pollution abatement and balanced growth the analysis of endogenous growth models with pollution often concentrates on steady state trajectories under the assumption that the steady state is in some sense stable in the present note we provide examples showing that this issue should be dealt with carefully we use the rebelo ak model augmented with a stock of pollutants causing a negative externality it is found that optimal growth is not necessarily balanced contrary to the outcome of the standard rebelo model moreover the existence of the externality may affect long run optimal growth rates

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

questioning the empirical basis of the environmental kuznets curve for co2 new evidence from a panel stationarity test robust to multiple breaks and cross dependence abstract this paper investigates the time series properties of per capita co2 emissions and per capita gdp levels for a sample of 86 countries over the period 1960 2000 for that purpose we employ a state of the art panel stationarity test which incorporates multiple shifts in level and slope thereby controlling for cross sectional dependence through bootstrap methods our analysis renders clear cut evidence that per capita gdp levels are nonstationary for the world as a whole while per capita co2 is found to be regime wise trend stationary the analysis of country groups shows that for africa and asia per capita co2 is best described as nonstationary while per capita gdp appears stationary around a broken trend in addition we find evidence of regime wise trend stationarity in both variables for the country groups consisting of america europe and oceania the results of our analysis carry important implications for the statistical modelling of the environmental kuznets curve for co2 since the differing order of integration in both variables for the world as a whole and for africa and asia calls into question the validity of panel cointegration techniques which assume that both variables are nonstationary and cointegrated with one another cointegration techniques would not be appropriate either for the case of america europe and oceania which are characterised by per capita gdp and co2 emissions being stationary around a broken trend similar conclusions are reached when we analyse country groups based on levels of development failure to properly characterise the time series properties of the data by not controlling for an unknown number of structural breaks and for cross sectional dependence could be responsible for the fragility and lack of robustness surrounding the estimation of environmental kuznets curves

policy uncertainty and household savings using german microdata and a quasi natural experiment we provide evidence on how households respond to an increase in uncertainty we find that household saving increases significantly following the increase in political uncertainty observed in the run up to the 1998 german general election we also find evidence of a labor supply response by workers who can use the margin offered by part time employment our results are suggestive of the economic effects of wars of attrition when political disagreement leads to delays in adopting a reform or the possibility that earlier reforms may be revoked the increased uncertainty could slow the economy

an optimal path to extinction poverty and resource degradation in the open agrarian economy this paper constructs a model of the open agrarian economy in order to explore the tendency of many such economies to evolve along paths characterised by severe environmental degradation it pays special attention to the importance of commodity prices and the transfer system in determining agricultural activity levels in ecologically delicate systems

resilience in the dynamics of economy environment systems the ecological concept of resilience has begun to inform analysis of change in economy environment systems the linkages between resilience and the stability of dynamical systems are discussed along with its role in understanding of the evolution of such systems particular linkages discussed include those between resilience biodiversity and the sustainability of alternative states recent developments in modelling the resilience of joint economy environment systems suggest the advantages of analysing change in the system as a markov process the transition probabilities between states offering a natural measure of the resilience of the system in such states it is argued that this emergent property of the collaboration between ecology and economics has far reaching implications for the way we think about model and manage the environmental sustainability of economic development

measuring uncertainty based on rounding new method and application to inflation expectations abstract the literature on cognition and communication documents that people use round numbers to convey uncertainty this paper introduces a method of quantifying the uncertainty associated with round responses in pre existing survey data i construct micro level and time series measures of inflation uncertainty since 1978 inflation uncertainty is countercyclical and correlated with inflation disagreement volatility and the economic policy uncertainty index inflation uncertainty is lowest among high income consumers college graduates males and stock market investors more uncertain consumers are more reluctant to spend on durables cars and homes round responses are common on many surveys suggesting numerous applications of this method

niche diversification in environmental ecological economics abstract this paper is devoted to the identification and comparison of the niches of neoclassical environmental economics nee and ecological economics eco it is presented in four sections section 1 argues that the existing literature does not make the differences and relations between the sister disciplines neatly transparent section 2 critically examines the antecedents of the subjects with reference to three structural dimensions such as scarcity perception problem solving orientation and range of integration section 3 collates the elements and reformulates the definitions section 4 is coda on the essay the divide between the paradigms which came to the surface during the 1960s became prominent through the growth controversy of the subsequent decade the controversy over the need for change of economic theory to cope with the growing intensity of environmental uncertainty makes the disciplines sore about each other the neoclassical paradigm comprising of elements like relative scarcity allocative approach market correction and technological optimism characterises nee the distinguishing characteristics of eco include thermodynamic irreversibility absolute scarcity economy ecosystem symbiosis biophysical approach ecological stewardship and prudent pessimism the niches are competitive and complementary in some respects and thus provide a unique example of fruitful niche diversification within environmental ecological economics we have a feeling that the economics profession can trace out the interface of the disciplines in some policy areas and raise the effectiveness of prescriptions so that this academic species diversity can serve humankind to its full potential

precautionary savings and the self employed this work focuses on the impact of uncertainty on savings under bequest form specifically we estimate whether and to what extent income variability does have an effect on post mortem savings we approximate the post mortem savings with the closest dedicated savings which is savings in term insurance a lump sum inherited at the death of the subscriber furthermore we test whether the intensity of the income variance or the riskiness of the job type such as self employment matters more in the choice our results show that self employment status is one of the most relevant variables affecting term insurance ownership

bioeconomics and post keynesian economics a search for common ground abstract this paper is concerned with the links between two schools of economic thought which challenge the neoclassical synthesis bioeconomics refers to that school of economics stressing the fact that the human species is a part of the larger biosystem of the planet and ultimately subject to the same laws and limitations as other life forms post keynesian economics is a specific school of macroeconomics stressing the fundamental ideas of keynes marx and kalecki concerning uncertainty the nature of production and the role of government in economic affairs bioeconomics and post keynesian economics have much in common in terms of their methodological framework their emphasis on production rather than exchange and their interpretation of the social rate of discount a potential area of conflict between the two schools is their attitude toward economic growth the areas of commonality between the two schools are discussed and a research and policy program which combines the insights of both approaches is suggested

estimating the effects of earnings uncertainty on families saving and insurance decisions this paper investigates whether families save partially to self insure against uncertain future earnings and estimates the extent to which pooled insurance substitutes for saving as a precaution against earnings risk an econometric model is estimated using unique household survey data from the nineteenth century to examine families joint saving and insurance decisions the historical microdata are of interest because they predate widespread social insurance programs which may stunt self insurance through private saving among contemporary families the econometric results imply that two independent measures of idiosyncratic earnings risk matter for families saving decisions additionally families whose primary wage earners belong to labor unions significantly save less frequently than others all else being equal but this tendency is not apparent among members of private benevolent societies

economic growth and environmental degradation the environmental kuznets curve and sustainable development abstract in this paper we critically examine the concept of the environmental kuznets curve ekc it proposes that there is an inverted u shape relation between environmental degradation and income per capita so that eventually growth reduces the environmental impact of economic activity the concept is dependent on a model of the economy in which there is no feedback from the quality of the environment to production possibilities and in which trade has a neutral effect on environmental degradation the actual violation of these assumptions gives rise to fundamental problems in estimating the parameters of an ekc the paper identifies other econometric problems with estimates of the ekc and reviews a number of empirical studies the inference from some such ekc estimates that further development will reduce environmental degradation is dependent on the assumption that world per capita income is normally distributed when in fact median income is far below mean income we carry out simulations combining ekc estimates from the literature with world bank forecasts for economic growth for individual countries aggregating over countries to derive the global impact within the horizon of the bank s forecast 2025 global emissions of so 2 continue to increase forest loss stabilizes before the end of the period but tropical deforestation continues at a constant rate throughout the period

