impacts of opec s political risk on the international crude oil prices an empirical analysis based on the svar models abstract the impacts of opec s political risk on the fluctuations of international crude oil prices have caused widespread concern and analyzing the impacts is of great significance to the investment decisions and risk aversion strategies in the crude oil markets therefore using the international country risk guide icrg index as a proxy for the countries political risk situation we empirically investigate the impacts of opec s political risk on the brent crude oil prices based on several structural vector autoregression svar models the main empirical results indicate that 1 the political risk of opec countries does have a significant and positive influence on brent crude oil prices in the sample period from january 1998 to september 2014 and the most significant positive influences appear in about one and a half year and last about a year 2 opec s integrated political risk contributes to 17 58 of the oil price fluctuations in the sample period which is only lesser than that of the oil demand shocks 34 64 3 compared with the political risk of opec countries in north africa and south america the political risk of opec countries in the middle east contributes most to the oil price fluctuations 4 among the eight components of the political risk in opec the internal conflicts contribute most to the oil price fluctuations in the sample period

the control of technology alliances an empirical analysis of the biotechnology industry we examine the determinants of control rights in biotechnology alliances through three case studies and a quantitative analysis aghion and tirole 1994 argue that control rights will be assigned so as to maximize the value of the final output as long as the r d firm has sufficient financial resources consistent with this framework the allocation of control rights to the r d firm increases with the firm s financial resources the empirical evidence regarding the relationship between control rights and the stage of the project at the time the alliance is signed is more ambiguous

a study on the future of unconventional oil development under different oil price scenarios a system dynamics approach abstract fluctuations in the oil global market has been a critical topic for the world economy so that analyzing and forecasting the conventional oil production rate has been examined by many researchers thoroughly however the dynamics of the market has not been studied systematically with regard to the new emerging competitors namely unconventional oil in this paper the future trend of conventional and unconventional oil production and capacity expansion rates are analyzed using system dynamics approach to do so a supply side modeling approach is utilized while main effective loops are modeled mathematically as follows technological learning and progress long and short term profitability of oil capacity expansion and production and oil proved reserve limitations the proposed model is used to analyze conventional and unconventional oil production shares up to 2025 under different oil price scenarios the results show that conventional oil production rate ranges from 79 995 to 87 044 mb day which is 75 80 percent of total oil production rate while unconventional oil production rate ranges from 19 615 to 28 584 mb day simulation results reveal that unconventional oil can gain a considerable market share in the short run although conventional oil will remain as the major source for the market in the long run

lifting the us crude oil export ban a numerical partial equilibrium analysis the upheaval in global crude oil markets and the boom in shale oil production in north america brought scrutiny on the us export ban for crude oil from 1975 the ban was eventually lifted in early 2016 this paper examines the shifts of global trade flows and strategic refinery investments in a spatial game theoretic partial equilibrium model we consider detailed oil supply chain infrastructure with multiple crude oil types distinct oil products as well as specific refinery configurations and modes of transport prices quantities produced and consumed as well as infrastructure and refining capacity investments are endogenous to the model we compare two scenarios an insulated us crude oil market and a counter factual with lifted export restrictions we find a significant expansion of us sweet crude exports with the lift of the export ban in the us refinery sector more imported heavy sour crude is transformed countries importing us sweet crude gain from higher product output while avoiding costly refinery investments producers of heavy sour crude e g the middle east are incentivised to climb up the value chain to defend their market share and maintain their dominant position

the effects of human resource management practices on productivity a study of steel finishing lines the authors investigate the productivity effects of innovative employment practices using data from a sample of thirty six homogeneous steel production lines owned by seventeen companies the productivity regressions demonstrate that lines using a set of innovative work practices which include incentive pay teams flexible job assignments employment security and training achieve substantially higher levels of productivity than do lines with the more traditional approach which includes narrow job definitions strict work rules and hourly pay with close supervision their results are consistent with recent theoretical models which stress the importance of complementarities among work practices

the effects of oil price shocks on the economies of the gulf co operation council countries nonlinear analysis abstract this paper examines the effects of oil price shocks on the real gdp of the gulf cooperation council gcc countries the empirical method used is the nonlinear cointegrating autoregressive distributed lag nardl model of shin et al 2013 in which short run and long run nonlinearities are introduced via positive and negative partial sum decompositions of the explanatory variable s the results suggest evidence of asymmetries in all the cases we find significant positive oil price changes in all the cases with the expected positive sign implying that increases in oil price lead to increases in real gdp conversely negative oil price changes are significant for only kuwait and qatar with the expected positive sign suggesting that decreases in oil price lead to decreases in their real gdp further analysis implemented using panel data shows that positive oil prices changes increase real gdp and negative changes decrease real gdp overall the results suggest that positive oil price changes have a considerably larger impact on real gdp than negative changes

does opec act as a cartel empirical investigation of coordination behavior abstract in this paper i use quarterly and monthly data from 1994 to 2014 to test if opec acts as a cartel and therefore it affects oil prices through members coordination i use engle and granger two step approach johansen cointegration test and autoregressive distributed lag ardl bounds testing approach of cointegration to examine the long run relation between opec production and each member s production as an evidence of coordination besides i apply granger causality and toda and yamamoto tests to check the direction of causality between the opec production and oil prices u k brent and dubai fateh the findings show no evidence of cointegration between the production of the members and that of opec indicating no cartel behavior exists moreover the results show that opec production does not cause oil prices rather it is the other way around

