co2 emissions energy consumption and economic growth in bric countries abstract this paper examines dynamic causal relationships between pollutant emissions energy consumption and output for a panel of bric countries over the period 1971 2005 except for russia 1990 2005 in long run equilibrium energy consumption has a positive and statistically significant impact on emissions while real output exhibits the inverted u shape pattern associated with the environmental kuznets curve ekc hypothesis with the threshold income of 5 393 in logarithms in the short term changes in emissions are driven mostly by the error correction term and short term energy consumption shocks as opposed to short term output shocks for each country short term deviations from the long term equilibrium take from 0 770 years russia to 5 848 years brazil to correct the panel causality results indicate there are energy consumption emissions bidirectional strong causality and energy consumption output bidirectional long run causality along with unidirectional both strong and short run causalities from emissions and energy consumption respectively to output overall in order to reduce emissions and not to adversely affect economic growth increasing both energy supply investment and energy efficiency and stepping up energy conservation policies to reduce unnecessary wastage of energy can be initiated for energy dependent bric countries

vector autoregression cointegration and causality testing for causes of the british industrial revolution the existence timing and possible causes of the british industrial revolution are considered by investigating the time series properties of industrial production and various explanatory variables utilising two types of robust cointegration based causality tests we argue that domestic forces notably technological progress shaped the industrial revolution whereas overseas trade expansion was mainly a consequence of industrial growth results from granger type var tests are contrasted with those of toda and phillips working paper 91 07 university of western australia 1991b where the latter manifest some of the potential problems raised by the authors when applied to a data set of this type an understanding of the possible causes of the first industrial revolution may shed more general light on the forces promoting industrialization and growth to the extent that the first industrial revolution offers a template exports appear not to provide a simple pathway to industrialization

racing with uncertainty and strategic interaction between competitors as the race unfolds most of the existing literature examines one or other of these features but not the two combined our aim is to see how the efforts of competitors in a race vary with the intensity of rivalry between them in our principal model whch is of a one dimensional race it is shown that the leader in the race makes greater efforts than the follower and efforts increase as the gap between competitors decreases under certain conditions the same results hold in our second related model which is of a two dimensional race

cost structure and productivity growth in european railway systems the purpose of this paper is threefold first to empirically investigate the coststructure of the railway systems in ten european countries belgium denmark france germany greece italy luxembourg the netherlands portugal and the united kingdom of the european union second to provide measures of economies diseconomies of scale and fully investigate the manner by which economies of scale have affected the cost structure of the system and have been affected by the growth in input prices and technology and third to measure economic efficiency and identify its sources in achieving this purpose the translog technology has been used and the translog model was estimated using time series data covering the period 1969 1993 zellner s iterative method was used in estimating the translog model

a model of the evolution of duopoly does the asymmetry between firms tend to increase or decrease this paper is an attempt to identify some of the factors that affect the evolution of market structure in a model of dynamic competition between two firms the stochastic evolution of the state of competition depends on the respective effort rates of the firms the question is whether the current leader works harder than the laggard does the gap between firms tend to increase or decrease we show that several effects are at work the state tends to evolve in the direction where joint payoffs are greater since joint payoffs are related to joint product market profits less joint effort costs there are two classes of effect the joint profit effect and various joint cost effects the latter result in part from the pattern of profits and in part from endpoint effects that give relief from efforts asymptotic expansions illuminate these influences moreover we show by numerical simulation that there is another kind of joint cost effect the pattern of joint effort costs can influence the pattern of evolution of market structure and the evolution of the pattern of market structure can influence the pattern of efforts in a mutually self reinforcing manner in particular there may be equilibria in which this last effect means that the laggard works harder than the leader even though all the other effects work in favour of the leader

in search of optimised regional trade agreements and applications to east asia we quantitatively analyse the trade effects of enhanced trade facilitation with extended gravity equations our findings confirm that rtas comprised of countries equipped with better trade facilitation are more likely to be trade creating less likely to be trade diverting and are thus more likely to lead the world economy toward global free trade we also find that i the traditional gains from shallow integration through eliminating tariff barriers will be greater for south south rtas in east asia such as an asean china rta provided that the tariff reducing schedule is strictly fulfilled ii the gains from deeper integration through enhancing trade facilitation will be greater for north north rtas in east asia such as a japan korea rta and iii the gains from a combined trade liberalisation strategy through tariff reductions and enhanced trade facilitation will be greater for north south rtas in east asia such as a china korea and an asean 3 rta

