access to markets and rural poverty evidence from household consumption in china abstract this paper presents evidence on the effects of access to domestic and international markets on per capita consumption of households using data from rural china the econometric analysis uses alternative identification schemes to address the potential endogeneity of access to markets we use straight line distances to coastline and navigable river along with the topography of the intervening counties as sources of exogeneous variations we also use identification through heteroskedasticity which does not rely on standard exclusion restrictions the results from alternative identification schemes show that better access to both domestic and international markets has positive effects on per capita consumption the domestic market effect is significantly larger in magnitude and there is complementarity between the access to domestic and international markets

uncertainty and endogenous technical change in climate policy models until recently endogenous technical change and uncertainty have been modeled separately in climate policy models in this paper we review the emerging literature that considers both these elements together taken as a whole the literature indicates that explicitly including uncertainty has important quantitative and qualitative impacts on optimal climate change technology policy

tax structure and corruption cross country evidence one common feature of the current literature on corruption especially the empirical contributions to it is the emphasis on the exogenous determinants of corruption which are generally beyond the direct control of governments to date little is known about how the design of government policy potentially affects the level of corruption in a country even though there is growing recognition that the design and administration of tax and spending policies play important roles in promoting or discouraging corrupt practices using a large sample of countries over the 1995 2009 period this paper fills the gap by conducting the first analysis in the literature to examine the significance of the tax structure as measured by both tax mix and tax complexity in determining corruption our results suggest the following 1 countries relying more heavily on direct taxes tend to exhibit less corruption than countries that rely more heavily on indirect taxes and 2 countries with more complex tax systems tend to be more corrupt than countries with less complex tax systems these results are robust across alternative measures of corruption and tax structure and alternative estimations with and without correcting the potential endogeneity issue of the tax structure variables

tax innovations and public revenues in sub saharan africa we study the effect of two tax innovations value added taxes vat and autonomous revenue authorities ara on tax revenues in sub saharan africa the dataset consists of 47 countries over 1980 2010 we find that vats have no effect on total tax revenues neither in the short nor in the long run aras lead to higher tax revenues in the short and medium run but the effect dissipates over time the main conclusion is that tax innovations are not a panacea to overcome the revenue shortages in african countries but they are helpful in the short and medium run

evolution of population resource dynamics models abstract this paper provides a comprehensive analysis of brander and taylor s 1998 model and its descendants from the following perspectives population growth substitutability innovation capital accumulation property rights and institutional designs and modeling approach this survey aims to contribute to a better understanding of population and resource dynamics models in general and facilitate further application of the model framework to relevant circumstances although often treated as exogenous in optimal growth models making population growth an endogenous function allows us to analyze broader effects of economic activities on population the issues of substitutability innovation and capital accumulation are intertwined allowing a model to address the effect of an endogenous technological change on substitutability between natural and man made capital facilitates our analyses of sustainability issues to address internalizing inter generational externalities in resource use incorporating property right changes and institutional designs to this type of model is a useful exercise but careful attention is needed for the consistency between such an arrangement and the mathematical representation of the depicted economy finally although the common criticism regarding convenient mathematical assumptions applies to the existing bt type models the use of computer simulation can relax such assumptions to better represent the intended relationships between the relevant variables

the value added tax its causes and consequences almost unknown in 1960 the value added tax vat is now found in more than 130 countries raises around 20 percent of the world s tax revenue and has been the centerpiece of tax reform in many developing countries this paper explores the causes and consequences of the remarkable rise of the vat a key question is whether it has indeed proved as its proponents claim an especially effective form of taxation to address this it is first shown that a tax innovation such as the introduction of a vat reduces the marginal cost of public funds if and only if it also leads an optimizing government to increase the tax ratio this observation leads to the estimation on a panel of 143 countries for 25 years of a system of equations describing both the probability of vat adoption and the revenue impact of the vat the results point to a rich set of determinants of vat adoption this being more likely for example if a country has a program with the imf and the less open it is to international trade in the revenue equation the presence of a vat does indeed have a significant impact but also a complex one with a negative intercept effect counteracted by positive effects that are greater the higher are per capita income and more tentatively openness while the sign of the revenue impact of the vat is thus in general ambiguous most countries that have adopted a vat seem to have gained a more effective tax instrument in doing so though this is less apparent in subsaharan africa and most without it seem likely to gain from its adoption

