beyond carbon pricing the role of banking and monetary policy in financing the transition to a low carbon economy it is widely acknowledged that introducing a price on carbon represents a crucial precondition for filling the current gap in low carbon investment however as this paper argues carbon pricing in itself may not be sufficient this is due to the existence of market failures in the process of creation and allocation of credit that may lead commercial banks the most important source of external finance for firms not to respond as expected to price signals under certain economic conditions banks would shy away from lending to low carbon activities even in the presence of a carbon price this possibility calls for the implementation of additional policies not based on prices in particular the paper discusses the potential role of monetary policies and macroprudential financial regulation modifying the incentives and constraints that banks face when deciding their lending strategy through for instance a differentiation of reserve requirements according to the destination of lending may fruitfully expand credit creation directed towards low carbon sectors this seems to be especially feasible in emerging economies where the central banking framework usually allows for a stronger public control on credit allocation and a wider range of monetary policy instruments than the sole interest rate

an aggregate model of technical change a simple aggregate growth model is presented in which technology is described by a probability distribution from which new plants are drawn especially good draws are viewed as technological innovations that shift the mean of the following period s plant distribution function the resulting technical change is endogenous random and cumulative in contrast to conventional growth models the model s growth path displays nonstationary drift rather than deterministic trend and the long run per capita growth rate has positive rather than zero sensitivity to the model s saving parameter

bankable permits for the control of environmental pollution abstract intertemporal trading of emission permits banking is often identified as one of three promising market mechanisms for controlling pollution along with averaging and trading surprisingly the efficiency properties of permit banking systems have not been investigated using a simple optimal control model this paper investigates firms incentives for banking or borrowing emission permits and compares the emission and output streams firms would choose with the socially optimal solution we find that in many cases firms will suboptimally choose excessive damage and output levels in early periods and correspondingly too few in later periods if given the opportunity to freely move emissions between time periods we propose a simple alternative trading scheme we term modified banking that counters this problem and should be no more difficult for an environmental authority to implement than a straigth banking system

collective labor supply and household production this paper emphasises the importance of incorporating household production into the collective model of the household and considers how and to what extent the results of chiappori 1992 can be extended to this case this abstract was borrowed from another version of this item

neither crowding in nor out public direct investment mobilising private investment into renewable electricity projects abstract rapid structural change towards a low carbon energy supply requires significant additional investments into innovative but high risk low carbon technologies mobilising greater private investments requires applying the right policy instruments but while fiscal measures and regulation have been well researched systematic quantitative evidence about the effect of public direct investment is lacking absent empirical evidence contradictory theoretical arguments claim that such public co investments either crowd out or crowd in private investors in this paper we show that the macroeconomic concept of crowding out in is inapplicable to sectoral studies such as of renewable electricity instead both neoclassical microeconomics and evolutionary economics suggest public direct investment to have a positive effect due to either externalities or market creation effects we also provide the first quantitative estimate of the effect of public direct investment on private investment into renewable electricity technologies for 17 countries in the period 2004 2014 using fgls and static and dynamic gmm estimators we find that public investments not only have a positive but also consistently the largest effect on private investment flows relative to feed in tariffs taxes and renewable portfolio standards in general and for wind and solar technologies separately implications for policy aimed at accelerating the low carbon transition are discussed

assessing green energy economy stimulus packages evidence from the u s programs targeting renewable energy the paper provides a comprehensive empirical assessment of american stimulus policies aimed at renewable energy re technologies we use an indicator based methodology to assess progress with respect to energy environmental and socio economic issues resulting from re stimulus programs linked to the american recovery and reinvestment act and review and analyze the emerging but scattered literature overall our results indicate that stimulus programs have had a positive effect on the re sector this is despite the fact that they were originally planned to work in combination with a greenhouse gas cap and trade system which has not been implemented from the methodological perspective our approach is resource intensive and our analysis highlights numerous challenges notably related to causality and additionality despite these limitations this research improves our understanding of the broad effects and impacts of re stimulus programs

