profit maximising goes global the race to the bottom we explore four decades of cyclical and long run dynamics in income distribution and economic activity for a panel of 13 oecd countries as measured by the wage share and output gap when modeled as predator prey dynamics economic activity in oecd countries is weakly profit led convergence to a long run equilibrium is relatively slow delaying the profit squeeze stage for many years our race to the bottom model suggests that the oecd countries have been engaged in undercutting each other s real unit labour costs an extension of the model shows that the long run equilibrium has been shifting south west towards a lower wage share it may even be that this race has the undesirable consequence of decreasing economic activity

finance inflation and employment a post keynesian kaleckian analysis the purpose of this paper is to contribute to the post keynesian kaleckian macroeconomic literature we develop a macroeconomic model that explicitly integrates the role of borrowing and cash payment commitments on outstanding debt interest plus principal repayment into the consumption and investment expenditures as well as into the inflation generating process we explore the way that finance influences the distribution effects of inflation in the demand side of a money credit using economy we suggest a new phillips curve that encapsulates the impact of financial commitments on wage and profit claims we argue that high debt and cash payment commitments are likely to be associated with a positive demand side effect of inflation on the rate of employment and that they might be conducive to a negative supply side effect of employment on the inflation rate the author 2011 published by oxford university press on behalf of the cambridge political economy society all rights reserved

joint confidence intervals for income shares and lorenz curves in a recent paper beach and davidson 1983 extended the principles of statistical inference to lorenz curves and income shares by establishing the asymptotic distribution and covariance structure of a vector of lorenz curve ordinates corresponding to a set of quantile abscissae one can thus use the lorenz curve and income shares no longer just as descriptive devices for summarizing distribution information but now also as analytical tools for comparing alternative distributions and carrying out conventional statistical inference on them it would clearly be desirable however to extend and complement this work by providing a method for computing a set of joint confidence intervals about these income shares and for illustrating graphically a joint confidence band about a set of estimated lorenz curve ordinates the present paper provides a new and simple technique for doing this when analyzing differences between sets of income shares or lorenz curves one typically wants to elicit more detailed information than is provided by a standard joint chi square test on the overall set of shares that is when the hypothesis of two sets of shares being the same is rejected we generally want to know further which particular differences in shares are different from zero and of these nonzero differences which are positive and which negative savin 1980 a natural way of providing such information is through multiple comparison procedures developed in this paper in a recent work richmond 1982 has developed a general method of finding multiple comparison intervals that is particularly suited to the present problem and in this situation appears to dominate other conventional alternatives in contrast for example to scheff s s projection method richmond s approach focuses on a set of primary points of interest income shares among a more general set of points including the lorenz curve ordinates and optimizes the joint confidence interval lengths on this primary set of points since estimated lorenz curve ordinates are built up from underlying income shares these shares perhaps further supplemented are natural choices for the primary set the method however also provides a joint confidence band that geometrically bounds the set of lorenz curve ordinates and interpolated segments between them the present

climate change uncertainty irreversibility and the precautionary principle this paper begins with a critique of the option value argument used by economists to explain and justify the precautionary principle the argument is shown to misrepresent both uncertainty and irreversibility an alternative justification of the precautionary principle is discussed under conditions of keynesian uncertainty and irreversibility interpreted in terms of incommensurability recent formal decision theories under keynesian uncertainty are reviewed and their limitations explored with particular reference to the insights that decision theory can bring to understanding the precautionary principle throughout the decision problems under consideration are those faced by climate change policy makers copyright oxford university press

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international comparisons of welfare and poverty dominance orderings for ten countries inference based stochastic dominance procedures are applied to luxembourg income study data to rank ten western countries in terms of standards of living and poverty first order dominance comparisons ranks more than 50 percent of all pairwise comparisons and second order generalized lorenz dominance adds another 25 percent truncated dominance analysis is used to make inferences about poverty and up to 98 percent of the truncated distributions are ordered the results differ substantially from those obtained when only relative incomes and inequality are considered

regulation of a spatial externality refuges versus tax for managing pest resistance we examine regulations for managing pest resistance to pesticide varieties in a temporally and spatially explicit framework we compare the performance of the epa s mandatory refuges and a tax or subsidy on the pesticide variety under several biological assumptions on pest mobility and the heterogeneity of farmers pest vulnerability we find that only the tax or subsidy restores efficiency if pest mobility is perfect within the area if pest mobility is imperfect and when farmers face identical pest vulnerability only the refuge might restore efficiency with simulations we illustrate that complex outcomes may arise for intermediate levels of pest mobility and farmers heterogeneity our results shed light on the choice of regulatory instruments for common pool resource regulations where spatial localization matters

inequality in male and female earnings the role of hours and wages the authors decompose annual earnings into hours of work and hourly earnings and analyze male female differences in earnings inequality using canadian data their results indicate that the larger female inequality in earnings is due to a greater inequality in the distribution of hours of work the distributions of wages for men and women are either statistically indistinguishable or more equal for women the authors compare two data points 1988 and 1981 and find the same structure in the gender comparisons also changes between 1988 and 1981 in earnings inequality are generated from movements in the hours distributions copyright 1996 by mit press

poverty in canada and the united states measurement trends and implications although canada and the united states are two of the richest countries in the world many canadians and americans perceive themselves and are perceived by others to be poor which raises the issue of how best to measure poverty within canada there are widespread worries that the self image of canada as a place with relatively little poverty somewhat kinder and gentler than the united states may be a bit outdated see graves dugas and beauchamp 1999 angus reid 1999 poverty in canada has been rising while in the united states it has been falling in recent years which raises the issues of why that has been happening and what it will mean in the longer term for canada and the united states as a whole in this paper therefore i begin by asking how poverty in affluent countries should be measured before examining recent evidence on poverty intensity and its social significance in section 1 the use of the sen shorrocks thon index of poverty intensity is advocated and the poverty box is introduced as a summary graphical representation in section 2 recent data are presented on poverty in europe and north america and it is noted that between 1994 and 1997 canadian provinces became quite similar to many u s states in poverty intensity a fixed effects model is used in section 3 to examine whether changes in trade exposure the unemployment rate unemployment insurance and social assistance are significant determi

