cambodia s energy poverty and its effects on social wellbeing empirical evidence and policy implications abstract this study aims to quantify the incidence of energy poverty in cambodia and its potential impact on the social wellbeing of the people of cambodia the notion of energy poverty of a household is not well understood in the context of literature as it may refer to either energy poor or economically poor condition of the household this study defines energy poverty in terms of lack of accessibility and or affordability of energy which may cause the deprivation of a household and affect its wellbeing the study uses the latest cambodia socio economic survey data 2015 cses 2015 to investigate the impacts of energy poverty on the health education and earning opportunities of the households the findings of the study suggest that energy poverty of a household is strongly associated with the type of fuel used and low consumption of unaffordable clean energy by the household the resulting impacts of energy poverty on the wellbeing of households are enormous energy poor households have a higher probability of its members suffering from respiratory problems spending more on medical care having a higher dropout rate from schools and lower earning opportunities than the households without energy poverty based on its findings the study suggests an urgent need of policy measures focusing on provision of clean and affordable energy to poor households to reduce eliminate energy poverty in cambodia

black markets for currency hoarding activity and policy reforms abstract in emerging market economies under development of financial markets leads to goods hoarding and foreign currency accumulation as forms of investment in this paper an asset market model supplemented by explicit treatment of smuggling and second economy activity is used to study the paths of black market exchange rates second economy prices hoarding stocks and privately held dollar balances following policy reforms we discuss conditions for overshooting and related dynamics of exchange rates and prices following official exchange rate adjustments price reforms and altered risks of monetary confiscation or currency reforms the saddlepath trajectory of financial adjustment is simulated using data from recent russian experience 1997 elsevier science b v

calculating and using second order accurate solutions of discrete time dynamic equilibrium models we describe an algorithm for calculating second order approximations to the solutions to nonlinear stochastic rational expectations models the paper also explains methods for using such an approximate solution to generate forecasts simulated time paths for the model and evaluations of expected welfare differences across different versions of a model the paper gives conditions for local validity of the approximation that allow for disturbance distributions with unbounded support and allow for non stationarity of the solution process

the inflation output trade off with downward wage rigidities the macroeconomic implications of downward nominal wage rigidi ties are analyzed via a dynamic stochastic general equilibrium model featuring aggregate and idiosyncratic shocks a closed form solution for a long run phillips curve relates average output gap to average wage inflation it is virtually vertical at high inflation and flattens at low inflation macroeconomic volatility shifts the curve outwards and reduces output the results imply that stabilization policies play an important role and that optimal inflation may be positive and dif fer across countries with different macroeconomic volatility results are robust to relaxing the wage constraint for example when large idiosyncratic shocks arise jel e23 e24 e31 e63

law enforcement and the black market exchange rate abstract this paper examines how a system of multiple exchange rates can give rise to unreported exports and imports and a black market for foreign exchange risk aversion rather than an assumed smuggling or detection technology generally guarantees the coexistence of legal and illegal trading evidence for brazil suggests that enforcement of the exchange rate and trade regime is an important fundamental of the black market exchange rate that has so far invariably been left out of empirical work

commercial policy and the brain drain it is hypothesized that commercial and payments policies enacted by governments tend to raise the incomes of higher income individuals and thus to lower rates of emigration the degree of a country s intervention in its international finance and trade sectors is proxied by the black market premium for us dollars in the country it is argued that more extensive protection of domestic industry reflected in higher black market us dollar premiums raises highly skilled workers incomes reflected by a reduction in emigration using data on immigration to the usa by country it is found that higher black market premiums are related to lower us immigration rates consistent with the hypothesis

price setting behaviour competition and markup shocks in the new keynesian model abstract this paper shows that firms price setting behaviour determines whether a higher level of competition among firms amplifies or dampens short run inflationary pressures in the new keynesian model when strategic complementarity in pricing decisions prevails the effect of markup shocks is relatively small

smuggling and price disparity abstract this paper proposes a model of smuggling consistent with the coexistence of smuggling legal trade and price disparity defined as a domestic price which exceeds is less than the return from legal export import these phenomena have been found to characterize indonesian smuggling a framework is presented in which legal trade is used to cloak smuggling activity with the implication that the greater the volume of legal trade the less the costs of smuggling this model is then used to explain the observation noted above and to show that smuggling may be welfare increasing vis a vis the non smuggling situation and that even if the suppression of smuggling is costless tax revenue maximization may require a positive level of smuggling in addition the model is applied to coffee and rubber exports from indonesia