introducing household production in collective models of labor supply in a recent paper chiappori 1992 i proposed a model of labor supply based on a collective representation of household behavior in this framework each household member is characterized by his or her own utility function and decisions are only assumed to result in pareto efficient outcomes i showed that these simple assumptions were sufficient to i generate testable restrictions on labor supply functions and ii recover individual preferences and the outcome of the decision process from observed behavior for the sake of simplicity the results were derived in the simplest possible case namely a static labor supply model with private consumptions such a framework was appropriate only for the purpose of the paper that is a preliminary exploration of the properties of collective models of labor supply the next step is to evaluate the robustness of the results to various extensions of the basic model this opens a general research program and generates a wide range of particular problems that it is hoped will be considered in the future among the most serious shortcomings of the 1992 model is the absence of household production as in most labor supply models agents were assumed to divide their time between market activities and leisure as apps and rees 1997 in this issue very rightly point out in their comment the absence of domestic production is far from innocuous as soon as welfare issues are considered for instance a low level of market labor supply will automatically be interpreted as a large consumption of leisure whereas it may in fact reflect the specialization of one of the members in domestic

unpacking the public private partnership revival abstractthis paper examines the recent resurgence of interest in public private partnerships ppps to provide infrastructure in developing countries first the paper demonstrates that there has been a revival of support for private sector participation in infrastructure second the paper argues that this revival differs from earlier attempts to increase the involvement of the private sector in public service provision in a number of respects in particular the current support for ppps is related to an increased availability of global financial capital third the paper considers the implications of this distinct feature of the revival for development

technology diffusion and the rate of technical change the way in which the process of technical change is formulated at the macroeconomic level implies generally speaking immediate diffusion or adoption of new technologies whether primarily disembodied in nature accounting for any shift in the production function as in the early technology index formulations or embodied in new investment as in the subsequent vintage growth models technical progress will be identified with advances in inventiveness or best practice technologies at first this might well seem the most appropriate way to separate out the contribution of the technology production factor from the other production factors from a straightforward economic point of view though advances in technology or best practice productivity levels are only relevant to the extent that they have been translated in actual achieved productivity levels the issue is a well known one in most empirical research on the measurement of the contribution of technical change to economic growth and has received much attention in the recent productivity slowdown debate denison i 979 griliches i980 nordhaus i980 and i 98i in particular there it was generally agreed that other technology factors including a slowdown in the rate of the spread of technology to use kendrick s i 98i term were more important than the actual decline in r d expenditure in contributing to the overall slowdown in productivity the importance of the diffusion of innovation rather than the mere occurrence of innovations is of course the major factor underlying most of the microeconomic diffusion literature the fundamental reasons for delay in adopting the so called retardation factors have been found to relate both to uncertainty and lack of information about the new technology and the often proprietary nature of the new technology since griliches i957 and mansfield s i96i seminal papers most of this literature has focused on the theoretical arguments underlying the traditional s shaped epidemic diffusion curve in more recent research particularly the mechanical static nature of these diffusion models has been questioned and various alternative diffusion models suggested including dynamic supply models metcalfe 1981 i982 stoneman i983 in which both the economic characteristics of the innovation and its diffusion environment have been made endogenous to the diffusion process these latter models in particular allow for an interpretation of the diffusion of technology in a broader macroeconomic growth and structural change perspective

the evolution of economic institutions as a propagation process based on some notions from recent game theoretic approaches to explain the emergence of institutions a model is put forward which implies some generalizations and extensions first the evolution of institutions is interpreted as a diffusion process this interpretation provides a general formal framework to cover both the case of strategic and that of non strategic interaction second different forms of interdependency effects between the individuals involved are identified as making the crucial difference between the case where institutions emerge spontaneously in an unorganized form and the case where they do not

