using field experiments to address environmental externalities and resource scarcity major lessons learned and new directions for future research this article provides an overview of the use of field experiments in energy and resource economics i concentrate on two areas of study field experiments that i speak to the use of dynamic pricing plans to manage the use of electricity and water and ii explore the adoption of energy saving technologies viewed in its totality this work suggests that both neo classical factors such as prices or search costs and behavioural constructs such as salience or social norms influence the use of energy and water for academics the studies reviewed provide a deeper understanding of individual behaviour and the factors that drive the private provision of public goods for policy makers the studies reviewed provide a blueprint outlining ways to combine insights from neo classical and behavioural economics to manage energy water demand and mitigate externalities generated through their use

central bank independence a critical view from a developing country perspective abstract merely establishing an independent central bank may not bring about its professed benefits in developing countries with shallow financial markets where there is limited scope for a truly independent monetary policy the benefits of an independent central bank may be eroded by conflicts between fiscal and monetary policy and by inherent problems of central bank institutional design so that problems of dynamic inconsistency associated with monetary policy are not solved but merely transformed less developed countries wishing to establish a low inflation path should concentrate on instituting financial policy reforms that bolster opposition to inflation and institutional arrangements that force discipline on fiscal policy directly rather than indirectly through monetary policy

1 000 cash back the pass through of auto manufacturer promotions automobile manufacturers frequently use promotions involving cash incentives while payments are nominally directed to either customers or dealers the ultimate beneficiary of the promotion depends on the outcome of price negotiation we use program evaluation methods to compare the incidence of these two types of promotions customers obtain 70 to 90 percent of a customer rebate but only 30 to 40 percent of a dealer discount promotion a 500 difference for a typical promotion our leading hypothesis is that pass through rates differ because of information asymmetries customer rebates are well publicized to customers while dealer discount promotions are not

automatic bill payment and salience effects evidence from electricity consumption abstract the introduction of automatic bill payment abp programs in 2005 eliminated the need for consumers to view recurring bills if those enrolled in abp programs offered by utilities and other service providers forgo inspection of their recurring bills then price salience declines prices perceived by boundedly rational agents fall and consumption increases this paper considers the impact of such programs on consumer demand and welfare and empirically tests whether enrollment in such programs increases demand results show abp enrollment increases residential electricity consumption by 4 0 and commercial electricity consumption by as much as 8 1 enrollment in programs designed to smooth seasonal variation in monthly utility bills of low income customers results in 6 7 greater electricity use

green taxes can we protect the environment and improve the tax system at the same time on a cursory inspection public economics appears to provide a straightforward and compelling answer of yes to the question posed in the title to this paper as economists have long argued appropriately designed taxes can in principle at least efficiently restrain levels of polluting activities and in addition such taxes will generate revenues so that we can reduce rates on other forms of taxation that distort the functioning of the economy green taxes in short promise a double dividend they can both reduce excessive levels of pollution and increase the efficiency of the overall tax system at least so several economists have argued recently 17 20 but is this really so with the growing recognition of the enormous revenue potential of certain environmental taxes especially carbon taxes to address the problem of global warming public economists have returned to this question with a new round of research efforts directed both to understanding the properties of pollution taxes as revenue sources and to estimating their revenue potential and the magnitude of their effects on the economy and the newly emerging literature is producing some quite astonishing and very troubling findings in this paper i want to review this work and explore its implications when viewed in relation to some other research it appears to suggest that most forms of regulatory activity at least those that increase the costs of the regulated activities may have hitherto unappreciated costs of a stunning magnitude what many of us would have taken to be second order side effects of environmental and other regulatory policies can be of a magnitude that compromises to a significant extent their welfare enhancing properties having reviewed this body of work i wish also to explore some issues in the political economy of green taxes it is helpful to begin by briefly putting the issue in historical perspective

causal independence between energy consumption and economic growth in liberia evidence from a non parametric bootstrapped causality test abstract this contribution investigates causal interdependence between energy consumption and economic growth in liberia and proposes application of a bootstrap methodology to better reflect causality employment is incorporated as additional variable the study demonstrates evidence of distinct bidirectional granger causality between energy consumption and economic growth additionally the results show that employment in liberia granger causes economic growth and apply irrespective of the short run or long run evidence from a monte carlo experiment reveals that the asymptotic granger causality test suffers size distortion problem for liberian data suggesting that the bootstrap technique employed in this study is more appropriate given the empirical results implications are that energy expansion policies like energy subsidy or low energy tariff for instance would be necessary to cope with demand exerted as a result of economic growth in liberia furthermore liberia might have the performance of its employment generation on the economy partly determined by adequate energy therefore it seems fully justified that a quick shift towards energy production based on clean energy sources may significantly slow down economic growth in liberia hence the government s target to implement a long term strategy to make liberia a carbon neutral country and eventually less carbon dependent by 2050 is understandable