investing in a green transition abstract at the rio 20 conference the world s governments affirmed a need to transition toward green economies and background reports in preparation for the event emphasized the role of investment subsequent authors noted that private investment flows overwhelm public ones arguing that private investment must be mobilized for a transition however the role of private investment in a major economic transition is poorly understood particularly when the investment is not inherently attractive to investors and must be made attractive through policy we present a model representing investment macroeconomic interactions with classical features among its novel features is a distinction between affected sectors which are sensitive to the amount of green capital in the economy because of network effects and forward backward linkages and unaffected sectors which are relatively insensitive we argue that affected sectors are both harder to change and nearer to the base of the economy in model runs we observe that in a green transition the affected sector lags the unaffected sector with possible implications for a transition strategy thus in the model firm and investor behavior postpones deeper and more systemic changes until late in the transition

the proposals for a european tax on co2 and their implications for intercountry distribution this paper analyzes the advantages andimplications of the implementation of aeuropean tax on carbon dioxide emissions as anown resource of the eu and it focuses on itseffects on intercountry distribution incontrast to a harmonized tax which would onlyhave distributive effects within each memberstate a tax collected at european scale wouldalso have important distributive effects amongdifferent countries these effects would alsodepend on the use of tax revenues the paperinvestigates through a simple empiricalanalysis the distributive effects among themember states of three tax models a pureco2 model a 50 50 energy co2model and a co2 model with a burden onnuclear power

climate change financial stability and monetary policy using a stock flow fund ecological macroeconomic model we analyse i the effects of climate change on financial stability and ii the financial and global warming implications of a green qe programme emphasis is placed on the impact of climate change damages on the price of financial assets and the financial position of firms and banks the model is estimated and calibrated using global data and simulations are conducted for the period 2015 2115 four key results arise first by destroying the capital of firms and reducing their profitability climate change is likely to gradually deteriorate the liquidity of firms leading to a higher rate of default that could harm both the financial and the non financial corporate sector second climate change damages can lead to a portfolio reallocation that can cause a gradual decline in the price of corporate bonds third financial instability might adversely affect credit expansion and the investment in green capital with adverse feedback effects on climate change fourth the implementation of a green qe programme can reduce climate induced financial instability and restrict global warming the effectiveness of this programme depends positively on the responsiveness of green investment to changes in bond yields

wealth inequality theory measurement and decomposition this paper reviews the basic principles of inequality measurement underlining the advantages and shortcomings of alternative measures from a theoretical standpoint and in the context of the study of the distribution of wealth adopting the two most popular measures the gini index and the p shares the paper documents wealth inequality in canada using the 1999 2005 and 2012 survey of financial security sfs it carries out several decompositions with covariates featuring dfl type reweighting methods and gini and p shares rif regressions the latter parallel decompositions deepen our understanding of how changes in socio demographic characteristics including the compensating role of family formation and human capital impact wealth inequality

the social welfare implications decomposability and geometry of the sen family of poverty indices in this paper we propose a unified framework for the sen indices of poverty intensity that shows an explicit connection between the indices and the common underlying social evaluation function we also identify the common multiplicative decomposition of the indices that allows simple and similar geometric interpretations and easy numerical computation jel classification c000 h000 o150 implications en termes de bien etre collectif decomposabilite et geometrie de la famille d indices de pauvretea la sen dans ce memoire les auteurs proposent un cadre d analyse integre des indices d intensite de pauvretea la sen qui souligne la relation explicite entre ces indices et la fonction sociale d evaluation commune qui les soustend les auteurs identifient aussi la decomposition multiplicative commune de ces indices qui permet d en donner des interpretations geometriques simples et idoines et de faire des calculs numeriques faciles

testing for the monotone likelihood ratio assumption although monotonicity of the likelihood ratio for conditioned densities is a common technical assumption in economic models empirical tests for its plausibility do not appear to have been conducted this article develops such a test based on the theory of order restricted inference that is robust with respect to the correlation structure of the distributions being compared the test is applied to study the technology revealed by agricultural production experiments for the data under scrutiny the results support the monotone likelihood ratio assumption in a second application we find some support for the assumption of affiliation among bids cast in a multiple round vickrey auction for a consumption good

the impact of food stamps on us poverty in the 1980s a marginal dominance analysis the relative effectiveness of the us food stamp program in reducing the incidence and depth of poverty is compared at a number of poverty lines across time the analysis is based upon an extension of dominance methods for ordering poverty recently developed statistical inference procedures and a merged data set that permnits an unusually comprehensive measure of income the comparative effectiveness of the food stamp program in reducing headcount poverty over time is contingent on the poverty line selected however the reduction in poverty gaps is greater in 1990 than in 1982 regardless of the poverty line chosen the sensitivity of the results to the income concept equivalence scale and time period used for measuring income are also considered

changes in the distribution of wages in canada 1981 1992 this article uses microdata to study the changes in the distribution of weekly wages in canada from 1981 to 1992 changes in the distribution are analyzed using lorenz curves and eight different univariate measures of inequality evidence is presented that indicates that inequality is anticyclical increasing during recessions and falling during business cycle expansions moreover after changes in the cycle are accounted for there has been a clear upward trend in wage inequality comparisons between the canadian and the u s distributions show that wage inequality was less pronounced in canada than it was in the united states in the 1980s and was increasing in canada relative to the united states from 1989 to 1992

poverty and inequality under income and price dispersions many policies simultaneously affect the distribution of prices and incomes in the economy moreover a bias may occur when there is a stochastic relationship between prices and incomes and this relationship is being ignored it is therefore important to dispose of an analytical framework for welfare analysis that could account for changes in this joint distribution how can the joint influences of price and income distributions on poverty and inequality indicators be analysed we offer a method to deal with this problem by using parametric formulae of poverty and inequality measures we propose statistical indicators for the levels variabilities and a statistical link of price indices and nominal living standards these indicators are consistent with an approximation of the problem based on a bivariate lognormal distribution of price indices and nominal living standards our analysis provides hints about the social welfare impact of economic shocks or policies affecting levels variabilities and correlation of prices and incomes intuitive insights are obtained while using arithmetic means and variances instead does not lead to illuminating results the role of price and income variabilities for poverty and inequality is more complex than generally expected with the possibility of several variation regimes empirical investigation of these statistics would guide social policies