production and environmental resources a prelude to an evolutionary framework the paper advances a framework to study the evolution of technology and institutions it is based on two simple tenets first the quality and quantity of environmental resources are defined and constrained by the regime of technology and institutions second the character and extent of innovations are informed and limited by the regime as well the framework is contrasted with neoclassical and ecological economics while the framework assimilates ideas from both paradigms it departs from them by stressing the importance of the technological institutional regime tir the two views ignore in different ways the significance of tir 46 the neoclassical program conceives the flow of innovations as tir independent while the ecological agenda regards the fund of resources as tir independent 1 consequently both camps fail to provide an endogenous account of the observed punctuated character of the evolution of tir neoclassical economists maintain that as a resource depletes its price rises which induces switching to a cheaper one encourages exploration or spurs invention harold barnett and chandler morse 7 11 state that nature imposes particular scarcities not an inescapable general scarcity the responses to environmental resource limitation are supposedly singular activities stripped from any underpinning regime the neoclassical disregard of tir heuristically resembles the fable of marie antoinette s folly in response to the scarcity of bread at the eve of the french revolution she advised according to legend buying cake instead ecological economists offer a different view of resource limits 48 for herman daly 21 8 nature really does impose an inescapable general scarcity while neoclassical economists emphasize relative limitation scarcity pricing ecological economists stress malthusian general limitation for ecological economists substitution can solve relative allocation but cannot solve general limitation general limitation can be avoided only if economic activity proceeded within certain boundaries or as put by martin o connor 69 within appropriate cyclical structure of resource transformations under the motto sustainable development a low pace production activity supposedly enables a population to replicate indefinitely ecological economists conceive

stock market wealth and consumer spending martha starr mccluer this article investigates the effects of stock market wealth on consumer spending traditional macroeconometric models estimate that a dollar s increase in stock wealth boosts consumption by three to seven cents with the substantial 1990s rise in stock prices the nature and magnitude of this wealth effect have been much debated after describing the issues and previous research i present new evidence from a well known consumer survey the results are broadly consistent with life cycle saving and a modest wealth effect most stockholders reported no appreciable effect of stock prices on their saving or spending but many mentioned retirement saving in explaining their behavior jel e21 e30 d12 i introduction the relationship between stock market wealth and consumer spending has been a subject of long standing interest traditional macroeconometric models estimate that a dollar s increase in household wealth boosts consumer spending by three to seven cents per year such an effect is consistent with predictions from a simple life cycle model in which consumers spend more over their lifetimes in response to higher wealth however the stock market is known to play a role as a passive predictor of information thus it is also possible that stock prices simply lead aggregate economic activity without any short run change in spending induced by changes in wealth understanding the response of spending to changes in wealth is important for determining how stock market fluctuations affect the macroeconomy the question also bears directly on theories of saving behavior and on the issue of retirement preparedness by today s workers the experience of the past few years provides an interesting opportunity to revisit this issue stock prices increased substantially in the 1990s with the standard poor s 500 more than doubling from 1994 to 1997 and rising another 44 through 1999 at the same time stock ownership broadened considerably mostly through mutual funds and retirement accounts so that a large number of households likely experienced wealth gains the increase in wealth might be expected to boost consumer spending and lower the saving rate and indeed these trends occurred however it is hard to separate the influence of the wealth effect from other factors that also would have promoted spending such as strong income growth and favorable labor market conditions this article presents some new evidence on the response of spending to changes in wealth the data come from the michigan survey research center src survey of consumers an ongoing nationally representative survey of u s households in interviews conducted between july and september 1997 households owning stock were asked special questions about their spending and saving the questions covered a number of factors that may influence the effect of wealth on spending including the value and form of stockholdings stock price expectations concerns about retirement and perceptions of income uncertainty in brief the results are broadly consistent with life cycle saving and a modest wealth effect the vast majority of stockholders reported no appreciable effect of stock prices on their spending or saving but many mentioned retirement saving in explaining their behavior the next section reviews previous research on the relationship between stock market wealth and consumer spending the third section describes the data from the michigan survey and the fourth presents the results a final section summarizes and concludes ii background and previous research to frame the discussion it is useful to review how an unexpected increase in wealth would affect consumption in a simple lifecycle model this model though restrictive in its assumptions provides valuable intuition about the propensity to consume unexpected stock gains consequences of refinements to the model are discussed below

grazing the commons an empirical analysis of externalities subsidies and sustainability abstract an empirical means of measuring externalities in the fifty states of the us is presented and the relationship between externalities subsidies and sustainability is investigated firms seeking to maximize profits create externalities thus securing implicit internal subsidies the subsidies are generally supported by those less well off and the socioeconomic energy and environmental indicators of the public sector worsen as externalities and subsidies increase implicit subsidies due to externalities in pollution control energy consumption and taxes are quantified the amount of subsidy is calculated by state and statistically compared to socioeconomic energy environmental and economic variables poverty unemployment and income disparity are found to increase significantly while income economic development attractiveness energy efficiency and environmental quality decline with increasing externalization across states an empirical method of operationalizing sustainability is presented and the relationship of sustainability to subsidies is investigated and found to be significant and negative recommendations are presented for minimizing the effects of externalities

ecosystem prices activity analysis applied to ecosystems abstract in this paper a method is developed to derive prices for natural goods from information about material and energy flows within ecosystems the derivation is based on an analogy between ecological and economic systems both systems are characterized by flows of material and energy to derive ecosystem prices the mathematical structure of koopman s economic linear production model his activity analysis is applied to a material flow model of ecosystems the ecological interpretation of these prices is discussed and the uniqueness of the price system is investigated an algorithm for price calculation is derived and demonstrated with a numerical example finally it is discussed whether ecosystem prices may be suitable as surrogates for economic valuations of natural goods

higher order risk attitudes demographics and financial decisions we conduct an experiment to study the prevalence of the higher order risk attitudes of prudence and temperance in a large demographically representative sample as well as in a sample of undergraduate students participants make pairwise choices between lotteries of the form proposed by eeckhoudt and schlesinger 2006 the choices in these lotteries isolate prudent from imprudent and temperate from intemperate behavior we relate individuals risk aversion prudence and temperance levels to demographics and financial decisions we observe that the majority of individuals decisions are consistent with risk aversion prudence and temperance in both the student and the demographically representative sample an individual s level of prudence is predictive of his wealth saving and borrowing behavior outside of the experiment while temperance predicts the riskiness of portfolio choices our findings suggest that the coefficient of relative prudence for a representative individual is approximately equal to two

limits to substitution and irreversibility in production and consumption a neoclassical interpretation of ecological economics abstract there are many methodological approaches within ecological economics one of the principal modes of analysis is a modified version of the standard neoclassical model this paper examines the parallels which emerge between the ideas of some ecological economists concerning production and the ideas of others concerning consumption when these ideas are interpreted in the neoclassical paradigm it is well known that ecological economics is characterized by arguments concerning limits to substitution between inputs energy natural capital etc vs manufactured capital labor etc in production and the implications these have for sustainability however various authors have also expressed concerns regarding limits to substitution in consumption either between environmental assets and other goods or between basic needs commodities and other goods though the specific reasons for non substitution are different in the production and consumption cases the underlying theme is that individual commodities and other inputs have unique physical or other properties which make them poor substitutes ideas about irreversibility in production and economic development are also prominent in ecological economics likewise many authors have argued for similar irreversibilities in consumption behavior in analogy to the term technological change i coin the term preferential change to describe these phenomena the linking themes in this case are that the economy environment system is evolutionary in character and that external effects intended and unintended consequences of actions or processes imposed on other parties or resources are all pervasive

