rising residential rents in chinese mega cities the role of monetary policy although there have been a large number of studies carried out on fluctuations in housing prices little is known about what causes changes in residential rents which are inextricably intertwined with urban living standards this is especially noteworthy in chinese cities which are now being challenged by the housing market frenzies shift share analysis is proposed to evaluate all possible triggers of residential rent inflation in three cities during the 2001 2013 period which covers two distinct monetary policy regimes in china it is found that the recent rise in residential rent comes as a result of aggregate inflation associated with an expansionary monetary policy since the 2008 global financial crisis and an all encompassing and stable policy stance should therefore be adopted

auctions with resale when private values are uncertain evidence from the lab and field abstract auction theory represents one of the richest areas of research in economics over the past three decades yet whether and to what extent the introduction of secondary resale markets influences bidding behavior in sealed bid first price auctions remains under researched this study begins by examining field data from a unique data set that includes nearly 3000 auctions over 10 000 individual bids for cutting rights of standing timber in british columbia from 1996 to 2000 in comparing bidding patterns across agents who are likely to have resale opportunities with those who likely do not we find evidence that is consistent with theory critical evaluation of the reduced form bidding model however reveals that sharp tests of the theoretical predictions are not possible because several other differences may exist across these bidder types we therefore use a laboratory experiment to examine if the resale opportunity by itself can have the predicted theoretical effect we find that while it does have the predicted effect a theoretical model based on risk averse bidders explains the overall data patterns more accurately than a model based on risk neutral bidders beyond testing theory the paper highlights the inferential power of combining naturally occurring data with laboratory data

effects of energy price rise on investment firm level evidence from indian manufacturing sector this paper analyses the effects of the rising prices of energy products on the investment of a large panel of manufacturing firms in india during 1993 2013 the prime motivation behind this study is the absence of an empirical study into this research issue exclusively on indian economy the empirical results obtained by estimating an error correction model ecm using generalized method of moments gmm show that energy price rise has negative effect on the investment of firms in the manufacturing sector the negative effect is transmitted to the firm s investment through both demand side and supply side factors the transmission also depends upon factors such as the energy intensity of production the results also show that the sales growth investment relationship becomes weak in the face of the rising prices of the energy which could be due to the cautious approach to investment adopted by the firms therefore it calls for the attention of the policy makers to evolve a comprehensive energy policy to ensure continuous supply of energy at affordable prices to the manufacturers

economic analysis of coal price electricity price adjustment in china based on the cge model in recent years coal price has risen rapidly which has also brought a sharp increase in the expenditures of thermal power plants in china meantime the power production price and power retail price have not been adjusted accordingly and a large number of thermal power plants have incurred losses the power industry is a key industry in the national economy as such a thorough analysis and evaluation of the economic influence of the electricity price should be conducted before electricity price adjustment is carried out this paper analyses the influence of coal price adjustment on the electric power industry and the influence of electricity price adjustment on the macroeconomy in china based on computable general equilibrium models the conclusions are as follows 1 a coal price increase causes a rise in the cost of the electric power industry but the influence gradually descends with increase in coal price and 2 an electricity price increase has an adverse influence on the total output gross domestic product gdp and the consumer price index cpi electricity price increases have a contractionary effect on economic development and consequently electricity price policy making must consequently consider all factors to minimize their adverse influence

bidding behaviour in multi unit auctions an experimental investigation we present laboratory experiments of five different multi unit auction mechanisms two units of a homogeneous object were auctioned off among two bidders with flat demand for two units we test whether expected demand reduction occurs in open and sealed bid uniform price auctions we also test revenue equivalence for these auctions as well as for the ausubel the vickrey and the discrim inatory sealed bid auction furthermore we compare the five mechanisms with respect to the efficient allocation of the units auctions play a more and more important role in everyday business life an increasing number of important markets are organised as auctions and auction design is probably one of the most successful applications of economic theory to practice among the prominent examples are the spectrum auctions in the us and in europe treasury auctions in the us the design of electricity spot markets oil and timber sales as well as the massive use of procurement auctions both by the public sector and by private firms the spectrum auctions across the world have demonstrated that carefully designed auctions raise high revenues and often succeed in implementing efficient allocations

multi unit demand auctions with synergies behavior in sealed bid versus ascending bid uniform price auctions abstract we construct a relatively simple model of bidding with synergies and solve it for both open outcry and sealed bid uniform price auctions the essential behavioral forces involved in these auctions are 1 a demand reduction force resulting from the monopsony power that bidders with multiple unit demands have when synergies are relatively inconsequential and 2 bidding above stand alone values in order to capture significant complementarities between units the latter creates a potential exposure problem as bidders may win only parts of a package and earn negative profits bidding outcomes are closer to equilibrium in clock compared to sealed bid auctions however there are substantial and systematic deviations from equilibrium with patterns of out of equilibrium play differing systematically between the two auction formats these patterns of out of equilibrium play are analyzed along with their effects on revenue and efficiency