revisiting the sen poverty index a modification of the official sen poverty index yields an index which is not only continous in individual incomes and consistent with the transfer axiom but also admits a geometric interpretation in terms of the area beneath a graph called the inverse generalized lorenz curve for normalized poverty gaps by jenkins and lambert 1993 or the poverty gap profile by shorrocks 1994

heterodox theories of economic growth and income distribution a partial survey heterodox theories of economic growth and income distribution are surveyed focusing on major theories and recent contributions first a general framework for examining growth and distribution is discussed in terms of which classical marxian and post keynesian kaleckian and other theories are presented since this framework examines how variables are determined in equilibrium second dynamics behind equilibria are examined focusing on goods market and labor market changes third the framework is extended in a variety of ways to examine additional models addressing productivity growth and technical change money and inflation finance and debt additional distributional considerations multisector issues open economy questions and the environment it is concluded that the literature on heterodox theories of growth and distribution is vibrant large and growing and addresses many issues that are ignored or neglected in orthodox theories including power unemployment and aggregate demand

testing for marginal changes in income distributions with lorenz and concentration curves asymptotically distribution free statistical tests for comparing absolute and relative lorenz and concentration curves are provided the procedures do not require independent samples and can be used to test for marginal changes in income distributions the tests are illustrated using a large sample of tax returns that have been randomly selected for audit by the internal revenue service the tests reveal the marginal effects of systematic underreporting of income and tax liabilities on the u s income distribution copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

network connectedness of green bonds and asset classes abstract we identify network connectedness between green bonds and different asset classes over different investment horizons in the eu and us asset markets we first focus on dynamic correlations between green bond and asset class price changes in different time scales on the basis of wavelet coherence we then identify network connectedness by decomposing time series into different frequency components in each of which we evaluate connectedness on the basis of the error variance decomposition of a multivariate vector autoregressive model our empirical evidence reveals strong connectedness between green bonds and treasury and corporate bonds in the short and long run and in both the eu and the usa with green bonds receiving sizeable spillovers from treasury and corporate bond prices and transmitting negligible effects likewise we find that green bonds are weakly connected with high yield corporate bond stock and energy assets over different time scales these findings have implications for green bond investors regarding portfolio design and hedging decisions and for the channelling of financial flows to economic activities that are consistent with a decarbonized economy

towards post keynesian ecological macroeconomics the paper starts with a brief criticism of macroeconomic analyses of different schools of thought for their focus on economic growth and maximisation of output this applies to the traditional keynesian approach which has focused on the achievement of sufficient aggregate demand to underpin full employment and full capacity utilisation down playing aggregate supply constraints this also applies to the neoclassical approach including the current new consensus macroeconomics approach which asserts the dominant role of aggregate supply in the long run and where growth is set by the so called natural rate of growth with no concerns over environmental and ecological issues the paper then proposes a different approach to macroeconomic analysis it explicitly acknowledges that economic growth is a double edged sword growth can help to alleviate persistent levels of high unemployment but it can also lead to potentially catastrophic environmental problems building on the monetary circuit theory and the demand led growth theory the paper offers an analysis of the interconnections and interdependence of the economic biophysical and social worlds and by doing it hopes to provide the building blocks for the establishment of post keynesian ecological macroeconomics

stagnation income distribution and monopoly power the deceleration in the rate of industrial growth in the indian economy since the middlesixties initially interpreted by some as a temporary downward deviation from trend hasnow come to be generally accepted as reflecting long run tendencies towards stagnation several explanations for these tendencies have been offered bhagwati and desai 1970 and bhagwati and srinivasan 1975 have focused on inefficiencies and the misallocationof resources arising from industrial policies pursued by the government others chakravarty 1974 raj 1976 and vaidyanathan 1974 among them have emphasisedthe sluggishness of agricultural growth which is alleged to have retarded industrial growthby limiting markets and the supply of wage goods and raw materials a third view reflectedin srinivasan and narayana 1977 for example has put the blame on a slackening of invest ment demand due to lower public investment but does not explain why public investmentfell or why its fall restrained industrial growth finally there is the explanation put forthin bagchi 1970 1975 1982 in nayyar 1978 and in parts of mitra 1977 that inequali ties in income distribution have resulted in a limited demand for industrial goods reducedincentives for investment and therefore reduced growth this view seems to suggest apositive relation between growth and income equality which is opposed to the generallyaccepted idea derived from cambridge growth models that higher growth requires greaterinequality the purpose of this paper is to examine the last explanation by considering the inter action between growth and income distribution in an underdeveloped economy with thehelp of a simple macroeconomic model the model is a stylisation of the indian economy so that we will be able to use the model to assess the argument that a deceleration in therate of growth of the indian industrial economy could have been caused by an unequaldistribution of income the argument will not be made that this income distributional con straint is the binding constraint on industrial growth the model will merely examine theinternal consistency of the argument that a bad income distribution could explain stagnation in the sense of reduced growth and show that in the indian context as in other similarcontexts this argument can be put forward in explaining stagnation our argument is first presented with a highly simplified schematisation of the indianeconomy which we shall call the basic model the economy modelled produces only one

testing a social safety net abstract standard benefit incidence analysis does not distinguish policy impacts on persistent poverty from transient poverty we offer an alternative approach based on actual and simulated joint distributions of consumption over time which allows us to distinguish the extent of protection against poverty from promotion out of poverty the approach is illustrated by an analysis of the distributional impact of changes in cash benefits introduced to compensate for other policy reforms in hungary cash benefits protected many from poverty but promoted few out of poverty the safety net s impact on poverty was largely due to higher average outlays rather than improved targeting

the effectiveness of energy service demand reduction a scenario analysis of global climate change mitigation abstract a reduction of energy service demand is a climate mitigation option but its effectiveness has never been quantified we quantify the effectiveness of energy service demand reduction in the building transport and industry sectors using the asia pacific integrated assessment computable general equilibrium aim cge model for the period 2015 2050 under various scenarios there were two major findings first a 25 energy service demand reduction in the building transport and basic material industry sectors would reduce the gdp loss induced by climate mitigation from 4 0 to 3 0 and from 1 2 to 0 7 in 2050 under the 450 ppm and 550 ppm co 2 equivalent concentration stabilization scenarios respectively second the effectiveness of a reduction in the building sector s energy service demand would be higher than those of the other sectors at the same rate of the energy service demand reduction furthermore we also conducted a sensitivity analysis of different socioeconomic conditions and the climate mitigation target was found to be a key determinant of the effectiveness of energy service demand reduction measures therefore more certain climate mitigation targets would be useful for the decision makers who design energy service demand reduction measures