investment risks in power generation a comparison of fossil fuel and renewable energy dominated markets abstract due to their high capital intensity weather dependent renewable energies res such as solar and wind face considerable investment risks in power markets in addition their uncertain production volumes also affect the investment risks of other plant types through the impact on power prices and residual demand increasing res shares thus potentially increase overall investment risks in power markets which many analysts consider to be a potential problem against this background this paper compares investment risks of different technologies in markets with increasing shares of variable res it further analyses how generation mixes are affected by these investment risks if the risks are evaluated on a stand alone basis or in a plant portfolio context of a private firm for this purpose a stylized investment and dispatch model is used to conduct monte carlo simulations from which risk measures are derived the results show that capital intensive res face the highest stand alone risks since their profits are most affected by the power price risk however the results further indicate that the stand alone risks of variable res decrease with their share in the market because of a negative correlation of output and price risk in addition res have a risk benefit in firm plant portfolios in terms of constituting a hedge against losses of fossil fuel plants this positive portfolio effect however rapidly decreases and becomes negative with increasing res shares in the market

explaining the attacker s advantage technological paradigms organizational dynamics and the value network abstract understanding when entrants might have an advantage over an industry s incumbent firms in developing and adopting new technologies is a question which several scholars have explained in terms of technological capabilities or organizational dynamics this paper proposes that the value network the context within which a firm competes and solves customers problems is an important factor affecting whether incumbent or entrant firms will most successfully innovate in a study of technology development in the disk drive industry the authors found that incumbents led the industry in developing and adopting new technologies of every sort identified by earlier scholars at component and architectural levels competency enhancing and competency destroying incremental and radical as long as the technology addressed customers needs within the value network in which the incumbents competed entrants led in developing and adopting technologies which addressed user needs in different emerging value networks it is in these innovations which disrupted established trajectories of technological progress in established markets that attackers proved to have an advantage the rate of improvement in product performance which technologists provide may exceed the rate of improvement demanded in established markets this mismatch between trajectories enables firms entering emerging value networks subsequently to attack the industry s established markets as well

sources procedures and microeconomic effects of innovation fabio arcangeli paul david frank engelman christopher freeman massimo moggi richard nelson luigi orsenigo nathan rosenberg michele salvati g n von tunzelman two anonymous referees and the participants at the meeting of the committee on distribution growth and technical progress of the italian national research council cnr rome november 16 1985 have helped with various redraftings a particularly grateful acknowledgment is for the insightful and patient help of moses abramovitz this work has been undertaken at the science policy research unit spru university of sussex as part of the research program of the designated research centre sponsored by the economic and social research council esrc earlier support to the research that led to this paper by the italian national research council cnr is also gratefully acknowledged the statistical research has been undertaken with the assistance of stephano brioschi ilaria fornari and giovannu prennushi

industrial districts old wine in new bottles harrison b 1992 industrial districts old wine in new bottles reg studies 26 469 483 according to the theory of industrial districts a new wave of economic growth is being led in a number of regions in europe north america and east asia by spatially concentrated networks of mostly small and medium sized enterprises often using flexible production technology and characterized by extensive local interfirm linkages does this amount to a re emergence of the dominance of what urban and regional economists call agglomeration economies over the well known pressures on business to spatially disperse its operations neoclassical economic theorizing from marshall to perroux provides one perspective on the contemporary industrial district phenomenon another is afforded by granovetter s more recent elaboration of the ideas of embedding under and over socialization confronting each of these theoretical approaches with the other leads me to conclude that the industrial district prototypes involv

the social cost of carbon emissions seven propositions determining the social cost of carbon emissions scc is a crucial step in the economic analysis of climate change policy as the us government s recent decision to use a range of estimates of the scc centered at 77 tc or equivalently 21 tco2 in cost benefit analyses of proposed emission control legislation underlines this note reviews the welfare economics theory fundamental to the estimation of the scc in both static and intertemporal contexts examining the effects of assumptions about the typical agent s pure rate of time preference and elasticity of marginal felicity of consumption production and mitigation technology and the magnitude of climate change damage on estimates of the scc we high light three key conclusions i an estimate of the scc is conditional on a specific policy scenario the details of which must be made explicit for the estimate to be meaningful ii the social discount rate relevant to intertemporal allocation decisions also depends on the policy scenario and iii the scc is uniquely defined only for policy scenarios that lead to an efficient growth path because marginal costs and benefits of emission mitigation diverge on inefficient growth paths we illustrate these analytical conclusions with simulations of a growth model calibrated to the world economy authors abstract

