bank runs liquidity costs and investment distortions abstract in this paper we extend the diamond and dybvig 1983 model of intermediation to study further the conditions under which bank runs can occur and to consider how private parties might adjust to the existence of bank run equilibria we provide weaker necessary conditions for runs we then characterize how banks respond to the possibility of runs in their design of deposit contracts and investment decisions banks might choose to offer contracts that prevent runs but under some conditions the second best contracts will involve accepting some risk of runs in order to achieve higher expected returns from their investments

the impact of population on co2 emissions evidence from european countries this paper analyses the impact of population growth on co2 emissions in european union countries traditionally researchers have assumed a unitary elasticity of emissions with respect to population growth in this study population is treated as a predictor in the model instead of being included as part of the dependent variable per capita emissions thus relaxing the above mentioned assumption of unitary elasticity we also contribute to the existing literature by taking into account the presence of heterogeneity in the sample and considering a dynamic specification the sample covers the period 1975 1999 for the current european union members our results show that the impact of population growth on emissions is more than proportional for recent accession countries whereas for old eu members the elasticity is lower than unity and non significant when the properties of the time series and the dynamics are correctly specified the different impact of population change on co2 emissions for the current eu members should therefore be taken into account in future discussions of climate change policies within the eu

measuring the incentives to learn in colombia using new quantile regression approaches abstract this paper employs newly developed quantile regression techniques to investigate a policy that could differentially affect students performance the colombian vouchers were assigned using lotteries and were renewable as long as the students maintained satisfactory academic progress this second aspect of the program may provide incentives for low attainment students to work harder the evidence supports the hypothesis that incentives could account for the impact of the vouchers including lower repetition rate the effect of the vouchers is largest in the lower tail of the educational attainment distribution a possibility that was conjectured by others but has not yet been confirmed empirically the evidence suggests that the incentive effect of the program increases weak students test scores by at least 0 1 standard deviations roughly the score gain associated to a half year of school learning

democracy financial openness and global carbon dioxide emissions heterogeneity across existing emission levels summary the determinants of co 2 emissions have attracted many researchers over the past few decades most of studies however ignore the possibility that effect of independent variables on co 2 emissions could vary throughout the co 2 emission distribution we address this issue by applying quantile regression methods we examine whether greater democracy and more financial openness consistently reduce emissions among the most and least emission nations our results show that the effect of democracy on co 2 emissions is heterogeneous across quantiles among the most emissions nations greater democracy appears to reduce emissions but more financial openness does not appear to reduce it

does democracy lead to a better environment deforestation and the democratic transition peak the relationship between democracy and environment is subject to controversy some scientists find that democracy has a positive impact in reducing environmental disruption other scholars claim that democracy tends to accelerate environmental degradation by using deforestation rates as a proxy for environmental disruption we suggest that both sides might be right our quantitative analysis has three important outcomes first there is evidence of an inverted u shaped relationship between deforestation and democracy second countries in democratic transition experience the highest deforestation rates compared to non democracies and mature democracies third in explaining deforestation rates democracy has larger explanatory power than income this last result implies that in reducing deforestation rates the emphasis should not only be on economic development but even more on democratization

targeted transfers and the fiscal response to the great recession abstract between 2007 and 2009 government expenditures increased rapidly across the oecd countries while economic research on the impact of government purchases has flourished in the data most of the increase in expenditures was in government transfers after documenting this fact we argue that future research should focus on the positive impact of transfers towards this we present a model in which there is no representative agent and ricardian equivalence does not hold because of uncertainty imperfect credit markets and nominal rigidities targeted lump sum transfers are expansionary both because of a neoclassical wealth effect and because of a keynesian aggregate demand effect

a model of financial crises in emerging markets recent events in mexico asia russia and brazil have underscored that a satisfactory explanation of financial crises in emerging markets remains elusive not too long ago the prevailing view was that crises were the inevitable outcome of ongoing fiscal imbalances coupled with fixed exchange rates but this first generation view pioneered by krugman 1979 has fallen out of fashion because in many crises the crucial fiscal disequilibria were absent and as obstfeld 1994 has argued currency crises have sometimes occurred even though central banks had more than enough resources to prevent them witness much of europe in the early 1990s obstfeld put forward a second generation view in which central banks may decide to abandon an exchange rate peg when the unemployment costs of defending it become too large this new perspective implied that crises could be driven by self fulfilling expectations since the costs of defending the peg may themselves depend on anticipations that the peg will be maintained but obstfeld s emphasis on mounting unemployment and domestic recession while appropriate for the erm 1992 crisis was at odds with the facts in mexico in 1994 and east asia in 1997 asian