game theory for central bankers a report to the governor of the bank of england you asked me to review this book for you and try to digest what lessons it might hold for you i can well understand why you delegated this exercise to me you were no doubt already aware that alex cukierman ac is an eminent theoretician who has been applying currently fashionable game theoretic modeling techniques to the study of monetary policy and you may have had some concerns whether you would find the book user friendly in the rest of this review following both your instructions and my own inclinations i shall concentrate primarily upon the lessons and light that his work provides for monetary issues in general and for the conduct of central banking in particular neither you nor i have either the interest or the mathematical competence to assess how far this book represents an advance in the application or technical procedures of game theory as such in that respect the author will no doubt regard this as only a partial and one sided review of his work nevertheless ac hopes that you and other practitioners will read at least some part of the book and he has gone to considerable lengths to try to structure the book into modules of differing levels of technical difficulty and abstraction so that you will read the easy bits thus

the institutional foundations of monetary commitment a comparative analysis abstract this paper adopts an institutional perspective on the problem of designing governance structures for restraining monetary policy this perspective broadens the standard literature on central bank independence in several dimensions first although it recognizes that an independent central bank is one important institutional arrangement it also considers a much broader variety of institutional arrangements that have been used historically and today to restrain monetary policy second it considers not only the formal or legal institutional arrangements governing monetary policy but also the broader environment or institutional endowment in which those formal arrangements are embedded third this paper is concerned with the problem of enforcement given the institutional endowment in which formal monetary rules are implemented how likely are they to stick broadening the perspective in these ways frames the issue as a matching problem when it is recognized both that countries differ in the nature of their institutional endowments and that there is an array of possible formal arrangements that can be adopted to govern monetary policy the question then becomes how best to align the formal arrangements with the endowment in which they will be embedded case studies of diverse monetary policy making institutions in cote d ivoire argentina thailand and new zealand are used to motivate and illustrate the analysis

the political economy of policy credibility the new classical macroeconomics and the remaking of emerging economies the criterion of policy credibility is invoked with increasing frequency today by new classical development economists in debates over economic and institutional reform in developing and transitional countries the paper argues that the credibility criterion is used to privilege neoliberal economic policies and associated institutions the paper demonstrates that the credibility criterion is theoretically anti pluralist and politically anti democratic in this connection the paper argues that a policy s credibility is always secured endogenously through political and economic power rather than exogenously by virtue of the epistemiological status of the theory that promotes it the paper concludes by suggesting two alternative criteria by which policy regimes and the governance structure of monetary institutions could be adjudicated these alternative criteria are termed the principle of democratic credibility and the principle of fallibility copyright 2000 by oxford university press

shrouded attributes and information suppression evidence from the field we use eld and natural experiments in online auctions to study the revenue eect of varying the level and disclosure of shipping charges our main ndings are 1 disclosure aects revenues for low shipping charges a seller is better odisclosing 2 increasing shipping charges boosts revenues particularly when these charges are hidden and 3 the level and disclosure of the shipping charge have little eect on the number of bidders attracted to an auction

the economic and environmental impact of a carbon tax for scotland a computable general equilibrium analysis using a disaggregated energy economy environmental model we investigate the economic and environmental impact of a scottish specific carbon tax under three alternative assumptions about the use of the revenue raised by the tax revenues raised are not recycled within scotland revenues are used to increase general government expenditure or to reduce scottish income tax we find that by imposing a tax of 50 per tonne of co2 the 37 co2 reduction target is met with a very rapid adjustment in all three cases if the model incorporates forward looking behaviour however the adjustment is much slower if agents are myopic in addition the results of the model suggest that a carbon tax might simultaneously stimulate economic activity whilst reducing emissions and thus secure a double dividend but only for the case in which the revenue is recycled through income tax

the macroeconomics of populism in latin america by populism this paper refers to an economic approach that emphasizes growth and income redistribution and deemphasizes the risks of inflation and deficit finance external constraints and the reaction of economic agents to aggressive nonmarket policies it analyzes two instances of populism chile under allende and peru under garcia these experiences are described in detail not as a righteous assertion of conservative economics but as a warning that populist policies ultimately fail and always at a frightening cost to the groups they were supposed to benefit this paper explores the question of whether some variant of populist policies could succeed it suggests that populist policies could succeed if they stayed clear of foreign exchange constraints emphasized reactivation for a brief initial period and then shifted to growth policies most important expansionary policies must reflect awareness of capacity constraints and must rely for financing on an extremely orthodox fiscal policy and rigorous tax adminsitration the paper concludes by warning that imf style policies unconcerned with growth of social progress may establish financial stability in the short run but inevitably open the door to yet another round of destructive reaction in the form of populist policies