timing constraints and the allocation of time the effects of changing shopping hours regulations in the netherlands abstract a 1996 change in shopping hours regulations in the netherlands provides an opportunity to study the effects of timing constraints on total time spent in shopping working and other activities as well as the timing of these activities we develop a simple structural model to make predictions about the effects of imposition and relaxation of a timing constraint on time use patterns and utilize time diary data from 1995 1997 1999 and 2000 to examine time use patterns by demographic group before and after the change in addition to a change in the timing of shopping we find a non negligible increase in the total time spent shopping

identification and estimation of a class of household production models we consider a class of household production models characterized by a dichotomy property in these models the amount of time spent on household production does not depend on the household utility function conditional on household members having a paid job we analyse the non parametric identifiability of the production function and the so called jointness function a function describing which part of household production time is counted as pure leisure it is shown that the models are identified in the two adult case but not in the single adult case we present an empirical application to swedish time allocation data the estimates satisfy regularity conditions that were violated in previous studies and pass various specification tests for this data set we find that male and female home production time are q substitutes copyright c 2003 john wiley sons ltd

impact of an emissions trading scheme on australian households a computable general equilibrium analysis abstract following the international commitment to tackle climate change issues many countries have introduced climate change policies to reduce emission levels australia also expects to follow the international pathways to implement a climate change policy to curb its greenhouse gas emissions in this context the former labor government in australia intended to switch its carbon tax policy to an emissions trading scheme ets after 2 years of its initial operation to achieve an emission target of 5 per cent below the 2000 level by 2020 by employing a computable general equilibrium model and a social accounting matrix database this article analyses the potential impacts of an ets with various revenue recycling options on australian households results show that an emission permit price of a 20 per tonne of co2 e would help australia to achieve the 2020 emission reduction target this permit price is likely to have a small contraction in australia s real gdp i e about 0 3 per cent and in real household consumption i e about 0 19 per cent the price of electricity is projected to increase by 13 per cent the revenue recycling options seem to create an improvement in the macro economy and there is a trade off between economic efficiency and equity in the australian economy with compensations the personal income tax reduction policy results in an economic efficiency with a positive change in real aggregate household consumption whereas providing an equal lump sum transfer brings benefits equally for all household groups increased government transfers based on recipients current pension and allowance rates generate more welfare gains for middle income household groups

the role of preferences and opportunity costs in determining the time allocated to housework the time devoted to housework in couple households is substantial research on intrahousehold time allocations has generally assumed that housework is a necessary evil and that the partner with the lower opportunity cost of time in the market will devote more time to home production in reality households individuals are likely motivated to maximize happiness and preferences regarding even mundane household chores differ considerably we use information on preferences opportunity costs and time use from the 2000 2001 united kingdom time use survey to examine the time partners spend doing laundry ironing cleaning and food shopping while compared with other household chores such as gardening and do it yourself repairs the selected activities are generally less enjoyable preferences do vary across the population and are correlated with reported time use joint multivariate analysis of his and her time on weekend and weekday days as well as maid service reveals that her opportunity cost of time matters substantially more than his but that his preferences play a greater role than hers

public financing of innovation new questions economic theory justifies policy when there are concrete market failures the article shows how in the case of innovation successful policies that have led to radical innovations have been more about market shaping and creating through direct and pervasive public financing rather than market fixing the paper reviews and discusses evidence for this in three key areas i the presence of finance from public sources across the entire innovation chain ii the concept of mission oriented policies that have created new technological and industrial landscapes and iii the entrepreneurial and lead investor role of public actors willing and able to take on extreme risks independent of the business cycle we further illustrate these three characteristics for the case of clean technology and discuss how a market creating and shaping perspective may be useful for understanding the financing of transformative innovation needed for confronting contemporary societal challenges