conceptualising environmental responsibility abstract downstream responsibility is rarely addressed in the academic literature and in corporate sustainability reporting we conceptualise downstream responsibility for the example of carbon emissions by establishing a terminology as well as a framework for quantifying downstream carbon footprints by extracting emissions intensive sales chains for a number of australian industry sectors and comparing these to emissions intensive supply chains we demonstrated the ability of input output analysis to quantify emissions responsibility in both directions we extend the definition of downstream responsibility beyond the product use and disposal phases to include what we call enabled emissions this term implies that whatever is sold downstream enables our customers to operate and emit irrespective of whether it is our product that is combusted or that directly combusts fuels or not our structural path analyses and threshold capture relationships reveal stark differences between industries with regard to the data collection efforts necessary to achieve a reasonably complete footprint assessment industries appear to have their own specific carbon footprint profiles and one cannot design generic relevance tests that tell which data to collect moreover we conclude that current completeness standards in carbon reporting cannot be satisfied using relevance thresholds input output analysis and structural path analysis are excellent tools that can help companies undertake screening exercises which in turn help prioritising and streamlining the collection of data needed to establish a corporate downstream carbon footprint compared to conventional manual approaches hybrid life cycle assessments assisted by input output analysis and structural path analysis achieve more complete results with substantially less staff money and time

the growth effects of tax rates in the oecd this paper explores the merits of macro and micro based tax rate measures within an open economy fiscal policy and growth model using annual data for 15 oecd countries we find statistically small non robust long run growth effects of macro based average tax rates on capital income and consumption but some evidence for average labor income tax effects changes in micro marginal income tax rates at both the personal and corporate levels yield statistically robust gdp responses of modest size both domestic and foreign corporate taxes appear relevant in general tax effects on gdp operate largely via factor productivity rather than factor accumulation

climate change and optimal energy technology r d policy public policy response to global climate change presents a classic problem of decision making under uncertainty theoretical work has shown that explicitly accounting for uncertainty and learning in climate change can have a large impact on optimal policy especially technology policy however theory also shows that the specific impacts of uncertainty are ambiguous in this paper we provide a framework that combines economics and decision analysis to implement probabilistic data on energy technology research and development r d policy in response to global climate change we find that given a budget constraint the composition of the optimal r d portfolio is highly diversified and robust to risk in climate damages the overall optimal investment into technical change however does depend in a non monotonic way on the risk in climate damages finally we show that in order to properly value r d abatement must be included as a recourse decision

the impact of regulation on ceo labor markets i examine empirically whether the executive labor market helps to slot managers with higher education quality into jobs where they can obtain greater returns from their human capital skills comparing a sample of regulated gas and electric firms with manufacturing firms i find that utilities attract ceos with a lower quality education than do unregulated firms comparing a sample of airline firms pre and postderegulation airlines have ceos with a higher quality education postderegulation these results suggest that the labor market slots ceos with a lower quality of education into regulated business environments

who s afraid of atmospheric stabilisation making the link between energy resources and climate change abstract the distribution of fossil fuel reserves and resources between different regions and deposits has strong implications for climate change economics and policy the task of stabilising the atmosphere is intimately linked to the question of long term energy supplies as conventional petroleum reserves deplete notwithstanding debates about the scope for reserve extension through continued exploration and development it suggests a supply side component to complement the consumption orientation of existing climate policies the task is to ensure that investment and innovation moves towards the low carbon frontier instead of the high carbon frontier this also implies that the opec countries have little to fear about the long run impact of climate change policy the priority is to deter development of more carbon intensive unconventional petroleum deposits and technologies and to ensure that the existing trends to diversify power generation sources continue and extend more widely over time supply side constraints will not solve the climate problem in themselves but they make the task a lot easier if the opportunities are taken

when will fossil fuel reserves be diminished crude oil coal and gas are the main resources for world energy supply the size of fossil fuel reserves and the dilemma that when non renewable energy will be diminished is a fundamental and doubtful question that needs to be answered this paper presents a new formula for calculating when fossil fuel reserves are likely to be depleted and develops an econometrics model to demonstrate the relationship between fossil fuel reserves and some main variables the new formula is modified from the klass model and thus assumes a continuous compound rate and computes fossil fuel reserve depletion times for oil coal and gas of approximately 35 107 and 37 years respectively this means that coal reserves are available up to 2112 and will be the only fossil fuel remaining after 2042 in the econometrics model the main exogenous variables affecting oil coal and gas reserve trends are their consumption and respective prices between 1980 and 2006 the models for oil and gas reserves unexpectedly show a positive and significant relationship with consumption while presenting a negative and significant relationship with price the econometrics model for coal reserves however expectedly illustrates a negative and significant relationship with consumption and a positive and significant relationship with price consequently huge reserves of coal and low level coal prices in comparison to oil and gas make coal one of the main energy substitutions for oil and gas in the future under the assumption of coal as a clean energy source

major oil exporters may profit rather than lose in a carbon constrained world the organization of petroleum exporting countries opec claims compensation for losses in expected oil export revenues due to co2 mitigation measures in developing countries these losses are expected for two primary reasons a reduction in the consumption of oil in importing countries and a reduction in the producer price of oil taxation in an importing country implies a transfer of rents from producers to consumers so far most studies have focused on these two mechanisms and corroborated that revenue losses for opec are to be expected however there are also mechanisms that may be expected to raise the price of oil products in a cost effective regime for dealing with climate change i e a regime in which all or most countries participate and in which the same carbon price is applied on all carbon emitting activities the cost of using unconventional oil or synthetic diesel from coal will increase even more than the cost of using conventional oil given that reserves of conventional oil are expected to dwindle over time heavy oils and coal to liquids might set the long run price for liquid fuels which means that the price of oil would increase beyond the carbon fee i e the rent on conventional oil would increase we use an energy economic optimization model to analyze these three mechanisms we find that the net present value of opec revenue from conventional oil increases slightly at most by 4 percent with a global co2 restriction regime we also consider conditions under which this result does not hold