political and economic inequality and the environment abstract this paper analyzes and tests the hypothesis that political and economic equality result in lower levels of environmental degradation based on formal statements of the argument put forward by boyce r 1994 ecological economics 11 169 178 i show that equality may or may not be necessary to minimize degradation under some plausible conditions greater inequality may even be conducive to lower degradation actual results depend primarily on the intersection between the distribution of preferences across groups and the institutional rules two cross national empirical tests tend to support the contention that distributional issues do not systematically explain variations in environmental quality the results reinforce the conclusion that assumptions about the structure of preferences and workings of social choice institutions ignore complex interactions which influence the relationship between degradation and equality

stoking the fires co2 emissions and economic growth abstract we examine the relationship between economic development and carbon dioxide emissions a greenhouse gas central to global warming predictions estimates derived from global panel data suggest a diminishing marginal propensity to emit mpe carbon dioxide as gdp per capita rises despite this global carbon dioxide emissions growth will continue at 1 8 percent per annum for the foreseeable future a result that is not sensitive to average output growth instead emissions growth continues because output and population will grow most rapidly in lower income nations with high mpes this latter feature emphasizes the distributional consequences of policies to reduce emissions

drivers of intersectoral metal consumption intensity in china a combined input output and sensitivity analysis abstract as a country with a high level of metal consumption china must urgently formulate effective policies to improve its metal use efficiency this article identifies the key sectors with the highest metal consumption intensity mci and investigates the effect of the pure technical and final demand coefficients on the mci of key sectors using a combined input output and sensitivity analysis the results show that the average mci of key industries increased from 7 37 tonnes per ten thousand yuan to 32 13 tonnes per ten thousand yuan during the period from 2002 to 2012 and the manufacturing and processing of the metals sector n14 revealed the greatest mci moreover the elasticity of the mci in terms of the pure technical and final demand coefficients of key sectors also increased rapidly from 2002 to 2012 and the number of corresponding transactions leading to the increase in key sectoral mci significantly increased in terms of the elasticity of the technical coefficients their sensitivity exceeded that of the pure technical coefficients in most cases due to the influence of the demand structure and direct transactions between sectors had important impacts on the mci in most key industries meanwhile almost all the sectors exerted direct or indirect effects on the mci of the mining of metal ores industry n4 in addition the manufacturing of general and special purpose machinery n16 manufacturing of electrical machinery and apparatus n18 and construction n22 exerted influences on most sectors concerning the final demand coefficient elasticity the gross fixed capital formation of most sectors induced the greatest elasticity in the corresponding sectors and the greatest elasticity of all the sectors was related to the gross fixed capital formation of n22

reexamining the empirical evidence for an environmental kuznets curve this paper uses an updated and revised panel data set on ambient air pollution in cities worldwide to examine the robustness of the evidence for the existence of an inverted u shaped relationship between national income and pollution we test the sensitivity of the pollution income relationship to functional forms to additional covariates and to changes in the nations cities and years sampled we find that the results are highly sensitive to these changes and conclude that there is little empirical support for an inverted u shaped relationship between several important air pollutants and national income in these data

urbanization and co2 emissions a semi parametric panel data analysis this paper investigates the relationship between urbanization and co2 emissions in a sample of 20 emerging countries over the period 1992 2008 using the semi parametric panel data model with fixed effects proposed by baltagi and li 2002 we find little evidence in support of an inverted u curve and thus the kuznets hypothesis is not confirmed by our analysis our findings shed new light on the urbanization co2 emissions nexus

bank runs as an equilibrium phenomenon a standard demand deposit contract in which individuals are entitled to their full deposit at any time provided the bank is solvent is analyzed in a context in which there are no exogenous events on which agents condition their behavior and a unique equilibrium involving a bank run with positive probability is shown to exist

do economic financial and institutional developments matter for environmental degradation evidence from transitional economies abstract several studies have examined the relationship between environmental degradation and economic growth however most of them did not take into account financial developments and institutional quality moreover stern stern d 2004 the rise and fall of the environmental kuznets curve world development 32 8 1419 1439 noted that there are important econometric weaknesses in the earlier studies such as endogeneity heteroscedasticity omitted variables etc the purpose of this paper is to fill this gap in the literature by investigating the linkage between not only economic development and environmental quality but also financial development and institutional quality we employ the standard reduced form modelling approach to control for country specific unobserved heterogeneity and gmm estimation to control for endogeneity our study considers 24 transition economies and panel data for 1993 2004 our results support the ekc hypothesis while confirming the importance of both institutional quality and financial development for environmental performance we also found that financial liberalization may be harmful for environmental quality if it is not accomplished in a strong institutional framework