designing climate mitigation policy this us paper provides an exhaustive review of critical issues in the design of climate mitigation policy by pulling together key findings and controversies from diverse literatures on mitigation costs damage valuation policy instrument choice technological innovation and international climate policy the authors begin with the broadest issue of how high assessments suggest the near and medium term price on greenhouse gases would need to be both under cost effective stabilization of global climate and under net benefit maximization or pigouvian emissions pricing the remainder of the paper focuses on the appropriate scope of regulation issues in policy instrument choice complementary technology policy and international policy architectures

tax credits labour participation and home production in the netherlands we set up a dynamic reduced form model of labour market participation for women who balance career and motherhood the model accounts for the occurrence of future child birth and early retirement

a model of intertemporal emission trading banking and borrowing abstract this paper provides a general treatment of emission trading banking and borrowing in an intertemporal continuous time model using optimal control theory the decentralized behavior of firms is shown to lead to the least cost solution attainable under joint cost minimization explicit solutions for the time paths of emissions and permit prices are derived when firms are allowed to both bank and borrow and when firms are only allowed to bank emission permits the policy implications of emission banking and borrowing are discussed

spending time and money within the household we consider both theoretically and empirically the allocation of time and money within the household the research question is whether a married person who enjoys more leisure than their partner also receives more consumption which seems to indicate the outcome of power within the household or receives less consumption which seems to indicate differing intrahousehold preferences we develop a simple parametric structural model with household production that is tested on survey data we find that relative wages have an impact on power for leisure this effect is dominated by a conventional wage effect in which the partner who has the higher wage takes less leisure

estimating the parameters of a household production function with joint products by estimating the parameters of a production function whose inputs consist of family time and market goods the authors offer some new microeconomic estimates of the value of production that takes place in the home and also examine the concept of joint production that is the degree to which time devoted to home production simultaneously serves as leisure they find evidence of substantial jointness between home production time and leisure the degree of which is greater for wives than for husbands and that both husband and wife possess human capital skills more productive in market work than in home work

can government purchases stimulate the economy this essay briefly reviews the state of knowledge about the government spending multiplier drawing on theoretical work aggregate empirical estimates from the united states as well as cross locality estimates i assess the likely range of multiplier values for the experiment most relevant to the stimulus package debate a temporary deficit financed increase in government purchases i conclude that the multiplier for this type of spending is probably between 0 8 and 1 5 jel e23 e62 h50

which renewable energy policy is a venture capitalist s best friend empirical evidence from a survey of international cleantech investors governments around the world have adopted ambitious targets to increase the share of renewable energy and reduce greenhouse gas emissions they pursue a variety of policy approaches to achieve these targets it has been a popular theme for contributions in energy policy to investigate the effectiveness of such policies this article adds a new perspective to the debate namely looking at the policy preferences of private investors in innovative clean energy technology firms we surveyed 60 investment professionals from european and north american venture capital and private equity funds and asked them to assess the effectiveness of various policies in terms of stimulating their interest to invest in innovative clean energy technologies in addition to quantitative rankings we use qualitative interview data to capture additional information on why investors prefer some policies over others the combined analysis compensates for the inherent limitations of a quantitative ranking using generic policy types the results of this exploratory analysis demonstrate that all other things being equal investors in our sample perceived feed in tariffs to be the most effective renewable energy policy the overall preference for feed in tariffs is even more pronounced among investors based in europe and with higher exposure to clean energy