a perpetual race to stay ahead this paper presents a model of dynamic competition between two firms that repeatedly engage in an innovative activity the state of competition measured by the difference between the number of innovations introduced by the firms evolves stochastically according to their effort level the structure of markov perfect equilibria is identified it is generally not true that competition is fiercest when firms are closest rather firms invest under two distinct circumstances while sufficiently ahead to outstrip their rival and secure a durable leadership while behind to regain leadership and prevent the situation from worsening to the point where their rival outstrips them industry such a market structure cannot be adequately modelled by a repeated game since history obviously affects market opportunities more precisely previous outcomes determine the range of available actions and pay offs economists have thus resorted to the study of races to gain insights into the strategic issues raised by such competition with the notable exceptions of aoki 1991 harris 1991 and budd harris and vickers 1993 most of the literature has analysed formal races displaying exogenous finishing lines or deadlines as well as final prizes and rewards and the corresponding results rely on backward induction however such assumptions do not seem to capture accurately the essential features of many markets often the rivalry only ends if at all when one of the competitors withdraws so that the deadline should be endogenized moreover benefits and losses are continuously collected additionally the emerging empirical literature on races stresses the inadequacy of standard models and the need to model r d as a race with multiple prizes in the words of cockburn and henderson 1994 our finding that the modern game theoretic literature is of only limited usefulness as an empirical guide points to the need to model r d as a race with multiple prizes the model analysed in this paper is an attempt to offer an adequate framework for this type of dynamic competition the stochastic evolution of the state of competition between two firms depends on their respective effort levels the state of competition is measured by the

innovation and industry evolution the theoretical literature on innovation has been concerned with a single innovation produced by a number of identical agents by contrast we consider a market in which one firm is the current incumbent while the remaining firms are challengers moreover we consider a sequence of innovations so that success does not imply that the successful firm reaps monopoly profits forever after but only until the next better innovation is developed we begin with a fully optimizing behavioral model and derive the equivalent of the schumpeterian process of creative destruction that is a firm enjoys temporary monopoly power but is soon overthrown by a more inventive challenger the essential point to grasp is that in dealing with capitalism we are dealing with an evolutionary process the fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers goods the new methods of production or transportation the new markets the new forms of industrial organization that capitalist enterprise creates schumpeter 1942 pp 82 83

proliferating regional trade arrangements why and whither this paper investigates why regional trade arrangements rtas are proliferating extensively and how the effects of multiple rtas by interacting with each other evolve over time our empirical analysis based on an extended gravity model utilising a large panel dataset of 175 countries from 1948 to 1999 shows that rtas on average increase global trade by raising intra bloc trade without damaging extra bloc trade the net trade effects however heavily depend on the types of rta strategic evolution over time which we categorise as expansionary rtas duplicate rtas or overlapping rtas we find that countries excluded from an rta can benefit more from duplicating a separate rta than from joining an existing rta this result explains why the number of bilateral trade blocs rather than the membership size of existing rtas is currently exploding we also find that the net trade creating effects of rtas are substantially lower for countries participating in overlapping rtas this result suggests that it is less likely that the currently proliferating rtas will completely merge and lead the world economy to global free trade our empirical results are robust to controlling for the characteristics of countries that may influence the impact of rtas

go for broke or play it safe dynamic competition with choice of variance we consider a differential game in which the joint choices of the two players influence the variance but not the mean of the one dimensional state variable we show that a pure strategy perfect equilibrium in stationary markov strategies me exists and has the property that patient players choose to play it safe when sufficiently ahead and to take risks when sufficiently behind we also provide a simple condition that implies both players choose risky strategies when neither one is too far ahead a situation that ensures a dominant player emerges quickly