the effect of food stamp cashout on undernutrition abstract we investigate the effect of food stamp cashout on undernutrition using household data from cashout experiments in alabama and san diego california we apply dominance methods to test for differences in nutrient distributions at or below the recommended dietary allowances

statistical inference and the sen index of poverty statistical inference procedures are developed for a k sen s distribution sensitive index of poverty and each of its components the headcount ratio income gap ratio and the gini index of the poor using results from u statistics the authors show that estimates of the index and its components all have a jointly asymptotically normal distribution and the variance covariance structure can be consistently estimated the inference tests are illustrated by applying them to the same microeconomic data set used in estimating official u s poverty statistics the application reveals that the sen index increased significantly in each of the three periods considered copyright 1997 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

a measure of segregation based on social interactions we develop an index of segregation based on two premises 1 a measure of segregation should disaggregate to the level of individuals and 2 an individual is more segregated the more segregated are the agents with whom she interacts we present an index that satisfies 1 and 2 and that is based on agents social interactions the extent to which blacks interact with blacks whites with whites etc we use the index to measure school and residential segregation using detailed data on friendship networks we calculate levels of within school racial segregation in a sample of u s schools we also calculate residential segregation across major u s cities using block level data from the 2000 u s census

revenue raising vs other approaches to environmental protection the critical significance of pre existing tax distortions using analytical and numerical general equilibrium models we show that preexisting factor taxes produce a tax interaction effect that increases the costs of pollution taxes and quotas under policies that raise revenue and recycle it through cuts in marginal factor tax rates this effect is partially offset by a revenue recycling effect grandfathered pollution quotas such as those used under the 1990 clean air act amendments to regulate electric utilities so2 emissions do not benefit from this offset preexisting taxes raise this regulation s cost by over 70 more than half of this additional cost could be avoided by auctioning quotas and exploiting the revenue recycling effect

economics and the well being of canadian children the basic argument of this paper is that as economists we need to pay more attention to how policy affects the well being of children as individuals not just as members of families except with reference to programs explicitly designed for children e g the child tax benefit the issue of how economic policy in general affects the well being of the children themselves is relatively missing in the economics literature though children constitute nearly 25 per cent of the canadian population for example discussions of monetary policy are unlikely to consider the impact of alternative choices for children s well being debates about the merits of labour market mobility do not pay much attention to the impact of mobility on children discussions of optimal tax structures do not look at the issue from the perspective of the child 2

the eirin flow of funds behavioural model of green fiscal policies and green sovereign bonds abstract fiscal and monetary policies as well as new financial instruments could play a key role to meet the paris agreement however deep uncertainty characterizes their design and their potential effects on growth financial and credit market stability and inequality we develop the eirin flow of funds behavioural model to simulate the introduction of green fiscal policies and green sovereign bonds and we display their effects on firms investments in the brown and green sector on unemployment on the credit and bonds market eirin is stock flow consistent and is rooted on a balance sheet approach it adopts a leontief production function with no substitution of the production factors i e labour capital and raw materials its sectors are endowed with adaptive behaviours and expectations and interact with the others and the foreign sector through a set of markets simulations show that green public policies can promote green growth by influencing firms expectations and the credit market green sovereign bonds represent a short term win win solution while green fiscal measures have higher immediate distributive effects that induce negative feedbacks on the economy these results are influenced by the conditions fiscal budgetary and public debt gdp in which both measures are implemented

conflict and distribution abstract we develop a behavioral model that links the level and pattern of social conflict to the societywide distribution of individual characteristics the model can be applied to groups that differ in characteristics such as wealth ethnicity religion and political ideology we settle questions of existence and uniqueness of conflict equilibrium conflict is seen to be closely connected with the bimodality of the underlying distribution of characteristics however in general the conflict distribution relationship is nonlinear and surprisingly complex our results on conflict patterns also throw light on the phenomena of extremism and moderation journal of economic literature classification numbers d63 d72 d74

the effects on competitiveness of coordinated versus unilateral fiscal policies reducing ghg emissions in the eu an assessment of a 10 reduction by 2010 using the e3me model abstract international competitiveness effects from coordinated and uncoordinated multilateral policies to reduce co 2 emissions from 11 member states of the eu by 2010 are compared with those from unilateral policies to achieve a 10 cut in each member state alone the paper presents the results from four projections using a large scale integrated regionalised e3 model of the eu estimated on time series cross section data 1968 93 with international trade treated as between each member state and a european transport and distribution network the 10 reduction is achieved by additional excise duties incremented every year 1999 to 2010 according to the carbon contents of fuels with special with special treatment of electricity taxed on outputs not inputs with revenues recycled via reductions in employers social security contributions multilateral coordinated policies require a common tax rate of 156 ecu per tonne carbon 1999 prices which rises to an average of 165 ecu per tonne with a wide range between regions when policies are uncoordinated all the tax shift projections show double dividends for emission reduction and employment gain for all member states unilateral policies do not show much carbon leakage but they show smaller gains for output and employment effects for price competitiveness appear to be small and mixed with serious losses appearing only for the netherlands and for metals and chemicals especially for unilateral action

a supermultiplier stock flow consistent model the return of the paradoxes of thrift and costs in the long run supermultiplier models have been recently brought to the post keynesian debate yet these models still rely on quite simple economic assumptions being mostly ow models which omit the nancial determinants of autonomous expenditures since the output growth rate converges in the long run to the exogenously given growth rate of non capacity creating autonomous expenditure and the utilization rate moves towards the normal utilization rate the paradoxes of thrift and costs remain valid only as level e ects average growth rates this paper investigates whether the core conclusions of supermultiplier models hold in a more complex economic framework described by means of a supermultiplier sfc model in which private business investment is assumed to be completely induced by income while the autonomous expenditure component in this case consumption out of wealth becomes endogenous the results of the numerical simulation experiments suggest that the paradox of thrift can remain valid in terms of growth e ects and that a lower pro t share can also be associated to a higher accumulation rate though with a lower pro t rate