political influence on the central bank international evidence political influence on the central bank is measured bere by looking at the probability that a central bank governor will be replaced shortly after a political change of government the governor changes about half the time witbin six months of a nonconstitutional or other radical change of government a military coup or a restoration of democracy the governor is much less likely to change within six months following a routine change in the head of government about one fourth of the time in developing countries and one tenth in industrial countries these indicators vary across countries and correlate statistically with inflation and its variability and with real growth and real interest rates differences in the vulnerability of the central bank to political instability in political instability itself and in central bank turnover in nonpolitical periods seem to be a major part of the explanation for why developing countries have on average higher and more variable inflation than industrial countries do

how do urban households in china respond to increasing block pricing in electricity evidence from a fuzzy regression discontinuity approach abstract china is the largest electricity consumption country after it has passed the united states in 2011 residential electricity consumption in china grew by 381 35 12 85 per annum between 2000 and 2013 in order to deal with rapid growth in residential electricity consumption an increasing block pricing policy was introduced for residential electricity consumers in china on july 1st 2012 using difference in differences models with a fuzzy regression discontinuity design we estimate a causal effect of price on electricity consumption for urban households during the introduction of increasing block pricing policy in guangdong province of china we find that consumers do not respond to a smaller approximately 8 increase in marginal price however consumers do respond to a larger increase in marginal price an approximately 40 increase in marginal price induces an approximately 35 decrease in electricity use 284 kw h per month our results suggest that although the increasing block pricing could affect the behavior of households with higher electricity use there is only a limit potential to overall energy conservation

analysing households responsiveness towards socio economic determinants of residential electricity consumption in singapore abstract the research of household electricity use is still relatively new for singapore where apart from some government surveys and sparingly available papers not much has been done to understand the underlying socio economic determinants that affect residents energy demand here we seek to quantify price and income elasticities as well as provide reasonable justification for price asymmetry in singapore using a panel approach across dwelling types and geographical areas we find that households do not react much to prices and that price elasticities may decrease as income rises there is also some evidence of price asymmetry with surprising results putting responsiveness towards price decreases larger than price increases this points towards similar behavioural patterns with the rebound effect for household energy efficiency if found present in future studies our findings suggest that there will only be positive responses towards dynamic pricing and higher churn rates if more transparent information is provided on related cost savings when households are exposed to retail choice in the electricity market after full retail competition is introduced in 2018 in addition a large role will have to come from cultivating the young to engage in sustainable practices to achieve energy efficiency targets

environmental policy and double dividend in a transitional economy abstract although the environmental benefit from implementing a climate tax is usually realized the economic dividend still remains a controversial issue warranting further research this is because the impact of an environmental policy on an economy wide system will depend on factors that differ from one region to the next in this paper we develop a static cge model for liberia that is capable of analyzing both a uniform and a partial carbon tax policy under the uniform policy instituted to ensure mitigation in the range of 20 50 an economic dividend is found for energy employment and welfare in particular energy consumption increases by between 5 and 15 5 respectively interestingly under a second best policy which exempts economically strategic sectors from the tax no economic dividend is found for all three variables this time energy use declines by between 2 and 9 these suggest that a uniform environmental tax policy is a more viable option for liberia in particular as it does not only generate economic dividend for employment and welfare it also incentivizes liberia s adoption and use of renewable energy technologies in general based on the results obtained further conditions for the feasibility of a double dividend are proposed

seigniorage and political instability the importance of seigniorage relative to other sources of government revenue differs markedly across countries this paper tries to explain this regularity by studying a political model of tax reform the model implies that countries with a more unstable and polarized political system will have more inefficient tax structures and thus will rely more heavily on seigniorage this prediction of the model is tested on cross sectional data for seventy countries the authors find that after controlling for other variables political instability is positively associated with seigniorage copyright 1992 by american economic association