reassessing the empirical relationship between the oil price and the dollar abstract this paper aims at reassessing the empirical relationship between the real price of oil and the u s dollar real effective exchange rate over the 1974 2015 period we find that changes in both variables are now linked by a negative relationship going from the dollar exchange rate to the real oil price however the same relationship is found positive when ending the sample in the mid 2000s in line with the previous literature to understand and investigate this evolution we rely on a nonlinear smooth transition regression model in which the oil price dollar nexus depends on the dynamics followed by the u s currency our results show that the relationship is negative most of the times but turns positive when the dollar hits very high values as in the early eighties

quantitative effects of the shale oil revolution abstract the aim of this paper is to analyze the impact of the so called shale oil revolution on oil prices and economic growth we employ a general equilibrium model of the world oil market in which saudi arabia is the dominant firm with the rest of the producers as a competitive fringe our results suggest that most of the expected increase in us oil supply due to the shale oil revolution has already been incorporated into prices and that it will produce an additional increase of 0 2 in the gdp of oil importers in the period 2010 2018 we also employ the model to analyze the collapse in oil prices in the second half of 2014 and conclude that it was mainly due to positive unanticipated supply shocks

micro data heterogeneity and the evaluation of public policy nobel lecture this paper summarizes the contributions of microeconometrics to economic knowledge four main themes are developed 1 microeconometricians developed new tools to respond to econometric problems raised by the analysis of the new sources of micro data produced after the second world war 2 microeconometrics improved on aggregate time series methods by building models that linked economic models for individuals to data on individual behavior 3 an important empirical regularity detected by the field is the diversity and heterogeneity of behavior this heterogeneity has profound consequences for economic theory and for econometric practice 4 microeconometrics has contributed substantially to the scientific evaluation of public policy

the political economy of opec abstract we develop a conceptual model that captures opec pricing behavior and apply it to explain the large gap observed between domestic fuel prices in opec countries and prices in the rest of the world we model opec as a cartel of nations not firms and assume that politicians use two instruments production quotas and domestic fuel consumption subsidies the cartel of nations model suggests that introduction of alternatives to petroleum products may lead opec to reduce exports and increase domestic fuel consumption the empirical analysis suggests that when opec sets production quotas it places similar weights on consumer and producer surplus but when opec countries set domestic fuel subsidies on average 6 more weight is given to consumer surplus with some of the opec countries pursuing very aggressive domestic cheap fuel policies

pattern based expectations international experimental evidence and applications in financial economics abstract we study how subjects extrapolate simple patterns in financial time series in order to develop a descriptive model of actual agent behavior the laboratory experiment for this analysis was conducted in germany and japan statistical analyses indicate considerable similarity in expectations formation across cultures and document that agents expectations are at variance with the notion of standard trend extrapolation the paper then proposes a method for computing expectations for any economic time series based on the experimental data such pattern based expectations are shown to explain stock prices and the dynamics of the forward discount on the foreign exchange market

i struggled with this money business respondents perspectives on contingent valuation abstract in the long running debates about the validity and legitimacy of contingent valuation cv very little research has engaged directly with respondents during or after the survey to explore what individuals willingness to pay wtp figure meant this paper presents the results of qualitative research with respondents to a cv survey carried out as part of the appraisal of a specific nature conservation policy in the uk the results show that respondents questioned the validity of their wtp figures through discussion of the difficulties they experienced in framing a meaningful reply significant difficulties included problems in contextualising what the scheme was and how much it might be worth in both monetary and non monetary terms an inability to work out a value for one scheme in isolation from others in other parts of the uk and feelings that values for nature were not commensurable with monetary valuation turning to the legitimacy of cv participants in the research challenged claims that cv is a democratic process for ensuring that public values are incorporated in policy decisions recognizing that hard economic choices have to be made in order to achieve nature conservation goals participants argued for a decision making institution where local people could contribute to environmental policy decisions through dialogue with scientists and policy makers in the final part of the paper this project is compared with three studies that have also used qualitative approaches with respondents during and or after a cv survey the paper concludes that more context specific qualitative research with respondents is needed to explore further the conclusion that cv may not be a good methodology for capturing complex cultural values for nature and landscape

measures of fit for rational expectations models this survey provides a detailed description of some of the recent theoretical and empirical literature on rational expectations econometrics the survey pays special attention to non stationarity of the data and to the various methods for evaluating rational expectations models that have been developed as alternatives to the classical statistical approach of testing overidentifying restrictions these methods have become very popular and widely used in empirical research we provide an illustration using danish stock market data and we summarize the many results obtained recently using these measures in areas as diverse as stock prices the term structure of interest rates exchange rates consumption and saving the balance of payments tax smoothing hyperinflation and linear quadratic adjustment cost models for inventories labour demand and money demand

can agents learn to rational expectations some results on convergence and stability of learning in the uk stock market rational expectations are frequently justified as the point of convergence of agents learning process when agents learning feeds back on the actual law of motion of the economy convergence of their rule to a rational expectations equilibrium ree is not guaranteed however applying new methods to analyze the convergence of learning in a model of u k stock prices we find evidence that agents could not have learned to form rational expectations if they had attempted to estimate the long run dynamics of the model if however agents have strong priors and impose a unit root on the model thus confining their learning to the short run dynamics there is evidence that recursive learning may eventually lead them to a ree the learning process on the path to this equilibrium is highly volatile suggesting that learning may help to explain excess volatility in u k stock prices copyright 1994 by royal economic society