what s different about banks abstract negotiable certificates of deposit cd s trade in the capital market in competition with other securities like commercial paper and bankers acceptances if cd s must pay lenders competitive monetary interest the reserve tax on cd s is borne by bank borrowers viability of the tax means there must be something special about bank loans that makes some borrowers willing to pay higher interest rates than those on other securities of equivalent risk moreover there must be something special about banks that prevents other intermediaries from competing to assure that it never pays to finance loans with cd s

exploring china s carbon emissions peak for different carbon tax scenarios abstract under the united nations framework convention on climate change china has made a commitment to peak co2 emissions around 2030 china is still interested in fulfilling its commitment to address climate change in this study a diffusion model of energy technology based on endogenous technology learning under bounded rationality is developed to explore the possible impacts of different carbon tax conditions on the diffusion of energy technologies in china it is concluded that the substitution of energy technology is a long term and slow process in the case of a high carbon tax transition technologies and new technologies will appear earlier and replace the original technology 6 8 years earlier than in the case of a lower carbon tax the transition technology will become dominant only for a short period of time around 2030 but will be quickly replaced by new technology the traditional technology will cease to exist in the last thirty years of this century in all carbon tax scenarios in the low carbon tax or high carbon tax scenarios carbon emissions will peak in 2030 and then decline significantly the peak in carbon emissions is lower under the high carbon tax scenario than the low carbon tax scenario representing a 28 decrease

wright meets markowitz how standard portfolio theory changes when assets are technologies following experience curves abstract we consider how to optimally allocate investments in a portfolio of competing technologies using the standard mean variance framework of portfolio theory we assume that technologies follow the empirically observed relationship known as wright s law also called a learning curve or experience curve which postulates that costs drop as cumulative production increases this introduces a positive feedback between cost and investment that complicates the portfolio problem leading to multiple local optima and causing a trade off between concentrating investments in one project to spur rapid progress vs diversifying over many projects to hedge against failure we study the two technology case and characterize the optimal diversification in terms of progress rates variability initial costs initial experience risk aversion discount rate and total demand the efficient frontier framework is used to visualize technology portfolios and show how feedback results in nonlinear distortions of the feasible set for the two period case in which learning and uncertainty interact with discounting we compare different scenarios and find that the discount rate plays a critical role

representing induced technological change in models for climate policy analysis induced technological change itc whereby the relative price effects of reducing greenhouse gas emissions stimulate innovation that mitigates the cost of abatement is both tantalizing to decision makers and challenging to represent in the computational economic and engineering models used to analyze climate change policy this overview reconciles the divergent views of technology and technological change within different types of models elucidates the theoretical underpinnings of itc introduces the reader to the techniques of their practical implementation and evaluates the implications for models results

quasi experimental analysis on the effects of adoption of a value added tax i introduction the value added tax vat has displaced many different trade sales and manufacturing taxes in the past half century becoming a major source of government revenue for an increasing number of countries the tax has all the desirable non distortionary theoretical properties of a sales tax its incidence ultimately falling on consumers but it is much harder to avoid as the tax is collected at all intermediate steps during the production of a finished retail good rather than at the final sale as a result it has proven incredibly popular as it can collect a great deal of revenue keen and lockwood 2010 toder and rosenberg 2010 while this tax is theoretically less distorting than other taxes for each dollar of revenue collected there is limited analysis regarding its overall impact on the economy demonstrating that the tax also has few negative side effects would make it invaluable for developing countries looking for an effective tax instrument showing that a vat is associated with increases in growth trade or investment would be solid evidence in favor of its adoption however empirical studies of vat are rare this study seeks to fill a hole in the literature analyzing the overall economic impact of a vat which will allow policy makers to make informed decisions of the costs and benefits of this tax understanding the effects of the vat is vital as the importance of the vat is unlikely to decline in the future the imf increasingly suggests that countries raise more revenue through adopting a vat or raising vat rates bird 2010 many countries facing rising pressures on pension programs as a result of changing demographics are funding social programs from general revenues rather than payroll taxes which usually means shifting the overall tax composition of government revenues toward vats bird and smart 2012 a vat is a requirement for eu membership and other international organizations are considering their own mandatory vats with a unified set of rules and repayment systems at an international rather than national level such as the gulf cooperation countries cnossen 1998 kapur 2012 as more countries adopt vats international payment mechanisms for collecting vats will become more efficient ebrill et al 2001 and vats will become more popular in the future as a country chooses when to enact a vat simply estimating the effect of adoption on macroeconomic variables such as trade or growth through normal regression techniques will result in biased estimates as countries that choose to adopt a vat may be fundamentally different from those who do not in order to solve this selection problem i use survival analysis to generate probabilities of vat adoption to be used as propensity score for 192 countries from 1967 to 2012 i then employ matching methods to obtain the causal effects of vat adoption among 112 countries 90 of which do eventually adopt from 1986 to 2007 in the year of adoption and for 5 years after 1 the results of this study reveal that vat adoption is associated with increases in investment and less robustly increases in growth as well as decreases in inflation and government spending there is no evidence of changes in trade once controlling for selection 2 this study is organized as follows section ii covers background on previous studies on the vat and other tax policies section iii describes the adoption equation using survival analysis both its determinants and results section iv introduces the matching process section v describes the results of the matching as well as some robustness checks section vi concludes ii background starting with france in 1954 and reaching its first developing country in 1960 when it was enacted by the cote d ivoire 166 countries have at some point implemented a vat as of january 2013 and once passed nearly all countries retain it figure 1 shows aggregate vat adoption over time and figure 2 shows the adoptions in each year