can african countries efficiently build their economies on renewable energy abstract the translog production model is estimated to provide insights on the effectiveness of renewable energy for africa the analysis shows that capital labor renewable energy and nonrenewable energy drive output in african countries with renewable energy being a higher driver of growth than the conventional fossil fuels over the sample period this finding is reflective of the fact that renewable sources like wind hydro and solar account for a greater share of power generation in most african countries output elasticities computed for both energy types reaffirm the results and suggest that eastern and central african countries are more renewable energy dependent than the other three regions in addition technological progress is driven mainly by the efficiency with which various factors and energy inputs are used while africa has great potential of facing out conventional fossil energy the discussion provided in this study suggests that such transition is limited in practice due to issues of scale economics and sitting problems

a new carbon tax in portugal a missed opportunity to achieve the triple dividend in 2014 the portuguese government appointed a commission for environmental tax reform that formulated a carbon tax proposal designed to achieve three dividends to help portugal meet the european union s target for emissions reductions by 2030 to boost long term employment and gdp above their pre carbon tax levels and to strengthen public finances by lowering public indebtedness a key feature of this proposal was a judicious set of mixed strategies to recycle all carbon tax revenues back into the economy in this note we show how the carbon tax that the portuguese parliament eventually approved deviated from such guidelines and ultimately failed to achieve the triple dividend we argue that authorities need to quickly amend the existing legislation to avoid this misguided attempt turning into a missed opportunity to improve environmental macroeconomic and fiscal outcomes

domestic capacity and the implementation gap in regional trade agreements regional trade agreements rtas all over the world share many of the same institutional features from dispute settlement mechanisms to legalized language to escape clauses and espouse many of the same goals but many of those features are unimplemented in different contexts across the world many observers have pointed to an implementation gap in rtas most of which promise much but deliver relatively little but offer no explanation for this gap i argue that this is explained by domestic capacity in countries where the rule of law is weak and infrastructure is insufficient and particularly when those elements interact it is difficult to implement trade agreements this article utilizes expert survey data to demonstrate that member states with poor infrastructure and little respect for the rule of law are unable to carry out the obligations they agree to in their trade agreements domestic capacity both physical and institutional can explain the implementation gap between what agreements promise and wh

carbon taxation in russia prospects for a double dividend and improved energy efficiency russia is not only one of the world s major sources of carbon based energy coal oil and gas but is also one the most intensive users of energy furthermore russia accounts for a disproportionately large share of global carbon dioxide emissions some 5 to 6 of global carbon dioxide emissions eia 2011a it has been estimated world bank 2008 that russia could reduce its use of primary energy use by 45 with consequent economic and environmental benefits high energy and carbon intensity of the russia economy is inter alia explained by low energy prices due to high export taxes as well as administrative regulation of domestic prices of gas and electricity and low environmental taxes carbon taxes are one such pigouvian tax and they would address concerns on several fronts simultaneously in the short to medium term they would inter alia lead to lower ghg emissions and encourage the diffusion of more energy efficient technologies in the longer term the increased cost of energy inputs is expected to induce technological progress in this analysis the macroeconomic and sectoral effects of carbon taxes on the russia economy are examined this analysis addresses the following objectives i to test the double dividend hypothesis under perfect and imperfect competition in output markets to analyse ii the incidence of carbon taxes iii impacts on sectoral competitiveness iv effects on income equity and v interactions of carbon taxes with other taxes a computable single country multi sector comparative static cge model is employed russland verfugt nicht nur uber einen der grosten vorrate an kohlenstoffbasierter energie wie kohle rohol und gas sondern ist auch einer der grosten energieverbraucher daruber hinaus ist russland fur einen uberproportional grosen anteil von kohlendioxid emission etwa 5 bis 6 der weltweiten kohlendioxidemission verantwortlich mit der einfuhrung einer kohlendioxidsteuer konnten gleichzeitig unterschiedliche wirkungen erzielt werden kurz und mittelfristig wurden kohlenstoffsteuern sowohl zu einer reduzierung von treibhausgasemissionen als auch zur einfuhrung von energieeffizienteren technologien fuhren langfristig wird erwartet dass hohe energiekosten den anreiz zur entwicklung und zur investition in energiesparenden technischen fortschritt erhohen die vorliegende arbeit analysiert und bewertet die makrookonomischen und sektoralen auswirkungen einer einfuhrung von kohlenstoffsteuern auf die russische wirtschaft die ziele der arbeit bestehen darin die hypothese der doppelten dividende fur den fall des vollkommenen und des unvollkommenen wettbewerbs auf gutermarkten zu uberprufen und die inzidenz einer kohlenstoffsteuer ihre auswirkungen auf die sektorale wettbewerbsfahigkeit ihre auswirkungen auf die einkommensverteilung und die interaktion von kohlenstoffsteuern mit anderen steuern zu analysieren und zu bewerten als methodischer ansatz wurde ein single country und multi sektor model gewahlt