energy transition poverty and inequality in vietnam this paper investigates energy transition energy poverty and energy inequality in vietnam employing a longitudinal dataset of a nationally representative household survey we use the data on residential energy expenditure of more than 9 000 households over the period 2004 2016 we find a transition from traditional energy to modern energy but this transition varies across regions between ethnic and welfare groups and between rural and urban population the poor and ethnic minority households still rely heavily on traditional energy sources such as coal and biomass to meet their energy demands electricity poverty has decreased but energy cost poverty has increased in addition energy inequality tends to decrease at a more significant rate than income and consumption inequalities we propose a national program for energy poverty alleviation be established to devise policies to lower households energy costs further assistance to the poor and ethnic minority households is also recommended so that they can afford a higher level of electricity consumption

downward nominal and real wage rigidity survey evidence from european firms downward nominal and real wage rigidity it has been well established that the wages of individual workers react little especially downwards to shocks that hit their employer this paper presents new evidence from a unique survey of firms across europe on the prevalence of downward wage rigidity in both real and nominal terms we analyse which firm level and institutional factors are associated with wage rigidity our results indicate that it is related to workforce composition at the establishment level in a manner that is consistent with related theoretical models e g efficiency wage theory insider outsider theory we also find that wage rigidity depends on the labour market institutional environment collective bargaining coverage is positively related with downward real wage rigidity measured on the basis of wage indexation downward nominal wage rigidity is positively associated with the extent of permanent contracts and this effect is stronger in countries with stricter employment protection regulations

investments holdup and the form of market contracts the authors analyze incomplete contracts to induce efficient investment with exogenous switching costs fixed price contracts are efficient generate some rigidity in prices are renegotiated intermittently by possibly small amounts and when inflation is positive generate asymmetric responses to shocks all consistent with evidence on prices and wages with two sided specific investments efficiency requires prices to have sufficient escalator clauses to avoid renegotiation as observed in many long term contracts a third case with one sided specific investments can generate take or pay contracts and explain why firms sometimes pay for specific investments that appear to benefit employees directly

country level analysis of household fuel transitions abstract solid fuel combustion remains a dominant energy source for household heating and cooking in less developed countries as a result almost three billion people are exposed to household air pollution causing four million premature deaths annually primarily among poor women and children we analyze data from demographic and health surveys in 69 countries to identify determinants of transition from solid to cleaner fuel estimates from a population averaged linear model show that population density and size rural population share income inequality and charcoal production are positively associated with countries solid fuel use while gdp per capita electricity and natural gas production have the opposite effect economic development measured as gdp per capita has the strongest link to solid fuel use a standard deviation increase in per capita gdp above its mean reduces solid fuel use from 70 to 57 of households electricity production is another strong predictor solid fuel use drops by 11 when electricity production increases by one standard deviation above the mean in addition in a fixed effects linear model population size has a positive association with solid fuel use while increases in gdp per capita and the number of governments renewable energy incentives are associated with lower dependence on solid fuels

smuggling illegal versus legal goods across the u s mexico border a structural equations model approach author affiliation andreas buehn faculty of business and economics technische universitaet dresden chair for economics esp monetary economics 01062 dresden germany e mail andreas buehn tu dresden de corresponding author stefan eichler faculty of business and economics technische universitaet dresden chair for economics esp monetary economics 01062 dresden germany e mail stefan eichler tu dresden de acknowledgment we thank gordon hanson for providing the data on mexican wages and u s border enforcement we are also grateful to alexander karmann sunshine moore the editor and two anonymous referees for their many useful comments and suggestions on this article we also benefited from comments of participants of the lunchtime seminar at technische universitaet dresden all remaining errors are the authors responsibility 1 introductionin this article we study smuggling across the u s mexico border from 1975 to 2004 we contribute to the literature in the following ways first we treat smuggling as an unobservable variable using a multiple indicators multiple causes mimic model we capture the latent nature of smuggling and identify its determinants and long run trends 1 secondly we argue that the analysis of smuggling has been incomplete so far existing studies merely analyze the causes of trade misinvoicing illegal trade or smuggling of legal goods which represent only a fraction of total illegal trade to improve the understanding of illegal trade we distinguish between smuggling illegal goods versus smuggling legal goods the types of smuggling differ with respect to the goods being smuggled the agents involved in smuggling the smuggling incentive and the intensity of law enforcement trade misinvoicing occurs when entrepreneurs misreport the value of legal exports or imports to evade tariffs and taxes and is commonly considered a peccadillo smugglers usually bribe officials or are fined a fee smuggling illegal freight such as illicit drugs and illegal immigrants however often involves dangerous criminals who commit serious offenses and who if caught face severe punishment as a result their incentive to smuggle is related to the intensity of law enforcement rather than tax or tariff evasion studying the u s mexican case is appropriate as most illegal drugs and immigrants enter the united states via the mexican border the large income disparity between the two nations may explain the high u s demand for illegal goods which relatively poor mexicans are willing to meet despite the risks involved we examine whether the clinton and bush administrations succeeded in reducing smuggling across the border through intensified border enforcement using a simple microeconomic framework we determine which microeconomic incentives affect the two types of smuggling the hypotheses are then tested in a mimic model that studies the impact of observed causes the microeconomic incentives to smuggle on the latent phenomenon smuggling as indicated by observable macroeconomic variables applying the benchmarking procedure promoted by dell anno and schneider 2006 and dell anno 2007 we calculate a time series for each type of smuggling we find that smuggling in illegal goods from mexico to the united states decreases when mexican labor market conditions improve and u s border enforcement is intensified the mexican recessions in 1982 1983 and 1995 led to large temporary increases in smuggling to 113 billion and 87 billion respectively smuggling in illegal goods decreased overall however from 116 billion in 1984 to 27 billion in 2004 this reduction can be attributed to stricter u s border enforcement and better mexican job prospects smuggling legal goods is driven by real exchange rates and tariff and tax evasion export misinvoicing fluctuated between underinvoicing values of 0