competition and growth with step by step innovation an example this paper develops a simple example to analyse the relationship between product market competition and growth in a model with step by step innovations where laggards can never leapfrog the current industry leaders but instead must first catch up with the leaders before battling for technological leadership in the future unlike in existing schumpeterian models of growth more intense product market competition and or imitations may be growth enhancing

causality between exports and economic growth abstract this paper utilizes granger causality tests in investigating the relationship between exports and national income from a consistent data set for 47 developing countries in africa new empirical results as well as suggestions for future research are presented

dropout behavior in r d races with learning we examine a game theoretic model of a two firm r d race in which expenditures on r d and the concomitant increase in experience learning enable thefirms to increase their probability of discovering an invention the learning process is stochastic it generates a unique subgame perfect equilibrium for identicalfirms with the characteristic that the leader never drops out but the follower drops out if the leader gains a significant lead the leader can find it optimal to drop out if the firms value the invention differently or have different r d efficiencies thus our analysis generates results between vigorous competition and natural monopoly central to schumpeter s 1934 vision of entrepreneurship are the extraordinary profits associated with innovation the lure of these profits fuels the fires of creative destruction as innovators replace declining firms this article analyzes the competition for the profits obtained by bringing an innovation to fruition and receiving the associated patent we restrict attention to the subclass of innovations known as inventions innovations that are the product of a firm s research and development in particular we are concerned with the conditions that cause a firm after having invested in r d to drop out of the competitive race situations in which the leading firm drops out are of even greater interest competition in r d is often modelled as a race in which the winner receives a patent and reaps most or all of the benefits of the invention as exemplified by kamien and schwartz 1972 the early theoretical literature tended to be based on decision theoretic models the firm seeks an optimal rate of expenditure on r d determined in part by the expected value of the invention the extent of the first mover advantage the economies or diseconomies of scale in r d and the perceived intensity of rivalry it is not anticipated that the firm s decisions will affect the r d efforts of the perhaps unknown rivals kamien and schwartz 1982 p 124 show that the firm does no research if rivalry is sufficiently intense because their model is static however it is never the case that a firm enters the race and then drops out

tirole s industrial regulation and organization legacy in economics jean tirole was awarded the 2014 sveriges riksbank prize in economic sciences in memory of alfred nobel for his analysis of market power and regulation this paper provides an overview of some of that work and of his related contributions to game theory

a dynamic model of competitive entry response i develop a dynamic investment game with a memoryless research and development process in which an incumbent and an entrant can invest in a new technology and the entrant can also invest in the old technology i show that an increase in the probability of successfully implementing a technology can cause the incumbent to reduce its investment under certain conditions if the success probability is high the incumbent allows the entrant to win the new technology so that firms reach an equilibrium in which they use different technologies and threats of retaliation prevent attacks but if the success probability is low such an equilibrium cannot be sustained and both firms eventually implement both technologies

causality between export growth and industrial development empirial evidence from the nics abstract this paper investigates the causal relationship between export growth and industrial development in eight newly industrializing countries nics results of sims causality test show that for most of the nics there is a strong bidirectional causality between the growth of exports and industrial development these findings support the export led growth strategy in that expansion in exports not only promote the growth of national income but also lead to structural transformation of the developing countries

exports growth and causality in developing countries abstract previous empirical studies have interpreted results in regressions of output variables on export variables as providing support for an export promotion development strategy such an interpretation is questionable since these regressions provide no means of determining the direction of causality this paper performs causality tests between exports and growth for 37 developing countries the results cast considerable doubt on the validity of the export promotion hypothesis

the accident externality from driving we estimate auto accident externalities more specifically insurance externalities using panel data on state average insurance premiums and loss costs externalities appear to be substantial in traffic dense states in california for example we find that the increase in traffic density from a typical additional driver increases total statewide insurance costs of other drivers by 1 725 3 239 per year depending on the model high traffic density states have large economically and statistically significant externalities in all specifications we check in contrast the accident externality per driver in low traffic states appears quite small on balance accident externalities are so large that a correcting pigouvian tax could raise 66 billion annually in california alone more than all existing california state taxes during our study period and over 220 billion per year nationally