shrouded attributes consumer myopia and information suppression in competitive markets bayesian consumers infer that hidden add on prices e g the cost of ink for a printer are likely to be high prices if consumers are bayesian firms will not shroud information in equilibrium however shrouding may occur in an economy with some myopic or unaware consumers such shrouding creates an inefficiency which firms may have an incentive to eliminate by educating their competitors customers however if add ons have close substitutes a curse of debiasing arises and firms will not be able to profitably debias consumers by unshrouding add ons in equilibrium two kinds of exploitation coexist optimizing firms exploit myopic consumers through marketing schemes that shroud high priced add ons in turn sophisticated consumers exploit these marketing schemes it is not possible to profitably drive away the business of sophisticates it is also not possible to profitably lure either myopes or sophisticates to nonexploitative firms we show that informational shrouding flourishes even in highly competitive markets even in markets with costless advertising and even when the shrouding generates allocational inefficiencies

economic analysis of the climate pledges of the copenhagen accord for the eu and other major countries abstract this article uses the world gem e3 computable general equilibrium model to assess the economic consequences of the climate copenhagen accord the model allows analyzing the macroeconomic costs in terms of gdp the change in employment as well as the impacts on production of specific energy intensive sectors various 2020 climate scenarios are evaluated depending on the ghg mitigation pledges we find that the cost for the developed countries is around 0 5 of gdp in 2020 for the more ambitious pledges whereas the gdp effects are more heterogeneous across developing countries and russia reflecting the different pledges and the assumptions in the reference scenario across these countries further the article explores whether there is a form of double dividend in the eu when the revenues from auctioning or taxation of ghg emissions are used to reduce the social security contributions of employees we conclude that gdp and employment perform better compared to the free allocation of permits when more sectors are subject to auctioning or ghg taxes and the additional government revenues are used to reduce the cost of labour

central bank independence and macroeconomic performance some comparative evidence this note uses information on a sample of sixteen oecd countries to assess the relationship between central bank independence and macroeconomic performance as previous work suggests politically controlled central banks are more likely to pursue policies that lead to high and variable inflation however the authors find little evidence that political control of central bank policy has any impact on measures of the level or variability of growth unemployment or the ex ante real interest rate copyright 1993 by ohio state university press

energy taxation and the double dividend effect in taiwan s energy conservation policy an empirical study using a computable general equilibrium model abstract faced with pressure from greenhouse gas reductions and energy price hikes the taiwan government is in the process of developing an energy tax regime to reflect environmental external costs and effectively curb energy consumption as well as mitigate co2 emissions through an adequate pricing system this study utilizes a cge model to simulate and analyze the economic impacts of the draft energy tax bill and its complementary fiscal measures under the assumption of tax revenue neutrality the use of energy tax revenue generated for the purpose of reducing income tax is the best choice with double dividend effects since it will effectively stimulate domestic consumption and investment and consequently mitigate the negative impacts of the distortionary tax regime the double dividend effect is less significant however when the supplementary measures being used are for government expenditure nevertheless all supplementary measures have effectively reduced energy consumption which means they have delivered at least the first dividend in the sense of co2 emissions control it has been verified in this study that having adequate public finance policy measures is the key to realizing the double dividend effect

the double dividend hypothesis in a cge model specific factors and the carbon base abstract we use a computable general equilibrium model to empirically examine the double dividend dd hypothesis using the gtap model data for australia we examine three environmental taxes on the production of energy goods following bento and jacobsen 2007 we examine the role played by specific factors in the production of energy goods our results provide support for the existence of a strong dd in australia when revenue is recycled through reductions in consumption taxes the strong dd is larger when the share of specific factors is higher and is much more pronounced when carbon taxes are charged on the production origin based accounting rather than the usage destination based accounting of carbon these results draw attention to the importance of the definition of the carbon base and have implications for the scale of carbon leakage

carbon taxation and market structure a cge analysis for russia abstract russia is one of the world s major sources of carbon based energy as well as one its most intensive users introducing carbon taxes can lead to a reduction in emissions and encourage investment in energy efficiency we investigate the economic effects of carbon taxes on the russian economy under perfect competition and a cournot oligopoly in output markets the main findings are i substituting carbon taxes for labour taxes can yield a strong double dividend in russia however welfare gains strongly depend on the labour supply elasticity and elasticities of substitution between capital labour and energy ii under the assumption of a cournot oligopoly with homogenous products and symmetric firms in the markets for natural gas petroleum and chemical products metals and minerals welfare costs of the environmental tax reform can be higher than under perfect competition this is because introducing carbon taxes leads to a reduction in already sub optimal output thereby exacerbating pre existing distortions arising from imperfect competition iii furthermore increases in energy costs can result in higher mark ups in some markets because of less competition resulting from firms exit