how do daily changes in oil prices affect us monthly industrial output detecting asymmetry has become increasingly difficult using single frequency data this paper goes beyond the prevailing use of aggregate averaged data in order to provide a more in depth treatment of the dynamic effects of the price of crude oil on industrial output growth to do so we propose an asymmetric mixed data sampling amidas model to examine if there is any concealed evidence of asymmetry arising from daily effects of the price of crude oil on monthly changes in industrial output in the united states us we find that this model is able to detect dynamic asymmetric impacts of a high frequency independent variable on a low frequency dependent variable more effectively than when the high frequency variable is aggregated up at the time interval of the low frequency variable we find that in comparison with the marginal lagged effects of a rise in the daily price of crude oil the effects of a fall in the daily price of crude oil are more sluggish as it takes longer for the effects of the oil price drop to die off over time this finding implies that a fall in the price of crude oil shifts the supply curve rightward less and at a much slower pace than an equivalent price rise shifts it to the left

impacts of exchange rate volatility and international oil price shock on china s regional economy a dynamic cge analysis abstract a multi regional dynamic computable general equilibrium model is constructed in this paper to explore the macroeconomic effects of international oil price shocks and rmb exchange rate changes on china the results show that 1 in terms of regional development differences the decrease in international oil prices and depreciation of rmb are both conducive to economic growth although the impact of rmb devaluation is more obvious increases in international oil prices will further widen the output gap between the rich and the poor regions whereas oil price decreases and rmb devaluation will narrow the regional development differences 2 in terms of employment the depreciation of the exchange rate and the decline in international oil prices will help increase the employment rate in most regions but oil price hikes will be most beneficial for improving oil industry employment in the northeast 3 the impact of oil price volatility is asymmetric compared with rising oil prices falling oil prices have significantly greater effects on gdp industrial output employment and other aspects furthermore the impacts of exchange rate fluctuations and oil price changes on the regional economy exhibit a time lag

the effects of petroleum product price regulation on macroeconomic stability in china abstract china has undertaken measures to regulate the prices of petroleum products since 1998 in order to deal with the world oil price shocks on its macro economy however the effects of price regulation are yet unknown especially when the world oil price fluctuates in different regimes the study first analyses the mechanisms of petroleum product price ppp regulation in the case of gasoline and the crude oil gasoline price fluctuation transmission followed by the identification of regimes and their time intervals using regime switching vector autoregressive model and then estimates the effects of gasoline price regulation in reducing macroeconomic volatility it is found that the world crude oil fluctuates in different regimes the mild fluctuation regime and the violent fluctuation regime the ppp regulation can reduce oil price volatility and then macroeconomic volatility but it is more effective in the mild fluctuation regime the findings present a deeper understanding of the stabilization effect of ppp regulation on the macroeconomy provide an evidence for sustaining china s ppp regulation for the purpose of macroeconomic stability and offer policymakers new information for petroleum product pricing reforms

relative energy price and investment by european firms abstract a dynamic model of investment is estimated with data on non financial firms in 15 european countries across 25 industries over 1991 2006 a rise in real energy price reduces the degree of persistence in the investment adjustment cost function panel results suggest that in manufacturing a 1 rise in real energy price reduces investment by a country s firms by 1 9 relative to that by firms in other countries with a smaller effect for non manufacturing firms the negative effect of a higher relative price of energy on firm level investment is significantly less marked the larger the firm results imply that stabilizing the relative price of energy would steady firm investment with greater gains in stability at smaller and medium sized firms results are robust to consideration of country business cycle effect and firm leverage estimation of investment is based on the euler equation approach with over 21 000 observations individual country regressions imply that a rise in the relative price of energy price has a statistically significant negative effect on firm level investment in 14 out of 15 countries to avoid dynamic panel bias estimation is by generalized method of moments with instrumental variables

rockets and feathers the asymmetric speed of adjustment of uk retail gasoline prices to cost changes abstract the paper develops a quadratic quantity adjustment model to test the hypothesis put forward in the recent monopolies and mergers commission report that the speed of adjustment of uk retail gasoline prices to cost changes is more rapid when costs rise than when they fall and that the adjustment path is more concentrated around the mean value on the upswing using data from 1982 to 1989 evidence of faster and more concentrated responses to cost increases were found

permanent and transitory movements in labor income an explanation for excess smoothness in consumption many have argued that if labor income is difference stationary the permanent income hypothesis predicts that consumption should be relatively volatile in u s aggregate data labor income is well characterized as having a unit root however consumption turns out to be relatively smooth this anomaly is known as deaton s paradox i resolve deaton s paradox by providing decompositions of labor income into permanent and transitory components these preserve the univariate dynamic properties of labor income however when agents distinguish permanent and transitory movements in their labor income as the rational expectations hypothesis asserts they should the permanent income hypothesis correctly predicts the observed smoothness in consumption

