imperfect competition and the keynesian cross abstract this paper presents a simple general equilibrium model in which the only non walrasian feature is imperfect competition in the goods market the model is shown to exhibit various keynesian characteristics in particular as competition in the goods market becomes less perfect the fiscal policy multipliers approach the values implied by the textbook keynesian cross

environmental efficiency with multiple environmentally detrimental variables estimated with sfa and dea abstract the objective of this paper is to estimate comprehensive environmental efficiency measures for dutch dairy farms the environmental efficiency scores are based on the nitrogen surplus phosphate surplus and the total direct and indirect energy use of an unbalanced panel of dairy farms we define environmental efficiency as the ratio of minimum feasible to observed use of multiple environmentally detrimental inputs conditional on observed levels of output and the conventional inputs we compare two methods for the calculation of efficiency namely stochastic frontier analysis sfa and data envelopment analysis dea this paper reveals the strengths and weaknesses for estimating environmental efficiency of the methods applied both sfa and dea can estimate environmental efficiency scores the mean technical efficiency scores output oriented sfa 89 dea 78 and the mean comprehensive environmental efficiency scores sfa 80 dea 52 differ between the two methods sfa allows hypothesis testing and the monotonicity hypothesis is rejected for the specification including phosphate surplus dea can calculate environmental efficiency scores for all specifications because regularity is imposed in this method

evaluating unemployment policies what do the underlying theories tell us the paper surveys unemployment policies for advanced market economies and evaluates them by examining the predictions of the underlying macroeconomic theories the basic idea is that for the most part different unemployment policy prescriptions rest on different macroeconomic theories and our confidence in the prescriptions should depend at least in part on theories ability to predict some salient stylized facts about unemployment behavior the paper considers four types of policies laissez faire demand management policies supply side policies and structural policies copyright 1995 by oxford university press

agriculture s environmental externalities dea evidence for french agriculture the existence of persistent technical inefficiency offers the opportunity for a free lunch not typically implied by the neoclassical theory of the firm when external effects are related to the use of particular inputs reduction of persistent technically inefficient levels of input use represents a means of reducing external impacts an important example is found in agriculture where substantial environmental impacts are generated by particular inputs within this context this paper considers the usefulness of data envelopment analysis dea for estimation of potential input reductions and assessment of potential reductions of environmental impacts of agricultural inputs an application for french cereal production provides estimates that indicate that substantial potential exists for reduction of input use and environmental impacts

a kuznets curve in environmental efficiency an application on oecd countries the role of the environment is an important issue in policy making andthe accurate assessment of the environmental conditions is vital inthis paper using nonparametric techniques an environmental efficiencyindex is developed for each of the oecd countries these indexes allowone both to do cross section comparisons on the state of each country sproduction process in its treatment of undesirable outputs and also totrace each country s modification of their production processesovertime furthermore in this study we investigate the factorsunderlying societies environmental concerns that eventually lead tochanges in the environmental efficiency the results provide furtherempirical evidence for the environmental kuznets curve hypothesis

monopolistic competition as a foundation for keynesian macroeconomic models a general equilibrium macroeconomic model based on monopolistic competition is presented the model exhibits a traditional multiplier in the short run but due to free entry the multiplier disappears in the long run by construction all agents are fully rational the keynesian results are a consequence of the assumption of monopolistic competition which creates a divergence between optimal private behavior and optimal social behavior

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

measuring efficiency with a linear economic model this paper modifies and interprets data envelopment analysis dea using a linear economic model this approach is similar to the cone input output and assurance region approaches to dea but it is implemented so that the multipliers are measured in the same units across all linear optimization problems this approach allows one to interpret alternatives as profit maximizing organizations and the dea multipliers as prices that are comparable across the alternatives this is a useful extension of the assurance region concept but more important is that our approach enhances communication with decision makers the improved communication is illustrated by applying the model to the siting of a long term health care facility this application is interesting because the multiplier bounds make practical sense and because the problem has dimensions that sometimes lead to interpretation problems with the traditional dea model for example the site characteristics do not result from coordinated decisions some s

investment and market power abstract this paper argues that the degree of market power within an industry is an important determinant of interindustry differences in investment behavior a neoclassical investment model is analyzed to show that market power is positively associated with capital stock flexibility the intuition for the result is that firms adjust their stocks and investment plans quickly in response to new conditions so as to capture the rents asssociated with their market power

international regulations and environmental performance this article employs the data envelopment analysis dea approach to compute the environmental performance of all but two organisation for economic co operation and development oecd countries it is found that although the environmental performance of countries differs over time poland and hungary are the two best performers for all periods while italy japan austria and switzerland are ranked among the worst the effect of international regulations and some observed characteristics of countries on environmental performance are also investigated international regulations are reported to have a positive effect on environmental performance

econometric estimation of technical and environmental efficiency an application to dutch dairy farms in this article we estimate the technical and environmental efficiency of a panel of dutch dairy farms nitrogen surplus arising from the application of excessive amounts of manure and chemical fertilizer is treated as an environmentally detrimental input a stochastic translog production frontier is specified to estimate the output oriented technical efficiency environmental efficiency is estimated as the input oriented technical efficiency of a single input the nitrogen surplus of each farm the mean output oriented technical efficiency is rather high 0 894 but the mean input oriented environmental efficiency is only 0 441 intensive dairy farms are both technically and environmentally more efficient than extensive farms