the approach of ecological economics this paper discusses the major tenets of ecological economics including value pluralism methodological pluralism and multi criteria policy assessment ecological economics offers viable alternatives to the theoretical foundations and policy recommendations of neoclassical welfare economics a revolution in neoclassical economics is currently taking place and the core assumptions of welfare economics are being replaced with more realistic models of consumer and firm behaviour this paper argues that these new theoretical and empirical findings are largely ignored in applied work and policy applications in environmental economics as the only heterodox school of economics focusing on the human economy both as a social system and as one imbedded in the biophysical universe and thus both holistic and scientifically based ecological economics is poised to play a leading role in recasting the scope and method of economic science

a theory of anticipated utility abstract a new theory of cardinal utility with an associated set of axioms is presented it is a generalization of the von neumann morgenstern expected utility theory which permits the analysis of phenomena associated with the distortion of subjective probability

macroeconomic impacts of climate change mitigation in latin america a cross model comparison abstract in this paper we analyse macroeconomic consequences of greenhouse gas emission mitigation in latin america up to 2050 through a multi model comparison approach undertaken in the context of the climacap lamp research project we compare two carbon tax scenarios with a business as usual scenario of anticipated future energy demand in the short term with carbon prices reaching around 15 tco 2 by 2030 most models agree that the reduction in consumer spending as a proxy for welfare is limited to about 0 3 by 2050 at carbon prices of 165 tco 2 there is much more divergence in the estimated impact on consumer spending as well as gdp across models and regions which reflects uncertainties about technology costs and substitution opportunities between technologies we observe that the consequences of increasingly higher carbon prices in terms of reduced consumer spending and gdp tend to be fairly linear with the carbon price in our cge models however the consequences are divergent and nonlinear in our econometric model that is linked to an energy system model that simulates step changes in technology substitution the results of one model show that climate policy measures can have positive effects on consumer spending and gdp which results from an investment stimulus and the redistribution of carbon price revenues to consumers

green bond and financial markets co movement diversification and price spillover effects abstract we examine co movement between the green bond and financial markets finding that the green bond market couples with corporate and treasury bond markets and weakly co moves with stock and energy commodity markets we also find that green bonds have negligible diversification benefits for investors in corporate and treasury markets whereas diversification benefits are sizeable for investors in stock and energy markets we further confirm that green bonds are affected by substantial price spillovers from corporate and treasury fixed income markets and that large price swings in stock and energy markets have a negligible impact on green bond prices

statistical inference of progressivity dominance an application to health care financing distributions this paper employs a distribution free statistical test suitable for comparisons based on dependent samples to analyse changes in health care financing distributions on finnish data in distinction to the more general summary index approach used in most studies of progressivity measurement the difference between the lorenz curve of income inequality and the concentration curves of various taxes and payments is used to evaluate progressivity dominance and changes in progressivity sample weights are applied to account for the effect of sampling design and non response the analysis demonstrates that the dominance approach can be successfully applied to various types of distributional problems besides comparisons concerning differences in income distributions as an empirical application the paper presents estimation results for the progressivity of various health care financing sources using data from the 1987 and 1996 finnish health care surveys

relative deprivation and economic welfare a statistical investigation with gini based welfare indices the average level of relative deprivation is considered as a measure of the economic welfare or standards of living for a society this approach yields welfare indices that are weighted combinations of the mean income and the gini coefficient there has been no systematic international comparison of these gini based welfare indices in this paper they are applied to compare relative deprivation and economic welfare using data from the luxembourg income study the asymptotic distributions of estimators of gini based welfare indices are provided under weighted sampling

switching to carbon free production processes implications for carbon leakage and border carbon adjustment climate policy under partial global compliance raises concerns regarding carbon leakage while border carbon adjustment bca measures are a potential remedy they have also been criticised on various grounds this paper therefore investigates whether a policy fostering the switch to carbon free technologies can substitute for bcas a reason for the effectiveness of a targeted technology policy is that major leakage prone sectors such as iron and steel have two main sources of carbon emissions combustion of fossil fuels and industrial processes while combustion emissions can be reduced relatively easy by increasing energy efficiency reducing process emissions requires a switch to low carbon production processes e g in steel production by deploying electrolysis based on large scale solar electricity we show by means of a multi regional computable general equilibrium analysis that such a switch in steel production technology can eliminate a significant fraction of carbon leakage and also increase sectoral output and welfare since the necessary technologies are not available at large scale yet however are likely to be by 2020 a transitional bca scheme may be a crucial supportive instrument to foster such technology switches yet in the long run bca should be phased out to preserve the incentive for carbon free innovation

explaining interstate variation in income inequality this paper investigates interstate variation in income inequality by avoiding inequality indices and focusing directly on the lorenz curve the authors provide a more general explanation of the differences in inequality they find that mean family income the standard deviation of years of schooling per capita educational expenditure and property income are robust predictors of inequality of particular interest is their finding that ceteris paribus higher per capita education expenditures tend to be associated with states that have income inequality which is greater than the u s average copyright 1992 by mit press

innis lecture inference on income distributions this paper attempts to provide a synthetic view of varied techniques available for performing inference on income distributions two main approaches can be distinguished one in which the object of interest is some index of income inequality or poverty the other based on notions of stochastic dominance from the statistical point of view many techniques are common to both approaches although of course some are specific to one of them i assume throughout that inference about population quantities is to be based on a sample or samples and formally all randomness is due to that of the sampling process inference can be either asymptotic or bootstrap based in principle the bootstrap is an ideal tool since in this paper i ignore issues of complex sampling schemes and suppose that observations are iid however both bootstrap inference and to a considerably greater extent asymptotic inference can fall foul of difficulties associated with the heavy right hand tails observed with many income distributions i mention some recent attempts to circumvent these difficulties ce memoire tente de fournir une vue synthetique des diverses techniques disponibles pour faire des inferences a partir des repartitions de revenus on peut distinguer deux approches principales l une dans laquelle l objet vise est un indice d inegalite de revenus ou de pauvrete l autre est construite sur des notions de dominance stochastique d un point de vue statistique plusieurs techniques sont utilisees par les deux approches mais certaines techniques sont specifiques a l une ou a l autre approche l auteur postule que l inference a propos de quantites demographiques est fondee sur un echantillon ou des echantillons et que formellement tout le caractere aleatoire est attribuable au processus d echantillonnage l inference est soit asymptotique soit derivee par des technique de bootstrap en principe la seconde facon de proceder est un outil ideal puisque dans ce memoire l auteur ignore les problemes de procedures d echantillonnage complexes et presume que les observations sont idd cependant la seconde facon de proceder et encore plus la premiere peuvent rencontrer des difficultes associees au fait que l on observe des queues de distribution epaisses vers la droite dans plusieurs profils de repartition des revenus l auteur mentionne certains efforts recents pour contourner ces difficultes