exploring the effect of crisis on cooperatives a bayesian performance analysis of french craftsmen cooperatives the aim of this paper is to understand the economic performance of craftsmen cooperatives during the crisis period these cooperatives have the distinctive feature of being supply cooperatives we

who should buy long term bonds according to conventional wisdom long term bonds are appropriate for conservative long term investors this paper develops a model of optimal consumption and portfolio choice for infinite lived investors with recursive utility who face stochastic interest rates solves the model using an approximate analytical method and evaluates conventional wisdom as risk aversion increases the myopic component of risky asset demand disappears but the intertemporal hedging component does not conservative investors hold assets to hedge the risk that real interest rates will decline long term inflation indexed bonds are most suitable for this purpose but nominal bonds may also be used if inflation risk is low

risk perception in psychology and economics abstract the concept of rationality has been basic to most economic analysis its content has been successively refined over the generations as applied to the static world of certainty it has turned out to be a weak hypothesis not easily refuted and therefore not very useful as an explanation though not literally a tautology but recent decades have seen the development of stronger versions applied to a world in which time and uncertainty are real among its most important manifestations have been criteria for consistency in allocation over time the expected utility hypothesis of behavior under uncertainty and what may be termed the bayesian hypothesis for learning that is the consistent use of conditional probabilities for changing beliefs on the basis of new information these hypotheses have been used widely in offering explanations of empirically observed behavior though as not infrequently in economics the theoretical development has gone much further than the empirical implementation these hypotheses have also been used increasingly in normative analysis as a component of benefit cost studies therefore frequently referred to as benefit risk studies the value of reducing mortality rates from diseases for example has been studied by assuming that choice of occupations is made inter alia by comparing wage differences with mortality differences

growing up in the projects the economic lives of a cohort of men who came of age in chicago public housing empirical research by labor economists relies overwhelmingly on data collected in largescale government funded surveys the availability of such data dramatically lowers the cost of conducting research for any individual scholar large sample sizes and extensive breadth of variables allow precise testing of a wide variety of hypotheses combined with enormous increases in computing capabilities and the development of new techniques to analyze such data these data sets have transformed the field of labor economics james heckman 2000 the use of large scale survey data however has not come without a cost the set of questions that can be addressed is constrained by the variables that have been collected these studies are typically nationally representative with sample sizes too small to undertake detailed analysis in particular localized geographic areas or very specific subsets of the overall population because the researcher is removed from the data collection process and the analysis is national in focus understanding of institutional detail is de emphasized ethnography used by sociologists and anthropologists represents the polar opposite of the standard economic approach an ethnographer integrates himself or herself into the community being analyzed paying careful attention to the context in which the actors operate such studies tend to rely almost exclusively on qualitative analysis rarely gathering systematic quantitative data the benefits to such an approach are that the researcher structures the analysis to answer precisely the desired question and the depth of specific knowledge acquired by the sociologist allows for a richer understanding of the problem the costs of such an approach are that it is time intensive cannot be replicated and is of questionable generalizability in this paper we report preliminary findings of a joint study undertaken by an economist and an ethnographer that aims to integrate the usual economic and ethnographic approaches to empirical research 1 focusing on the residents of one high rise housing project building in chicago we have attempted to reconstruct retrospectively the economic and social histories of all young males who spent their adolescence in the housing project in the early 1990 s through the use of an extensive net of community contacts we have to date succeeded in locating 105 of these 118 men who are now in their late twenties and early thirties for almost all of these men we have obtained not only extensive self reported information but also evaluations of these men by other community members on a wide range of characteristics

household returns to land transfers in south africa a q squared analysis abstract the south african land reform programme has been widely criticised for its slow pace as well as its apparent lack of contribution to poverty reduction however there is little systematic evidence of the impact of land transfers on their beneficiaries due to data scarcity this paper combines econometric evidence based on official household surveys with qualitative data collected specifically to triangulate and complement the econometric analysis the qualitative data analysis confirms the plausibility of the econometric finding that on average beneficiaries do not gain from participation and suggests that the main reason for the disappointing impact of participation is the incompatibility of consultant led land use plans to land grantees skills

perception judgment and motivation in manufacturing enterprises findings and preliminary hypotheses from in depth interviews abstract in depth interviews with decision makers in 113 well regarded small and medium size metalworking enterprises in argentina mexico and the united states suggest that such individuals often perceive market technological and public policy data in a highly imperfect manner and thus address themselves to problems which are variants sometimes remote variants of those actually confronted this leads to mistaken judgments and the use of judgmental heuristics to solve problems further biases results additional complications result from the fact that enterprise objectives vary from task to task these findings and preliminary hypotheses have major implications for the analysis of entrepreneurial behavior

the oil price crash in 2014 15 was there a negative financial bubble abstract this paper suggests that there was a negative bubble in oil prices in 2014 15 which decreased them beyond the level justified by economic fundamentals this proposition is corroborated by two sets of bubble detection strategies the first set consists of tests for financial bubbles while the second set consists of the log periodic power law lppl model for negative financial bubbles despite the methodological differences between these detection methods they provided the same outcome the oil price experienced a statistically significant negative financial bubble in the last months of 2014 and at the beginning of 2015 these results also hold after several robustness checks which consider the effect of conditional heteroskedasticity model set ups with additional restrictions longer data samples tests with lower frequency data and with an alternative proxy variable to measure the fundamental value of oil