regional industrial dynamics under the environmental pressures in china abstract this study investigates how air pollution affects industrial path creation and industrial dynamics in china moving beyond existing literature that pays more attention to environmental effects of industrial development this paper focuses on how industrial development path changes due to environmental pollution using the data from chinese customs trade statistics ccts which covers the export trade data of prefecture level cities in china during 2002 2006 and 2012 to 2016 this paper probes into the effect of air pollution on industrial dynamics econometric model and instrumental variable iv regression are used in empirical analysis given the potential endogeneity issue results suggest that the interaction term between air pollution and density is negatively related to new industries entry it means that air pollution can reduce the effect of relatedness on industrial diversification and lead to path breaking further a channel for how air pollution affects industrial dynamics is examined in order to respond to air pollution local government conducts environmental regulation to lower the negative influence of air pollution which can lead to path breaking during industrial diversification process finally this paper seeks to bridge two strands of literature environmental economic geography and evolutionary economic geography

towards a genuine exchange value of nature interactions between humans and nature in a principal agent framework abstract this paper discusses the potential for modeling nature and man in an exchange economy we will firstly be outlining the need for exchange values in addition to the usual human evaluation of nature secondly we will be reviewing some basic exchange economy ideas arguing that these ideas can be adopted to a mutually beneficial exchange between humans and nature thirdly in a formal model we will show how the assumption that a civic society can be adapted to a principal agent approach whereby humans are the principal and nature is the agent issues such as property rights an objective concerning nature and services to be exchanged will be introduced this will include the derivation of a behavioral equation for nature as anticipated by humans fourthly a principal agent framework delivers a mutually beneficial exchange such as land for labor and given property rights derived genuine exchange values are interpreted as relative prices reflecting human and natural objectives fifthly the aforementioned problem will be extended to a world with undefined property rights and hints will be given to how this world can be modeled potential applications conflicting questions such as human welfare versus fitness of nature and the distribution of rights will be discussed

optimal investment policies with exhaustible resources an information based model an information based model of the optimal control type is developed using concepts from information theory to explore the dynamics of fossil resource exhaustion and the phenomenon of substitution by other forms of capital and technological knowledge all exhaustible resources stocks and forms of capital and knowledge are taken to be equivalent to forms of information in the physical sense it is shown that with optimal policies the planning period or cycle has several distinct phases with different optimal investment patterns the model has two important qualitative implications 1 economic growth rates are inherently discontinuous and 2 the model predicts an evolutionary structural change viz the creation of a new sector in response to the progressive exhaustion or obsolescence of previously essential resources or capital stocks a multiperiod extension is suggested leading to a tentative explanation for the kondratieff long wave phenomenon

the impact of federal government expenditures in the 1930s there is no shortage of explanations for the depressed conditions of the 1930s most of the recent literature has focused on the causes and severity of the great depression of 1929 33 but the failure of production to expand much beyond its 1929 peak by 1937 and the sharp 1937 38 recession have also received attention at the heart of the discussion has been the debate over monetary versus nonmonetary forces and the role of the federal reserve yet among possible nonmonetary forces little attention has been given to the role of federal government expenditures to cite only one example in the comprehensive study of this era edited by brunner 9 the role of government spending is ignored or at best mentioned only in passing in the volume s seventeen papers and comments

evaluation of the subjective probabilities of survival in the health and retirement study in the health and retirement study respondents were asked about the chances they would live to 75 or to 85 we analyze these responses to determine if they behave like probabilities of survival if their averages are close to average probabilities in the population and if they have correlations with other variables that are similar to correlations with actual mortality outcomes we find that generally they do behave like probabilities and that they do aggregate to population probabilities most remarkable however is that they covary with other variables in the same way actual outcomes vary with the variables for example respondents with higher socioeconomic status give higher probabilities of survival whereas respondents who smoke give lower probabilities we conclude that these measures of subjective probabilities have great potential use in models of intertemporal decision making under uncertainty

a physical view of sustainability abstract we assume that natural ecological communities tend to maximize the amount of stored biomass on a given area thereby creating the highest sustainable rate of entropy formation possible from that area we take this climax condition to define sustainability human intervention through agriculture reduced the ecosystem in given areas to a juvenile state a state which seems to produce entropy at a lower rate than that of the natural climax condition the gap in entropy production rates between the natural and the agricultural system would eventually be overcome by the direct and indirect use of fossil fuels these fossil fuels are consumed much faster than they are being formed and therefore a social structure based on their extensive use cannot be sustainable what type of social structure does meet our definition of sustainability that is what style and size of social activity will generate entropy at a rate no greater than that of the climax ecosystem in a particular area during the last two decades studies of economic activities and their environmental repercussions were limited to the possible costs and benefits of pollution control and to the economically optimal extraction rates of mineral resources the intrusion of human activities into the environment became increasingly apparent through the depletion of natural resource stocks and decreasing environmental quality in the 1990s sustainability of the socio economic system within the global ecosystem has become the pressing issue although research is increasingly concerned with the question of sustainability a definition based on physically measurable evidence is missing such a definition is proposed in this paper and an example application is given for a particular area

output effects of government purchases the theoretical analysis focuses on the distinction between temporary and permanent movements in government purchases under plausible conditions the temporary case involves an output response that is positive less than one to one with the change in government purchases and larger than that generated by an equal sized but permanent shift in purchase the equilibrium real rate of return rise in the temporary case but changes little in the permanent one defense purchases are divided empirically into permanent and temporary components by considering the role of temporary wars no temporary shifts in nondefense purchases were isolated empirical results verify an expansionary output effect for temporary purchases that exceeds that of permanent purchases the results for some other expectational hypotheses are found to be generally supportive of the theory

commitment risk and consumption do birds of a feather have bigger nests abstract consumption commitments goods like housing for which adjustment is costly change the relationship between risk and consumption commitment provides a motive to reduce consumption when possible future losses are too small to warrant adjustment but not when losses are large enough that adjustment would be worthwhile this implies conditions under which mean preserving increases in risk can increase housing consumption our empirical evidence exploits the interaction of these conditions with a novel proxy for unemployment risk couples sharing an occupation consistent with our model same occupation couples consume more housing only when adjustment costs are high and potential losses are sufficiently large

regulatory schemes and self protective environmental risk control a comparison of insurance liability and deposit refund systems abstract there has been an increasing interest in considering non traditional regulatory instruments for control of environmental risks traditional regulation has relied on liability in various forms after risky events have actually occurred there is concern that traditional instruments do not provide adequate signals to firms regarding social costs of risks this paper considers two important alternatives to traditional liability instruments insurance and deposit refund systems the purpose of the paper is to determine whether there is any theoretical superiority of these non traditional instruments in controlling environmental risk and safety a relatively simple model designed to capture the essential features of liability insurance and deposit refund instruments is developed and used to compare the resulting control levels under pure risk and pure uncertainty the paper shows how risk aversion limited liability afforded through bankruptcy and differences between social and private discount rates can affect the ranking of control levels under each of the three primary instruments the paper shows that under reasonable assumptions deposit refund systems such as input or discharge deposits or performance bonds will result in higher levels of controls than the other instruments results also suggest that it may be necessary to tailor regulatory instruments to specific firm situations such as requiring deposits from small firms in competitive industries