the effect of democracy on co2 emissions in emerging countries does the level of income matter abstract using quantile regression technique this paper explores the interaction effects of democracy and income on co2 emissions in 19 emerging countries over the period 1997 2010 the results indicate a stronger and significant interaction impact on co2 emissions only at the lower emission countries moreover democracy reduces co2 emissions but only if the country has already reached to a certain income level the new empirical evidence from this study provides a more complete picture of the determinants of emissions throughout the conditional distribution and these novel findings not only help advance the existing literature but also can be of special interest to the country s policy makers especially among the most democracy and least democracy nations

financial crises and balance of payments crises a simple model of the southern cone experience abstract this paper starts from a simple model of the domestic banking sector and develops the potentially destabilizing macroeconomic consequences of its role in intermediating foreign capital inflows both financial and balance of payments crises may result reminiscent of the southern cone experience

environmental kuznets curve for co2 in canada abstract according to the environmental kuznets curve hypothesis the relationship between per capita gdp and per capita pollutant emissions has an inverted u shape this implies that past a certain point economic growth may actually be profitable for environmental quality most studies on this subject are based on estimating fully parametric quadratic or cubic regression models while this is not technically wrong such an approach somewhat lacks flexibility since it may fail to detect the true shape of the relationship if it happens not to be of the specified form we use semiparametric and flexible nonlinear parametric modeling methods in an attempt to provide more robust inferences we find little evidence in favour of the environmental kuznets curve hypothesis our main results could be interpreted as indicating that the oil shock of the 1970s has had an important impact on progress towards less polluting technology and production

does trade openness improve environmental quality the literature on trade openness economic development and the environment is largely inconclusive about the environmental consequences of trade this study treats trade and income as endogenous and estimates the overall impact of trade openness on environmental quality using the instrumental variables technique we find that whether or not trade has a beneficial effect on the environment varies depending on the pollutant and the country trade is found to benefit the environment in oecd countries it has detrimental effects however on sulfur dioxide so2 and carbon dioxide co2 emissions in non oecd countries although it does lower biochemical oxygen demand bod emissions in these countries we also find the impact is large in the long term after the dynamic adjustment process although it is small in the short term

the impact of growth energy and financial development on the environment in china a cointegration analysis this article aims to investigate the impact of financial development economic growth and energy consumption on environmental pollution in china from 1953 to 2006 using the autoregressive distributed lag ardl bounds testing procedure the main objective is to examine the long run equilibrium relationship between financial development and environmental pollution the results of the analysis reveal a negative sign for the coefficient of financial development suggesting that financial development in china has not taken place at the expense of environmental pollution on the contrary it is found that financial development has led to a decrease in environmental pollution it is concluded that carbon emissions are mainly determined by income energy consumption and trade openness in the long run moreover the findings confirm the existence of an environmental kuznets curve in the case of china

on the effectiveness of capital controls the experience of colombia during the 1990s abstract this paper analyzes the effectiveness of capital controls in colombia the evidence presented points towards a relative inability of the measures adopted to reduce the level of capital inflows nonetheless the evidence suggests that non remunerated deposits have been successful in inducing a recomposition of foreign liabilities in favor of long term maturities it is likely that this is a positive result as it has made the country less vulnerable to a reversal in capital flows in this sense controls may be viewed as an effective way of internalizing the negative externality imposed by short term maturities

carbon intensity and economic development 1962 1991 a brief exploration of the environmental kuznets curve the relationship between national carbon dioxide emissions intensity co2 emitted per unit of gross domestic product and level of economic development has changed from essentially linear in 1962 to strongly curvilinear in 1991 the inverted u curve reached statistical significance briefly in the early 1970s and increasingly since 1982 this is the result not of groups of countries passing through stages of development but of efficiency improvements in a small number of wealthy countries combined with worse performance in poor and middle income countries the curvilinear relation is deepening and is likely to persist due to constraints on poorer countries in the world economy

does urbanization lead to less energy use and lower co2 emissions a cross country analysis despite the relationship between urbanization energy use and co2 emissions has been extensively studied in recent years little attention has been paid to differences in development stages or income levels most previous studies have implicitly assumed that the impact of urbanization is homogenous for all countries this assumption can be questionable as there are many characteristic differences among countries of different levels of affluence this paper investigates empirically the effects of urbanization on energy use and co2 emissions with consideration of the different development stages using the stochastic impacts by regression on population affluence and technology stirpat model and a balanced panel dataset of 99 countries over the period 1975 2005 the findings suggest that the impact of urbanization on energy use and emissions varies across the stages of development surprisingly urbanization decreases energy use in the low income group while it increases energy use in the middle and high income groups the impact of urbanization on emissions is positive for all the income groups but it is more pronounced in the middle income group than in the other income groups these novel findings not only help advance the existing literature but also can be of special interest to policy makers and urban planners