the shift in global crude oil market structure a model based analysis of the period 2013 2017 abstract this paper analyzes the recent developments in the global oil market investigating how the 2014 2016 price collapse and the following opec agreement affected the crude oil market structure and the behavior of major suppliers to this end we develop a partial equilibrium model with a spatial structure for the global crude oil market and simulate the market for the period between 2013 and 2017 under different market structure setups the simulation results reveal that although the oligopolistic market structures fit overall well to the realized market outcomes they are not successful at explaining the low prices during 2015 and 2016 which instead are closer to estimated competitive levels we further suggest that from 2014 onward the market power potential of major suppliers has shrunk considerably supporting the view that the market has become more competitive we also analyze the saudi arabia and russia led opec agreement and find that planned production cuts in 2017 particularly of saudi arabia and russia were below the levels of estimated non competitive market structure setups

beauty productivity and discrimination lawyers looks and lucre we propose models with an ascriptive characteristic generating earnings differentials and causing sectoral sorting allowing us to distinguish among sources producing such differentials we use longitudinal data on a large sample of graduates from one law school and measure beauty by rating matriculation photographs 1 betterlooking attorneys who graduated in the 1970s earned more than others after 5 years of practice an effect that grew with experience 2 attorneys in the private sector are better looking than those in the public sector differences that rise with age these results support theories of dynamic sorting and customer behavior

pattern recognition and procedurally rational expectations abstract this paper introduces a model of pattern recognition for assessing probabilities of future events experimental data from a time series setting indicates that the proposed model gives a better account of subjects expectation formation than the hypothesis of rational expectations parameter estimates suggest that individuals typically modify their behavior only with respect to some patterns while keeping other pattern responses unchanged in the light of new data when the individual data are used to simulate an asset market several features of speculative markets emerge large deviations of the market price from the fundamental price price movements in times without innovation in the fundamentals and large and variable levels of trading activities these regularities are shown to be consistent with pattern induced changes in expectations

information quality and long run risk asset pricing implications i study the asset pricing implications of the quality of public information about persistent productivity shocks in a general equilibrium model with kreps porteus preferences low information quality is associated with a high equity premium a low volatility of consumption growth and a low volatility of the risk free interest rate the relationship between information quality and the equity premium differs from that in endowment economies my calibration improves substantially upon the bansal yaron model in terms of the moments of the wealth consumption ratio and the return on aggregate wealth in this paper i introduce learning into a production based long run risk model learning improves the asset pricing implications of the model along three dimensions it increases the equilibrium equity premium reduces the volatility of consumption growth and reduces the volatility of the risk free interest rate i show that because of the production economy setting the relationship between information quality and the equity premium differs from that found in pure exchange economies see e g veronesi 2000 quantitatively my model improves substantially upon the bansal and yaron 2004 model in terms of its predictions about the volatility of the return on aggregate wealth and the wealth consumption ratio compared to bansal and yaron 2004 i use a lower relative risk aversion rra parameter two and a higher intertemporal elasticity of substitution ies parameter two my model generates a lower risk premium on the market portfolio 5 06 per year but does roughly as well as the bansal and yaron 2004 model according to other measures commonly used to assess the performance of consumption based asset pricing models such as the key moments of the risk free interest rate and the consumption growth rate more specifically i consider a general equilibrium model with a linear production technology and kreps porteus preferences kreps and porteus 1978 hengjie ai is at the fuqua school of business duke university this paper is based on chap

dividend variability and stock market swings this paper examines the extent to which swings in stock prices can be related to variations in the discounted value of expected future dividends when investors face uncertainty about their future behaviour i develop an econometric model that accounts for the instability of u s dividend growth and discount rates during the past 120 years estimates of the model reveal that changing forecasts of future dividend growth account for more than 90 of the predictable variations in dividend prices the estimates also imply that instability in the dividend and discount rate processes contribute significantly to the predictability of long horizon stock returns

the socioeconomic determinants of ill gotten gains within person changes in drug use and illegal earnings generalizing from the sociology of earnings attainment we develop a conceptual model of social embeddedness in conventional and criminal activities to explain illegal earnings among criminal offenders to isolate the effects of time varying factors such as legal earnings drug use and criminal opportunities we use data from the national supported work demonstration project to estimate fixed effects models predicting month to month changes in illegal earnings we find that criminal earnings are sensitive to embeddedness in conforming work and family relationships criminal experience and the perceived risks and rewards of crime moreover heroin and cocaine use creates a strong earnings imperative that is difficult to satisfy in the low wage labor market and offenders earn far more money illegally when they are using these drugs than during periods of abstinence

the emperor has no clothes the limits of opec in the global oil market most scholars and policymakers believe opec can and does influence the price of oil by acting as a cartel this paper argues that most of the conventional wisdom about opec is wrong opec rarely if ever influences the oil production rate in its member states further opec has almost no lasting impact on world prices except under rare conditions there was one occasion on which opec did have a significant impact on world oil prices namely the 1973 oil crisis but opec s role in the event has been greatly misunderstood the circumstances of the crisis were highly exceptional making it unlikely that the organization could ever have a similar impact on world oil prices again this paper seeks to correct the misunderstanding about opec s role and replace it with a better understanding of the organization i argue that opec is dysfunctional as a cartel as it has little or no causal impact on its members choices about production levels or investment in production capacity opec s role is obscured in part by the complexity of the world oil market and in part by misdirection by policymakers especially within opec many scholars especially economists have argued that opec should be understood as a cartel designed to solve a prisoner s dilemma pd coordination game yet opec s persistence is better understood as a widespread failure to update beliefs about the organization a failure that is driven by information asymmetry and politics the fact that such a widespread belief about the world s most important commodity market could be wrong can help us better understand international regimes