measuring social tension from income class segregation we develop an index that effectively measures the level of social tension generated by income class segregation we adopt the basic concepts of between group difference or alienation and within group similarity or identification from the income bi polarization literature but we allow for asymmetric degrees of between group antagonism in the alienation function and construct a more effective identification function using both the relative degree of within group clustering and the group size to facilitate statistical inference we derive the asymptotic distribution of the proposed measure using results from u statistics as the new measure is general enough to include existing income polarization indices as well as the gini index as special cases the asymptotic result can be readily applied to these popular indices evidence from the panel study of income dynamics data suggests that while the level of social tension shows an upward trend over the sample period of 1981 to 2005 government s taxes a

lorenz dominance and welfare changes in the u s distribution of income 1967 1986 this paper examines income inequality in the untied states over the period 1967 86 using recently developed tests for differences in lorenz curves the authors are able to rank eighteen of nineteen annual comparisons in contrast standard techniques are able to rank only twelve these results suggest that the lorenz dominance principle is more empirically relevant than previously thought the tests reveal a sharp rise in u s inequality between 1978 and 1982 as well as a shift toward greater inequality over the entire period the authors also examine changes in economic welfare using the joint mean lorenz dominance principle copyright 1991 by mit press

poverty in america 1970 1990 who did gain ground an application of stochastic dominance criteria employing simultaneous inequality tests in a partial panel atkinson 1987 proposed stochastic dominance criteria for analysing poverty which under certain conditions establish orderings of states for any poverty line and any poverty measure within given class refocusing debate on the nature of the income distribution of the poor employing new empirical techniques these criteria are implemented for the united states from 1970 to 1990 using the panel study of income dynamics results highlight the pivotal role of family size scale economies in consumption indicate different experiences for white versus non white groups and suggest that optimism over the progress of the poor is not warranted copyright 2003 john wiley sons ltd

the measurement and trend of housing inequality in the united states 1978 85 inequality in housing services for renters owners and all households in the united states is estimated for 1978 and 1985 hedonic techniques are applied to data from the american housing survey to derive values for housing services that include publicly provided as well as subsidized housing we find significant disparities in housing but substantially less inequality than in incomes in 1978 the top decile garnered 19 2 of housing services while the bottom decile received only 5 1 the trend however is towards greater equality in housing with large and statistically significant shifts across all deciles by 1985 the share of the top decile dropped to 16 3 a percentage decrease in share of 15 3 while that of the bottom decile rose to 5 7 a percentage increase of 11 4

risk aversion in the theory of expected utility with rank dependent probabilities expected utility with rank dependent probability theory is a model of decision making under risk where the preference relations on the set of probability distributions is represented by the mathematical expectation of a utility function with respect to a transformation of the probability distributions on the set of outcomes this paper defines based on g teaux differentiability measures of risk aversion for such preferences which characterize the relation more risk averse and applies these measures to the analysis of unconditional and conditional portfolio choice problems

relationship between green bonds and financial and environmental variables a novel time varying causality abstract in this paper we examine the time varying causal relationship between green bonds and other assets including us conventional bonds wilderhill clean energy equity index and co2 emission allowances price during the period spanning from 30 july 2014 to 10 february 2020 we apply the novel time varying granger causality test shi et al 2018 based on the recursive evolving algorithm introduced by phillips et al 2015a 2015b for controlling financial bubbles to detect real time causality detecting possible changes in the causal direction and dating financial turbulences the study based on this algorithm reveals a significant causality running from the us 10 year treasury bond index to green bonds starting from the end of the year 2016 until the end of the sample period besides we find that the link co2 emission allowances price causing green bonds is significant from the beginning of the sample period to the end of the year 2015 furthermore by using the recursive evolving causality algorithm of the shi et al 2018 test we find that the causality running from the clean energy index to green bonds is very limited to the year 2019 on the other hand there is no significant causality running from green bonds to all considered assets indicating no predictive power for this asset in its proper domain which is not yet examined in the literature

imperfect markets and the properties of macro economic environmental models as tools for policy evaluation abstract economic environmental models are deeply disaggregated macro economic systems which are used in economic environmental studies to explain the emissions of pollutions and the extraction of resources concerning the economic base two approaches can be differentiated the neoclassical and the keynesian paradigm models based on the neoclassical paradigm are depicting equilibrium of perfectly competitive markets whereas the models based on the keynesian paradigm have been developed from a critical position vis a vis neoclassical theory stressing the importance of market imperfections the paper at hand shows in its theoretical part that this fundamental difference to a large extent is responsible for differences in modeling results concerning the impact of policy instruments on the economy and the environment furthermore the two paradigms prefer different ways of parameterization which has consequences for the empirical validation of the models the construction of the references and the effects of environmental policy the paper at hand further shows that the theoretical arguments allow explaining the totally different and partly opposite results of concrete policy simulations in the polfree project where the large scale economic environmental models exiomod neoclassical and ginfors keynesian have been used

the effect of pro environmental preferences on bond prices evidence from green bonds abstract we use green bonds as an instrument to identify the effect of non pecuniary motives specifically pro environmental preferences on bond market prices we perform a matching method followed by a two step regression procedure to estimate the yield differential between a green bond and a counterfactual conventional bond from july 2013 to december 2017 the results suggest a small negative premium the yield of a green bond is lower than that of a conventional bond on average the premium is 2 basis points for the entire sample and for euro and usd bonds separately we show that this negative premium is more pronounced for financial and low rated bonds the results emphasize the low impact of investors pro environmental preferences on bond prices which does not represent at this stage a disincentive for investors to support the expansion of the green bond market