economic prosperity biodiversity conservation and the environmental kuznets curve many conservationists contend that economic growth and biodiversity conservation are incompatible goals some economists contest this viewpoint arguing that wealthier countries have the luxury of investing more heavily in efforts to conserve biodiversity under this assumption we expect a u shaped relationship between per capita wealth and proportion of species conserved we test this environmental kuznets curve ekc using estimates of per capita income and deforestation rates index of biodiversity threat for 35 tropical countries a prior analysis dietz s adger w n 2003 economic growth biodiversity loss and conservation effort journal of environmental management 68 23 35 using conventional regression techniques failed to provide any support for the parabolic relationship predicted by the ekc hypothesis here we introduce the use of quantile regression and spatial filtering to reanalyze this data addressing issues of heteroskedasticity and spatial autocorrelation we note that preliminary analysis using these methods provides some initial evidence for an ekc however a series of panel analyses with country specific dummy variables eliminated or even reversed much of this support a closer examination of conservation practices and environmental indicators within the countries particularly those countries that drove our initial support suggests that wealth is not a reliable indicator of improved conservation practice our findings indicate that an ekc for biodiversity is overly simplistic and further exploration is required to fully understand the mechanisms by which income affects biodiversity

democracy and environmental quality we develop and estimate an econometric model of the relationship between several local and global air pollutants and economic development while allowing for critical aspects of the socio political economic regime of a state we obtain empirical support for our hypothesis that democracy and its associated freedoms provide the conduit through which agents can exercise their preferences for environmental quality more effectively than under an autocratic regime thus leading to decreased concentrations or emissions of pollution however additional factors such as income inequality age distribution education and urbanization may mitigate or exacerbate the net effect of the type of political regime on pollution depending on the underlying societal preferences and the weights assigned to those preferences by the state

the heterogeneous effect of democracy political globalization and urbanization on pm2 5 concentrations in g20 countries evidence from panel quantile regression abstract pm2 5 emissions have serious adverse impacts on health and impede transport activities especially air and highway consequently policymakers and economists have focused on this issue the primary objective of this study is to investigate the effect of democracy political globalization and urbanization on pm2 5 concentrations within g20 countries ecological modernization theory is used to gain the best understanding of the impact of these driving forces on pm2 5 concentrations and obtains an analytical framework the method utilized is the panel quantile regression which takes into account the unobserved individual and distributional heterogeneity the results demonstrate that first the direct effect of democracy on pm2 5 concentrations is significantly positive in countries with higher emissions and has no impact on lower emission countries second the direct effect of political globalization on pm2 5 concentrations is significantly positive and especially greater in extremely low and high emission countries third persuasive evidence proves the existence of an environmental kuznets curve between urbanization and pm2 5 concentrations additionally this paper further assesses the direct and indirect influence mechanisms of democracy and political globalization on pm2 5 concentrations across pollution levels both have a positive negative indirect effect on pm2 5 concentrations in countries with higher lower emissions through its effect on gdp per capita the total effect appears positive suggesting that the increase in democracy and political globalization degrade environmental quality these results provide policymakers with critical policy recommendations that contribute to the reduction of pm2 5 concentrations and ensure sustainable economic development in the g20 countries

does higher economic and financial development lead to environmental degradation evidence from bric countries abstract a vast number of studies addressed the environmental degradation and economic development but not financial development moreover as argued by stern 2004 the rise and fall of the environmental kuznets curve world development 32 1419 1439 they present important econometric weaknesses using standard reduced form modeling approach and controlling for country specific unobserved heterogeneity we investigate the linkage between not only economic development and environmental quality but also the financial development panel data over period 1992 2004 is used we find that both economic and financial development are determinants of the environmental quality in bric economies we show that higher degree of economic and financial development decreases the environmental degradation our analysis suggests that financial liberalization and openness are essential factors for the co 2 reduction the adoption of policies directed to financial openness and liberalization to attract higher levels of r d related foreign direct investment might reduce the environmental degradation in countries under consideration in addition the robustness check trough the inclusion of us and japan does not alter our main findings