optimal monetary policy in a currency area abstract this paper investigates how monetary policy should be conducted in a two region general equilibrium model with monopolistic competition and price stickiness this framework delivers a simple welfare criterion based on the utility of the consumers that can be used to evaluate monetary policy in a currency area if the two regions share the same degree of nominal rigidity the terms of trade are completely insulated from monetary policy and the optimal outcome is obtained by targeting a weighted average of the regional inflation rates these weights coincide with the economic sizes of the region if the degrees of rigidity are different the optimal plan implies a high degree of inertia in the inflation rate but an inflation targeting policy in which higher weight is given to the inflation in the region with higher degree of nominal rigidity is nearly optimal

can product demonstrations create markets for sustainable energy technology a randomized controlled trial in rural india abstract the literature on sustainable energy technology sees informational barriers as a major obstacle to technology adoption in the case of solar home systems recent studies report positive socio economic effects on households but technology adoption remains underwhelming in collaboration with a local solar technology provider we conduct a randomized controlled trial in 75 large villages in the state of uttar pradesh india to examine the ability of village solar demonstrations to create markets for solar home systems we find no effect of such demonstrations on technology sales awareness or perceptions of solar technology technology adopters report high levels of satisfaction with product quality and service suggesting that the null finding cannot be attributed to poor technology these findings suggest that lack of awareness is not a binding constraint on the growth of solar technology markets in the study area based on additional surveys we find evidence suggesting that access to credit from rural banks is an important explanation for variation in sales across villages these results do not prove that information and awareness are irrelevant in general but they show that even carefully designed marketing campaigns cannot increase demand for new products in the presence of a binding credit constraint

partial adjustment without apology econometric partial adjustment models perform relatively well at the aggregate level however many kinds of microeconomic behavior involve discrete and occasional choices analyzing the classic employment adjustment problem we show how a generalized partial adjustment model tractably accommodates both observations by aggregating the actions of heterogeneous producers facing fixed adjustment costs aggregate disturbances cause changes in establishment level target employment and in the measure of establishments actively adjusting to their target whereas aggregate responses exhibit partial adjustment our framework also can be applied in general equilibrium settings with persistent idiosyncratic shocks without forfeiting the convenient use of linear solution methods

parallel fragmented or black defining market structure in developing economies abstract in describing market structure development economists employ such terms as fragmented informal parallel and segmented to account for the observed distributions of prices of both goods and factors although these terms are used interchangeably do they mean the same thing focusing on the parallel markets approach the paper identifies government policies which create excess demand or supply in particular markets as the core determinant of the emergence of an official unofficial market structure the legality of unofficial transactions proves critical in assessing the consequences of the parallel market situation contrasting alternative characterizations of market structure the paper concludes that the parallel market is a distinct analytical concept