covenants and collateral as incentives to monitor although monitoring borrowers is thought to be a major function of financial institutions the presence of other claimants reduces an institutional lender s incentives to do this thus loan contracts must be structured to enhance the lender s incentives to monitor covenants make a loan s effective maturity and the ability to collateralize makes a loan s effective priority contingent on monitoring by the lender thus both covenants and collateral can be motivated as contractual devices that increase a lender s incentive to monitor these results are consistent with a number of stylized facts about the use of covenants and collateral in institutional lending modern finance theory suggests that financial intermediaries such as commercial banks insurance companies and finance companies monitor and control their borrowers on behalf of other investors 1 this article investigates how the loans made by these institutions can be structured so as to best enhance the institutions role as delegated monitors covenants and collateral are common features of loans made by financial institutions but these features are somewhat difficult to justify consider loan covenants clauses in a loan contract that require the borrower to take or refrain from various actions berlin and mester 1992 magee and sridhar 1994 and park 1994 show that by giving institutions the right to renegotiate or call loans when covenants are violated covenants serve as tripwires that enhance the flexibility and efficiency of financial contracting also as documented in smith and warner 1979 control rights from covenants reduce borrower adverse selection or moral hazard nevertheless by allowing institutions to demand repayment based on any information contractible or not

global oil gas depletion an overview abstract the world s production of conventional hydrocarbons will soon decline hydrocarbon shortages are inevitable unless radical changes occur in demand or in the supply of non conventional hydrocarbons the details are as follows global conventional oil supply is currently at political risk this is because the sum of conventional oil production from all countries in the world except the five main middle east suppliers is near the maximum set by physical resource limits should middle east suppliers decide to substantially curtail supply the shortfall cannot be replaced by conventional oil from other sources world conventional oil supply will soon be at physical risk the middle east countries have only little spare operational capacity and this will be increasingly called upon as oil production declines elsewhere large investments in middle east production if they occur could raise output but only to a limited extent a partial exception is iraq but even here there would be significant delays before prospects are confirmed and infrastructure is in place if demand is maintained and if large investments in middle east capacity are not made the world will face the prospect of oil shortages in the near term even with large investments resource limits will force middle east production to decline fairly soon and hence also global conventional oil production the date of this resource limited global peak depends on the size of middle east reserves which are poorly known and unreliably reported best estimates put the physical peak of global conventional oil production between 5 and 10 years from now the world contains large quantities of non conventional oil and various oil substitutes but the rapidity of the decline in the production of conventional oil makes it probable that these non conventional sources cannot come on stream fast enough to fully compensate the result will be a sustained global oil shortage for conventional gas the world s original endowment is probably about the same in energy terms as its endowment of conventional oil since less gas has been used so far compared to oil the world will turn increasingly to gas as oil declines but the global peak in conventional gas production is already in sight in perhaps 20 years and hence the global peak of all hydrocarbons oil plus gas is likely to be in about 10 or so years

what will happen to the producer prices for fossil fuels if kyoto is implemented implementation of the kyoto commitments will result in lesser global fossil fuel consumption in 2010 than would occur in the absence of climate policy the paper explores how the consumption change resulting from climate policy implementation could affect the producer prices of fossil fuels the conclusion is that the price impact will be insignificant if the climate policy goals are established credibly and in the near future for that will give rationally behaving fossil fuel producers ample time to adjust production capacity to the changed outlook for future demand it is argued that as long as capacity develops in line with demand prices should remain the same irrespective of the speed and direction of demand change

the effects of the value added tax on revenue and inequality this paper examines the impact of the introduction of the value added tax on inequality and government revenues using newly released macro data we present both conventional country fixed effect re