externalities in economies with imperfect information and incomplete markets this paper presents a simple general framework for analyzing externalities in economies with incomplete markets and imperfect infonnation by identifying the pecuniary effects of these externalities that net out the paper simplifies the problem of determining when tax interventions are pareto improving the approach indicates that such tax interventions almost always exist and that equilibria in situations of imperfect information are rarely constrained pareto optima it can also lead to simple tests based on readily observable indicators of the efficacy of particular tax policies in situations involving adverse selection signaling moral hazard incomplete contingent claims markets and queue rationing equilibria traditional discussions of externalities have emphasized the distinction between technological externalities in which the action of one individual or firm directly affects the utility or profit ofanother and pecuniary externalities in which one individual s or firm s actions affect another only through effects on prices while the presence of technological externalities imply in general that a competitive equilibrium may not be pareto efficient pecuniary externalities hy themselves are not a source of inefficiency the fact that prices change has of course important consequences there are both distributional and allocational effects but the distribution effects net out gains for example hy firms whose prices increase are precisely offset by losses e g to individuals who must pay higher prices and there are no welfare losses from the allocation effects as long as the price changes involved are small if firms are maximizing profits and individuals are maximizing utility both facing prices that correctly refiect opportunity costs then standard envelope theorem arguments imply that changes in profits or utility induced by changes in allocations resulting from any small change in prices are negligible

opportunity cost for free allocations of emissions permits an experimental analysis an important feature of emissions trading is how emissions permits are allocated the choice between an auction and free allocation should not influence firms production choices nor consumer prices according to economic theory however many parties expect the method of allocation to affect product prices this paper describes an experimental investigation into price determination under a cap and trade program with different allocation methods participants initially display diverse pricing strategies however given a simple economic setting in which earnings depend on behavior we find that subjects learn to consider the opportunity cost of permits and overall behavior moves toward the economic prediction

u s energy research and development declining investment increasing need and the feasibility of expansion investment in energy research and development in the u s is declining despite calls for an enhancement of the nation s capacity for innovation to address environmental geopolitical and macroeconomic concerns we examine investments in research and development in the energy sector and observe broad based declines in funding since the mid 1990s the large reductions in investment by the private sector should be a particular area of concern for policy makers multiple measures of patenting activity reveal widespread declines in innovative activity that are correlated with research and development r d investment notably in the environmentally significant wind and solar areas trends in venture capital investment and fuel cell innovation are two promising cases that run counter to the overall trends in the sector we draw on prior work on the optimal level of energy r d to identify a range of values which would be adequate to address energy related concerns comparing simple scenarios based on this range to past public r d programs and industry investment data indicates that a five to ten fold increase in energy r d investment is both warranted and feasible

the us market for so2 permits policy implications of the low price and trading volume abstract the price of so2 permits and the volume of trading under the us acid rain program have been lower than expected this can be explained by the creation and distribution of more permits than were initially authorized by the sale of permits by high cost abaters who are subject to more stringent local emission constraints or who have irreversibly invested in high cost abatement technologies and by the deregulation of the natural gas and railroad industries which in combination with incentives for cost cutting under the new market approach to so2 control has lowered marginal costs of abatement curves and made them more uniform across powerplants the low price of permits and low trading volume are evidence that market approaches to pollution control can be more cost effective than command and control regulations the effect of public policies and technological changes on the allowance market are usefully examined in the context of an ideal market in which the equilibrium price of allowances equals the marginal cost of abatement of individual powerplants using recent data from coggins and swinton 1996 we are able to explain the current price of permits with some accuracy

a critical review of china s rapidly developing renewable energy and energy efficiency policies renewable energy and energy efficiency reee policies have far reaching implications for energy security climate change economic competitiveness pollution and human livelihood for these reasons reee has become a national priority for the chinese government particularly since 2005 this paper aims to critically review china s reee policies in six sectors electricity industry transportation buildings and local government in addition to examining the progress china has made in the development and implementation of reee policies this review also identifies limitations and room for improvement finally five policy recommendations are presented