oil price shocks and real gdp growth empirical evidence for some oecd countries this study assesses empirically the effects of oil price shocks on the real economic activity of the main industrialized countries multivariate var analysis is carried out using both linear and non linear models the latter category includes three approaches employed in the literature namely the asymmetric scaled and net specifications evidence of a non linear impact of oil prices on real gdp is found in particular oil price increases are found to have an impact on gdp growth of a larger magnitude than that of oil price declines with the latter being statistically insignificant in most cases among oil importing countries oil price increases are found to have a negative impact on economic activity in all cases but japan moreover the effect of oil shocks on gdp growth differs between the two oil exporting countries in the sample with the uk being negatively affected by an oil price increase and norway benefiting from it

slow information diffusion and the inertial behavior of durable consumption this paper studies the aggregate dynamics of durable and nondurable consumption under slow information diffusion sid due to noisy observations and learning within the permanent income framework we show that sid can significantly improve the model s predictions on the joint behavior of income durable consumption and nondurable consumption at the aggregate level specifically we find that sid can significantly improve the model s predictions for i smoothness in durable and nondurable consumption ii autocorrelation of durable consumption and iii contemporaneous correlation between durable and nondurable consumption furthermore we discuss that incorporating a fixed cost into our sid model does a better job of reproducing the infrequent adjustments of durable consumption at the individual level and the slow adjustments at the aggregate level

optimal monetary policy with durable consumption goods abstract we document that the durable goods sector is much more interest sensitive than the nondurables sector and then investigate the implications of these sectoral differences for monetary policy we formulate a two sector general equilibrium model that is calibrated both to match the sectoral responses to a monetary shock derived from our empirical var and to imply an empirically realistic degree of sectoral output volatility and comovement while the social welfare function involves sector specific output gaps and inflation rates the performance of the optimal policy rule can be closely approximated by a simple rule that targets a weighted average of aggregate wage and price inflation in contrast a rule that stabilizes a more narrow measure of final goods price inflation performs poorly in terms of social welfare

on the dynamic effects of oil price shocks a study using industry level data abstract this paper analyzes the effects of oil price shocks on demand and supply in various industries the impulse responses of identified var models indicate that for industries that have a large cost share of oil such as petroleum refinery and industrial chemicals oil price shocks mainly reduce supply in contrast for many other industries with the automobile industry being a particularly important example oil price shocks mainly reduce demand the paper suggests that oil price shocks influence economic activities beyond that explained by direct input cost effects possibly by delaying purchasing decisions of durable goods

english auctions with resale an experimental study i design and test a simple english auction and two english auctions with resale but with different informational backgrounds all three treatments theoretically have the same equilibrium i find however that the possibility of resale alters behavior significantly in the two treatments with resale subjects deviated from both the nash prediction and the common results about bidding behavior in english auctions subjects tend to overbid when they are certain they can reap the whole surplus in the resale market i employ different models like qre and levels of reasoning and conclude that overbidding can be explained as a rational response to the noisy environment in markets with human participants that is as rational decision making when anticipating others to make errors when the outcome of the resale market is not certain there is significant signaling behavior and auction prices tend to be lower than the nash prediction

finite horizons life cycle savings and time series evidence on consumption abstract this paper develops an explicitly aggregated life cycle model which allows for finite horizons and declining individual labor supply the model can generate a common upward trend in aggregate consumption labor income and nonhuman wealth without relinquishing hall s random walk at the micro level life cycle factors are shown to imply that consumption changes should be a predictable and b smoother than in the infinite horizon model econometric evidence using postwar u s data suggests that neither consumption s predictability nor its excess smoothness can be fully accounted for by life cycle considerations

asymmetric auctions with resale an experimental study we study auctions with resale based on hafalir and krishna s 2008 6 model as predicted weak bidders bid more with resale than without so that average auction prices tend to increase when the equilibrium calls for weak types to bid higher than their values with resale they do but not nearly as much as the theory predicts in other treatments outcomes are much closer to the risk neutral nash model s predictions bid distributions for weak and strong types are more similar with resale than without in line with the theory

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

crude oil and the macroeconomy tests of some popular notions a note perhaps no other economic events in the post world war ii era have generated as much attention as the series of crude oil price shocks that have jolted the world economy since the opec boycott of 1973 a tremendous amount of space in the popular and professional literature has been devoted to analyzing the impacts of these shocks on the developed economies and the adjustments these shocks have induced one residual of this literature has been a general impression that since 1973 the functional relationship between crude oil prices and the developed macroeconomies has been dramatically and fundamentally altered yet to our knowledge no one has formally tested this impression recent evidence of hamilton 1983 suggests that crude oil prices had a strong impact on the u s business cycle well before 1973 further while textbook treatments of oil price shocks tend to highlight cost push inflationary effects the research of berndt and wood 1975 1979 and wilcox 1983 indicates the net complementarity between energy and capital in the u s economy is quite strong both before and after 1973 thus oil price shocks may have stronger real effects than generally believed in this paper we formally test three popular notions associated with the so called