energy efficiency and household behavior the rebound effect in the residential sector over the years various efficiency policies have been designed and implemented to reduce residential energy consumption however it is very common that the policy expectations that are based upon engineering calculations do not come true the widely accepted explanation for the gap between expectation and the realization is the change of household behavior as the energy efficiency gains change the perceived cost of energy services and thereby generate shifts in consumption patterns the rebound effect the real controversy about the rebound effect lies in the identification of its magnitude in this paper we estimate the rebound effect in residential energy consumption by comparing the actual gas consumption levels with the ex ante predictions within a sample of well over 600 000 dutch dwellings and households we find a significant deviation between the engineering predictions and the households actual energy consumption a difference which varies by ownership wealth income and the actual gas use intensity our results show a rebound effect of 26 7 percent among home owners and 41 3 percent among tenants moreover we find that these effects are greatest among the lower income wealth groups and among households that tend to use more gas than average

optimal green tax reforms yielding double dividend in an stylized endogenous growth economy with a negative externality created by co2 emissions and in which abatement activities are made by private firms we find a wide range of dynamically feasible green tax reforms yielding the double dividend without any need to assume a complex production structure or tax system or a variety of externalities in production as a remarkable finding we obtain certain scenarios in which increasing the emissions tax up to the pigouvian level and removing completely the income tax is dynamically feasible and also it is the second best reform hence as a difference to previous literature in these scenarios the first best tax mix is implementable allowing for the elimination of both environmental and non environmental inefficiencies our result arises because of the consideration of public debt issuing and the management of the government budget balance with an intertemporal perspective the result is obtained for an intermediate range of environmental bearing in preferences the valid range being contingent on the pre existing income tax rate the type of tax reform that we propose could also be implemented for different energy taxes

dynamic corrective taxes with time varying salience abstract economies across the globe are becoming increasingly cashless and many payment systems have become automated driving a temporal wedge between consumption and payment and generally making the costs of consumption intermittently salient since this inconsistent price salience alters demand elasticities it is a particular concern for goods that generate externalities and the price based policies deployed to address them this paper derives optimal dynamic corrective taxes for suboptimal and persistent consumption decisions these taxes depend on the agent s ability to commit to a future consumption path we also characterize a second best constant tax and the excess burden from time invariant tax rates when calibrated to u s residential electricity consumption the model shows that the second best constant tax is more than twice the marginal external cost of carbon emissions

replacing a disobedient central bank governor with a docile one a novel measure of central bank independence and its effect on inflation this paper identifies two mechanisms that empirical papers on central bank independence assume to be embedded in the yardstick measure of turnover rate of central bank governor i the removal of a governor who is perceived as a challenger by the government and ii whether his her replacement is an ally of the government we identify the first mechanism with premature exits of central bankers and the second by examining whether or not the incoming governor is drawn from the ranks of the executive branch of the government we find that only premature exits and replacements with government allies increase inflation

oil price fluctuation volatility spillover and the ghanaian equity market implication for portfolio management and hedging effectiveness abstract this study attempts to contribute to the literature on stock markets and energy prices by examining the dynamic volatility and volatility transmission between oil and ghanaian stock market returns in a multivariate setting using the recently developed var garch var agarch and dcc garch frameworks in turn the models results are used to compute and analyze the optimal weights and hedge ratios for oil stock portfolio holdings for comparison purposes and to put the paper more in the perspective of west africa the nigerian stock market is also included in the analysis our findings point to the existence of significant volatility spillover and interdependence between oil and the two stock market returns while spillover effects are stronger for nigeria the transmission of volatility is much more apparent from oil to stock than from stock to oil in the case of ghana also the study demonstrates evidence of short term predictability in oil and stock price changes through time and reveals that conditional volatility changes more rapidly as result of substantial effects of past volatility rather than past news shocks for all market returns moreover we show that there is a slightly more effective hedge in the two stock markets under the dcc garch framework our preferred model compared to the other two models although hedging effectiveness is much greater for ghana on the whole our findings for optimal hedge ratios are consistent with other studies and particularly the view that oil assets should be an integral part of a diversified portfolio of stocks and suggest that a better understanding of volatility links is crucial for portfolio management in the presence of oil price risk finally the existence of multivariate asymmetric effects and dynamic conditional correlations as revealed by the var agarch and dcc garch models make it clear that the assumptions of symmetric effects and constant conditional correlations are not supported empirically

