opportunity challenges and policy choices for china on the development of shale gas with the highest shale gas reserves worldwide and huge need for energy the chinese government has introduced many incentives to accelerate the development of shale gas including subsidies and reduction or waiver of the related fees or taxes however the challenges posed by a lack of advanced technologies environmental protection a shortage of water in quantity and a knowledge of how to develop a good industry local community relationship are anticipated in the realization of the predicted golden age of the chinese shale gas industry based on the particular situation and available resources in china and with reference to the experiences in countries with a developed shale gas industry such as the u s a and suggestions by the international energy agency recommendations about the choices facing china can be summarized as follows allowing foreign investors directly to hold exploration and mining rights in shale gas could facilitate the obtainment of advanced technologies the improvement of the regulatory arrangements related to environmental protection could make developers more responsible prompting developers to improve their water use efficiency could help in not worsening the water supply to some extent and slo based mechanism guidance could be helpful in developing a mutual trust and benefit relationship between the shale gas industry and the local community

the future of macroeconomics macro theory and models at the bank of england abstract the adoption as policy models by central banks of representative agent new keynesian dynamic stochastic general equilibrium models has been widely criticised including for their simplistic micro foundations at the bank of england the previous generation of policy models is seen in its 1999 medium term macro model mtmm instead of improving that model to correct its considerable flaws many shared by other non dsge policy models such as the federal reserve s frb us it was replaced in 2004 by the dsge based beqm though this clearly failed during and after the global financial crisis it was replaced in 2011 by the dsge compass complemented by a suite of models we provide a general critique of dsge models for explaining forecasting and policy analyses at central banks and suggest new directions for improving current empirical macroeconomic models based on empirical modelling broadly consistent with better theory rather than seeking to impose simplistic and unrealistic theory

nonmonetary effects of the financial crisis in propagation of the great depression this paper examines the effects of the financial crisis of the 1930s onthe path of aggregate output during that period our approach is complementary to that of friedman and schwartz who emphasized the monetary impact of the bank failures we focus on non monetary primarily credit related aspects of the financial sector output link and consider the problems of debtors as well as those of the banking system we argue that the financial disruptions of 1930 33 reduced the efficiency of the credit allocation process and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand evidence suggests that effects of this type can help explain the unusual length and depth of the great depression this abstract was borrowed from another version of this item

irving fisher on the international transmission of booms and depressions through monetary standards the role of monetary standards in the international transmission of economic fluctuations particularly the role of the gold standard in the depression has attracted considerable recent attention for instance from choudhri and kochin 1980 hamilton 1988 temin 1989 1993 eichengreen 1992 and bernanke 1995 however this literature has overlooked a pioneering precursor irving fisher are booms and depressions transmitted internationally through monetary standards 1935 which has also been neglected in the literature on fisher i examine fisher s contribution in the context of later research on the topic and explore the place of fisher 1935 in fisher s work

the world on a cross of gold for many years the yin and yang of the debate about the causes of the great depression were the monetary history of the united states 1867 1960 by milton friedman and anna schwartz 1963 and peter temin s 1976 book did monetary forces cause the great depression as all monetary economists know in their book friedman and schwartz made the depression a central case study in support of their contention that historically monetary instability has been a major source of fluctuations in the real economy in their famous chapter on the great contraction which was later released as a separate volume friedman and schwartz attributed the collapse of production and prices in the united states particularly the disastrous 1931 33 slide to a precipitous decline in the u s money supply the proximate cause of this monetary contraction was not any direct action by the monetary authorities but rather a series of severe banking crises between late 1930 and early 1933 spasmodic panics induced the public to convert deposits into currency raising the aggregate currency deposit ratio and causing a decline in the ratio of inside money to the monetary base despite the largely unintended nature of the monetary contraction however friedman and schwartz placed the major portion of blame for the depression on the shoulders of the federal reserve which

the stability pact more than a minor nuisance stability pact more than a minor nuisance the stability and growth pact will lead member countries to aim for cyclically balanced budgets until this steady state is reached europe will continue its efforts at de cit cutting while so doing politicians are less likely to undertake the dif cult labour market reforms that are really needed is further scal retrenchment wise the paper reviews the reasons that have been advanced in favour of a stability pact and nds them wanting the most serious justi cations such as the systemic risk of bank crisis following a government s failure to service its debt can be better dealt with in other ways for example by prudential limits on banks exposure to public debts moreover our analysis reveals that the macroeconomic costs of the stability pact while sizeable are not as dangerous as often believed the costs will be barely visible once the steady state is reached the true macroeconomic costs are front loaded they concern the next few years after a decade already dominated by convergence efforts barry eichengreen and charles wyplosz