the relationship between oil price shocks and china s macro economy an empirical analysis china postdoctoral science foundation 20090460751 ministry of education of the people s republic of china 09yjc790167 09yja820074 national social science funds 09zd050 08ajy031

a comparison of the effects of exogenous oil supply shocks on output and inflation in the g7 countries a comparison of the effects of exogenous shocks to global crude oil production on seven major industrialized economies suggests a fair degree of similarity in the real growth responses an exogenous oil supply disruption typically causes a temporary reduction in real gdp growth that is concentrated in the second year after the shock inflation responses are more varied the median cpi inflation response peaks after three to four quarters exogenous oil supply disruptions need not generate sustained inflation or stagflation typical responses include a fall in the real wage higher short term interest rates and a depreciating currency with respect to the dollar despite many qualitative similarities there is strong statistical evidence that the responses to exogenous oil supply disruptions differ across g7 countries for suitable subsets of countries homogeneity cannot be ruled out a counterfactual historical exercise suggests that the evolution of cpi inflation in the g7 countries would have been similar overall to the actual path even in the absence of exogenous shocks to oil production consistent with a monetary explanation of the inflation of the 1970s there is no evidence that the 1973 1974 and 2002 2003 oil supply shocks had a substantial impact on real growth in any g7 country whereas the 1978 1979 1980 and 1990 1991 shocks contributed to lower growth in at least some g7 countries jel e31 e32 q43

does energy price regulation benefit china s economy and environment evidence from energy price distortions abstract china s energy prices have long been regulated due to the critical role energy plays in economic growth and social development which leads to energy price distortion to some extent to figure out whether energy price regulations will benefit china s economy measured by gdp growth and environment measured by carbon emissions we conducted an in depth simulation using path analysis where five energy products natural gas gasoline fuel oil steam coal and coking coal are selected and three measurements absolute relative and moving of energy price distortions are calculated the results indicate that with a series of energy pricing policies the price distortion for a single type of energy has gradually transformed while the energy pricing system in china is not fully market oriented yet furthermore china s economy benefits from relative and moving distortions while the absolute distortions of energy prices have negative impacts on economic growth finally with regard to the environment carbon emissions call for fewer distortions

china s oil policy and its impact the oil industry is extremely important to china s overall economic growth fiscal stability and international trade but oil industry reforms have been undertaken slowly and gradually in 1994 the government reimposed central control over its oil industry by fixing the price of crude and petroleum products and channelling virtually all sales through state agencies this move marks a temporary retreat from the ongoing experiment with oil deregulation which picked up speed since 1992 for as long as it lasts this renewed central recontrol over oil prices and distribution will create increased uncertainty for foreign participation

designing organizations for trading pollution rights regulators and academicians have recently become interested in using a marketable permits program as a new way to control aggregate pollution emissions our research focuses on choosing a permit trading mechanism that is both economically efficient and politically viable we consider an organized trading process and a revenue neutral auction both of which involve an initial allocation of permits based on past history each is tested in a competitive and in a non competitive environment to determine which mechanism performs best the results of our research suggest that overall the organized trading process outperforms the revenue neutral auction

this is what happened to the oil price macroeconomy relationship reply abstract james hamilton argues that oil price changes are still important for the macroeconomy and that using a filter which screens out drops and measures increases relative to a reference level wellrepresents the effects of price changes when they are choppy while this measure outperforms the oil price transformations considered in my paper much of its predictive power is coming from the pre 1986 and pre 1973 part of the sample with less than 10 years of choppy data finding the best oil price transformation will likely require analysis with cross sectional components ruling out effects from oil price decreases is also probably counterproductive to uncovering structure

speculation and demand reduction in english clock auctions with resale many auctions are followed by a resale market which occurs when the winner of the auction resells the item won to one of the participants from the original auction the existence of such transactions may initially appear counter intuitive however this paper will show that active inter bidder resale results from payoff maximizing decisions in the auction that take into account the incentives of a resale opportunity specifically i examine how the existence of an inter bidder resale opportunity impacts bidder behavior in an english clock auction and to what extent altering the bargaining power of the final buyer and reseller in the resale market determines the strategies followed in the initial auction in an attempt to understand the existence of these inter bidder transactions theoretical and behavioral analysis is used to develop hypotheses of speculation bidding above value and demand reduction bidding below value which are directly tested in a controlled experimental setting while value bidding is a dominant strategy in a standard english clock auction without resale when resale is allowed this theoretical claim is weaker demand reduction is observed when the bargaining power is shifted to the final buyer in resale and when the bargaining power is shifted toward the reseller speculation is observed the revenue achieved in the initial auction depends on the behavior observed in the auction regardless of bargaining power revenue is shown to decrease below what would have been earned in an english auction without resale due to demand reduction when the reseller has the bargaining power and speculation is observed this loss in revenue is somewhat mitigated by increased speculation