economic inequality in the arab region the paper uses harmonized household survey micro data to assess the levels and determinants of economic inequality in 12 arab countries it focuses on the sources of rural urban as well as metropolitan nonmetropolitan inequalities and applies the unconditional quantile regression decomposition technique to analyze the welfare gaps across the entire distribution the analysis finds moderate inequality levels with the gini coefficient for the distribution of household real per capita total expenditures ranging between 30 7 in libya and 45 in mauritania differences in households endowments such as demographic composition human capital and community characteristics appear as the main sources of the urban rural welfare gap there is inequality between metropolitan and non metropolitan regions in many countries mainly because of differences in returns to households characteristics and particularly returns to human capital

default and renegotiation a dynamic model of debt we analyze the role of debt in persuading an entrepreneur to pay out cash e ows rather than to divertthem in the e rstpartof the paper we study the optimal debt contract specie cally the trade off between the size of the loan and the repayment under the assumption that some debt contract is optimal in the second part we consider a more general class of nondebt contracts and derive sufficient conditions for debt to be optimal among these

technological change in energy systems learning curves logistic curves and input output coefficients abstract learning curves have recently been widely adopted in climate economy models to incorporate endogenous change of energy technologies replacing the conventional assumption of an autonomous energy efficiency improvement however there has been little consideration of the credibility of the learning curve the current trend that many important energy and climate change policy analyses rely on the learning curve means that it is of great importance to critically examine the basis for learning curves here we analyse the use of learning curves in energy technology usually implemented as a simple power function we find that the learning curve cannot separate the effects of price and technological change cannot reflect continuous and qualitative change of both conventional and emerging energy technologies cannot help to determine the time paths of technological investment and misses the central role of r d activity in driving technological change we argue that a logistic curve of improving performance modified to include r d activity as a driving variable can better describe the cost reductions in energy technologies furthermore we demonstrate that the top down leontief technology can incorporate the bottom up technologies that improve along either the learning curve or the logistic curve through changing input output coefficients an application to uk wind power illustrates that the logistic curve fits the observed data better and implies greater potential for cost reduction than the learning curve does

macroanalysis of the economic and environmental impacts of a 2005 2025 european union bioenergy policy using the gtap model and life cycle assessment abstract this paper describes a new tool to assess the medium and long term economic and environmental impacts of large scale policies the approach macro life cycle assessment m lca is based on life cycle assessment methodology and includes additional elements to model economic externalities and the temporal evolution of background parameters the general equilibrium model gtap was therefore used to simulate the economic consequences of policies in a dynamic framework representing the temporal evolution of macroeconomic and technological parameters environmental impacts expressed via four indicators human health ecosystems global warming and natural resources are computed according to policy life cycle and its indirect economic consequences in order to illustrate the approach two 2005 2025 european union eu energy policies were compared using m lca the first policy the bioenergy policy aims to significantly increase energy generation from biomass and reduce eu energy demand for coal the second policy the baseline policy is a business as usual policy where year 2000 energy policies are extended to 2025 results show that compared to the baseline policy the bioenergy policy generates fewer impacts on three of the four environmental indicators human health global warming and natural resources at the world and eu scales though the results may differ significantly at a regional level the results also highlight the key contribution of economic growth to the total environmental impacts computed for the 2005 2025 period a comparison of the results with a more conventional consequential lca approach illustrates the benefits of m lca when modeling the indirect environmental impacts of large scale policies the sensitivity and uncertainty analysis indicates that the method is quite robust however its robustness must still be evaluated based on the sensitivity and uncertainty of additional parameters including the evolution of economic growth

when is growth pro poor evidence from a panel of countries abstract growth is pro poor if the poverty measure of interest falls according to this definition there are three potential sources of pro poor growth a a high growth rate of average incomes b a high sensitivity of poverty to growth in average incomes and c a poverty reducing pattern of growth in relative incomes i empirically decompose changes in poverty in a sample of developing countries during the 1980s and 1990s into these three components in the medium to long run most of the variation in changes in poverty can be attributed to growth in average incomes suggesting that policies and institutions that promote broad based growth should be central to the pro poor growth agenda most of the remainder of the variation in changes in poverty is due to poverty reducing patterns of growth in relative incomes rather than differences in the sensitivity of poverty to growth in average incomes cross country evidence provides relatively little guidance as to the policies and institutions that promote these other sources of pro poor growth

dealing with environmental savings in a dynamical economy how to stop chasing your tail in the pursuit of sustainability abstract in most countries people are urged to change their pattern of consumption and lifestyle in a less energy consuming and more environmental friendly direction but gains in ecoefficiency are likely to be annihilated by a larger consumption the so called rebound effect resulting in an increased throughput in the economy here is an obvious contradiction another contradiction entails from the fact that most governments strive to promote economic growth which includes increased consumption the paper takes a look at various means to handle these contradictions in order to avoid or balance the rebound effect environmental policies including such measures as green taxes may redirect consumption from one kind to another but this demands that the alternative spending is less harmful than the one dissuaded from two other tested means are to alter the sector mix of the economy and to shorten the working hours work sharing to match the increasing efficiency