transmission of the great depression to a first approximation the question of how the great depression spread from country to country is short and straightforward fixed exchange rates under the gold standard transmitted negative demand shocks the first half of this paper consequently will describe current thinking about the relationship between the gold standard and the great depression the second half of the paper will look at a phenomenon not included in this first approximation financial crises many have noted that banking panics and currency crises are bad for national economies but few have tried to model their international spread

financial factors in the great depression eginning with irving fisher 1933 and john maynard keynes 1931 b 1963 macroeconomists have argued that financial markets were important sources and propagators of decline during the great depression turning points during the depression often coincided with or were preceded by dramatic events in financial markets stock market collapse waves of bankruptcy and bank failure and contractions in the money stock but the mechanism through which financial factors contributed to the depression has been a source of controversy as has been the relative importance of financial factors in explaining the origins and persistence of the depression this essay reviews the literature on the role of financial factors in the depression and draws some lessons that have more general relevance for the study of the depression and for macroeconomics i argue that much of the recent progress that has been made in understanding some of the most important and puzzling aspects of financial real links in the depression followed a paradigm shift in economics a central neglected theoretical piece of the story for financial factors was the allocative effects of imperfections in capital markets which can imply links between disruptions in financial markets and subsequent economic activity also the increasing emphasis on learning and path dependence in economics has helped to explain why financial shocks during the 1930s were so severe and why policy makers failed to prevent the depression

facts and ideas in microeconomic theory the title of my lecture is quite pretentious therefore let me first restrict the subject somewhat i will not speak on microeconomics in general but on demand theory in particular the less pretentious title facts and ideas in demand theory would be a fairer description of the content of my lecture if it comes to demand theory i enjoy reading in hicks a reoision of demand theory i read this book in parts again and again let me quote now a few lines on p 4

shale gas policy in the united kingdom an argumentative discourse analysis shale gas has become an energy policy priority in the united kingdom in light of profitable extraction activities in the united states since 2012 the coalition government has created key economic drivers to encourage shale exploration whilst growing activism in affected site communities has stirred significant media and academic commentary this study examines the growing national debate as a matter of discourse adopting an argumentative discourse analytic approach to assess data collected from stakeholder interviews n 21 and key policy actor statements quoted in broadsheet newspapers we explore three dominant storylines emerging in relation to shale gas policy 1 cleanliness and dirt concerns the relative framing of the environmental benefits and harms of shale gas 2 energy transitions pathways and diversions concerns geographic metaphors of transitions to carbon intensive and low carbon energy systems and 3 geographies of environmental justice concerns divisions of economic benefit distribution environmental impact and procedural fairness we find that central government policy rhetoric emphasises economic development regulatory oversight and distribution of benefits to site communities whilst minimising discussion of the implications of shale gas for anthropogenic climate change the role of these discourses in influencing shale gas policy is discussed

shale gas analysis of its role in the global energy market shale gas revolution that took place in the united states at the beginning of the 21st century has still been shaping our global fossil fuel market in 2012 the u s has surpassed russia in natural gas production for the first time since 1982 at the same year annual average u s henry hub natural gas spot price decreased to 2 75 per million btu which was 8 69 per million btu in 2005 in 2013 proved shale gas reserves of the world is estimated at nearly 2 7 trillion cubic metres tcm and unproved resources at staggering 203 9 tcm as a result there is a global rush to develop most of this resource as possible however shale gas is no miracle fuel it has been suggested that its effects on the environment could be worse than conventional natural gas fugitive methane emissions groundwater pollution and increased seismicity are amongst the most important potential environmental side effects there is also concern about the accuracy of resource potential estimations due to lack of data and specifically designed shale gas reservoir models nonetheless the analysis in this study clearly showed that without developing global shale gas resources we have to consume 66 of our proved natural gas reserves to supply the demand till 2040 this would make most of the world natural gas importers and rules of economy dictate that limited supply and increasing demand would skyrocket natural gas prices therefore shale gas resource development is not an option but a must for the continuance of our global energy market and economy