cross country differences in the effects of oil shocks abstract we compare the macroeconomic consequences of several types of oil shocks across a set of industrialized countries that are structurally very diverse with respect to the role of oil and other forms of energy in the economy the results crucially depend on the underlying source of the oil price shift when a rise in oil prices is caused by increased global economic activity or a rise in oil specific demand almost all countries experience respectively a temporary increase and transitory decline of real gdp the role of oil and other forms of energy cannot explain the differences in the effects of both shocks across countries in contrast this role is very important to explain asymmetries in the effects of exogenous oil supply shocks whereas net oil and energy importing countries typically face a permanent fall in economic activity the impact is insignificant or even positive in net energy exporting countries in addition countries that improved their net energy position the most over time became less vulnerable to oil supply shocks relative to other countries

why is consumption so smooth for thirty years it has been accepted that consumption is smooth because permanent income is smoother than measured income this paper considers the evidence for the contrary position that permanent income is in fact less smooth than measured income so that the smoothness of consumption cannot be straightforwardly explained by permanent income theory the paper argues that in postwar u s quarterly data consumption is smooth because it responds with a lag to changes in income

asymmetric pass through of oil prices to gasoline prices evidence from a new country sample abstract this paper investigates the asymmetric pass through of oil prices to gasoline prices under the non linear autoregressive distributed lags nardl model the analysis adds to the unsettled discussion of whether retail gasoline prices respond asymmetrically to oil prices and it is carried out for the us the uk spain italy and greece spanning the period january 2009 to july 2016 these countries have been selected on the basis that fuel markets are differentiated by the structure of retail markets oligopolistic behavior production lags and market competition which depends on extraction refinery and distribution the analysis considers markets that differ in terms of their structure both short and long run non linearity are tested by deriving both the positive and negative partial sum decompositions of the dependent variable in addition it was feasible to quantify the responses to positive and negative oil price shocks from the asymmetric dynamic multipliers the findings indicate that oil and gasoline prices provide mixed evidence of an asymmetric behavior short run asymmetry is found in the italian market while in the spanish market there is evidence of both short and long run asymmetry the remaining cases greece u k u s illustrate a symmetric pass through scheme of oil to retail gasoline prices

price of oil and world inflation and recession new evidence shows that the commonly held assumption that the 1973 74 oil price increase directly affected us and world inflation and subsequent recession is consistent with the empirical data an extended lucas varro real income equation applied to the us united kingdom canada france germany italy japan and the netherlands gives mixed results partly because of price control and decontrol programs simulation experiments on the price control variable using us data finds strong effects further studies can be made when consistent international data is available for the 1979 80 period 18 references 4 figures 3 tables dck

not all sectors are alike differential impacts of shocks in oil prices on the sectors of the colombian economy abstract in this paper an estimation of differential impacts of shocks in oil prices on the economic sectors in the oil exporting colombia is made using data from the world economy and adopting the model of structural autoregressive vectors var employed by kilian et al 2009 oil prices shocks are estimated according to three types of origin oil supply oil demand and aggregate demand subsequently using data from the colombian economy the effects that these shocks have on sectoral production in colombia are estimated through the use of var models which allow direct impacts to be separated from those that are transmitted through the interrelations between sectors the results obtained show that only the specific demand for oil and aggregate demand shocks affect significantly the total production in colombia although not in all sectors only manufacturing industry and electricity gas and water sectors are directly and significantly affected by both types of demand shocks however when considering the indirect effects transmitted through the interrelations between sectors it was found that the total impacts of these two types of shocks affect the construction transport and trade restaurants and hotels sectors as the effect is positive the colombian economy benefits from increases in oil prices due to demand factors but responds negatively when the opposite situation occurs

what happened to the oil price macroeconomy relationship abstract strong evidence is found that oil prices no longer granger cause many u s macroeconomic indicator variables in data after 1973 a number of potential explanations are explored that sample stability issues are responsible that oil prices are now endogenous and that linear and symmetric specifications misrepresent the form of the oil price interaction none of these hypotheses are supported by the data the opec price increases do appear to have had significant impacts while the effects of the price declines of the 1980s are smaller and harder to characterize these results have potentially important implications for the large body of research which utilizes oil prices as an instrumental or explanatory variable

oil and the macroeconomy since the 1970s economists have long been intrigued by empirical evidence that suggests that oil price shocks may be closely related to macroeconomic performance this interest dates back to the 1970s the 1970s were a period of growing dependence on imported oil unprecedented disruptions in the global oil market and poor macroeconomic performance in the united states thus it was natural to suspect a causal relationship from oil prices to u s macroeconomic aggregates since then a large body of work has accumulated that purports to establish this link on theoretical grounds and to provide empirical evidence in its support we do not attempt a comprehensive survey of this literature but rather provide an idiosyncratic synthesis of what we view as the key issues in this debate and the insights gained over the last 30 years the timing seems right for such an account although the experience of the 1970s continues to play an important role in discussions of the link between oil and the macroeconomy there have been a number of new oil price shocks since the 1970s notably the 1986 collapse of oil prices and the 2000 boom in oil prices as well as the oil price increases associated with the 1990 1991 gulf war and the 2003 iraq war given this richer case history we are arguably in a better position than two decades ago to distinguish the idiosyncratic features of each oil crisis from the systematic effects increases in oil prices have been held responsible for recessions periods of excessive inflation reduced productivity and lower economic growth in this paper we review the arguments supporting such views first we highlight some of the conceptual difficulties in assigning a central role to oil price shocks in explaining