financial intermediation and delegated monitoring this paper develops a theory of financial intermediation based on minimizing the cost of monitoring information which is useful for resolving incentive problems between borrowers and lenders it presents a characterization of the costs of providing incentives for delegated monitoring by a financial intermediary diversification within an intermediary serves to reduce these costs even in a risk neutral economy the paper presents some more general analysis of the effect of diversification on resolving incentive problems in the environment assumed in the model debt contracts with costly bankruptcy are shown to be optimal the analysis has implications for the portfolio structure and capital structure of intermediaries

on the sources of technological change assessing the evidence this paper uses a selective review of the economic literature on technological change to support four points that are important for interpreting and incorporating technological change into formal models of energy and the environment the review 1 supports the notion that no single source dominates the process of technological change it supports roles for rd 3 indicates that these spillovers are often indirect requiring own industry activities to utilize and 4 indicates that simple experience curve calibrations often used in formal models likely include a range of sources of technological change in addition to learning by doing some of which might not be induced by the sorts of policies typically considered in the climate context

technological learning in energy environment economy modelling a survey abstract this paper aims at providing an overview and a critical analysis of the technological learning concept and its incorporation in energy environment economy models a special emphasis is put on surveying and discussing through the so called learning curve both studies estimating learning rates in the energy field and studies incorporating endogenous technological learning in bottom up and top down models the survey of learning rate estimations gives special attention to interpreting and explaining the sources of variability of estimated rates which is shown to be mainly inherent in r d expenditures the problem of omitted variable bias the endogeneity relationship and the role of spillovers large scale models survey show that despite some methodological and computational complexity related to the non linearity and the non convexity associated with the learning curve incorporation results of the numerous modelling experiments give several new insights with regard to the analysis of the prospects of specific technological options and their cost decrease potential bottom up models and with regard to the analysis of strategic considerations especially inherent in the innovation and energy diffusion process in particular the energy sector s endogenous responses to environment policy instruments top down models

do security analysts exhibit persistent differences in stock picking ability abstract we investigate whether security analysts exhibit persistence in their stock picking ability we find that analysts whose recommendation revisions earned the most least excess returns in the past continue to outperform underperform in the future further the market recognizes these performance differences in the five day period surrounding the recommendation revision this market reaction however is incomplete excess returns in the one and three trading months following the revision are significant and positively associated with analysts prior performance however a trading strategy taking long short positions in recommendation upgrades downgrades conditional on analysts prior performance is unprofitable

brown backstops versus the green paradox abstract anticipated climate policies are ineffective when fossil fuel owners respond by shifting supply intertemporally the green paradox this mechanism relies crucially on the exhaustibility of fossil fuels we analyze the effect of anticipated climate policies on emissions in a simple model with two fossil fuels one scarce and dirty e g oil the other abundant and dirtier e g coal we derive conditions for a green orthodox anticipated climate policies may reduce current emissions the model can also be used to analyze spatial carbon leakage calibrations suggest that intertemporal carbon leakage from 0 to 8 is a relatively minor concern

vat tariffs and withholding border taxes and informality in developing countries abstract this paper explores the implications of a distinctive feature of the value added tax vat that is stressed by practitioners but has been largely overlooked by theorists that it functions in part as a tax on the purchases of informal operators from formal sector businesses and not least on their imports it also stresses the potential importance of the withholding taxes that are levied by many developing countries which have also been ignored it is shown in a simple model of informality that if both of these instruments are optimally deployed then the usual prescription that a small economy should not deploy tariffs remains valid even in the presence of an informal sector and a simple strategy is established generalizing the standard prescription developed in models without informality for deploying these instruments so as to preserve government revenue and increase welfare in the face of efficiency improving tariff cuts conditions are established under which a vat alone is fully optimal precisely because it is in part a tax on informal sector production but they are restrictive in general an efficient tax structure requires deploying both a vat and withholding taxes

the extent of the market and stages of agricultural specialization this paper provides empirical evidence of nonlinearity in the relationship between crop specialization in a village economy and the extent of the market size of the urban market relevant for the village the results suggest that the portfolio of crops in a village economy becomes more diversified initially as the extent of the market increases however after the market size reaches a threshold the production structure becomes specialized again this evidence on the stages of agricultural diversification is consistent with the stages of diversification identified in the recent literature for the economy as a whole and also for the manufacturing sector the evidence highlights the importance of improving farmers access to markets through investment in transport infrastructure and removal of barriers to trading