the importance of business owners in assessing the size of precautionary savings abstract not properly accounting for differences between business owners and nonbusiness owners in studies of household wealth can lead to erroneous conclusions about the significance of different saving motives using data from the panel study of income dynamics from the 1980s and 1990s we show that within samples of both business owners and non business owners the amount of precautionary savings with respect to labor income risk is modest and accounts for less than 10 of total household wealth previous large estimates of the size of precautionary balances resulted from pooling these two groups together such pooling is inappropriate given that business owners face higher labor risk and accumulate more wealth than non business owners for reasons unrelated to precautionary motives

fiscal dependence on trade taxes and the level of economic development a comment 1993 fiscal dependence on trade taxes and the level of economic development a comment applied economics vol 25 no 11 pp 1393 1397

simultaneity modeling analysis of the environmental kuznets curve hypothesis the environmental kuznets curve ekc hypothesis has been recognized in the environmental economics literature since the 1990 s various statistical tests have been used on time series cross section and panel data related to single and groups of countries to validate this hypothesis in the literature the validation has always been conducted by using a single equation however since both the environment and income variables are endogenous the estimation of a single equation model when simultaneity exists produces inconsistent and biased estimates therefore we formulate simultaneous two equation models to investigate the ekc hypothesis for fifty six countries using annual panel data from 1990 to 2012 with the end year is determined by data availability for the panel to make the panel data analysis more homogeneous we investigate this issue for a three income based panels namely high middle and low income panels given several explanatory variables our results indicate that there exists a bidirectional causality between economic growth and pollution emissions in the overall panels we also find that the relationship is nonlinear and has an inverted u shape for all the considered panels policy implications are provided

the surprisingly low importance of income uncertainty for precaution abstract while it is common to use income uncertainty to explain household saving decisions there is much disagreement about the importance of precautionary saving this paper suggests that income uncertainty is not an important motive for saving although households do have other precautionary reasons to save using a question from the survey of consumer finances that asks how much households want for precautionary purposes this paper shows that expressed household preferences and liquid savings are much lower than predicted by standard modeling assumptions households rarely list unemployment as a reason to save perceived income uncertainty does not affect liquid savings or precautionary preferences neither does being in an occupation with higher income volatility instead households seem very concerned with expenditure shocks

precautionary saving and consumption fluctuations this paper uses the consumption euler equation to derive a decomposition of consumption growth into four sources these four sources are new information and three sources of predictable consumption growth intertemporal substitution changes in the preferences for consumption and incomplete markets for consumption insurance using household level data we implement this decomposition for the average growth rate of consumption expenditures on nondurable goods in the united states from 1982 to 1997 the economic importance of precautionary saving rivals that of the real interest rate but the relative importance of each source of movement in the volatility of consumption is not precisely measured

a dynamic hierarchical approach to understanding and managing natural economic systems the study of economic systems and their guidance towards sustainability can be enhanced by understanding how natural systems use materials and energy at various levels of system organization how these levels interrelate and how interrelationships change towards this end the paper introduces natural economics as an approach to understanding the dynamics of hierarchical systems we define the concepts of natural economics to facilitate the description and assessment of system change and present dynamic modeling as a method for empirical research and as a tool for management decision making we illustrate with empirical applications the use of dynamic modeling at various levels of system organization empirical illustrations range from dynamic models of simple physical systems of material transport energy degradation and self organized criticality to models of complex industrial systems such as us iron ore mining and steel production the insights derived from the natural economics approach are used to draw conclusions for the study and management of economy environment interactions

monetary factors in the great depression this paper examines the role of monetary policy in the early stages of the great depression and considers the mechanism whereby this policy may have affected real activity i conclude that the depression was preceded by a dramatic shift towards a highly contractionary monetary policy the economic impact of this policy seems unlikely to have come through the conventional keynesian channels of a shortage of liquidity and high ex ante real interest rates but instead may have operated through unanticipated deflation and after 1930 through the disruption of financial intermediation as a consequence of the banking panics

the early history of modern ecological economics abstract this paper provides a historical perspective for the discussion on ecological economics as a special field of research by studying the historical background of ecological economics the present discussions and tensions inside the field might become easier to understand and to relate to the study is inspired by other studies of the emergence of new research areas done by sociologists and historians of science and includes both cognitive and social aspects macro trends and the role of individuals the basis for the paper is a combination of literature studies and interviews with key researchers from the field the story opens with the emergence of the new environmental agenda in the 1960s which was influenced by the scientific development in biology and ecology then it is outlined how the environmental challenge was met by economics in the 1960s around 1970 the basic ideas of ecological economics were given modern formulations but it took a long gestation period from the beginning of the 1970s to the end of the 1980s before ecological economics took shape during this gestation period the personal relationships between the actors were formed and the meetings that were decisive for the formal establishment of ecological economics took place

environmental management in development the evolution of paradigms in the past quarter century environmental management has increasingly become a concern of governments more recently the traditional split between developers and conservationists has begun to break down conceptions of what is economically and technologically practical ecologically necessary and politically feasible are rapidly changing this report discusses the implications of five paradigms of environmental management in development the author notes that the remedial legalistic approach of environmental management is breaking down instead interest in the more economically integrated approach of resource management has recently taken hold several interdependent forces indicate that improving the economic management of pollution and resources may be a necessary but insufficient measure to create the conditions for sustainable development the perception of tradeoffs between development and environmental quality persists in the present debate but its necessity is greatly exaggerated according to this paper finally it is noted that paradigms may be impervious to evidence and institutions and societies too difficult to change whether when and how these issues are resolved may be modern civilization s most significant test

how might nature value man abstract while much time and effort is spent attempting to quantify environmental services for inclusion in the economic system no one seems to ask how nature might value us an ecological accounting process is devised to accommodate ecosystem flows allowing for the computation of ecological prices and leading to the calculation of net ecosystem output and the efficiency of its production the process is somewhat similar to economic accounting but allows us to consider the ecosystem as open conforming to thermodynamic laws examples such as intervention to reduce soil erosion illustrate how humans might be appreciated by the ecosystem in some instances the net output might be higher with some human presence than with no human presence

medical expenditure risk and household portfolio choice medical expenses are an increasingly important contributor to household financial risk we examine the effect of medical expenditure risk on the willingness of medicare beneficiaries to hold risky assets using a discrete factor maximum likelihood method to address the endogeneity of insurance choices we find that having a moderately protective medigap or employer supplemental policy increases risky asset holding by 7 1 percentage points relative to those without supplemental coverage while participation in a highly protective medicare hmo increases risky asset holding by 13 0 percentage points our results highlight an important link between the availability of health insurance and financial behavior

thermodynamic constraints on optimal depletion of copper and aluminum in the united states a dynamic model of substitution and technical change abstract the paper proposes a methodology to integrate concepts from thermodynamics into economic models of optimal natural resource use and to empirically determine relationships between changes in thermodynamic states of materials and the use of high quality energy sources the integration is aimed at an assessment of technologies substitution and technical change based on economic concepts that do justice to fundamental physical constraints a model of natural resource use and production has been developed that combines econometric time series analysis with dynamic modeling techniques the model explicitly includes thermodynamic constraints on i the process of separating minerals from crude ore ii smelting processes iii substitution among inputs and iv endogenous technical change in mining smelting and refining based on empirical information the model has been simulated to assess outer limits of feasible resource savings in copper and bauxite mining smelting and refining in the united states conclusions are drawn for the evaluation of products and effluents from mining smelting and refining operations with regard to changes in the physical resource base and environmental quality