oil palm adoption household welfare and nutrition among smallholder farmers in indonesia summary oil palm is one of the most rapidly expanding crops throughout the humid tropics in indonesia the expansion is largely driven by smallholder farmers while recent research has studied effects for the environment and climate change socioeconomic impacts in the small farm sector have hardly been analyzed here we address this research gap by analyzing effects of oil palm adoption on farm household living standards and nutrition in sumatra using survey data and econometric models we estimate average impacts impact pathways and impact heterogeneity results show that oil palm adoption improves household living standards and nutrition mean impacts on food and non food expenditures as well as on calorie consumption and dietary quality are all positive and significant a sizeable part of the total effects is attributable to oil palm adopters expanding their farm size rather than realizing higher profits per hectare oil palm has lower labor requirements than alternative crops especially rubber so that adopting farmers are able to manage larger land areas labor saved through switching from rubber to oil palm is also used to increase off farm incomes impact heterogeneity is analyzed with quantile regressions we find positive effects of oil palm adoption across the entire expenditure distribution however the absolute gains in total expenditures and non food expenditures are larger for the better off suggesting that oil palm may contribute to rising inequality

convergence in co2 emissions a spatial economic analysis with cross country interactions abstract this research analyzes the evolution of co2 emissions per capita in a sample of 141 countries during the period 1970 2014 the study develops a spatially augmented green solow model by taking into consideration technological externalities and interdependence in the process of production which ultimately implies that co2 emissions in an economy are affected by the economic characteristics in neighboring countries the empirical model predicts convergence in co2 emissions among countries which is examined by means of modern dynamic spatial panel econometric techniques the multimodal distribution of the co2 emissions is consistent with the existence of three spatial clubs the space time dynamics of the three clubs are analyzed by means of the local directional moran scatterplot and spatial panel model with heterogeneous parameters our analysis reveals the hypothesis of spatial convergence clubs is more consistent with the data than the hypothesis of conditional convergence

income inequality and pollution a reassessment of the environmental kuznets curve abstract improvements in some measures of air and water quality can accompany rising per capita income as illustrated by the so called environmental kuznets curve for pollution variables which show such a relationship we hypothesize that a more equitable distribution of power contributes to these outcomes by enhancing the influence on policy of those who bear the costs of pollution relative to the influence of those who benefit from pollution generating activities an empirical analysis of international variations in seven indicators of air and water quality supports this hypothesis literacy political rights and civil liberties are found to have particularly strong effects on environmental quality in low income countries

effects of political institutions on air quality we empirically test existing theories on the provision of public goods in particular air quality using data on sulfur dioxide so2 concentrations from the global environment monitoring projects for 107 cities in 42 countries from 1971 to 1996 the results are as follows first we provide additional support for the claim that the degree of democracy has an independent positive effect on air quality second we find that among democracies presidential systems are more conducive to air quality than parliamentary ones third in testing competing claims about the effect of interest groups on public goods provision in democracies we establish that labor union strength contributes to lower environmental quality whereas the strength of green parties has the opposite effect

the environmental kuznets curve does one size fit all abstract this paper uses a new panel data set on state level sulfur dioxide and nitrogen oxide emissions from 1929 1994 to test the appropriateness of the one size fits all reduced form regression approach commonly used in the environmental kuznets curve literature empirical results provide initial evidence that an inverted u shape characterizes the relationship between per capita emissions and per capita incomes at the state level parameter estimates suggest however that previous studies which restrict cross sections to undergo identical experiences over time may be presenting statistically biased results

is there an environmental kuznets curve for sulfur abstract most existing estimates of the environmental kuznets curve ekc for sulfur which use samples of mainly high income countries indicate a maximum emissions turning point at middle to lower high income levels of gdp per capita we use a larger and more globally representative sample than previous sulfur ekc studies we find that sulfur emissions per capita are a monotonic function of income per capita when we use a global sample and an inverted u shape function of income when we use a sample of high income countries a model estimated in first differences results in a monotonic ekc when estimated with both high income and global samples reductions in emissions are time related rather than income related

do existing corruption levels matter in controlling corruption cross country quantile regression estimates abstract we examine the determinants of corruption using recent cross sectional data for nearly one hundred countries while the causes of corruption have drawn economists interest in recent years our main contribution is to examine the corruption determinants throughout the conditional distribution of corruption across nations are there different causes of corruption in highly corrupt nations compared to the least corrupt countries for instance we examine whether greater democracy and more economic freedom consistently reduce corruption among the most and the least corrupt our results for the significant determinants support some findings in the literature but also provide new conclusions in many cases quantile regression estimates are quite different from those from ols regressions among the most corrupt nations larger governments and greater economic freedom do not appear to reduce corruption but greater democracy seems to alleviate it our results suggest that some current corruption control policies may be reconsidered especially among the most corrupt and least corrupt nations