technological change in economic models of environmental policy a survey this paper provides an overview of the treatment of technological change in economic models of environmental policy numerous economic modeling studies have confirmed the sensitivity of mid and long run climate change mitigation cost and benefit projections to assumptions about technology costs in general technical progress is considered to be a noneconomic exogenous variable in global climate change modeling however there is overwhelming evidence that technological change is not an exogenous variable but to an important degree endogenous induced by needs and pressures hence some environmenteconomy models treat technological change as endogenous responding to socio economic variables three main elements in models of technological innovation are i corporate investment in research and development ii spillovers from r d and iii technology learning especially learning by doing the incorporation of induced technological change in different types of environmental economic models tends to reduce the costs of environmental policy accelerates abatement and may lead to positive spillover and negative leakage

optimal long term financial contracting we develop an agency model of financial contracting we derive long term debt a line of credit and equity as optimal securities capturing the debt coupon and maturity the interest rate and limits on the credit line inside versus outside equity dividend policy and capital structure dynamics the optimal debt equity ratio is history dependent but debt and credit line terms are independent of the amount financed and in some cases the severity of the agency problem in our model the agent can divert cash flows we also consider settings in which the agent undertakes hidden effort or can control cash flow risk

optimal lending contracts and firm dynamics we develop a general model of lending in the presence of endogenous borrowing constraints borrowing constraints arise because borrowers face limited liability and debt repayment cannot be perfectly enforced in the model the dynamics of debt are closely linked with the dynamics of borrowing constraints in fact borrowing constraints must satisfy a dynamic consistency requirement the value of outstanding debt restricts current access to short term capital but is itself determined by future access to credit this dynamic consistency is not guaranteed in models of exogenous borrowing constraints where the ability to raise short term capital is limited by some prespecified function of debt we characterize the optimal default free contract which minimizes borrowing constraints at all histories and derive implications for firm growth survival leverage and debt maturity the model is qualitatively consistent with stylized facts on the growth and survival of firms comparative statics with respect to technology and default constraints are derived borrowing constraints are an important determinant of firm growth and survival 1 such constraints may arise in connection to the financing of investment opportunities faced by firms or temporary liquidity needs such as those required to survive a recession this paper develops a theory of endogenous borrowing constraints and studies its implications for firm dynamics in our model debt is constrained by the firm s limited liability and option to default a lending contract specifies an initial loan size future financing and a repayment schedule the choice of these variables in turn determines future growth the firm s future borrowing capacity and its ability and willingness to repay hence borrowing constraints and firm dynamics are jointly determined we study this dynamic design problem our model builds on thomas and worral s 1994 model of foreign direct investment at time zero a risk neutral borrower firm or entrepreneur has a project which requires a fixed initial set up cost every period the project yields revenues that increase with the amount of 1 there is considerable evidence suggesting that financing constraints are important determinants of firm dynamics gertler and gilchrist 1994 argue that liquidity constraints may explain why small manufacturing firms respond more to a tightening of monetary policy than do larger manufacturing firms perez quiros and timmermann 2000 show that in recessions smaller firms are more sensitive to the worsening of credit market conditions as measured by higher interest rates and default premia evans and jovanovic 1989 show that the liquidity constraints are essential in the decision to become an entrepreneur fazzari hubbard and petersen 1988 among others view financial constraints as an explanation for the dynamic behaviour of aggregate investment and cabral and mata 1996 are able to fit reasonably well the size distribution of portuguese manufacturing firms by estimating a simple model of financing constraints for surveys see hubbard 1998 and stein 2003

positive and negative feedback in consequential life cycle assessment abstract in this paper we develop a typology of consequences that can be used for environmental assessments of investment in technologies as an illustration we estimate how the inclusion of different cause effect chains could affect the estimated greenhouse gas emissions resulting from buying and using a fuel cell bus today in contrast to earlier studies we include cause effect chains containing positive feedback from adoption e g economies of scale and learning we discuss how our findings affect the usefulness and limitations of consequential life cycle assessment lca and how lca methodology in more general can be used to support strategic technology choice a major conclusion is that environmental assessments of investment in emerging technologies should not only include effects resulting from marginal change of the current system but also marginal contributions to radical system change

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

effective climate energy solutions escape routes and peak oil abstract many well intended climate energy strategies are ineffective in the absence of serious environmental regulation this holds among others for direct support of clean energy voluntary energy conservation technical standards on a limited set of products unilateral stringent carbon pricing and awaiting peak oil as a climate strategy all of these suffer from escape routes that indirectly increase co2 emissions and thus make the original strategy ineffective on the other hand environmental regulation alone may lead to a myopia bias stimulating early dominance of cost effective technologies and a focus on incremental innovations associated with such technologies rather than on radical innovations although adopting a partial viewpoint keeps the analysis simple we urgently need a more inclusive systems perspective on climate solutions this will allow the formulation of an effective climate policy package that addresses the various escape routes

does education reduce income inequality a meta regression analysis this paper reexamines the effects of education on inequality through a comprehensive meta regression analysis of the extant empirical literature we find that education affects the two tails of the distribution of income education reduces the income share of top earners and increases the share of the bottom earners education has been particularly effective in reducing inequality in africa some of the results suggest that secondary schooling appears to have a stronger effect than primary schooling though this finding is not always robust the heterogeneity in reported estimates can be largely explained by differences in the specification of the econometric model and measure of inequality and education