opec saudi arabia and the shale revolution insights from equilibrium modelling and oil politics why did opec not cut oil production in the wake of 2014 s price fall this study aims at aiding the mostly qualitative discussion with quantitative evidence from computing quarterly partial market equilibria q4 2011 q4 2015 under present short term profit maximisation and different competition setups although the model performs reasonably well in explaining pre 2014 prices all setups fail to capture low prices which fall even beyond perfect competition outcomes this result is robust with respect to large variations in cost parameters rejecting present short term profit maximisation as well as a qualitative discussion of saudi arabian politics and the shale oil revolution lead to the conclusion that the price drop of 2014 16 was most plausibly the result of an attempt to defend market shares and to test for shale oil resilience besides being fuelled by other factors such as rising competitiveness of alternative technologies although shale oil might have increased competition permanently as supported by model results the agreement of december 2016 should not be misunderstood as an opec defeat

information quality and stock returns revisited this paper investigates the relation between information on the state of the economy and equity risk premium we use a setup where investors have epstein zin preferences and the economy randomly switches between booms and recessions we are able to establish 2 key results first investors with high elasticity of intertemporal substitution eis will require lower excess returns for holding stocks if they are provided with better information on the state of the economy second we find that this also holds for investors with moderate eis if they are sufficiently risk averse

production costs of global conventional and unconventional petroleum abstract concerns about the costs of developing oil and gas from conventional and unconventional formations have led many commentators to assume that increasing prices are in the offing and may be a limiting factor for economic growth historically production costs have fluctuated as influenced by the cost increasing effects of depletion versus the cost reducing effects of technological progress this paper aims to review several methods for assessing current and long term costs despite the uncertainty of such estimation evidence shows that production costs in the foreseeable future might not increase dramatically and actually could decrease as petroleum development methods improve and additional supplies come online recent examples include the commercially viable production of unconventional oil and gas resources that has kept energy prices contained

exact solutions for expected rates of return under markov regime switching implications for the equity premium puzzle this paper derives simple closed form solutions for expected rates of return on stocks and riskless one period bills under the assumption that shocks to the growth rates of consumption and dividends are generated by a markov regime switching process these closed form solutions are used to show that the markov regime switching process exacerbates the equity premium puzzle and the risk free rate puzzle three empirical examples illustrate the magnitude of the effects of markov regime switching on equilibrium expected returns this abstract was borrowed from another version of this item

testing for the cartel in opec non cooperative collusion or just non cooperative this paper extends the framework of green and porter 1984 and porter 1983a to encompass the case of a cartel opec faced by a competitive fringe non opec oil producers estimation of a simultaneous equation switching regression model allows us to examine which market structure better characterizes the world oil market during the 1974 2004 period and to test whether switches between collusive and non cooperative behaviour occurred the null hypothesis that no switch occurred is rejected in favour of the alternative that both cooperative and non cooperative behaviour was observed we find that although there were periods in which oil prices were measurably higher owing to collusion among opec members overall opec has not been effective in systematically raising prices above cournot competition levels our results suggest that on average over the period of study opec s behaviour is best described as cournot competition in the face of a competitive fringe constituted by non opec producers

economic valuation of the environment how citizens make sense of contingent valuation questions this study adopts a qualitative approach in order to investigate how people make sense of contingent valuation cv questions of a global environmental amenity the objective is not only to capture people s motivations and considerations of willingness to pay wtp but also to determine if they adequately comprehend an economic valuation of such public goods the findings indicate that a large proportion of respondents do not interpret the valuation task as intended however this lack of understanding is not always expressed unless probed in relation to the elicitation question and some people have the tendency to provide monetary estimates anyway whatever meaning they attach to these

opec vs us shale analyzing the shift to a market share strategy abstract in november 2014 opec announced a new strategy geared towards improving its market share oil market analysts interpreted this as an attempt to squeeze higher cost producers notably us shale oil out of the market over the next year crude oil prices crashed with large repercussions for the global economy we present a simple equilibrium model that explains the fundamental market factors that can rationalize such a regime switch by opec i the growth of us shale oil production ii the slowdown of global oil demand iii reduced cohesiveness of the opec cartel and iv production ramp ups in other non opec countries while v reductions in us shale costs act against these factors we show that these qualitative predictions are broadly consistent with oil market developments during 2014 2015 the model is calibrated to oil market data it predicts accommodation up to 2014 and a market share strategy thereafter and explains large oil price swings as well as realistically high levels of opec output

small streams diverse sources who invests in renewable energy in finland during the financial downturn this article addresses the investment gap in renewable energy sources identified by several authors examining the case of a country finland which introduced policy measures to diversify its renewable energy portfolio we analyse the development of investments in renewable heat and power in response to new policy measures and contextual factors during the downturn period 2009 2013 we investigate investor heterogeneity i e the diversity of logics employed by different types of res investors in spite of a severe financial recession we find an emergence of new sources of investment among these new investor types we find diversity in investment drivers and available options these include investors mobilized by the feed in tariff to seek profitable targets and investors such as real estate owners investing in heat pumps for their own use and benefiting from low interest rates we find that the diversification of investors supports the diversification in res sources and brings in new investors undeterred by the financial downturn our findings imply that policy makers should recognize that the responses to distinct incentives and pressures vary by investor types this also means that a mix of policies is required to maximize the contribution of different sectors to filling the renewable energy investment gap