assessing the determinants and drivers of multidimensional energy poverty in ghana abstract improving household access and use of clean energy has been central to global development efforts in recent years the negative effects of energy poverty on health climate livelihoods and economy has led to increased investments towards achieving universal access to clean energy however significant deprivations in clean energy remains especially in developing countries energy poverty may involve simultaneous deprivations on availability and affordability of clean energy using repeated cross sectional data this paper assesses the extent and determinants of multidimensional energy poverty in ghana between 2008 and 2014 the paper finds that though the level of multidimensional energy poverty reduced in ghana between 2008 and 2014 the incidence and intensity of multidimensional energy poverty remains high further we find substantial subgroup differences in multidimensional energy poverty the results reveal significant relationships between household characteristics and the multidimensional energy poverty status of households the reductions in multidimensional energy poverty were driven by the coefficient effects attributable to structural and policy changes over the period to facilitate universal access to clean energy and reduce the degree of multidimensional energy poverty there is the need to intensify the lpg promotion campaign and adopt strategies that target left behind and underserved groups

smuggling and the black market for foreign exchange this paper develops a model of the black market for foreign exchange in which black market currency is demanded and supplied by firms engaged in smuggling it is demonstrated that quotas or foreign exchange rationing are not necessary to induce the coexistence of legal and black foreign exchange markets variants of the model analyze the implications of capital flight unbalanced trade quotas foreign exchange licensing and economies with more than two goods

are the energy poor also income poor evidence from india abstract the energy poverty line is defined as the threshold point at which energy consumption begins to rise with increases in household income this approach is applied to cross sectional data from a comprehensive 2005 household survey representative of both urban and rural india the objective is to determine if the energy poor are also income poor and whether and how energy policies help reduce energy poverty independent of income the findings suggest that in rural areas some 57 of households are energy poor versus 22 that are income poor but in urban areas the energy poverty rate is 28 compared to 20 that are income poor that is energy policies are expected to play some roles in mitigating energy poverty we find that reducing energy poverty requires not only support for rural electrification but also more use of modern cooking fuels such as lpg while income growth matters a combination of energy related programs can play an independent and substantial role in reducing energy poverty

wage rigidity inflation and institutions we study the possible existence of downward nominal wage rigidity dnwr at wage growth rates different from zero in aggregate data even if dnwr prevails at zero for individual workers compositional effects might lead to falling aggregate wages while changes in relative wages combined with dnwr might lead to positive aggregate wage growth we explore industry data for 19 oecd countries over the 1971 2006 period we find evidence for a floor on nominal wage growth at 6 percent in the 1970s and 1980s at 1 percent in the 1990s and at 0 5 percent in the 2000s furthermore we find that dnwr is stronger in country years with strict employment protection legislation high union density centralized wage setting and high inflation

housing wealth and residential energy consumption abstract the housing wealth effect often manifests as a positive relationship between consumption and perceived housing wealth e g the perceived value of houses when the perceived value of a property rises homeowners may feel more comfortable and secure about their wealth causing them to spend more this study adopts a behavioural approach to verify if this relationship holds true for residential energy consumption in the uk while controlling for property characteristics and a large number of demographic socioeconomic and energy use behaviour variables we identified a significant relationship between housing wealth and energy consumption our models also considered psychological biases in energy consumption behaviours such as the framing effect our findings shed light on the behavioural aspects of housing wealth effect on residential energy consumption and demonstrate the potential to nudge households towards energy conservation most importantly we provide empirical evidence on the intriguing relationship among housing wealth residential energy consumption and fuel poverty the findings of this study are particularly helpful in designing and implementing energy consumption policies that can strike a balance between social justice and economic efficiency

smuggling around the world evidence from a structural equation model this article uses a multiple indicators multiple causes mimic model to analyse the determinants of smuggling the analysis reveals that higher corruption and a lower rule of law encourage smuggling tariffs and trade restrictions are important push factors while a higher black market premium bmp discourages smugglers based on the mimic estimates we calculate an index of smuggling which provides a ranking for 54 countries we find that smuggling is rampant in cameroon pakistan and kenya while it is least prevalent in switzerland finland and sweden

inflation and unemployment the world economy today is vastly different from the 1930s when seymour harris the chairman of this meeting infected me with his boundless enthusiasm for economics and his steadfast confidence in its capacity for good works economics is very different too both the science and its subject have changed and for the better since world war ii but there are some notable constants unemployment and inflation still preoccupy and perplex economists statesmen journalists housewives and everyone else the connection between them is the principal domestic economic burden of presidents and prime ministers and the major area of controversy and ignorance in macroeconomics i have chosen to review economic thought on this topic on this occasion partly because of its inevitable timeliness partly because of a personal interest reaching back to my first published work in 1941

female labor force participation and household dependence on biomass energy evidence from national longitudinal data this research received financial support from the food policy institute at the australian national university