energy environment policy modeling of endogenous technological change with personal vehicles combining top down and bottom up methods abstract the transportation sector offers substantial potential for greenhouse gas ghg emission abatement but widely divergent cost estimates complicate policy making energy economy policy modelers apply top down and bottom up cost definitions and different assumptions about future technologies and the preferences of firms and households our hybrid energy economy policy model is technology rich like a bottom up model but has empirically estimated behavioral parameters for risk and technology preferences like a top down model unlike typical top down models however it simulates technological change endogenously with functions that relate the financial costs of technologies to cumulative production and adjust technology preferences as market shares change we apply it to the choice of personal vehicles to indicate first the effect on cost estimates of divergent cost definitions and second the possible response to policies that require a minimum market share for low emission vehicles

risk adjusted financial costs of photovoltaics recent research shows significant differences in the levelised photovoltaics pv electricity cost calculations the present paper points out that no unique or absolute cost figure can be justified the correct solution is to use a range of cost figures that is determined in a dynamic power portfolio interaction within the financial scheme support mechanism and industry cost reduction the paper draws attention to the increasing role of financial investors in the pv segment of the renewable energy market and the importance they attribute to the risks of all options in the power generation portfolio based on these trends a former version of a financing model is adapted to project the energy mix changes in the eu electricity market due to investors behaviour with different risk tolerance aversion the dynamic process of translating these risks into the return expectation in the financial appraisal and investment decision making is also introduced by doing so the paper sets up a potential electricity market trend with the associated risk perception and classification the necessary risk mitigation tasks for all stakeholders in the pv market are summarised which aims to avoid the burden of excessive risk premiums in this market segment

transposing lessons between different forms of consequential greenhouse gas accounting lessons for consequential life cycle assessment project level accounting and policy level accounting abstract greenhouse gas accounting has developed in a number of semi isolated fields of practice and there appears to be considerable opportunity for transposing methodological innovations and lessons between these different fields this research paper identifies three consequential forms of greenhouse gas accounting consequential life cycle assessment project level accounting and policy level accounting these methods are described in detail and then compared in order to identify the key methodological differences and the potential lessons that can be transposed between them analysis of the substantive methodological differences suggests that consequential life cycle assessment could be enhanced by adopting the same structure used in project and policy level accounting which provides a time series of impacts aggregate level analysis and a transparent specification of the baseline and decision scenarios there is a case for conceptualising a unified form of consequential time series assessment of which project policy and product assessments would be sub types

will opec lose from the kyoto protocol a range of energy economy models forecast losses to members of the organisation of petroleum exporting countries opec should the kyoto protocol come into force these forecasts are a powerful influence in the united nations framework convention on climate change negotiations they are used by opec to advance the agenda on the impacts of response measures covertly arguing for compensation for lost oil revenues arising from implementation of the protocol this paper discusses this issue and explores the key assumptions of these models and their uncertainties assumptions about carbon leakage future availability of oil reserves substitution innovation and capital turnover are considered the paper suggests that losses will not affect opec countries equally and that these losses are not likely to be as substantial as the models forecast a range of policy measures are proposed to lessen any impact the protocol may have on opec

executive compensation and the cost of debt this study examines how different components of executive compensation affect the cost of debt we find that debt like and equity like pay components have differing effects an increase in defined benefit pensions is associated with lower bond yield spread while higher share holdings lead to higher spreads in addition we find that stock options have a mixed impact on the cost of debt whereas cash bonus has no significant impact overall our results indicate that corporate bondholders are fully aware of both risk taking and risk avoiding incentives created by various executive pay components

the economics of technical change this paper reviews the recent rapidly growing literature on technical change in the economy it concentrates on innovations and their diffusion at firm and industry level since this was the area designated as relatively weak in earlier literature surveys the review argues that the extensive empirical evidence and theoretical analysis now available presents a basic challenge to neoclassical theory after indicating some weaknesses in the neo schumpeterian literature the paper concludes by advocating an experiment with a new form of assessment by neighboring disciplines to economics itself which would take full account of the fundamental issues at stake in this modern methodenstreit c 1994 academic press inc copyright 1994 by oxford university press

can lenders discern managerial ability from luck evidence from bank loan contracts abstract we investigate the effect of managerial ability versus luck on bank loan contracting borrowers showing a persistently superior managerial ability over previous years more likely due to ability enjoy a lower loan spread while borrowers showing a temporary superior managerial ability more likely due to luck do not enjoy any spread reduction this finding suggests that banks can discern ability from luck when pricing a loan firms with high ability managers are more likely to continue their prior lower loan spread the spread reduction effect of managerial ability is stronger for firms with weak governance structures or poor stakeholder relationships corroborating the notion that better managerial ability alleviates borrowers agency and information risks we also find that well governed banks are better able to price governance into their borrowers loans which helps explain why good governance enhances bank value