material flows and economic models an analytical comparison of sfa lca and partial equilibrium models abstract the growing concern for environmental problems in the current economy has spurred the study of the way materials and substances flow through the economy resulting in many different types of analysis since all of these have their merits and shortcomings much of the present theoretical research seems to be focusing on combining the best aspects of each model type into an integrated model the aim of this paper is to make a first step in bridging the gap between the various types of analysis of material flows in the economy by discussing the main differences and similarities of three often employed model types substance flow analysis life cycle assessment and partial economic equilibrium analysis instead of submitting each model to a lengthy theoretical discussion we apply them to a single hypothetical example of a pollution problem by doing so we are able to evaluate the differences and similarities of the methods and results of the model in a practical way it appears that the results of the three models are complementary rather than contradictory each of them puts an emphasis on different aspects of the real world a sequential application of a number of limited models may therefore be an approach that provides more useful information than the tedious construction and application of an encompassing model that integrates these models

economy and environment a theoretical essay on the interdependence of economic and environmental systems preface notation guide 1 introduction part i the physical economy environment system 2 closed physical systems a model 3 structure and time in the physical system 4 technological change and the environmental constraints to physical growth part ii the economic system 5 the price system 6 prices property and the environment 7 economic conflict and environmental change part iii environmental strategies in an evolutionary economy environment system 8 time uncertainty and external effects 9 the market solution 10 the stationary state 11 conclusions references index

expectations heterogeneous forecast errors and consumption micro evidence from the michigan consumer sentiment surveys the household data underlying the michigan index of consumer sentiment are used to test the rationality of consumer expectations and their usefulness in forecasting expenditure the results can be interpreted as characterizing the shocks that hit different types of households over time expectations are found to be biased and inefficient at least ex post people underestimated the disinflation of the early 1980s and the severity of recent business cycles people s forecast errors are also systematically correlated with their demographic characteristics in part because of time varying group level shocks further sentiment helps forecast consumption growth some of this rejection of the permanent income hypothesis is due to the systematic demographic components in forecast errors

regulation school and environment theoretical proposals and avenues of research abstract the article explores the relevance of a particular approach of the institutionalist movement regulation theory to deal with the relationship between the economy and the environment regulation theory which appeared in france at the end of the 1970s is mainly interested in macroeconomic issues in contrast until now it has tended to neglect environmental questions by taking several key concepts of this theory accumulation regime mode of regulation institutional forms we have sought to assess its significance vis a vis the environmental field more precisely from the perspective of establishing an environmental regulationist theory we propose considering the economic relation to the environment as the articulation of three forms a transhistorical form a general capitalist form and a specific capitalist form the latter being variable in capitalist time and space we give several illustrations of the variability of the relation to the environment depending on the different accumulation regimes and the different modes of regulation two principal avenues of research are proposed historical analyses for given economic areas and comparative analyses relating in particular to different capitalist areas

an historical decomposition of the great depression to determine the role of money abstract the innovation accounting technique of historical decomposition seems ideally suited as a vehicle for a re examination of money s role during the depression its application using u s monthly data for 1919 to 1941 reveals that innovations in money exerted a considerable influence on prices and output after october 1929 although the depth of the depression and the extent of the subsequent recovery cannot be attributed solely to monetary factors an important albeit occasionally diminished monetary effect is also identified even when a passive contemporaneous response by money to price and output fluctuations is assumed not to contribute to the effect

knowledge of future job loss and implications for unemployment insurance this paper studies the implications of individuals knowledge of future job loss for the existence of an unemployment insurance ui market learning about job loss leads to consumption decreases and spousal labor supply increases this suggests existing willingness to pay estimates for ui understate its value but it yields new estimation methodologies that account for and exploit responses to learning about future job loss although the new willingness to pay estimates exceed previous estimates i estimate much larger frictions imposed by private information this suggests privately traded ui policies would be too adversely selected to be profitable at any price

ecological economics in china origins dilemmas and prospects abstract this paper is a first step towards articulating a chinese version of ecological economics over the last decade ecological economics has attracted increasing attention in the west similarly since the early 1980s scholars in china have undertaken specific research on existing ecological economic issues in accordance with chinese political economic socio cultural and ecological conditions however this endeavor is hardly known in the west and little attention has been given so far to the potential role of chinese attitudes in the international ecological economics movement this paper is designed to make up for that neglect and attempts to address the following questions what social and cultural traditions are required for chinese ecological economics to operate what are the political and institutional implications of ecological economics in china will chinese ecological economists feel comfortable in a society where open debate is viewed as unacceptable behavior in order to clarify the chinese interpretation of ecological economics and its impact on the policy making process a preliminary overview of its emerging background evolutionary history key viewpoints and theories nature and policy influence is presented three major intellectual sources of chinese ecological economics are identified and the theoretical applications are emphasized then some theoretical and practical issues that may arise in future research are discussed along with implications of chinese ecological economics for the international community in addition to biophysical functions and ecological conditions socio political structures and processes need to be explicitly addressed in extending the research agenda of ecological economics

the environmental kuznets curve ekc theory part b critical issues according to the environmental kuznets curve ekc theory the process of economic growth is expected to limit the environmental degradation created in the early stages of development the first article of this study reviews the empirical studies examining various factors other than income that may lead to an ekc pattern the current article reviews in the first part the major critiques on the ekc speculation which relate to the following issues the normal distribution of world income the feedback from environmental degradation to economic growth the characteristics of the pollutant in question various econometric issues the evolution of consumption when income rises and the assumption about a common developmental pattern in all countries the second part discusses additional matters reported indirectly in the literature and or must be further examined there are doubts whether the gdp series captures the transition of production to the three productive sectors in empirical estimations and whether services are less polluting compared to industry activities finally the original kuznets theory which laid the groundwork for the ekc concept does not seem to solve income inequality problems

self organization and sustainability energetics of evolution and implications for ecological economics abstract in the 1920s alfred lotka suggested that evolution results both in an increasing total energy flow through the biosphere and in increasing energy efficiency of biological processes later authors attempted to generalize lotka s conjectures and to transform them into general evolutionary laws these laws are derived from the laws of thermodynamics and it is frequently argued that they also apply to the development of economic systems in the present paper an alternative interpretation of the lotka principles is suggested which starts from the self organization of dissipative structures self organization concepts from ecological and evolutionary economics are integrated on this basis energetic regularities in evolutionary processes are interpreted as emergent properties of competitive self organization given the close relationship between energy dissipation in economic processes and various environmental problems thermodynamic effects of economic evolution are of practical policy relevance the evolutionary perspective taken here implies that policy measures toward sustainable development will primarily have to affect the kinds of innovative behavior triggered in competitive processes

a flexible assurance bonding system for improved environmental management abstract current methods of regulating activities that are known or suspected to be environmentally danaging are not working well they induce legal confrontation obfuscation and government intrusion into the inner workings of firms they tend to suppress technical and social innovation aimed at long term solutions they do not mesh well with the market signals that firms use to make decisions this paper discusses some of the underlying reasons for this problem and outlines a flexible environmental assurance bonding system designed to incorporate environmental criteria and uncertainty into the market system and to induce positive environmental technological innovation in addition to direct charges for known environmental damages an assurance bond equal to the current best estimate of the largest potential future environmental damages would be levied and kept in an interest bearing escrow account the bond plus a portion of the interest would be returned if and only if the firm could prove that the suspected damages had not occured or would not occur if damages did occur the bond would be used to rehabilitate or repair the environment and to compensate injured parties by requiring the users of environmental resources to post a bond adequate to cover potential future environmental damages with the possibility for refunds the burden of proof is shifted from the public to the resource user and a strong economic incentive is provided to research the true costs of environmentally innovative activities and to develop innovative cost effective pollution control technologies