the relation between price and marginal cost in u s industry an examination of data on output and labor input reveals that some u s industries have marginal cost well below price the conclusion rests on the finding that cyclical variations in labor input are small compared with variations in output in booms firms produce substantially more output and sell it for a price that exceeds the costs of the added inputs the paper documents the disparity between price and marginal cost where marginal cost is estimated from annual variations in cost it considers a variety of explanations of the findings that are consistent with competition but none is found to be completely plausible

monopolistic competition and the effects of aggregate demand how important is monopolistic competition to an understanding of the effects of aggregate demand on output we ask the question at three levels can monopolistic competition by itself explain why aggregate demand movements affect output can it together with other imperfections generate effects of aggregate demand in a way that perfect competition cannot if so can it give an accurate account of the response of the economy to aggregate demand movements the answers are no yes and yes

public debts and fiscal politics how to decide the phenomenal growth in our public deficits over the past twenty years is a matter of public and professional concern see symposium 1989 while this concern may indeed be well founded particularly given current deficit levels public deficits are not always bad certainly in times of deep recessions short term deficit financing can stimulate aggregate demand increase national income and reduce unemployment in a keynesian fashion see richard startz 1989 second long term deficit financing may be needed to sustain a long term path of optimal consumption see peter diamond 1965 third public deficits including pay as yougo social security can offer welfare gains for significant subsets of consumers who have been liquidity constrained r glenn hubbard and kenneth judd 1986 who have been unable to purchase indexed private annuities alan blinder 1988 or who have been unable to sufficiently diversify their investment portfolios away from human capital robert merton 1983 finally robert barro 1979 has argued that public deficits may be an important policy instrument to insure intertemporal welfare maximization when public expenditures are stochastic and public taxes are economically inefficient taxes can be smoothed to reduce the lifetime excess burden of public financing the concern today is not that we have deficits but rather that we may be overdoing a good thing if this is the issue then we need to ask why and what can be done about it this is my agenda here i the political economy of recent deficits

searching for a kuznets curve in environmental efficiency using kernel estimation abstract the paper constructs environmental efficiency indexes for a sample consisting of high and low income countries using nonparametric production frontier techniques and then establishes an environmental kuznets relationship for environmental efficiency by nadaraya watson kernel estimation methodology

is environmental efficiency trade inducing or trade hindering abstract global efforts to identify strategies for sustainable economic growth and development underline the need for understanding important links between environmental policies and international trade in this paper by constructing an environmental efficiency index for 111 countries from 1980 to 2009 we are able to empirically test for one such link an improvement in the environmental efficiency index in terms of carbon dioxide emissions reflects a decrease in the cost of efforts to mitigate the environmental costs associated with growth countries that improve their environmental efficiency are found to experience strong international trade effects both through increased exports and increased imports while the positive link between efficiency improvements and exports is supportive of the porter hypothesis the positive link between efficiency improvements and imports is supportive of strong positive income effects on account of environmental efforts these results which are robust to alternative estimation strategies lend strong support to global efforts to improve countries environmental efficiencies

economics of efficiency measurement by the dea approach three aspects of efficiency measurement by data envelopment analysis are discussed here analytically these aspects comprise output specific input allocations by each firm flexibility in the production process and the role of learning by doing in efficiency improvement

electricity market structure electricity price and its volatility abstract the transition of the singapore electricity market structure shows that real time pricing with vesting contracts appears more effective than day ahead or real time pricing with a cap in maintaining a low electricity price and its volatility

small menu costs and large business cycles a macroeconomic model of monopoly i introduction the conflict between modern neoclassical and traditional keynesian theories of the business cycle centers upon the pricing mechanism in neoclassical models prices are fully flexible they represent the continuous optimization of economic agents and the continuous intersection of supply and demand in keynesian models prices are often assumed to be sticky they do not necessarily equilibrate all markets at all times one of the reasons for the resurgence of the equilibrium approach to macroeconomics has been the absence of a theoretical underpinning for this keynesian price stickiness this note shows that sticky prices can be both privately efficient and socially inefficient the business cycle results from the suboptimal adjustment of prices in response to a demand shock to the extent that policy can stabilize aggregate demand it can mitigate the social loss due to this suboptimal adjustment in some keynesian models prices are simply exogenously fixed 2 in others agents must set their prices in advance of the transaction date the act of altering a posted price is certainly costly these costs include such items as printing new catalogs and informing salesmen of the new price yet these menu costs are small and therefore generally perceived as providing only a weak foundation for these fixed price models however this inference is flawed small menu costs can cause large welfare losses the claim that price adjustment costs are small does not rebut the claim that they are central to understanding economic fluctuations

increasing returns and the foundations of unemployment theory current approaches to macroeconomic theory divide roughly into two basic schools of thought one approach typically associated with rational expectations views the economy as basically at or near walrasian market clearing equilibrium in which case it becomes very difficult to explain away convincingly the undeniable persistence at times of involuntary unemployment another approach views the underemployed economy as being in a state of temporary fixed price disequilibrium in which case aside from having to repress suspicions that the essence of effective demand failure might not have to do with prices fixed at wrong values there is a lot of rationalising to be done about why profitable adjustments are so slow this paper argues that something like an internally consistent theory of steady state involuntary unemployment is possible and even plausible the cornerstone of this third approach is increasing returns to scale which blocks unemployed agents from breaking out of a low level equilibrium trap unless there is overall coordination or stimulation a simple model is presented which contains the basic ideas

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