the spectre of deflation a review of empirical evidence what explains the widespread fear of deflation this article reviews the history of thought economic history and empirical evidence on deflation with a view to answering this question it also outlines informally the main effects of deflation in applied monetary models the main finding is that for both historical and contemporary deflations there are many open empirical questions that could be answered using the tools economists use to study inflation and monetary policy more generally qu est ce qui explique la peur tres repandue de la deflation ce memoire fait un tour d horizon de l histoire de la pensee economique de l histoire economique et des resultats empiriques quant aux effets de la deflation en vue de repondre a cette question on fait aussi echo informellement aux effets principaux de la deflation dans les modeles monetaires appliques ce qui ressort principalement de ce travail est que tant pour les deflations dans l histoire que dans le monde contemporain il y a bien des questions empiriques encore irresolues auxquelles on pourrait donner une reponse en utilisant l outillage mental que les economistes utilisent pour etudier l inflation et la politique monetaire plus generalement sp c tre n thing that is thought to be seen but has no material existence haunting presentiment of ruin war madness etc

iylm a general theory compatible replacement for islm the islm model introduced in 1936 37 to provide interpretations of keynes s general theory subsequently emerged in its hicks hansen form as the workhorse and trained intuition of post war macroeconomists however islm is an essentially orthodox model based on neoclassical foundations and fails completely as an adequate representation of central elements of keynes s macroeconomic thought this article proposes iylm as a replacement for islm the new model being general theory compatible in that it is grounded only on key propositions in that work its purpose is to contribute within the constraints of a two market framework to the resuscitation of keynes s macroeconomics as an alternative to the inadequacies of much current macroeconomics the first part of the article derives the model and argues that those sympathetic to the general theory can accept the iylm framework whilst simultaneously rejecting islm the second part shows that hicks hansen islm is based on an income augmented form of orthodox loanable funds theory

debt deflation theory and evidence abstract in the early 1990s the most severe recessions occurred in those countries which had experienced the largest increases in private debt burdens was this an accident of history or did it reflect deeper forces affecting market economies the paper comprises three parts first it presents three stylised facts about debt and its impact on consumption growth in the 1930s and the 1990s second it discusses the reception of irving fisher s work on debt deflation by his contemporaries and argues that it is helpful to think of debt deflation as a real business cycle phenomenon third there is a theoretical discussion of the reaction of debt and consumption to shocks in the context of a model of precautionary saving central to the model is the role of distributional shocks which implies that aggregate demand may be a nonmonotonic function of the price of assets in terms of the consumption good multiple equilibria may exist leading to the possibility of financial instability the analysis of debt deflation requires the construction of real business cycle models without a representative consumer

the nation in depression t he economic cataclysm of the 1930s was an international phenomenon experienced by countries in all parts of the globe countries as diverse as the united states germany chile and japan all experienced significant depressions in the 1930s thus the title of charles kindleberger s classic book the world in depression 1973 captures an important feature of the great depression these international aspects especially the importance of the gold standard in causing the downturn and transmitting depression from one country to another have been emphasized in recent years in excellent books by peter temin 1989 and barry eichengreen 1992 these books have rightly received widespread attention and have successfully changed the focus of much analysis of the great depression from the united states to the world economy while such a change from american provincialism is surely healthy and warranted adopting an international perspective on the great depression risks losing sight of the many ways in which the u s depression differed in timing and severity from depressions elsewhere more important it may obscure the many uniquely american causes of america s great depression this paper examines the ways in which the u s experience during the 1930s resembled that of other countries in some regards and fundamentally differed in other aspects i also evaluate the evidence on the causes of the great depression in the united states and the sources of the eventual recovery i suggest that the path of american output and unemployment before 1931 can be explained quite well with only domestic factors even after 1931

household debt and spending during the financial crisis evidence from danish micro data abstract we use data for nearly 500 000 danish households to study the relationship between household leverage prior to the financial crisis of 2007 2009 and the development in spending over the course of the crisis we find a strong negative correlation between pre crisis leverage and the change in spending during the crisis this reflects that highly levered households spent a larger share of their income than their less levered peers prior to the crisis resulting in larger increases in debt in these years once we condition on the size of the pre crisis change in debt a high level of debt is no longer associated with a larger spending decline our results suggest that the larger decline in spending among high leverage households is the result of a spending normalization pattern that is also found in other years rather than a causal effect of high debt levels suppressing household spending during the crisis