the national system of innovation in historical perspective contrary to some recent work on so called globalisation this paper argues that national and regional systems of innovation remain an essential domain of economic analysis their importance derives from the networks of relationships which are necessary for any firm to innovate whilst external international connections are certainly of growing importance the influence of the national education system industrial relations technical and scientific institutions government policies cul tural traditions and many other national institutions is fundamental the historical examples of germany japan and the former ussr illustrate this point as well as the more recent contrast between east asian and latin american countries introduction the national system of friedrich list according to this author s recollections the first person to use the expression national system of innovation was bengt ake lundvall and he is also the editor of a highly original and thought provoking book 1992 on this subject however as he and his colleagues would be the first to agree and as lundvall himself points out the idea actually goes back at least to friedrich list s conception of the national system of political economy 1841 which might just as well have been called the national system of innovation the main concern of list was with the problem of germany overtaking england and for underdeveloped countries as germany then was in relation to england he advocated not only protection of infant industries but a broad range of policies designed to accelerate or to make possible industrialisation and economic growth most of these policies were concerned with learning about new technology and applying it the racialist and colonialist overtones of the book were in strong contrast to the inter nationalist cosmopolitan approach of the classical free trade economists and list s belief that holland and denmark should join the german bund and acquire german nationality because of their descent and whole character reads somewhat strangely in the european community of today nevertheless despite these unattractive features of his outlook he clearly anticipated many contemporary theories after reviewing the changing ideas of economists about development in the years since the second world war the world bank 1991 concludes that it is intangible investment in knowledge accumulation which is decisive rather than physical capital investment as was at one time believed pages 33 35 the report cites the new growth theory

renewable energy policies and private sector investment evidence from financial microdata this paper analyses the effect of government policies and other determinants on private finance investment in renewable energy a unique dataset of financial transactions for renewable energy projects is constructed using the bloomberg new energy finance database the dataset covers 87 countries six renewable energy sectors wind solar biomass small hydropower marine and geothermal and the 2000 2011 time span in a first set of models undertaken at the level of the financial deal we find that in contrast to quota based schemes price based support schemes are positively correlated with private finance contributions this result holds for complementary analyses undertaken at the level of the project however for those projects in which public finance complements private finance co financed projects neither quota based measures nor price based support schemes have a significant effect on private finance flows

the evolution of new industries and the determinants of market structure several empirical regularities concerning firm growth rates and industry firm size distributions have been developed by studying primarily mature industries the primary purpose of this article is to bring together and extend empirical regularities on the evolution of new industries and to use these regularities to gain further insight into the forces governing industry evolution to explain these regularities a model is constructed which emphasizes how factors governing the early evolution of industries may shape their market structure at maturity it stresses how chance events and exogenous factors that influence the number of potential entrants to the industry the growth rate of incumbents and the ease of imitation of industry leaders will influence the ultimate number and size distribution of firms in the industry

recent evolutionary theorizing about economic change this famous passage from marshall s principles of economics it first appeared in the fifth edition which came out in 1907 nicely brings out two issues which are as germane to economics today as they were when marshall wrote the first is the heavy reliance by economists in their formal theorizing on the notion of equilibrium the other is the appeal that biological conceptions3x201d have for many economists particularly when their focus is on economic change

nonmarket household time and the cost of children raising children demands a considerable amount of parental time obliging working parents either to reduce their leisure time further or to buy childcare services in the market parents may face additional opportunity costs upon deciding to participate in the labor market but these are difficult to measure using a survey instrument in belgium and germany we estimate the income compensation needed to maintain family well being when adults work versus when they do not enter the labor market in both countries we find that full time working parents face extra child costs and require higher labor market participation compensation compared with childless adults

evolution in the finitely repeated prisoner s dilemma abstract this paper examines some aspects of evolutionary dynamic behavior in the finitely repeated prisoner s dilemma the fitness of cooperation found in the best known simulation of this type that by robert axelrod stems from strategy set restrictions the game used for the simulation has a continuum of pure cooperation equilibria and no pure defection equilibrium some new simulations are presented here for the finitely repeated game although cooperation is ultimately exploited and extinguished dynamic paths can pseudo converge in ways that allow partial cooperation to flourish for extended periods of time

public policy influence on renewable energy investments a panel data study across oecd countries this paper examines the impact of public policy measures on renewable energy re investments in electricity generating capacity made by institutional investors using a novel combination of datasets and a longitudinal research design we investigate the influence of different policy measures in a sample of oecd countries to suggest an effective policy mix which could tackle failures in the market for clean energy the results call for technology specific policies which take into account actual market conditions and technology maturity to improve the conditions for institutional investments advisable policy instruments include economic and fiscal incentives such as feed in tariffs fit especially for less mature technologies additionally market based instruments such as greenhouse gas ghg emission trading systems for mature technologies should be included these policy measures directly impact the risk and return structure of re projects supplementing these with regulatory measures such as codes and standards e g rps and long term strategic planning could further strengthen the context for re investments