choice under uncertainty problems solved and unsolved ffifteen years ago the theory of choice under uncertainty could be considered one of the success stories of economic analysis it rested on solid axiomatic foundations it had seen important breakthroughs in the analytics of risk risk aversion and their applications to economic issues and it stood ready to provide the theoretical underpinnings for the newly emerging information revolution in economics 1 today choice under uncertainty is a field in flux the standard theory is being challenged on several grounds from both within and outside economics the nature of these challenges and of our profession s responses to them is the topic of this paper

nutrition and nonparticipation in the us food stamp programme microdata from the national food consumption survey are used to test for differences in caloric and protein intake distributions we compare poor households that participate in the us food stamp programme to eligible households that do not participate tests for stochastic dominance provide unambiguous evidence that eligible nonparticipants suffer from relative undernutrition compared to participating households probit analysis is used to identify characteristics of participating and nonparticipating households

discontinuous losses from poverty generalized pα measures and optimal transfers to the poor abstract this paper examines the distributional properties of poverty measures which are discontinuous at the poverty line it is shown that among all the additive poverty measures only those measures with some discontinuous jump at the poverty line are such that it is optimal to allocate a given antipoverty budget either to the richest of the poor or to the poorest of the poor or to both a special class of such poverty measures is an extension of the well known p the properties of which are investigated

a re count of poverty in us central cities just who and where are the urban poor poverty remains a persistent problem in central cities across the us and the government s approach to measuring it is not without shortcomings this paper applies recently developed innovations in poverty measurement and presents improved estimates of central city poverty across time a broader and more comprehensive income concept is employed to measure family resources and important distributional aspects of poverty are incorporated by using the sen index in general sen indexes for the central city are significantly reduced when comprehensive income is used to evaluate poverty motivating these changes are the substantial reductions that occur in the depth of poverty and the relative income inequality among poor central city residents regionally the results suggest that the elements of comprehensive income have their greatest impact on estimates of poverty in southern central cities while the central cities of the west are least affected

inequality measurement an axiomatic approach the theory of inequality measurement is examined using some basic axioms which extend the pigou dalton principle of transfers from these basic axioms various inequality indices may be derived as an alternative to ad hoc methods or to methods involving prior specification of a social welfare function the key idea is the concept of distance between two income shares conventional inequality indices are analysed in terms of their implied distance functions

what does europe pay for clean energy review of macroeconomic simulation studies this paper analyses the macroeconomic costs of environmental regulation in european energy markets on the basis of existing macroeconomic simulation studies the analysis comprises the european emssion trading scheme energy taxes measures in the transport sector and the promotion of renewable energy sources we find that these instruments affect the european economy in particular the energy intensive industries and the industries that produce internationally tradeable goods from a macroeconomic point of view however the costs of environmental regulation appear to be modest the underlying environmental targets and the efficient design of regulation are key determinants for the cost burden

convergence of the south and non south income distributions 1969 1979 income distribution and inequalities in the southern united states are analyzed and compared with data for the rest of the country the evidence presented in this paper reveals that in the 1970s the souths income distribution either converged or moved significantly closer to the income distribution of the rest of the country the degree of convergence depends on the definition of the recipient unit and to a degree on the particular cost of living index used to deflate southern and non southern incomes the convergence is attributed in part to the labor unionization in the northeast and the resulting relocation of companies to the south data are from the 1970 and 1980 censuses and concern total household income excerpt

non bayesian decision theory ahead of its time the case of g l s shackle this article deals with the reception of george l s shackle s volume expectation in economics introducing a unique attempt to discard the probability framework in the investigation of behaviour under uncertainty through a fresh reading of the textual evidence including correspondence held at cambridge university library the article assesses why decision theorists interest in shackle s theory substantial during the 1950s faded away in the early 1960s the article argues that apart from shackle s refusal to comprehend that his critics were under the influence of a new subjective probability perspective a major explanation of the dismissal of his work stays in shackle s stance not to establish a collaborative link with those critics who showed a positive attitude towards his theory the article shows though that the discussion between shackle and his critics hinged on a number of topics that are still crucial to the current developments of decision theory

international comparisons of income inequality tests for lorenz dominance across nine countries this paper examines income inequality across nine countries using the luxembourg income study data set new statistical tests and comparability of data provide an exceptionally clear picture of relative income inequality only 4 comparisons out of a possible 108 cannot be ranked in most cases differences in the definition of the recipient unit make little difference in the rankings irrespective of recipient units sweden norway and germany come out at the top of the ordinal lorenz ranking with australia canada and the united kingdom in the middle and the united states and switzerland at the bottom copyright 1991 by the london school of economics and political science

statistical tests of changes in u s poverty 1975 to 1990 since president lyndon johnson declared the war on poverty three decades ago scholars have devoted many volumes to analyzing characteristics of poverty evaluating effectiveness of antipoverty policies and measuring changes in poverty unfortunately most poverty studies have focused primarily on the incidence of poverty rather than on both the incidence of poverty and the income distribution within the poor population although a k sen s 23 seminal work on measurement of poverty demonstrated the importance of constructing and using a distribution sensitive poverty measure in evaluating poverty the u s federal government still uses the proportion of poor as virtually the only indicator of poverty with few exceptions such as bishop formby and smith 5 most recent scholarly works on poverty issues including sawhill 21 hanratty and blank 17 and slesnick 24 are also concerned exclusively with the incidence of poverty and use a single poverty line in this study we demonstrate that a more comprehensive look at poverty using distribution sensitive measures and multiple poverty lines yields a different picture of poverty changes over time compared to what official u s statistics portray practically the comparison of poverty changes can be decomposed into three parts 1 setting a poverty line an income threshold below which a person is defined as poor this step is also called the identification of the poor and is very important in poverty study 2 choosing a method to aggregate individual poverty into overall poverty different methods of aggregating may lead to different conclusions about poverty changes therefore an appropriate method is essential for poverty study and 3 statistical inference since conclusions about poverty changes are drawn from a random sample of the population it is important to know whether the estimated poverty