preferences over wealth experimental evidence abstract preferences over wealth are a channel to explain why households in the aggregate are less responsive when real interest rates fall following such preferences they save more than would be optimal in a standard model however little is known about preferences over wealth empirically we run an intentionally simple lab experiment on intertemporal spending and saving decisions with 180 students under a positive discount factor zero interest and linear utility maximizing behaviour would imply spending any funds instantaneously while half of the participants behave optimally we find a robust pattern where participants on average form and maintain a stock of wealth consistent with wealth entering the utility function directly

is energy cost an accurate indicator of natural resource quality abstract the use of energy cost as an indicator of natural resource quality is examined energy cost is the direct and indirect energy used to produce a unit of a resource commodity different approaches to the role of energy in the economy are discussed and it is demonstrated theoretically that energy cost can give false indications of changes in resource quality this is because energy cost is only an accurate indicator of resource quality if either energy is the single primary factor of production and the economy can be represented by an input output model or if there is substitutability between the factors of production then marginal products must be proportional to the factors embodied energy these conditions are tested empirically using data from the us agricultural sector the results show that there is substitutability and marginal products are not proportional to embodied energy however the strong neoclassical assumption of price taking profit maximization can be rejected at a 5 level of significance though not at the 3 5 level the generality of the empirical results may be restricted due to data limitations but the theoretical framework can be applied to other data sets other resources and even other indicators

employment politics and economic recovery during the great depression in earlier studies economic historians found that political goals rather than social or humanitarian objectives motivated much of new deal spending using new information on annual state level employment for the 1930s this paper shows that while politics are still important responding to the needs of the unemployed was an important determinant of new deal spending

ecological pricing and economic efficiency abstract there is a need to accurately account for the contributions of environmental assets to the overall economy such accounting would permit policies that allow protection of important natural resources and aid the analytic process to determine an accurate basis for a sustainable economy the aim is to develop an accounting framework for ecology that is sufficiently consistent with the economic framework that the two can be fruitfully combined with appropriate definitions of the flows the two systems can be connected into a common framework no single measure of the system productivity and efficiency can be given for the combined system however until the ecosystem metabolism can be converted into economic terms this could be done with a series of economic valuation techniques ecological prices could then be estimated and a single measure of ecological economic output could be given with the net combined system input and output now in common terms a technical system efficiency measure can logically be proposed because human activity inevitably involves dissipation such emissions would now have a monetary price because such emissions are irrecoverable the total output of the combined system is greater than it is under the current definition giving rise to a technical system wide efficiency measure

risk and savings a taxonomy abstract the effect of risk on savings depends not just on preferences but also on the type of risk this helps to explain why the empirical literature reports positive effects for developed countries but negative effects for developing countries

precautionary saving by young immigrants and young natives 1 introduction and literature review foreign born population accounted for approximately 9 of the total population residing in the united states by the mid 1990s and including their children they were responsible for approximately 51 of the u s population growth martin 1995 these dramatic changes in the u s population have prompted much economic research on the immigrant population but despite the great deal of attention that has been paid to the labor market progress of immigrants little is known about their saving and wealth accumulation patterns 1 many studies requiring information on the saving behavior of immigrants simply assume that immigrant savings parallel that of natives macurdy nechyba and bhattacharya 1998 however it may be the case that immigrants behave differently have different motives different opportunities and different needs with respect to saving and wealth accumulation vis a vis natives most of the limited literature on the saving behavior of immigrants is inspired by european and middle eastern guest worker migration and consequently is geared to the behavior of temporary migrants 2 three papers that focus on the saving behavior of immigrants in general are the papers by galor and stark 1990 carroll rhee and rhee 1994 and dustmann 1997 galor and stark note that immigrants and natives differ from one another in their migration probabilities because immigrants have ties to other countries it is more likely that they emigrate relative to the native born worker 3 using an overlapping generations model galor and stark show that the higher the probability of emigration the higher is the level of savings hence they predict immigrants save more than the native born dustmann models precautionary savings and assumes that immigrants maximize expected lifetime utility from consumption in the host and home country proportionally to the lifetime spent abroad and at home 4 under appropriate restrictions 5 dustmann shows that if labor markets in the home and host countries are uncorrelated immigrants will carry out more precautionary savings relative to a comparable native worker because immigrants will be subject to greater income risk in the host country 6 however it is also possible in dustmann s formulation to have immigrants engaging in less precautionary saving relative to native workers for example if economic conditions across the two countries are correlated immigrants could be subject to less lifelong income risk than natives given their ability to diversify away labor market risk by operating in two markets rather than just one as in the case of natives additionally if the risk preferences of natives and immigrants are different then the precautionary saving motive could be more or less pronounced in one group relative to the other all else equal carroll rhee and rhee 1994 use the canadian survey of family expenditures to compare saving behavior of immigrants to canada from different regions of the world they conclude that immigrant saving does not significantly differ by country of origin however they do find that recent immigrants save less than do canadian born and that immigrants saving behavior approaches the pattern of the canadian born over time overall the theoretical literature tends to favor the hypothesis that immigrants carry out more precautionary savings than natives which could result in immigrants accumulating more wealth than natives immigrants face greater uncertainty regarding their labor market participation labor market progress and health care coverage these factors along with geographic distance may make it more difficult to obtain financial support from family members in times of necessity requiring that immigrants maintain larger stocks of precautionary saving but dustmann s model in consonance with a widely held view also allows for immigrants to be more risk tolerant than natives since they are willing to undergo higher uncertainties and risks when they decide to migrate to a new country barsky et al

sustainability analysis of a society based on exergy studies a case study of the island of samso denmark abstract the danish island samso has since 1997 initiated a process through which the island should reach a state where it would be able to supply its own energy such a situation was reached since 2005 after having established 21 windmills and the island is now a net exporter of electricity to the danish power network at the same time the buildings in the more habituated areas were connected to 4 district heating plants which generate heat from combustion of straw in some cases combined with supplementary inputs from photo thermal devices meanwhile certain activities on the island such as running the ferries cars factories and heating in more distant areas are still dependent on significant input of fossil fuels the inhabitants have recently stated a wish to move on towards being independent of fossil fuels in 2030 and carbon neutral during the next decades as a consequence the idea came up to develop a method for the sustainability analysis of a society which would assist in governing the transitional process in the direction of increasing sustainability therefore a framework has been developed based on the concept exergy that may reveal where large consumptions are taking places such areas are likely to be sensible targets for action or at least increased attention basic methods have been developed that allows to account for infrastructure transfers inputs and outputs and consumption in terms of exergy and taking into account whether the exergy storages or flows can be considered to be renewable or not the framework has been developed for six societal sectors the energy sector the public sector the private households the agricultural sector the industry commerce and trade sector and nature nature is here considered an activity that provides the society with an exergy that may also be of value to our societies often referred to as ecosystem services based on the estimated amount of infrastructure and transfers inputs and outputs a number of sustainability indicators have been developed that may be monitored over time and which may serve to indicate whether potential measures undertaken also lead the society in the right direction an attempt to evaluate the potential importance of wastes has also been carried out as in organic waste could play an important role in acquiring the amount of bio diesel required to run the ferries in the future the results demonstrate that the already existing overhead in production of electricity leaves the island with many options and a great opportunity to be independent of fossil fuels in near future in fact it might well be that socio economical perspectives will turn out to be the more severe obstacles in the transition process adjacent to this work a carbon model has also been set up to reveal the consequence of proposed measures and strategies to the carbon budget of the island jorgensen and nielsen 2014