central bank behavior a positive empirical analysis abstract the central bank is analyzed as a utility maximizing unit acting in the framework of a politico economic model it derives utility from keeping the price level stable and is constrained by government the structure of the economy and the political commitment to stable exchange rates it uses a satisficing strategy concentrating on keeping conflicts with government below a certain level in the case of serious conflict the central bank follows the policy directions undertaken by government but with a time lag the complete model comprising endogenous consumer voters government and central bank is econometrically tested for germany with good results

delving into liberia s energy economy technical change inter factor and inter fuel substitution abstract the industrial energy mix of liberia is dominated by petroleum products this has generated serious environmental problems contributing immensely to co 2 emissions and other pollutants in the country this study has attempted to investigate the potential for inter factor and inter fuel substitution between capital labor petroleum and electricity in liberia by employing a translog production and cost function approach ridge regression procedure has been adopted to estimate the parameters of the function due to multicollinearity in the data estimation results show that all inputs are substitutes these suggest that price based policies coupled with capital subsidy programs can be adopted to redirect technology use towards cleaner energy sources like electricity hence retaining the ability to fuel the economy while also mitigating greenhouse gas ghg emissions substitution between energy and labor and energy and capital implies that removal of price ceilings on energy in liberia would tend to reduce energy use and increase capital and labor intensiveness notwithstanding the study seems to show no evidence of convergence in relative technological progress of the four inputs implying that petroleum will continue to play a dominant role in the energy consumption mix of liberian industry while labor investment will continue to outweigh capital inputs finally the findings of this study provide general insights and underscore the importance of policies that focus on installed capacity of renewable electricity energy intensity targets as well as merger of enterprises

the impacts of carbon tax and complementary policies on chinese economy under the pressure of global warming it is imperative for chinese government to impose effective policy instruments to promote domestic energy saving and carbon emissions reduction as one of the most important incentive based policy instruments carbon tax has sparked a lively controversy in china this paper explores the impact of carbon tax on chinese economy as well as the cushion effects of the complementary policies by constructing a dynamic recursive general equilibrium model the model can describe the new equilibrium for each sequential independent period e g one year after carbon tax and the complementary policies are imposed and thus describe the long term impacts of the policies the simulation results show that carbon tax is an effective policy tool because it can reduce carbon emissions with a little negative impact on economic growth reducing indirect tax in the meantime of imposing carbon tax will help to reduce the negative impact of the tax on production and competitiveness in addition giving households subsidy in the meantime will help to stimulate household consumptions therefore complementary policies used together with carbon tax will help to cushion the negative impacts of carbon tax on the economy the dynamic cge analysis shows the impact of carbon tax policy on the gdp is relatively small but the reduction of carbon emission is relatively large

on the impossibility of central bank independence four decades of time and intellectual inconsistency the intellectual justification for modern central banking time inconsistency celebrated its fortieth anniversary in 2017 alongside the cambridge journal of economics however the key progeny of the time inconsistency literature central bank independence has fundamental flaws that have been thus far neglected in mainstream research in the first instance the argument for independence relies on a utilitarian rather than institutional analysis one that neglects the genesis of central banks and their relation to other institutions within a country second central bank independence neglects the complex interdependencies of the global monetary and financial system applying an institutional lens to the concept of central bank independence i conclude that independence fails under the reality of globalization as much as it does in a domestic context with central banks reliant on all manner of political institutions they are never really independent operationally or in terms of policy

politics and business cycles in industrial democracies politics alberto alesina influences from political competition on macroeconomic policy are often thought to be a source of economic fluctuations politicians are described as being driven by two not mutually exclusive main motivations they want to be reelected and they harbour political or ideological biases when such theories are confronted with actual cycles in a number of industrial countries the pattern of inflation unemployment output and budget deficits indicates that partisan policy making is a fairly widespread phenomenon with more limited evidence that electoral preoccupations result in major fluctuations the combination of partisanship and electoral cycles may easily result in socially undesirable outcomes in particular the degree of politico institutional stability and the independence of the central bank have a bearing on macroeconomic outcomes these observations raise a number of important questions about the design of political institutions