the competition situation analysis of shale gas industry in china applying porter s five forces and scenario model abstract with the increasing of energy demand and environmental pressure china government has been exploring a way to diversify energy supply shale gas development is becoming an important energy strategy in china in recent years due to giant shale gas reserves however the shale gas market is preliminarily shaping in china so that many factors have great influence on its competition to find these factors and to control them rationally is good for the cultivating chinese shale gas market five forces model for industry analysis puts an insight into the competitive landscape of shale gas market by showing the forces of supplier power buyer power threat of substitution barriers to entry and degree of rivalry illustrating the key factors that affect competitive landscape provides a view into the situation of shale gas industry the variation tendency of shale gas industry is analyzed by setting various scenarios finally some suggestions are proposed in order to keep the development of shale gas industry positively

policy recommendations to promote shale gas development in china based on a technical and economic evaluation because of its resource potential and clean burning advantages the development of shale gas can significantly increase the supply of cleaner energy while offering the associated benefits to foster shale gas development many policy incentives have been introduced in china however the current incentives have not been sufficiently aggressive and the shale gas industry has been slow to develop existing policies thus need to be further improved to provide effective support for decision makers in china a technical and economic evaluation is performed in this study to explore the profitability of shale gas production in pilot zones the results show that shale gas production is subeconomic under the current technical and economic conditions based on this evaluation a policy analysis is conducted to investigate the profitability improvement offered by the major policies available in china to elucidate a path toward improving incentive policies the results indicate that policy instruments related to gas prices financial subsidies corporate income taxes or combinations thereof could be used as priority options to improve policy incentives based on these results recommendations are presented to improve the current incentive polices aimed at accelerating shale gas development

full insurance in the presence of aggregate uncertainty this paper tests implications of full consumption insurance the object is to determine how much mileage can be obtained from a model with complete markets with such features as private information or liquidity constraints omitted the implication exploited is that individual consumption responds to aggregate risk but not to idiosyncratic risk the test involves regressing the change in household consumption onto the change in aggregate consumption and other right hand side variables such as the change in household income and change in employment status all variables other than the change in aggregate consumption are predicted to be insignificant in explaining the change in household consumption with observations on consumption and income for 10 695 households from the consumer expenditure survey the results are mixed the results for one specification exponential utility are mostly consistent with full consumption insurance the results for the other specification power utility are not

a simple test of consumption insurance are consumers effectively insured against idiosyncratic shocks to income or wealth either by formal institutions such as charities private insurance and government programs or by informal mechanisms such as gifts and loans from relatives friends and neighbors under full insurance consumption growth should be cross sectionally independent of idiosyncratic variables that are exogenous to consumers this proposition is tested by cross sectional regressions of consumption growth on a variety of exogenous variables full insurance is rejected for long illness and involuntary job loss but not for spells of unemployment loss of work due to strike and an involuntary move

stochastic analysis of a shale gas investment strategy for coping with production uncertainties abstract the soaring demand for natural gas and deteriorating environmental conditions in recent years have together created a significant incentive for china to develop shale gas exploration in this endeavor production capacity is a major uncertainty that substantially affects the net investment return we propose a markov decision process model to explore and determine the desirable investment strategy under such uncertainty our model has the advantage of being able to handle dynamic stochastic market states and it considers not only the value of the project itself net cash flow but also the social welfare environmental cost and financial subsidy our objective is to maximize the long run expected return of investment the methodology was applied to determine the investment strategy for a case study in china we found that the project is feasible only when the production capacity is larger than 8 55 billion cubic meters additional shale gas supply may generate higher sales revenue however the benefits may be neutralized by the decrease in price when domestic demand is inelastic to price we also found that financial subsidy is an effective incentive for shale gas investment because it significantly increases the expected return of investment

natural resource ownership financial gains and governance the case of unconventional gas development in the uk and the us abstract who owns an area s natural resources affects the local financial gains from extraction and participation in resource governance we develop a typology of ownership regimes using two dimensions of ownership private versus public and local versus absentee and apply it to unconventional natural gas development in the united kingdom uk and the state of pennsylvania in the united states we find that local residents in pennsylvania own 53 of the acreage leased for development and capture an estimated 8 5 of the value of production of the typical well more than double what is expected from a well in the uk s public absentee regime despite revenue sharing policies the dollar amount of local payments is also larger in pennsylvania with the difference reflecting policies and institutions not differences in the value of production the pennsylvania case provides a benchmark for public absentee owners considering policies to direct payments to communities hosting extraction it gives the local payments corresponding to the case where subsurface owners voluntarily negotiate lease terms with energy firms and roughly half of ownership revenues accrue locally