foreign exchange rationing and employment in industrializing countries abstract this paper analyzes the interaction of two constraints foreign currency controls and a minimum wage on the behavior of a small industrializing country the latter is characterized by the large proportion of intermediate inputs in total imports the main results are the following 1 the two distortions magnify the adverse effects on employment of a minimum wage 2 the rationing policy is self defeating on its own terms 3 devaluation is almost inevitable despite the political considerations that make it so difficult and 4 black markets may be tolerated so openly because they help undo some of the harmful effects noted above

computing second order accurate solutions for rational expectation models using linear solution methods this paper shows how to compute a second order accurate solution of a non linear rational expectation model using algorithms developed for the solution of linear rational expectation models the result is a state space representation for the realized values of the variables of the model this statespace representation can easily be used to compute impulse responses as well as conditional and unconditional forecasts

assessing the extent and intensity of energy poverty using multidimensional energy poverty index empirical evidence from households in india abstract in this paper we have made a comprehensive assessment of the extent and various socio economic implications of energy poverty in india amartya sens s capability approach to development underpins the analysis of household level data taken from the india human development survey ii ihds ii 2011 12 using the multidimensional energy poverty index mepi the overall results show that energy poverty is widespread in india and the existence of energy poverty also coincides with the other forms of deprivations such as income poverty and social backwardness for example dalits lower caste and adivasis tribal are found to be extremely energy poor compared to the other social groups in india the results also reveal that it is the responsibility of women to manage the domestic chores such as collection of firewood and making of dung cake in traditional indian households inefficient use of such biomass fuels is found to cause health hazards

household energy choice and consumption intensity empirical evidence from bhutan abstract this paper uses data from three bhutan living standard surveys blss 2003 blss 2007 and blss 2012 to examine the trends and patterns of household energy consumption and identify and analyze the factors that influence household energy choices consumption intensity and the per capita household expenditure on energy sources in bhutan during the last decade significant numbers of bhutanese households have switched to cleaner energy sources empirical results show that a household s choice of cleaner energy sources is driven by income level and household wealth the age gender and education of the household heads access to electricity and location education and income have a differential role on the choice of clean or dirty fuel wealthier and more educated households use and rely more on clean sources of energy like electricity and liquid petroleum gas while poorer households use and rely on dirty fuel such as fuelwood and kerosene the study shows that female headed households are more likely to choose cleaner fuels and above all the availability of a clean and cost effective source of energy within proximity to the household is an important factor in the adoption of clean energy several models using a variety of alternative independent variables such as proxies for education and wealth were estimated and confirmed the robustness of the results

trade regimes and wages abstract we examine the impact of restrictive trade regimes on wages in the manufacturing sector a simple three sector economic model predicts that wages will fall in response to trade regime restrictiveness empirical tests are based on data for 37 countries over time our measure of trade regime restrictiveness is the black market premium on u s dollars the results strongly suggest that restrictive trade regimes reduce wages consistent with our theoretical analysis

is lumpy investment relevant for the business cycle the lumpiness of investment activity at the plant level is a well established fact previous research has suggested that such discrete and occasional adjustments have significant aggregate implications in particular it has been argued that changes in plants willingness to invest in response to aggregate shocks can at times generate large movements in total investment demand in this study i reassess these predictions in a general equilibrium environment specifically assuming nonconvex costs of capital adjustment i derive generalized s s adjustment rules yielding lumpy plant level investment within an otherwise standard equilibrium business cycle model in contrast to previous partial equilibrium analyses model results reveal that the aggregate effects of lumpy investment are negligible in general equilibrium households preference for relatively smooth consumption profiles offsets changes in aggregate investment demand implied by the introduction of lumpy plant level investment as a result

uniform commercial policy illegal trade and the real exchange rates a theoretical analysis countries on fixed exchange rates sometimes use uniform tariff cum subsidy utcs schemes as a way of achieving a real depreciation without disturbing the nominal exchange rate a potential drawback of this policy in relation to an across the board devaluation is that a utcs scheme provides incentives for illegal trade using an optimizing model with currency convertibility and illegal trade the author finds that welfare is lower under a utcs scheme than under a corresponding across the board devaluation and that in some cases the real exchange rate actually appreciates in response to an increase in the utcs rate

how robust is a poverty profile comparison of poverty such as when poverty is greatest typically matter far more for policy choices than do aggregate measures of poverty such as how many people are deemed poor the authors examine alternative methods for constructing poverty profiles focusing on their internal consistency and appropriateness for guiding policy none is perfect but some methods appear to be preferable to others when the aim is to inform policies for fighting absolute consumption poverty a case study on indonesia reveals that the country s regional and sectoral poverty profile is highly sensitive to some aspects of measurement but quite robust to others

