and germany inflation the estimation results show substantial time variation in the coefficient associated with the volatility highlighting the empirical relevance of the proposed extension moreover in a pseudo out of sample forecasting exercise the proposed variant also forecasts better than various standard benchmarks

asean tigers and sustainability of energy use decomposition analysis of energy and co2 efficiency dynamics abstract this study is a comparative analysis of the development of energy intensity and co2 emission intensity in the asean countries in the years 1971 97 the reasons and driving forces behind the changes are studied in the article using a complete decomposition methodology the decomposition analysis explains energy use or co2 emissions with three different factors activity effect structural effect and intensity effect the authors provide an analysis of dynamic changes of energy consumption and co2 emission flows intensity effects on energy use and co2 emissions revealed large differences in the performance of asean countries an interesting finding of the study is that in the 1990s the intensity effects on co2 emissions in asean countries have started to increase indicating decreasing co2 efficiencies of the economies the general observation on the basis of decomposition analyses is that the phase of industrialization is increasing the energy intensity of the nations and when the increased energy demand is fulfilled with fossil fuels the co2 emissions will inevitable grow however it has to be recognized that the co2 emissions per capita in asean countries are very low except in singapore compared with many oecd countries

decomposition of aggregate carbon intensity for freight trends from 10 oecd countries for the period 1971 1993 abstract historical patterns of aggregate carbon intensity from freight are different than those from other sectors while aggregate carbon intensity declined for all other sectors aggregate carbon intensity for freight increased the adaptive weighted divisia rolling base year index specification is applied to carbon emissions from the freight sector of 10 oecd countries for the period 1970 1993 increases in aggregate carbon intensity for nine of the countries range from less than 20 to over 150 and may be primarily attributed to shifts in modal structure toward more carbon intensive modes these increases in aggregate carbon intensity are driven primarily by an increase in activity which parallels the growth in gdp furthermore changes in fuel price and vehicle purchase taxes do not appear to be effective instruments for reducing energy consumption for this end use alternative policy options including less carbon intensive fuels and technologies and reduced congestion appear to be better choices