who pays for bank insolvency in transition and emerging economies abstract this paper explores the equity of the way losses from bank insolvencies and their avoidance through intervention by the authorities have been distributed over creditors depositors owners and the population at large in transition and emerging economies it suggests a number of regulatory reforms that would alter the balance between seeking to avoid insolvency and lowering the costs of insolvency should it occur it considers whether a lex specialis for dealing with problem banks by prompt corrective action and if necessary resolving them if their net worth falls to zero at little or no cost to the taxpayer can be applied in the circumstances of transition and emerging economies

a system dynamics analysis of technology cost and policy that affect the market competition of shale gas in china abstract in order to ease environment pressure and alleviate the scarce problem of energy chinese government has begun to exploit and develop shale gas sg since 2009 however the formation of competitive market is bristled with difficulties due to its infancy imperfect and lack of standardization this paper firstly analyzes the status quo of technology policy cost and competition of sg industry in china then a system dynamics sd model is built to show various trends of chinese sg industry under different scenarios which shows that technology policy and cost all have effects on competitiveness at last the simulations reveal that the number of competitors in chinese sg industry will arrive at its peak from 2019 to 2020 the corresponding recommendations have been presented chinese government should pay more attention on the perfection of laws and regulations of sg industry and competitors should focus on increasing r d investment

endogenous cycles in a stiglitz weiss economy the literature on financial imperfections and business cycles has focused onpropagation mechanisms in this paper we model a purereversion mechanism such that the economy may converge to a two period equilibrium cycle this mechanism confirms that financial imperfections may have a dramatic amplification effect unlike in some related models contracts are complete indexation is not assumed away the welfare properties of a possible stabilizing policy are analyzed the model itself is a dynamic extension of the well known stiglitz weiss model of lending under moral hazard although stylized the model still captures some important features of credit cycles

barriers to the development of china s shale gas industry abstract shale gas has become a promising onshore energy prospect in china as much as the country aspires for greater energy independence through the use of its shale gas reserves this process is slowed down by the combined weight of relative inexperience lack of technology geographical complexity a hostile economic environment a disincentive pipeline regime and a complex land ownership system to foster a better understanding of the current circumstances of the country s shale gas sector a panel of scholars and experts shared their perspectives and insider knowledge on china s shale gas industry it was found that some of the country s man made institutional barriers are factors that have been hindering shale gas development in china in addition to natural conditions such as water concerns and the complex geography of shale fields resolving this situation necessitates breaking the monopoly that major state owned oil companies have over high quality shale gas resources opening pipeline network access providing geological data developing the domestic oil service market creating conditions for fair competition between service providers and improving the water management system

precautionary saving in the small and in the large the theory of precautionary saving is shown to be isomorphic to the arrow pratt theory of risk aversion making possible the application of a large body of knowledge about risk aversion to precautionary saving and more generally to the theory of optimal choice under risk in particular a measure of the strength of the precautionary saving motive analogous to the arrow pratt measure of risk aversion is used to establish a number of new propositions about precautionary saving and to give a new interpretation of the dreze modigliani substitution effect copyright 1990 by the econometric society

china s energy security and its challenges towards 2035 abstract within the last twenty years china has become dependent on import of coal oil and natural gas especially oil is now an economic and a security concern by the chinese regime and key international stakeholders until 2035 china will account for one fourth of the global net growth in global gas consumption and more than half of the net growth in oil consumption the future demand cannot be covered by china s own conventional and unconventional sources pipelines from neighboring countries can cover more than half of the needed import of natural gas by 2030 but only 10 percent of the import demand of oil is secured so far even if china attempts to address its insufficient supply of oil by increased investments in overseas oil fields there is still a large gap furthermore the oil import will largely come from politically unstable countries and regions and the bulk of the supplies must be shipped through the potentially insecure hormuz and malacca straits the ongoing territorial disputes with neighboring countries regarding areas with gas and oil reserves in contested waters bear evidence to regional conflict potentials and china appears to engage more actively in energy diplomacy and regional cooperation