a dynamic network analysis of the world oil market analysis of opec and non opec members abstract we characterize the dynamic network structure of major oil producing countries we examine the oil production coordination of 13 organization of the petroleum exporting countries opec and 17 non opec members we construct the dynamic network structure using the network connectedness measure of diebold and yilmaz 2009 we investigate the structural changes in connectedness of opec and non opec members additionally we study how the influence of opec members non opec countries and major oil producers evolve we find that the network structure of major oil producing countries changes significantly over time specifically the impact of changes in oil production of all opec members on global oil production declines whereas the impact of non opec on global oil production increases opec s increase decisions have a significant and positive impact on opec and non opec coordination however cut decisions do not affect coordination we find that opec countries and developing countries have significantly higher levels of connectedness additionally countries with high oil production levels have significantly more influence the empirical results provide intuition about the recent developments in global oil production

tests of rational expectations in a stark setting the authors test the hypothesis that subjects forecasts in a stark experimental setting are not predictably different than the actual process generating the data the particular process that they use is a random walk forty subjects predict realizations of random walks chosen to be consistent with the actual process generating the data the authors find that they cannot predict subjects deviations from rational expectations of the process actually generating the data for about half of the subjects the authors cannot predict the forecast errors of about 90 percent of the subjects with information actually available to them coauthors are arlington w williams raymond c battalio and timothy i mason copyright 1993 by royal economic society

combining quantitative and qualitative data in welfare policy evaluations in the united states summary researchers have made significant efforts to combine quantitative and qualitative methods in welfare reform policy research in the united states this paper draws on several examples arising from the american experience to argue that mixed methods research particularly but not exclusively with integrated sampling data collection and data analysis can yield important and unexpected insights that neither method alone could generate we caution that each method has strengths and weaknesses that must be borne in mind so as not to oversell the promise of mixed methods research

switching equilibria the present value model for stock prices revisited abstract this paper analyzes the dynamic features displayed by alternative rational expectations equilibria in the context of the present value model for stock prices with feedback in particular it shows that there exists a unique equilibrium implying cointegration and that equilibrium is characterized by either the fundamental or alternatively the backward solution depending on the size of the feedback parameter it is shown analytically that the existence of switching equilibria induces large stock market swings using us data and structural estimation the hypotheses of feedback and switching equilibria are tested the empirical results provide evidence of both switching equilibria and feedback

invention and innovation in the chemical industry demand pull or discovery push abstract this paper describes a study of the determinants of the rate direction and scale of inventive and innovative activity in the chemical industry over the period 1830 1980 statistical data are interpreted in the light of case study material in three major sectors dyestuffs plastics and pharmaceuticals theories of technical change and economic growth particularly those of schmookler and schmpeter are examined in relation to this material on the chemical industry the findings suggest that the importance of demand pull and discovery push factors and the validity of schmookler s and schumpeter s theories vary over an industry s life cycle

what is the energy policy planning network and who dominates it a network and qca analysis of leading energy firms and organizations this study examines the structure of the energy industry and the energy policy planning network eppn i use cross sectional director interlocks from 2002 to examine the social networks amongst a sample of the largest energy firms between these firms and the eppn and to calculate relative network centrality measures for the firms i then use qualitative comparative analysis qca to isolate specific combinations of energy firm attributes that are associated with network position i find that the energy industry has several key intra firm interlocks that link dominant companies to each other and that the industry is well represented on the boards of eppn organizations additionally several dominant energy firms provide links between ultra conservative and moderate policy development organizations finally qca models suggest that firms with many employees high revenue and who produce oil are most likely to hold prominent positions in the eppn though above average political campaign contributions offer an alternative path into the network

capitalism as an engine of progress economists from marx to schumpeter have touted capitalism as an engine of technical progress but what kind of an engine is it what are its key components how does it work

time and frequency connectedness among oil shocks electricity and clean energy markets abstract this paper examines the time and frequency connectedness among electricity carbon and clean energy markets and oil price demand and supply shocks in doing so we use the spillover method proposed by diebold and yilmaz 2012 and its extension in the frequency domain by barunik and k ehlik 2018 we find increased connectedness during the global financial crisis as well as in the shale oil revolution period the total connectedness is also higher in the short run compared to the long run due to their low connectedness electricity futures can act as a risk diversifier and safe haven asset against oil shocks net pairwise directional connectedness among oil shocks and the clean energy index is higher during the shale oil revolution these results have important implications for investors with different investment time horizons

forecasting dynamics and convergence to market fundamentals evidence from experimental asset markets abstract subjects trade shares of a fictitious asset in a computerized double auction market and submit one period ahead forecasts of the mean contract price on average the predictions of the rational expectations hypothesis are not supported and forecasts tend to be both biased and inconsistent with the specification of the process which would generate prices in a rational expectations equilibrium nevertheless an empirical analysis of agents forecasting dynamics indicates that learning does occur and that agents forecasts evolve in a direction consistent with a rational expectations equilibrium

do opec announcements influence oil prices abstract this paper investigates the effect of opec production decisions increase cut maintain on both wti and brent crude oil prices between q1 1991 and q1 2015 by employing the event study methodology and by using two indices as benchmarks bci and s p gsci we employ an egarch model to take into account the high volatility of oil prices and some stylized facts characterizing this volatility we find that the impact of opec s announcements on oil prices i evolves over time and among decisions ii is more significant for production cut and maintain iii is different for wti and brent prices and iv is sensitive to the benchmark index moreover opec s decisions depend on the exploration and extraction cost of more expensive unconventional oil resources