a ladder within a ladder understanding the factors influencing a household s domestic use of electricity in four african countries abstract according to the energy ladder hypothesis electricity is at the top of the energy ladder of household energy use that depends primarily on wealth status income and education levels of the users however it is often observed that households with higher income wealth and education levels do not use electricity for all domestic activities such as lighting heating and cooking creating a ladder within a ladder using a comprehensive data set from the living standard measurement study from four african countries ethiopia malawi tanzania and uganda covering 17 000 households this paper investigates the factors determining a household s adoption of electricity for lighting only and for lighting and cooking the results of a multinomial logit model and an ordered probit model show that demographic characteristics a household s wealth and human capital access to markets and remoteness greatly accelerate a household s use of electricity for light and cooking which provides evidence of a ladder within a ladder

towards a new approach in measuring energy poverty household level analysis of urban india abstract measurement of energy poverty has been a missing priority in energy research there is hardly any consensus regarding whether to consider energy as a resource or capacity output or outcome and quantity or service in this paper we revisit major approaches in literature to assess energy poverty economic engineering and access based including others we critique the economic and engineering approaches for the arbitrariness of cut offs and the misplaced emphasis on less meaningful energy quantity finding the access based approach most suitable we propose a method of assessing energy poverty based on deprivation in modern cooking and lighting fuels we divide the energy poor into three groups transitional moderate and extreme energy poor we apply the method to india s urban areas of different states and union territories using the national sample survey data the results reveal energy poverty to be primarily dictated by deprivation in cooking and a greater incidence of energy poverty in larger states in contrast to conventional measures we compute the depth and severity of energy poverty only for energy poor as opposed to for the entire population these complementary measures depict energy poverty of energy poor more accurately and therefore will direct the attention of pro poor energy policies and programmes appropriately

some macroeconomic and monetary policy implications of new micro evidence on wage dynamics this paper investigates the macroeconomic relevance of new findings regarding nominal wage stickiness wage indexation wage staggering and synchronisation and downward nominal and real wage rigidity in the euro area quantifying the relevance of this evidence for monetary policy remains to be fully resolved but our results suggest that countries with lower indexation and higher wage stickiness for newly hired workers experience higher employment volatility and lower inflation volatility and that wage staggering and synchronisation of wage changes in particular months result in less persistence in real wages and inflation jel e24 e52

wage bargaining and nominal rigidities abstract delays in wage negotiations do not necessarily mean work stoppage production can continue under the terms of the old contract while the parties are bargaining holdout this holdout option is included in a strategic bargaining game in addition to strike and lock out threats integrating the bargaining model in a standard macroeconomic framework it turns out that holdout threats will prevail under certain circumstances in this case wages will be rigid in nominal terms so that an increase in aggregate nominal demand increases aggregate output

the role of labor markets for euro area monetary policy in this paper we explore the role of labor markets for monetary policy in the euro area in a new keynesian model in which labor markets are characterized by search and matching frictions we first investigate to which extent a more flexible labor market would alter the business cycle behavior and the transmission of monetary policy we find that while a lower degree of wage rigidity makes monetary policy more effective i e a monetary policy shock transmits faster onto inflation the importance of other labor market rigidities for the transmission of shocks is rather limited second having estimated the model by bayesian techniques we analyze to which extent labor market shocks such as disturbances in the vacancy posting process shocks to the separation rate and variations in bargaining power are important determinants of business cycle fluctuations our results point primarily towards disturbances in the bargaining process as a significant contributor to inflation and output fluctuations in sum the paper supports current central bank practice which appears to put considerable effort into monitoring euro area wage dynamics and which appears to treat some of the other labor market information as less important for monetary policy

the implementation of decentralised biogas plants in assam ne india the impact and effectiveness of the national biogas and manure management programme abstract the indian government s national biogas and manure management programme nbmmp seeks to deliver renewable energy services to households across the country by facilitating the deployment of family sized 3 anaerobic biogas digesters nbmmp policy is implemented at three levels from government and state nodal agency via private contractors to households creating multiple institutional arrangements we analysed the scheme in assam north east india focusing on how policy was implemented across two districts and interviewing stakeholders in rural households state and non state institutions the top down supply side approach to policy enables government to set targets and require individual states to deploy the scheme which benefits households who can afford to participate nbmmp delivered improved energy service outcomes to a majority of households although the level of knowledge and understanding of the technology amongst users was limited training and education of householders and particularly women is needed in relation to the maintenance of digesters feedstock suitability and the environmental and potential livelihood benefits of digestate a revised bottom up approach to policy which highlights the contextual and demand side issues around adopting the technology may deliver monetary benefits from market competition and enable development of community focused microfinance schemes to improve the affordability of biogas systems