the impact of oil price shocks evidence from the industries of six oecd countries most of the studies about the macroeconomic consequences of oil price shocks have been focused on us aggregate data in contrast to these studies this paper empirically assesses the dynamic effect of oil price shocks on the output of the main manufacturing industries in six oecd countries the pattern of responses to an oil price shock by industrial output is diverse across the four european monetary union emu countries under consideration france germany italy and spain but broadly similar in the uk and the us moreover evidence on cross industry heterogeneity of oil shock effects within the emu countries is also reported

this is what happened to the oil price macroeconomy relationship abstract many of the quarterly oil price increases observed since 1985 are corrections to even bigger oil price decreases the previous quarter when one looks at the net increase in oil prices over the year recent data are consistent with the historical correlation between oil shocks and recessions

multi object auctions with resale theory and experiment abstract we study multi object auctions in the presence of post auction trade opportunities among bidders who have either single or multi object demand we focus on two formats vickrey auctions where package bidding is possible and simultaneous second price auctions we show that under complementarities the vickrey format has an equilibrium where the objects are allocated efficiently at the auction stage whether resale markets are present or not the simultaneous second price on the other hand leads to inefficiency with or without resale possibility our experimental findings show that the possibility of resale in second price auctions decreases the efficiency rate at the auction stage compared to the no resale case however after resale the efficiency rate in second price is as high as that of vickrey auction without resale outcomes in the experiment preventing resale neither benefits nor hurts auction revenues in a second price format

auctions with resale opportunities an experimental study we study first price asymmetric private value auctions with resale opportunities presented in seller s and buyer s markets we offer experimental evidence on bidding behavior prices and resource allocation building upon the hafalir and krishna 2008 model we find that bidders will bid higher in an auction if the resale market is a seller s market than a buyer s market there is a price revenue efficiency trade off established theoretically between these two resale regimes in equilibrium however final efficiency is high irrespective of the resale market structure evidence of bid symmetrization and higher final efficiency is found in the buyer advantaged resale case jel d44 c92

oil revenue shocks and government spending behavior in iran abstract oil revenues play an important role in the political economy of iran on average 60 of the iranian government revenues and 90 of export revenues originate from oil and gas resources current international sanctions on iran have mainly targeted the oil production capacity of iran and its exports to the global markets in this study we analyze the dynamic effects of oil shocks on different categories of the iranian government expenditures from 1959 to 2007 using impulse response functions irf and variance decomposition analysis vdc techniques the main results show that iran s military and security expenditures significantly respond to a shock in oil revenues or oil prices while social spending components do not show significant reactions to such shocks

exogenous oil supply shocks how big are they and how much do they matter for the u s economy abstract the paper proposes a new measure of exogenous oil supply shocks the timing the magnitude and the sign of this measure may differ greatly from current state of the art estimates it is shown that only a small fraction of the observed oil price increases during oil crisis periods can be attributed to exogenous oil production disruptions exogenous oil supply shocks cause a sharp drop of u s real gdp growth after five quarters rather than an immediate and sustained reduction in economic growth and a spike in cpi inflation after three quarters overall exogenous oil supply shocks made remarkably little difference for the evolution of the u s economy since the 1970s although they did matter for some historical episodes

auctions with resale markets an application to u s forest service timber sales when bidders anticipate an opportunity for resale trade the value of winning an auction is determined in part by the option values of buying and selling in the secondary market one implication is that a bidder s willingness to pay at an auction increases with the expected level of competition between resale buyers empirical evidence from auctions of timber contracts supports this prediction and rejects standard models that ignore resale the estimated effect is smaller after policy changes expected to diminish the prevalence of resale additional evidence supports the predicted presence of a common value element introduced by the resale opportunity

an econometric characterization of business cycle dynamics with factor structure and regime switching a dynamic factor model with regime switching is proposed as an empirical characterization of business cycles the approach integrates the idea of comovements among macroeconomic variables and asymmetries of business cycle expansions and contractions the first is captured with an unobservable dynamic factor and the second by allowing the factor to switch regimes the model is estimated by maximizing its likelihood function and the empirical results indicate that the combination of these two features leads to a successful representation of the data relative to extant literature this holds for within and out of sample and for both revised and real time data copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