the dynamics of the revenue maximization market share trade off saudi arabia s oil policy in the 2014 15 price fall given its highly undiversified economic base maximizing revenues will always rank highly in saudi arabia s output decision however this objective needs to be balanced against another maintaining its share in key markets and maximizing long term revenue given the massive size of saudi arabia s reserves the trade off between these two objectives tends to change over time depending on market conditions the nature of the shock and the behaviour of other producers saudi arabia s oil policy is hence not constant we argue that the advent of us shale has made the calculus of the trade off more uncertain complicating saudi arabia s output decision using a simple game we show that under uncertainty it is always safer for the kingdom to assume that the shale oil supply is highly elastic and thus decide not to cut output but as saudi arabia learns more about this new source of supply its policy could adapt accordingly the fact that saudi arabia s oil policy could change as the trade off between revenue maximization and market share evolves and as new information to the market arrives will keep the market second guessing and will continue to shape market expectations and to influence market outcomes jel q48 government policy d43 oligopoly and other forms of market imperfection q41 demand and supply prices d81 criteria for decision making under risk and uncertainty q02 commodity markets

do crises induce reform a critical review of conception methodology and empirical evidence of the crisis hypothesis the notion that economic crises induce the adoption of reform ranks among the most widely accepted concepts in the political economics literature however the underlying mechanism of the so called crisis hypothesis has yet to be fully understood this paper provides a comprehensive survey of the relevant empirical evidence to date and scrutinizes the operationalization of the hypothesis key concepts crisis reform and the political mediation of reform during crises we argue that the social perception of both crises and the subsequent cost of reform requires consideration of how these concepts are operationalized as a product of the broader economic and institutional environment social perceptions largely determine the manner in which the political mediation of reform during crises works present day methodological approaches fail to adequately reflect social perceptions and consequently compromise the determination of what constitutes both crisis and the cost of reform in the context of the crisis hypothesis most notably the identification of crises by fixed thresholds constructed around macroeconomic variables impedes the interpretation of the hypothesis underlying mechanism a fuller treatment of social perception within the operationalization of the hypothesis key concepts can enhance our understanding of how economic crises influence political dynamics in bringing about reform

absorptive capacity coauthoring behavior and the organization of research in drug discovery we examine the interface between for profit and publicly funded research in pharmaceuticals firms access upstream basic research through investments in absorptive capacity in the form of in house basic research and pro publication internal incentives some firms also maintain extensive connections to the wider scientific community which we measure using data on coauthorship of scientific papers between pharmaceutical company scientists and publicly funded researchers connectedness is significantly correlated with firms internal organization as well as their performance in drug discovery the estimated impact of connectedness on private research productivity implies a substantial return to public investments in basic research

opec and venezuelan oil production evidence against a cartel hypothesis abstract this study revisits the opec cartel hypothesis using a case study a test is conducted to see if venezuela has its production granger cause its opec quota or whether the opec quota for venezuela granger causes venezuelan production the results show both occur at different times in the short run opec s oil production quota for venezuela granger causes venezuelan production however shortly after cuts venezuela cheats on agreements suggesting a tit for tat oligopoly game which is not anti competitive in the long run we show that venezuelan oil production granger causes opec s quota for venezuela but not vice versa having venezuelan oil production granger cause opec quotas for venezuela in the long run suggests opec does not coordinate outputs as much as it reacts to them the evidence suggests venezuela is not a part of an opec anti competitive syndicate even though we show that venezuelan oil production is low an alternative explanation for why venezuela and possibly other opec members have low oil production outputs is that institutions and risk aversion not cartel participation is the cause a vector error correction model shows that there is no tendency for venezuelan oil production to converge to opec s quota for venezuela

volatility momentum and time varying skewness in foreign exchange returns this article tests a stochastic volatility model of exchange rates that links both the level of volatility and its instantaneous covariance with returns to pathwise properties of the currency in particular the model implies that the return volatility covariance behaves like a weighted average of recent returns and hence switches signs according to the direction of trends in the data this implies that the skewness of the finite horizon return distribution likewise switches sign leading to time varying implied volatility smiles in options prices the model is fit and assessed using bayesian techniques some previously reported volatility results are accounted for by the fitted models the predicted pattern of skewness dynamics accords well with that found in historical options prices

opec and world oil security abstract on the margin the effectiveness of policy to enhance the stability of world oil market oil conditions greatly depends on which countries supply what economists would call the marginal barrels that is the barrels whose production responds to changes in demand if the countries dominating the production of the marginal barrels are relatively unstable policies to reduce world oil consumption or boost oil production from stable suppliers will provide the additional benefit of reducing the contribution of unstable producers to the world oil market if the countries dominating the marginal barrel are relatively stable however policies to reduce world oil consumption or boost oil production from stable suppliers will be less effective in promoting oil market stability typically we think of the highest cost producers as supplying the marginal barrel of oil but our assessment finds it quite likely that opec dominates production of the marginal barrel of world oil moreover opec members have been among the more unstable producers on a historical basis hence reducing world oil consumption and promoting oil production in stable non opec countries will enhance world oil security policies to promote stability in opec countries also would enhance world oil security

do expected shifts in inflation affect estimates of the long run fisher relation recent empirical studies suggest that nominal interest rates and expected inflation do not move together one for one in the long run a finding at odds with many theoretical models this article shows that these results can be deceptive when the process followed by inflation shifts infrequently we characterize the shifts in inflation by a markov switching model based upon this model s forecasts we reexamine the long run relationship between nominal interest rates and inflation interestingly we are unable to reject the hypothesis that in the long run nominal interest rates reflect expected inflation one for one