downward wage rigidities and optimal monetary policy in a monetary union this paper analyses the implications of heterogeneity in the type of downward wage rigidity nominal or real for optimal monetary policy in a monetary union with asymmetric wage adjustment costs indexation in one region of the union reduces optimal grease inflation in the presence of common productivity shocks large common shocks may have sizeable and persistent effects on the intra union terms of trade whereby the region characterized by downward real wage rigidity adjusts with a persistent loss of competitiveness in response to asymmetric productivity shocks there is no role for grease inflation because relative price changes facilitating the real wage changes dominate the adjustment mechanism

optimal monetary and fiscal policy in a currency union we lay out a tractable model for the analysis of optimal monetary and fiscal policy in a currency union the monetary authority sets a common interest rate for the union whereas fiscal policy is implemented at the country level through the choice of government spending in the presence of country specific shocks and nominal rigidities the policy mix that is optimal from the viewpoint of the union as a whole requires that inflation be stabilized at the union level by the common central bank whereas fiscal policy has a country specific stabilization role one beyond the efficient provision of public goods

how strong is the macroeconomic case for downward real wage rigidity we explore the existence of downward real wage rigidity drwr at the industry level based on data from 19 oecd countries for the period 1973 1999 the results show that drwr compresses the distributions of industry wage changes overall as well as for specific geographical regions and time periods but there are not many real wage cuts that are prevented more important however drwr attenuates larger real wage cuts thus leading to higher real wages there is stronger evidence for downward nominal wage rigidity than for drwr real wage cuts are less prevalent in countries with strict employment protection legislation and high union density

distribution properties of latin american black market exchange rates abstract this paper conducts a statistical analysis of the distribution properties of black market exchange rate changes for 12 latin american currencies the infinite variance stable law hypothesis is tested using a regression type technique to estimate the parameters of the stable paretian distribution strong evidence is found supporting this hypothesis a separate analysis of extreme observations using a robust statistical procedure further supports these findings

impact of off farm income on household energy expenditures in china implications for rural energy transition abstract this study examines the impact of off farm income on rural household energy expenditures paying special attention to clean energies such as electricity and gas and non clean energy such as coal we use instrumental variable approaches to address the endogeneity issues of off farm income and analyze household survey data collected from rural gansu henan and shandong provinces of china econometric results show that off farm income promotes rural energy transition in particular off farm income significantly increases both electricity and gas expenditures but decreases coal expenditure of rural households further analyses reveal that the energy transition effects generated by off farm income are more pronounced for households in shandong where the economy is relatively better developed relative to henan and gansu our findings highlight the importance of income diversification through off farm activities by farm households to enhance clean energy accessibility and boost sustainable rural economic development

asymmetric labor market institutions in the emu and the volatility of inflation and unemployment differentials how does the asymmetry of labor market institutions affect the adjustment of a currency union to shocks to answer this question this paper sets up a dynamic currency union model with monopolistic competition and sticky prices hiring frictions and real wage rigidities in our analysis we focus on the differentials in inflation and unemployment between countries as they directly reflect how the currency union responds to shocks we highlight the following three results first we show that it is important to distinguish between different labor market rigidities as they have opposite effects on inflation and unemployment differentials second we find that asymmetries in labor market structures tend to increase the volatility of both inflation and unemployment differentials finally we show that it is important to take into account the interaction between different types of labor market rigidities overall our results suggest that asymmetries in labor market structures worsen the adjustment of a currency union to shocks

optimal monetary policy and downward nominal wage rigidity in frictional labor markets empirical evidence suggests that nominal wages in the u s are downwardly rigid this paper studies the optimal long run inflation rate in a labor search and matching framework under the presence of downward nominal wage rigidity dnwr in this environment optimal monetary policy targets a positive inflation rate the annual long run inflation rate for the u s is around 2 percent positive inflation greases the wheels of the labor market by facilitating real wage adjustments and hence it eases job creation and prevents excessive increase in unemployment following recessionary shocks these findings are related to standard ramsey theory of wedge smoothing by following a positive inflation policy under sticky prices the monetary authority manages to reduce the volatility and the size of the intertemporal distortion significantly the intertemporal wedge is completely smoothed when prices are fully flexible since the optimal long run inflation rate predicted by this study is considerably higher than in otherwise neoclassical labor markets the nature of the labor market in which dnwr is studied can be relevant for policy recommendations