breaking the iron rice bowl evidence of precautionary savings from the chinese state owned enterprises reform abstract china s large scale reform of state owned enterprises soe in the late 1990s provides a natural experiment for estimating precautionary savings before the reform soe workers enjoyed similar job security as government employees the reform caused massive soe layoffs but government employees kept their iron rice bowl the changes in the relative unemployment risks for soe workers provide a clean identification of income uncertainty with self selection biases mitigated by focusing on government assigned jobs precautionary savings account for about 40 percent of soe households wealth accumulation moreover demographic groups more vulnerable to the reform also accumulated more precautionary wealth

information order and knowledge in economic and ecological systems implications for material and energy use abstract ecological and economic systems are open systems that require energy to change the thermodynamic states of materials from naturally occurring to more valued forms these changes are accompanied by information flows and changes in the order of systems and their surroundings in this paper thermodynamics is used to assess these system changes and relate them to the knowledge present in a system particular emphasis is given to 1 the fundamental relationships among material energy and information flows and changes in order and knowledge 2 the role of equilibrium and non equilibrium thermodynamics in assessing system change 3 the increasing role of material and energy flows through economic systems and 4 the necessity for improved societal valuation of these flows

a theory of economic growth with material energy resources and dematerialization interaction of three growth mechanisms the nature of energy and material resources in a non optimizing growth theory framework is clarified this involves two modifications of the conventional theory firstly multiple feedback mechanisms or growth engines are identified such that the impact of the cost of production through demand on growth is accounted for secondly a production function distinguishes between resource use technical efficiency and value creation the resulting model is analytically solved under the condition of a constant growth rate given model complexity numerical experiments are performed as well providing relevant insights to the academic and political debates on environmental kuznets curves and dematerialization

marginal federal personal and corporate income tax rates in the u s 1909 1975 abstract in this article i first report and describe the construction of two new statistical series on the marginal federal income tax rates for corporations and private individuals in the united states since the inception of those taxes and then analyze the behavior of these series over time several results on the determination of tax rates are derived these generally are not consistent with barro s theory of deficit finance

environmental bonds and environmental research in innovative activities abstract this paper considers the incentive to uncover potential future social costs of activities having no historical precedents since ex ante markets in the future external effects of historically unique activities are non existent the private incentives to uncover the possibility of thalidomide type results in such activities is weak the paper discusses the value of sequentially determined environmental bonds as mechanisms for the generation of research funds in these cases and derives measures for the calculation of such bonds

indicators of sustainable development some lessons from capital theory abstract interest in sustainable development has prompted a search for suitable indicators that might complement or supplant the traditional measures of economic success although there is no agreement about the precise meaning of sustainable development one idea which is increasingly in good currency is that sustainable development requires that the stock of capital that one generation passes on to the next be maintained or enhanced further this stock of capital is seen by some to comprise two elements manufactured capital and natural capital the extent to which these are believed to be substitutes or complements is one factor which separates the neoclassical school from some of its critics a premise of this paper is that if capital theory is relevant to sustainable development then it should also be helpful in developing indicators however even within the normal confines of economics capital theory is not a homogeneous body of analysis therefore an exploration of capital theory and its relevance to sustainable development can be expected to generate various perspectives on those measures most useful for gauging the sustainability of economic activity it is these linkages between capital theory in various schools of thought and possible indicators of sustainable development that are the subject of this paper

is sustainability optimal examining the differences between economists and environmentalists abstract this paper examines a number of possible explanations for the apparent differences between economists and environmentalists concerning economic growth and sustainable development some of the differences are well known and relate to issues such as resource scarcity intergenerational equity and the composition of social capital however our analysis finds that while economic notions of optimal growth and the techniques of benefit cost analysis have important advantages for evaluating complex tradeoffs because they are quantifiable they may have potentially serious drawbacks as well the paper focuses on two potential sources of bias in the use of welfare economics for social choice first there is a conservative reinforcement in benefit cost analysis which is likely to produce biases against policy interventions to protect a degraded environment second and perhaps more importantly the aggregation of individual willingness to pay as a measure of social benefits is shown to be invalid in the case of positional goods where the demand for the good reflects the desire of individuals to raise their own relative standing this error may cause the economic calculus to be biased against non positional goods including non rival goods such as environmental resources these biases further complicate the already strained assumptions in utilitarian based welfare economics that by relying on revealed preference and consumer sovereignty are unable to distinguish between or apply different weights to the satisfaction of different categories of preferences furthermore because the dynamic consequences of even small biases in judging social optimality may give rise to large social costs or advance an unsustainable path there is a danger in relying solely on a potentially biased measure of welfare as a basis for guiding social choice the paper concludes by suggesting that efforts to correct these drawbacks of economic analysis are likely to result in approaches to sustainable development that narrow the apparent differences between economists and environmentalists

readjustment potentials in industrial energy efficiency and structure abstract with the availability of input output data for 1977 it is possible to analyze the short run effects of the 1974 energy price increase as well as other factors on the energy efficiency of the industries of the economy such an analysis is conducted here using a number of measures derived through the energy input output model attention is focused on patterns of energy use changes in energy intensities through time and the factors which underlie these changes a specific measure of the degree to which energy substitution is attributable to changes in direct and indirect energy requirements is developed and estimated results show that large changes in the economy s overall industrial energy requirements are not observed between 1963 and 1977 however for individual fuels large changes in intensity values are not at all uncommon among industries

an experimental analysis of the effectiveness of an environmental assurance bonding system on player behavior in a simulated firm it has long been recognized that the present command and control methods for pollution abatement are inefficient using market mechanisms for environmental management is a promising alternative to the direct regulatory approach market mechanisms are just beginning to appear in u s environmental policy for example tradable permit schemes are being developed and implemented for some air pollutants under the amended clean air act various other forms of taxes and tradable permits have been proposed however these systems do not address the large uncertainty inherent in most environmental problems one mechanism currently being studied to address uncertainty more effectively is a flexible environmental assurance bonding system designed to incorporate environmental criteria and uncertainty into market incentives this study uses an experimental approach employing an interactive computer game simulation model with human players to examine the effectiveness of the assurance bonding system under varying degrees of uncertainty an environmental cost efficiency index ecei or profit per unit waste is used to measure player performance preliminary results indicate that players are more successful under the assurance bonding system in terms of ecei than under the simulated current system

risk management and wealth accumulation behavior in france abstract recent theoretical saving models have placed greater emphasis on studying prudent behavior in the face of an uncertain future and have shown the influences of background risks on precautionary savings a prudent household exposed to a high future income risk will increase its savings empirical tests on recent french data insee patrimoine 97 show the relevance of subjective earnings variance to explain wealth accumulation but its contribution is not very large around 5

poor little rich kids the role of nature versus nurture in wealth and other economic outcomes and behaviors wealth is highly correlated between parents and their children however little is known about the extent to which these relationships are genetic or determined by environmental factors we use administrative data on the net wealth of a large sample of swedish adoptees merged with similar information for their biological and adoptive parents comparing the relationship between the wealth of adopted and biological parents and that of the adopted child we find that even prior to any inheritance there is a substantial role for environment and a much smaller role for pre birth factors and we find little evidence that nature nurture interactions are important when bequests are taken into account the role of adoptive parental wealth becomes much stronger our findings suggest that wealth transmission is not primarily because children from wealthier families are inherently more talented or more able but that even in relatively egalitarian sweden wealth begets wealth we further build on the existing literature by providing a more comprehensive view of the role of nature and nurture on intergenerational mobility looking at a wide range of different outcomes using a common sample and method we find that environmental influences are relatively more important for wealth related variables such as savings and investment decisions than for human capital we conclude by studying consumption as an overall measure of welfare and find that like wealth it is more determined by environment than by biology