mean reversion in equilibrium asset prices this paper demonstrates that negative serial correlation in long horizon stock returns is consistent with an equilibrium model of asset pricing when investors display only a moderate desire to smooth their consumption commonly used measures of mean reversion in stock prices calculated from historical returns data nearly always lie within a 60 percent confidence interval of the median of the monte carlo distributions implied by the authors equilibrium model from this evidence the authors conclude that the degree of serial correlation in the data could plausibly have been generated by their model copyright 1990 by american economic association

real risk inflation risk and the term structure i present a model for the term structures of nominal and real interest rates in the uk that incorporates markov switching and allows for non neutralities nonlinear dynamics and flexibility in the dynamics of the risk premia the model is used to assess how accurately the term structure reflects changing expectations of future yields and inflation i find that variations in inflation expected over the next two to three years are very accurately reflected by current yields over longer horizons the term structures closely track changing expectations regarding future nominal and real yields but not future inflation

the intertemporal elasticity of substitution an exploration using a us panel of state data this paper uses state level consumption data to estimate the intertemporal elasticity of substitution of consumption ies in contrast to the results of hall 1988 and campbell and mankiw 1989 we provide evidence indicating that the ies is significantly different from zero and probably close to one since inference about the ies in the context of the standard euler equation is problematic as a result of mis specification bias we cast most of our discussion in the context of the framework developed by campbell and mankiw this modifies the euler equation in that a fraction of agents simply consume their income the use of panel data to examine the relationship between interest rates and consumption growth has two advantages first we achieve a significant increase in precision which in particular allows us to rule out a zero ies second we can use the panel aspect of the data to bypass asset return measurement problems in particular we identify a common time component in expected consumption growth that is associated with movements in interest rates when the ies is positive

a branch of economics is missing micro micro theory jn the life history of most sciences there are movements toward the study of larger aggregates or toward the detailed study of smaller and more fundamental units my impression is that in most fields the movement toward the study of more micro units has predominated yet in economics in the 1930 s the movement was in the macro direction both physics and biology in the last three decades have made great strides by studying smaller and smaller entitiesphysics by studying more minute fundamental particles and biology by studying the fundamental elements determining genetics in a general sense economics has not been moving in this direction although some work of this nature exists the purpose of this paper is to review some samples of the work that exists and to argue that this area must become a major field of economic research and study the question of how individuals in multiperson firms influence firm decisions seems like such a natural question to ask that it is amazing that it is not part of the formal agenda of economists as a profession of course it has been asked but not by present day economists in their professional capacity in other words micromicroeconomics has never become an established field for the most part theorists have not only not raised this question but they have continued to develop micro theory in such a way as to discourage economists from raising this question part of the reason for this lies in the maximizing and optimizing biases of conventional micro theory and part can be ascribed to the consequences of the long period required to refine the theory so that elements that did not fit the basic model were discarded

the 2014 oil bust causes and consequences abstract this article suggests that the 2014 oil price collapse was possibly triggered by the falling euro versus the us dollar specifically the usd eur exchange rate likely adjusted to the sudden economic growth outlook divergence between the us and the eu as evident by the relative short term interest rate spread measures and triggered a strong dollar trade which is negative for the crude oil prices thus in our view the 2014 oil price bust is another episode of oil price inefficiency similar to the 2008 oil bubble the key argument presented in this article is that as long as there are temporary economic growth divergences between the us and the eu the resulting exchange rate volatility is likely to create the pricing inefficiencies in crude oil which in fact are mean reverting as the economic growth divergences eventually dissipate

imperfect cartelization in opec a model of global oil production is applied to study cartelization by opec countries we define a measure for the degree of cooperation analogous to the market conduct parameter of cyert et al 1973 geroski et al 1987 lofaro 1999 and symeonidis 2000 this parameter is used to assess the incentives of different opec members to collude we find that heterogeneity in opec and the supplies of the non opec fringe create strong incentives against collusion more specifically opec s supply strategy although observed to be substantially more restrictive than that of a cournot nash oligopoly is found to still be more accommodative than that of a perfect cartel the strategy involves allocating larger than proportionate quotas to smaller and relatively costlier producers as if to bribe their participation in the cartel this is in contrast to predictions of the standard cartel model that such producers should be allocated relatively more stringent quotas furthermore we demonstrate that cartel collusion is more likely to be sustained for elastic than for inelastic demand since global oil demand is well known to be inelastic this observation provides another structural explanation for why opec behavior is inconsistent with that of a perfect cartel our study points to multiple headwinds that limit opec s ability to mark up the oil price 2016 elsevier b v

qualitative and mixed methods research in economics surprising growth promising future qualitative research in economics has traditionally been unimportant compared to quantitative work yet there has been a small explosion in use of quantitative approaches in the past 10 15 years including mixed methods projects which use qualitative and quantitative methods in combination this paper surveys the growing use of qualitative methods in economics and closely related fields aiming to provide economists with a useful roadmap through major sets of qualitative methods and how and why they are used we review the growing body of economic research using qualitative approaches emphasizing the gains from using qualitative or mixed methods over traditional closed ended approaches it is argued that although qualitative methods are often portrayed as less reliable less accurate less powerful and or less credible than quantitative methods in fact the two sets of methods have their own strengths and how much can be learned from one type of method or the other depends on specific issues that arise in studying the topic of interest the central message of the paper is that well done qualitative work can provide scientifically valuable and intellectually helpful ways of adding to the stock of economic knowledge especially when applied to research questions for which they are well suited