aviation and the eu emissions trading scheme lessons learned from previous emissions trading schemes designing an emissions trading scheme requires in depth knowledge regarding several aspects this paper attempts to clarify some important design points of the forthcoming emissions trading scheme

schumpeterian dynamics part ii technological progress firm growth and economic selection abstract business firms strive for survival and growth they innovate in order to grow they imitate in order to survive the purpose of this paper the second in the series on schumpeterian dynamics is to construct a simple mathematical model which is capable of studying the evolution of an industry s state of technology as a dynamic outcome of the interactions among innovation imitation and capacity growth at the micro level of firms the doctrine of economic selection insists by means of the analogy to the biological theory of natural selection that only the most efficient firms will survive the long run competitive struggle for capacity growth indeed if neither innovation nor imitation is possible for the firm a firm or a group of firms which is lucky enough to start with the most efficient technology will outgrow all the other firms in the long run once however the possibility of technological imitation is allowed for the firms the industry will settle down to a static equilibrium of perfect technological knowledge not by the success of the most efficient firms in their striving for the higher growth rate but by the success of the less efficient in their effort to imitate the others the blind force of economic selection is thus outwitted by the human force of imitative activities finally when firms are allowed to innovate in their technology the selective force of market competition is no longer capable of weeding out the less fit even in the long run indeed it is shown in the present paper that the dynamic interplay of the processes of innovation imitation and growth will keep the industry s state of technology from settling down to the static equilibrium but reproduce in the long run a relative dispersion of efficiencies across firms in a statistically balanced form

mobilizing private finance for low carbon innovation a systematic review of barriers and solutions this paper analyses the field of innovation studies regarding barriers to low carbon innovation and consequences for finance investment and divestment and contributes to a more holistic understanding of the underlying mechanisms a combination of technological barriers combined with economic barriers institutional and political barriers contribute to sub optimal low carbon investment all along the innovation cycle policy makers need to take a systemic approach to enable the redirection of diverse private financial sources instruments range from cutting dirty r d subsidies and support for clean technology innovation and diffusion levelling the institutional playing field and making risks of high carbon and low carbon technologies transparent to providing a consistent but adaptive long term transition strategy this would allow financiers to gradually shift their investments away from high carbon mainstream markets and scale low carbon technology niche markets however financiers also need to sharpen their competencies with regard to new clean technologies and markets

a tale of two market failures technology and environmental policy abstract market failures associated with environmental pollution interact with market failures associated with the innovation and diffusion of new technologies these combined market failures provide a strong rationale for a portfolio of public policies that foster emissions reduction as well as the development and adoption of environmentally beneficial technology both theory and empirical evidence suggest that the rate and direction of technological advance is influenced by market and regulatory incentives and can be cost effectively harnessed through the use of economic incentive based policy in the presence of weak or nonexistent environmental policies investments in the development and diffusion of new environmentally beneficial technologies are very likely to be less than would be socially desirable positive knowledge and adoption spillovers and information problems can further weaken innovation incentives while environmental technology policy is fraught with difficulties a long term view suggests a strategy of experimenting with policy approaches and systematically evaluating their success

assessing the performance of the uk emissions trading scheme the uk s climate change programme introduced an emissions trading scheme ets for greenhouse gases firms in over 40 industrial sectors which have negotiated climate change agreements setting quantitative energy efficiency targets can use the ets to trade over and under compliance with these targets in parallel a limited number of firms have become major participants in the ets as a result of an auction of subsidies for additional abatement commitments the paper describes the uk arrangements and assesses the economic efficiency and environmental effectiveness of the ets drawing on evidence of participants behaviour both in the incentive auction and in subsequent trading