development of ecological economics in australia and new zealand abstract this paper reviews the development of ecological economics in australia and new zealand since its beginnings in the late 1970s a historical account is presented that focuses particularly on the activities of the australia new zealand society for ecological economics and key ecological economics research activities achievements of ecological economics in australia and new zealand are assessed using a range of quantitative and qualitative data the main areas of expertise developed by australian and new zealand ecological economists were found to be theoretical foundations and visions for ecological economics biodiversity and resilience input output analysis heterodox valuation approaches analysis of economy environment interactions sustainability indicators sustainable agriculture fisheries and oceans and energy thermodynamics both countries are ranked at the top or near the top of the world rankings in terms of per capita isee membership and publication rates in ecological economics a defining feature of ecological economics in australia and new zealand has also been its practical and problem solving focus and the level of end user engagement the paper concludes by discussing the challenges that face the future development of ecological economics in australia and new zealand

oil price shocks and employment the case of ohio coal mining economic theory suggests that oil price shocks will have an impact on employment in local coal markets however theory is silent on both the absolute and relative magnitudes based on vector autoregressive models we find that oil price shocks and therefore opec policies have significant impacts on ohio coal mining employment our study indicates that oil price shocks have larger impacts on ohio coal mining employment than do shocks to coal prices or coal wages our study is unusual in that we have examined the impact of oil price shocks on employment in a specific industry

the great crash and the onset of the great depression this paper argues that the collapse of stock prices in october 1929 generated temporary uncertainty about future income which led consumers to forgo purchases of durable goods that the great crash generated uncertainty is evidenced by the decline in surety expressed by contemporary forecasters that this uncertainty affected consumer behavior is shown by the fact that spending on consumer durables declined drastically in late 1929 while spending on perishable goods rose slightly this effect is confirmed by the fact that there is a significant negative relationship between stock market variability and the production of consumer durables in the prewar era

literature survey on the relationships between energy environment and economic growth abstract the aim of this study is to exhibit an exhaustive survey which is related to the great flight of the literature of energy environment growth nexus at the individual and regional scale studies covering the period from 1978 to 2014 the survey takes into consideration the sample country region etc periods covering econometric strategies and conclusions our survey is based on the causality direction among i the energy use variables electricity nuclear renewable and non renewable and output growth ii between economic growth and environment and between the three variables at the same time globally these surveys provide paradoxical and not conclusive results which energy consumption can boost economic growth through the productivity enhancement and it can boost also the environmental damages through the enhancement of pollutant emissions our survey sheds more the lights on the energy environment growth literature by giving an extensive listing 1978 2014 of these causal linkages among the energy use variables environment and economic growth for both individual and collective cases there is a unanimous consensus about the importance of dealing with such dynamic relationship which is seems to be a cornerstone element in setting any ambition strategies energy ecological and economics

saving response to unemployment of a sibling abstract standard theoretical models of household saving behavior do not typically assume that household perceptions of the world change in response to observed events in light of the potential importance of such perception changes e g after a financial crisis this paper considers the hypothesis that a household s saving rate rises through informal learning after a sibling direct or in law has been unemployed the empirical results in this paper are consistent with the learning hypothesis with coefficients estimated by the instrumental variable iv method implying that a household s saving rate increases by 2 3 percentage points if a sibling has been unemployed

sustainability economics where do we stand abstract environmental economics which is a branch of resource economics the environment as a scarce resource is essentially about market failures the costs of pollution and pollution abatement and the economics of regulation sustainability economics includes the problem of maintaining economic growth while reducing pollution and or its impacts with special attention to the linked problems of energy supply not to mention the supply other exhaustible resources climate change and most urgently fossil fuel consumption there is a need for integration of resource and environmental economics under a new rubric sustainability economics

shocks and asset dynamics in ethiopia abstractthis article uses household survey panel data of 416 rural households to study asset dynamics in the northern highlands of ethiopia and the response of assets to shocks the period under examination 1996 2003 was marked by severe environmental shocks including a series of droughts the article empirically studies the nature of household asset paths over time using as the point of departure the theory on precautionary savings behavior results indicate that the response of assets to weather shocks the differential effect of these shocks on liquid and less liquid forms of wealth holdings and the nature of asset dynamics are all consistent with the implications of a precautionary motive for holding wealth

on the construction of marginal federal personal and social security tax rates in the u s abstract in this article i correct and extend my earlier series on marginal federal personal income tax rates i also construct a measure of the marginal social security tax rate and add this to the income tax rate to obtain a measure of the effective marginal tax rate on income due to federal taxes finally i compare my series on marginal income tax rates and its method of construction with those of barro and sahasakul

planning for sustainability as a learning concept abstract the major theme of the following discussion is the importance of a transdisciplinary approach to guide sustainability related planning and management activities the proposed approach involves much more than the usual interaction between partners from different disciplines a revised process is needed to allow real cooperation in sustainability planning this process will require a more open recognition of the subjective priorities that become the framework of sustainable development issues of various interest groups and disciplines the sustainable development agenda should be more geared towards learning processes than projected future outcomes learning is enhanced through a participatory framework inclusive of stakeholder interests insights from a broad range of disciplinary areas including the science of complexity sociology philosophy law economics and management are presented to support this position the conventional stranglehold of disciplinary thinking in policy circles limits the capacity of our decision makers to unravel the complexity of all real world environmental policy and management problems policy making needs to embody respect for that complexity and allow flexibility to promote perpetually evolving learning as a fundamentally transdisciplinary framework ecological economics has some prospect to represent these interests in a purposeful and necessarily pragmatic way

the relative importance of foreign and domestic disturbances for aggregate fluctuations in the open economy switzerland 1964 1981 abstract this paper studies whether the advent of floating exchange rates served to insulate switzerland from economic shocks of foreign origin it estimates a vector autoregression comprising four swiss and three world aggregate time series and interprets the results in terms of the properties of the vector moving average representation implied by the estimates the chief finding is that foreign shocks explain most of the systematic variation of the swiss variables in both regimes

entropy structure and organisational change abstract the paper sets out a basis for rigorous thermodynamic characterisation of structural change and of organisational interdependencies between economic and environmental processes many attempts have been made to exploit entropy as a generic explanatory variable it has widely been proposed that entropy is a measure of the level of dis order of a system of how mixed up things are then as organisation is often thought synonymous with some notion of order it has been a small step to propose that increasing organisation is the converse of increasing entropy another suggestion has been that social system structure and change can be explained in terms of a tendency towards maximum entropy production the lotka principle of maximum energy dissipation all these notions must be rejected the putative entropy order connection has its inspiration in boltzmann s probabilistic interpretation of thermodynamic entropy as a measure of microscopic disorder this order principle is simply not applicable under conditions far from thermodynamic equilibrium prigogine conditions which prevail for all important economic and ecological processes under such conditions the relationship between entropy production and changes in structure or organisation is multi faceted and situation specific attempts to account for the specificity of societal activities in terms of a generic scalar measure of organisation or dissipation are largely after the fact and in no way do away with the need for analysis of institutional and ethical dimensions of human action in their own right when properly allied to institutional analysis however the far from equilibrium thermodynamics furnishes a rich impetus for a coevolutionary perspective in ecological economics with promise of incisive treatments of in particular issues of system environment codependency and of the time in determinacies of economy environmental change