were there regime switches in u s monetary policy working paper 2004 14 june 2004 abstract a multivariate model identifying monetary policy and allowing for simultaneity and regime switching in coefficients and variances is confronted with u s data since 1959 the best fit is with a model that allows time variation in structural disturbance variances only among models that also allow for changes in equation coefficients the best fit is for a model that allows coefficients to change only in the monetary policy rule that model allows switching among three main regimes and one rarely and briefly occurring regime the three main regimes correspond roughly to periods when most observers believe that monetary policy actually differed and the differences in policy behavior are substantively interesting though statistically ill determined the estimates imply monetary targeting was central in the early 80s but was also important sporadically in the 70s the changes in regime were essential neither to the rise in inflation in the 70s nor to its decline in the 80s jel classification e52 e47 c53 key words counterfactuals lucas critique policy rule monetary targeting simultaneity volatility model comparison i the debate over monetary policy change in an influential paper clarida gali and gertler 2000 cgg presented evidence that us monetary policy changed between the 1970 s and the 1980 s indeed that in the 70 s it was drastically worse they found that the policy rule apparently followed in the 70 s was one that when embedded in most stochastic general equilibrium models would imply non uniqueness of the equilibrium and hence vulnerability of the economy to sunspot fluctuations of arbitrarily large size their estimated policy rule for the later period on the other hand eliminated this indeterminacy these results are a possible explanation of the volatile and rising inflation of the 70 s and of its subsequent decline the cgg analysis has two important weaknesses one is that it fails to account for stochastic volatility us macroeconomic variables and particularly the federal funds rate have gone through periods of tranquility and of agitation with forecast error variances varying greatly from period to period ignoring such variation does not lead to inconsistent estimates of model parameters when the forecasting equations themselves are constant but it strongly biases toward a finding of changed parameters tests of the stability of the forecasting equations the other weakness is that the cgg analysis rests on powerful and implausible identifying assumptions they require that we accept that the response of the monetary authority to expected future inflation and output does not depend on the recent history of inflation money growth or output it is hard to understand why this should be so especially in the 70 s when monetarism was a prominent theme in policy debates congress was requiring reports from the fed of projected time paths of monetary aggregates and financial markets were reacting sensitively to weekly money supply numbers the requirement for existence and uniqueness of equilibrium in dynamic models is that the monetary policy rule show a more than unit response of interest rates to the sum of the logs of all nominal variables that appear on the right hand side of the reaction function if we force a particular measure of expected future inflation to proxy for all the nominal variables that actually appear independently in the reaction function we are bound to get distorted conclusions on the one hand because expected future inflation will be a noisy measure of the full set of nominal influences on policy we might get downward bias in our estimates from the usual errorsin variables effect on the other hand to the extent that expected future inflation like most expected future values shows less variation than current nominal variables we could find a mistaken scaling up of coefficients

how large are global fossil fuel subsidies summary this paper estimates fossil fuel subsidies and the economic and environmental benefits from reforming them focusing mostly on a broad notion of subsidies arising when consumer prices are below supply costs plus environmental costs and general consumption taxes estimated subsidies are 4 9 trillion worldwide in 2013 and 5 3 trillion in 2015 6 5 of global gdp in both years undercharging for global warming accounts for 22 of the subsidy in 2013 air pollution 46 broader vehicle externalities 13 supply costs 11 and general consumer taxes 8 china was the biggest subsidizer in 2013 1 8 trillion followed by the united states 0 6 trillion and russia the european union and india each with about 0 3 trillion eliminating subsidies would have reduced global carbon emissions in 2013 by 21 and fossil fuel air pollution deaths 55 while raising revenue of 4 and social welfare by 2 2 of global gdp

variability of durable and nondurable consumption evidence for six o e c d countries the author estimates consumption variability ratios for both durable and nondurable consumption using data for six oecd countries his methodology which relies on a long run restriction implied by the consumer s intertemporal budget constraint overcomes many of the problems inherent to previous approaches some important departures from the permanent income model emerge 1 nondurable consumption shows mild excess smoothness in the united states and italy and mild excess volatility in japan and france and 2 durable consumption shows extreme excess smoothness in all countries alternative factors capable of generating the differences in volatility across types of goods are discussed copyright 1993 by mit press

volatility and slow technology diffusion abstract i study the effects of uncertainty on technology adoption and thereby on volatility and growth i present an analytically tractable model in which i uncertainty about the returns to adoption delays technology diffusion and ii the mean and volatility of output growth are jointly determined in equilibrium i then test the key predictions of the model by studying the introduction of three major information and communication technologies icts computers internet and cell phones i find that countries with more volatile growth rates of real gdp per capita have higher time adoption lags and lower average growth as predicted by the model

speculation in standard auctions with resale in standard auctions resale creates a role for a speculator a bidder who is commonly known to have no use value for the good on sale we study this issue in environments with symmetric independent private value bidders for second price and english auctions the efficient value bidding equilibrium coexists with a continuum of inefficient equilibria in which the speculator wins the auction and makes positive profits first price and dutch auctions have an essentially unique equilibrium and whether or not the speculator wins the auction and distorts the final allocation depends on the number of bidders the value distribution and the discount factor speculators do not make profits in first price or dutch auctions