some instability puzzles in kaleckian models of growth and distribution a critical survey we tackle the issue of the possible instability of the kaleckian distribution and growth model distinguishing between keynesian and harrodian instability we review various mechanisms that have been proposed by critics of the kaleckian model to tame harrodian instability while bringing back the rate of utilisation to its normal rate we find that the mechanisms that have been suggested are far from convincing therefore we conclude that it may be premature for the critics of the kaleckian model to dismiss the endogeneity of the rate of capacity utilisation in long run growth equilibrium copyright the author 2010 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

economic impacts of the 1997 eu energy tax simulations with three eu wide models in march 1997 the european commission adopted aproposal that increases existing minimum levels oftaxation on mineral oils by around 10 to 25 andintroduces excises for other energy products thispaper analyses the macroeconomic impacts of theproposal it employs three models hermes gem e3 ande3me all models confirm that the proposal will havepositive macroeconomic impacts when the tax revenuesare used to reduce social security contributions paidby employers for the eu as a whole both gdp andemployment are expected to be higher and co2emissions are 0 9 to 1 6 percent lower the positiveeu wide effects can be observed in practically allmember states the sector impacts are modest with theenergy sector expected to face the most negativeimpacts differences between model results are due tothe model type general equilibrium ormacro econometric the eu countries covered and theway tax exemptions were handled crucial assumptionsto obtain the double dividend are the modelling ofthe labour market and the impacts on eu externaltrade the sensitivity of the results for the use oftax revenues tax exemptions and tax rate increases isassessed

on modeling and interpreting the economics of catastrophic climate change with climate change as prototype example this paper analyzes the implications of structural uncertainty for the economics of low probability high impact catastrophes even when updated by bayesian learning uncertain structural parameters induce a critical tail fattening of posterior predictive distributions such fattened tails have strong im plications for situations like climate change where a catastrophe is theoretically possible because prior knowledge cannot place sufficiently narrow bounds on overall damages this paper shows that the economic consequences of fat tailed structural uncertainty along with unsureness about high temperature damages can readily outweigh the effects of discounting in climate change policy analysis

truncation bias and the ordinal evaiuation of income inequality lorenz dominance analysis is used to examine the effect of top coding on the ordinal evaluation of u s income inequality across time current population survey microdata are adjusted for truncation bias and statistical inference procedures are used to examine biennial changes in unadjusted and adjusted lorenz curves beginning in 1985 the truncation bias has a significant effect on ordinal rankings of income inequality

uncertainties in macroeconomic assessments of low carbon transition pathways the case of the european iron and steel industry abstract the climate targets agreed in paris 2015 render deep decarbonization of energy and emission intensive industries crucial policy makers are interested in the macroeconomic consequences of such decarbonization pathways and often rely on integrated modelling studies however the underlying modelling assumptions and uncertainties often remain unquestioned or invisible although they may govern the models results for the case of a zero process emission pathway of the european iron and steel industry we demonstrate how different assumptions on different layers of uncertainty influence results we show that effects strongly depend on technology choice prevailing macroeconomic states as well as regional characteristics the underlying socio economic development and the climate policy trajectory seem to play a less important role particularly we find that the choice of model i e which macroeconomic theory strand it arises from influences the sign and magnitude of macroeconomic effects and thus should be well understood in terms of appropriate interpretations by both modelers and policy makers we emphasize that model assumptions should be transparent results sought as to be robust across a range of possible contexts and presented together with the conditions under which they are valid to that end co design and co production in research would support its relevance and applicability

monetary policy and macroeconomic stability under alternative demand regimes in this paper we analyse the interaction of macroeconomic activity and the dynamics of real wages from a theoretical perspective by means of a system dynamic approach we investigate the economic viability of wage and profit led demand regimes by analysing not only the effect of real wages on output but also the feedback mechanisms of macroeconomic activity on the real wages furthermore in this context we focus on the role of monetary policy as a macroeconomic stabilisation mechanism in the two mentioned demand regimes

the carbon footprint of european households and income distribution abstract this paper calculates the carbon footprint of private consumption in the eu27 by five groups of household income using a fully fledged macroeconomic input output model covering 59 industries and five groups of household income for the eu27 due to macroeconomic feedback mechanisms this methodology besides induced intermediate demand also quantifies i private consumption induced in the other household groups ii impacts on other endogenous final demand components and iii negative feedback effects due to output price effects of household demand the carbon footprint is calculated separately for the consumption vector of each of the five income groups the simulation results yield a non linear income elasticity of direct and indirect emissions at each income level the value of the direct footprint income elasticity decreases from 1 32 first quintile to 0 69 fourth quintile the value of the indirect footprint income elasticity is always below unity and decreases from 0 89 to 0 62 the results in general reveal a relative decoupling effect the share of the top income group in income 45 is much larger than its share in the carbon footprint 37 and vice versa for the bottom income group 6 in income and 8 in footprint

poverty measurement research using the consumer expenditure survey and the survey of income and program participation the most recent comprehensive examination of poverty measurement in the united states was conducted by the national academy of sciences nas panel on poverty and family assistance constance f citro and robert t michael 1995 in their report the panel recommended changing the definition of both the poverty thresholds and the resources that are used to measure poverty in this paper we implement a number of the panel s basic procedures with slight modifications to obtain experimental poverty rates for 1991 to 1996 this paper presents poverty estimates using thresholds derived from the 1989 1991 consumer expenditure survey cex and using family resources based on the 1991 panel of the survey of income and program participation sipp and the march 1992 current population survey cps the resulting experimental poverty rates are compared to those based on the official measure while most previous work has examined the new poverty measure exclusively using the cps this paper presents for the first time estimates from the sipp the survey that the panel recommended should become the official source of poverty resource measurement additional estimates from the cps from 1992 1996 are presented in order to examine the behavior of these experimental poverty rates over time our findings reveal that changes in the poverty rates based on the official and the experimental measures are similar over time we show that poverty rates using sipp data are below those using the cps we also show that using the experimental poverty measure yields a poverty population that looks more like the total population in terms of various demographic and socioeconomic characteristics than does the poverty population based on the current official measure