an economic model of the brain drain asymmetric information in the labor market is discussed as a major cause of the exodus of foreign trained students from developing countries the authors suggest that employers in the country in which the students have been trained have a more accurate judgment of the true productivity of students than have employers in the students native country an illustrative numerical model is developed and its implications are analyzed annotation

downward nominal and real wage rigidity survey evidence from european firms it has been well established that the wages of individual workers react little especially downwards to shocks that hit their employer this paper presents new evidence from a unique survey of firms across europe on the prevalence of downward wage rigidity in both real and nominal terms the authors analyse which firm level and institutional factors are associated with wage rigidity the results indicate that it is related to workforce composition at the establishment level in a manner that is consistent with related theoretical models e g efficiency wage theory insider outsider theory the analysis also finds that wage rigidity depends on the labour market institutional environment collective bargaining coverage is positively related with downward real wage rigidity measured on the basis of wage indexation downward nominal wage rigidity is positively associated with the extent of permanent contracts and this effect is stronger in countries with stricter employment protection regulations

meta analysis of empirical evidence on energy poverty the case of developing economies abstract energy poverty has evolved as an important issue of research from academic and policy perspectives during the last two decades the energy poverty estimates exhibit widespread variations across regions methodologies and datasets making the task of energy and development policies challenging the variations in energy poverty estimates necessitate a systematic and rigorous analysis of these empirical studies to obtain a true measure of energy poverty the present study conducts a meta analysis of 30 studies and 103 estimates of energy poverty on average 71 1 percent of the population in the overall sample studies has been identified as energy poor high i square statistic values suggest heterogeneity bias in the sample studies therefore analysis at the subgroup level has been conducted meta regression analysis of overall sample and subgroups has identified type of methodology citations impact factor of the journal regional dummies average key crude oil price and gross domestic product as significant factors that explain heterogeneity in the energy poverty effect sizes we recommend inclusion of local and regional factors in assessment of energy poverty for developing a uniform methodology to assess energy poverty across developing economies

jamaica s foreign exchange black market as in many other less developed nations the imposition of foreign exchange controls promoted the growth of a foreign exchange black market in jamaica this article explains the structure and functioning of the market in recent years under controls initially imposed in 1954 this market grew to about us 1 7 billion of transaction value per year by 1990 during the 1980s the main participants in the market seeking to buy foreign exchange were jamaican importers and savers who either were restricted from obtaining foreign exchange in the official market or chose to evade taxes and other rules by using the black market on the supply side were jamaican expatriates living abroad foreign tourists ganja exporters and traders using false invoices thousands of black market exchangers provided the market making service sometimes adding the service of funds transfer overseas a black market exchange rate model supported this interview based institutional description of the market the foreign exchange black

a novel test of the monetary approach using black market exchange rates and the johansen juselius cointegration method abstract cointegration is appropriate for testing long run exchange rate theories such as the monetary approach but the post 1973 floating exchange rate period may be too short we confirm the monetary model using longer black market exchange rate series and the johansen juselius cointegration method

the transhipment problem smuggling and welfare in paraguay abstract this paper studies the effects of contraband on resource allocation and welfare using parguayan data a major portion of exports from this economy involves the transhipment of goods from third countries through paraguay to brazil and argentina to avoid trade taxes both explicit and implicit via quantitative restrictions and multiple exchange rates using international and paraguayan databases for 1990 we calculate that contraband accounted for 58 of exports and 31 of imports finally we estimate that such trade increased welfare by 2 1 of gdp

factors determining household use of clean and renewable energy sources for lighting in sub saharan africa abstract the purpose of the current research is to examine the factors that influence household use of determinants of renewable and clean energy sources used for lighting purposes in africa using the data from the living standard measurement study lsms from three african countries ethiopia tanzania and malawi for this purpose the paper uses multinomial logit and ordered probit econometrics models the descriptive analysis reveals that rural households are dependent largely on kerosene and batteries for lighting their houses while electricity and batteries form a major source of energy for lighting urban households a small fraction of households uses solid fuels and solar as their source of energy for lighting econometric results show that female headed households are likely to adopt clean and renewable sources of energy compared to male headed households wealthier and more educated households are found to use electricity and solar energy for lighting while poorer households tend to use kerosene batteries and solid fuels empirical results indicated that the ethiopian households followed by malawian households are more likely to use clean sources of energy compared to tanzanian households