economic impacts of higher oil and gas prices the role of international trade for germany the analysis concentrates on direct and indirect price increases induced shifts in international trade and structural changes in the oil importing economies the paper at hand asks whether a stabilizing effect via international trade and domestic structural change on the gdp of oil importing countries can be observed if a permanent oil price increase occurs at least for germany structural change from consumer goods to investment goods industry and an improvement of international competitiveness limit negative impacts of increased energy prices analysis is based on the extensive and disaggregated global ginfors model and the detailed inforge model for the german economy

energy price regulatory price distortion and economic growth a case study of china energy prices are often distorted by government control which is justified on the grounds that such control will help mitigate the negative impact of price volatility from oil imports and thus positively affect the domestic economy in this paper we show in a two sector growth model that regulatory price distortion can negatively affect the economy and then based on the model we empirically estimate the impact of the price distortion on output growth in china using monthly time series data from 2005m1 to 2012m12 in contrast to the usual argument for regulatory control to mitigate price volatility we find that regulatory price distortion negatively affects output growth in china during both the short and long term because it is robust to different measures of output and price distortion hence the argument that using price regulation to protect economic growth is undermined and subsequently this study lends its support to energy price deregulation a market oriented energy price regime may improve the resilience of the domestic economy to global oil price shocks

money growth and inflation a regime switching approach abstract we develop a markov switching model for inflation with time varying transition probabilities inflation is characterized by two regimes high and low inflation and the probability of regime changes depends on money growth using bayesian techniques we apply the model to the euro area germany the us the uk and canada for data from the 1960s up to the present our estimates suggest that a smoothed measure of broad money growth corrected for real time estimates of trend velocity and potential output growth has important leading indicator properties for switches between inflation regimes thus money growth provides an important early warning indicator for risks to price stability

are bid preferences benign the effect of small business subsidies in highway procurement auctions abstract bid preferences in procurement auctions allow firms from an identifiable group an advantage in bidding against unfavored firms while economic efficiency is expected to fall as a result of bid preferences government procurement costs may either increase or decrease depending on the competitive response of favored and unfavored firms this paper uses data from california auctions for road construction contracts where small businesses receive a 5 percent bid preference in auctions for projects using only state funds and no preferential treatment on projects using federal aid i show that while firms bidding behavior matches theoretical predictions procurement costs are 3 8 percent higher on auctions using preferences the higher procurement cost in preference auctions is attributed to reduced participation by lower cost large firms structural estimates of latent firm costs are then used to evaluate how efficiency and the division of surplus between firms and the government are impacted by bid preferences firm profits are 3 1 percent lower under bid preferences however this is overwhelmed by the efficiency loss due to reduced large firm participation the efficiency loss conditional on firm participation is estimated to represent around 0 1 percent of overall procurement costs including the adverse effect of preferences on the participation of large firms increases the estimated efficiency loss to 3 6 percent which represents 27 cents for each additional dollar awarded to small businesses through the program counterfactual simulations indicate that if participation were instead inelastic to bid preferences the 5 percent bid preference would be close to the optimal level

efficiency in auctions with failed resale abstract the possibility of resale affects efficiency in multi object uniform price auctions with asymmetric bidders we theoretically show that when the exogenous probability of a resale market is sufficiently low final efficiency is lower than in an auction without resale our experimental design consists of four treatments that vary the probability that bidders participate in a resale market resale always increases efficiency compared to the auction allocation but it also induces demand reduction by high value bidders which reduces auction efficiency consistent with theory and in contrast to what is usually argued the possibility of resale may reduce final efficiency and changes in the probability of resale have a non monotonic effect on efficiency we also analyze bargaining chat data to provide insights into the functioning of resale markets

cross country evidence on the link between volatility and growth this paper presents empirical evidence against the standard dichotomy in macroeconomics that separates growth from the volatility of economic fluctuations in a sample of ninety two countries as well as a sample of oecd countries the authors find that countries with higher volatility have lower growth the addition of standard control variables strengthens the negative relationship the authors also find that government spending induced volatility is negatively associated with growth even after controlling for both time and country fixed effects copyright 1995 by american economic association

oil and the macroeconomy when prices go up and down an extension of hamilton s results in an important paper hamilton 1983 demonstrated a strong correlation between oil price changes and gross national product growth in u s data however his study pertained to a period in which all the large oil price movements were upward and thus it left unanswered the question whether the correlation persists in periods of price decline moreover the price variable he used was somewhat distorted by price controls in the 1970s this note investigates whether hamilton s results continue to hold when the sample is extended to include the recent oil market collapse and the oil price variable is corrected for the effects of price controls particular attention is given to the possibility of asymmetric responses to oil price increases and decreases as suggested in the structural employment literature loungani 1986 davis 1987 hamilton 1988 like hamilton i based my investigation on the gnp equation in sims s 1 980b six variable quarterly vector autoregressive model