political and monetary institutions and public financial policies in the industrial countries institutions and policies vittorio grilli donato masciandaro and guido tabellini why do countries as similar as the industrialized oecd countries go through such different experience in terms of public deficits and debts or in terms of inflation the answer cannot come from macroeconomic policy responses to different disturbances nor from the principles of optimal taxation but rather from politics this article focuses on the role that particular institutions exert in providing constraints and incentives which shape the actions of policymakers the electoral process and political traditions affect the ability of governments to deal with deficits and mounting debts what seems to matter most it is found is the effect of the durability of governments governments with short horizons act myopically and never quite tackle the hard choices such governments typically exist in countries with an electoral system favouring many small political parties central bank independence promotes low inflation with no apparent costs in terms of real economic performance irrespective of the political institutions in fact there is no link between monetary and fiscal discipline these findings carry powerful implications for countries facing high indebtedness or stubborn inflation but also for the construction of the european economic and monetary union

responsiveness to energy price changes when salience is high residential natural gas demand in ukraine abstract despite its importance for policy purposes evidence about the price elasticity of natural gas demand in the residential sector is very limited and based on inference from situations with modest variation in prices we focus on a locale and time when price changes were extreme and salient to consumers namely ukraine between 2013 and 2017 we exploit the tariff reforms and detailed micro level household consumption records to assess whether consumers adjust their consumption in response to the rate changes and estimate the price elasticity of the demand for natural gas to isolate behavior attention is restricted to those households that made no structural energy efficiency upgrades to their homes thus keeping the stock of gas using capital fixed we find that households are capable of reducing consumption even without installing insulation or making any other structural modifications to their homes the price elasticity is about 0 16 wealthier households people living in multifamily buildings and heavy users have more inelastic demands households reduced consumption even when they received government assistance this and the fact the demand is inelastic especially for wealthier households bode well for tariffs or energy tax schemes where wealthier households subsidize the consumption of the poorer ones

are bilateral remittances countercyclical by putting together a relatively large data set on bilateral remittances of emigrants this paper is able to shed light on the important hypothesis of smoothing the smoothing hypothesis is that remittances are countercyclical with respect to income in the worker s country of origin the recipient of the remittance while procyclical with respect to income in the migrant s host country the sender of the remittance the econometric results confirm the hypothesis this affirmation of smoothing is important for two reasons first it suggests that remittances should be placed on the list of criteria for an optimum currency area second it brings into doubt plans by governments in some developing countries to harness remittances for their own use in that government spending in these countries generally fails the test of countercyclicality which remittances pass

information provision and consumer behavior a natural experiment in billing frequency abstract in this study i estimate a causal effect of increased billing frequency on consumer behavior i exploit a natural experiment in which residential water customers switched exogenously from bimonthly to monthly billing customers increase consumption by 3 5 5 in response to more frequent information this result is reconciled in models of price and quantity uncertainty where increases in billing frequency reduce the distortion in consumer perceptions using treatment effects as sufficient statistics i calculate consumer welfare gains equivalent to 0 5 1 of annual water expenditures heterogeneous treatment effects suggest increases in outdoor water use

climate change policy s interactions with the tax system abstract this paper presents a range of insights from recent literature on how climate change policies and other environmental policies interact with the fiscal system it explores four issues associated with fiscal interactions first it examines how these interactions influence the prospects for a double dividend both an environmental improvement and a reduction in the costs of the tax system second it analyzes how the use of revenues from a carbon tax or from a cap and trade system involving auctioned emissions allowances influences these policies economic costs third it addresses the question whether carbon taxes or cap and trade programs represent more efficient sources of government revenue than other more traditional revenue sources such as income sales or payroll taxes finally it analyzes how fiscal interactions affect the choice between co 2 emissions pricing instruments carbon taxes and cap and trade and other climate policy instruments

comparing climate policies to reduce carbon emissions in china new huadu business school research fund national social science foundation of china 12zd059 shandong social science planning fund program 12djjj12 independent innovation foundation of shandong university iifsdu 2012gn038 ministry of education research of social sciences china postdoctoral science foundation 2013m530309

implications of rational inattention abstract a constraint that actions can depend on observations only through a communication channel with finite shannon capacity is shown to be able to play a role very similar to that of a signal extraction problem or an adjustment cost in standard control problems the resulting theory looks enough like familiar dynamic rational expectations theories to suggest that it might be useful and practical while the implications for policy are different enough to be interesting

testing the behavior of rationally inattentive consumers in a residential water market abstract rationally inattentive consumers tend to apply simplified heuristics when making decisions we test the hypothesis of rational inattention in the context of residential water usage where water bills typically account for a small fraction of household expenditures and only attract casual attention we begin by rigorously testing whether or not residential water customers exhibit evidence of rational inattention we then propose a heuristic water demand model to explore the decision making of rationally inattentive consumers and validate the model by comparing the model with the discrete continuous choice model on attentive and fully informed decision makers in out of sample predictions