road accidents and traffic flows an econometric investigation this paper develops an empirical model of the relationship between road traffic accidents and traffic flows the analysis focuses on the accident externality which is determined mainly by the difference between the marginal and average risks the model is estimated using a new data set which combines hourly london traffic count data from automated vehicle recorders together with police records of road accidents the accident flow relationship is seen to vary considerably between different road classes and geographical areas more importantly even having controlled for these and other differences the accident externality is shown to vary significantly with traffic flows in particular while the accident externality is typically close to zero for low to moderate traffic flows it increases substantially at high traffic flows

competition imitation and growth with step by step innovation is more intense product market competition and imitation good or bad for growth this question is addressed in the context of an endogenous growth model with step by step innovations in which technological laggards must first catch up with the leading edge technology before battling for technological leadership in the future in contrast to earlier schumpeterian models in which innovations are always made by outsider firms who earn no rents if they fail to innovate and become monopolies if they do innovate here we find first that the usual schumpeterian effect of more intense product market competition pmc is almost always outweighed by the increased incentive for firms to innovate in order to escape competition so that pmc has a positive effect on growth second that a little imitation is almost always growth enhancing as it promotes more frequent neck and neck competition but too much imitation is unambiguously growth reducing the model thus points to complementary roles for competition anti trust policy and patent policy

causality and the first industrial revolution the existence timing and possible causes of the british industrial revolution are considered by investigating the time series properties of industrial production and various explanatory variables utilizing co integration based causality tests this paper argues that domestic forces notably population real wages and technological progress shaped the industrial revolution whereas overseas trade expansion was a consequence of industrial growth the first industrial revolution may shed more general light on the forces promoting industrialization and growth to the extent that the first industrial revolution offers a template exports do not appear to provide a simple pathway to industrialization copyright 1998 by oxford university press

estimating the impact of incidents on urban controlled access highways an empirical analysis abstractan empirical analysis is developed that quantifies the impact of different types of traffic incidents on the speed and maximum flow averages of vehicles on a controlled access highway the incident types considered include damage to highway infrastructure vehicle rollover crashes into stationary objects collisions with moving vehicles rain fog vehicle breakdowns pedestrians on roadway etc using real world data from chile s most heavily used urban motorway freeway estimates of incident impacts on speed are generated using a multiple linear regression model incorporating instrumental variables to correct for endogeneity flow results are then generated using the fundamental traffic equation relating speed flow and density a ranking of the impacts on highway traffic of the different incident types based on incident frequency as well as impact size demonstrates that for the real case studied the incidents with the greatest cumulative effect are in order of magnitude vehicle breakdow

persistence of technological leadership emerging technologies and incremental innovation in a model of competitive innovation i derive theoretical conditions for an entrant to displace the incumbent firm by innovating in an undeveloped substitute emerging technology the main result presents conditions on profitability and innovation speed that yield a markov perfect equilibrium in which the entrant pursues the emerging technology while the incumbent chooses to persist with the established technology and collect short run profits notably this result does not require the entrant s superiority to the incumbent for innovation finally when the model is calibrated to hard drive industry data its predictions are consistent with the observed outcomes

comparing alternative policies to reduce traffic accidents abstract this paper derives and implements formulas for the welfare effects of uniform mileage taxes gasoline taxes per mile insurance premiums and mileage taxes differentiated across vehicle and driver groups for reducing the external costs of passenger vehicle accidents the average external accident cost is estimated at 2 2 6 6 cents per mile accidents costs differ substantially across driver groups but only moderately across vehicles groups annual welfare gains from a mileage tax equal to marginal external costs for each driver vehicle group are 9 4 billion in the benchmark case the uniform mileage tax and per mile insurance reform can achieve 76 and 65 of this welfare gain respectively while the gasoline tax can achieve only 28 of the welfare gain unlike other policies the gasoline tax induces costly improvements in average fleet fuel economy that have little effect on reducing external costs

dynamic competition in technological investments an empirical examination of the lcd panel industry abstract when are technological laggards more likely to try to catch up with leaders we offer empirical evidence on firm level data of plant investments in the tft lcd panel industry where technological competition has been intense and dynamic we find that the followers level of technology has a non monotonic effect on technology improving investments with intermediate followers the most apt to invest in catch ups this result is a puzzle given the existing theory on technology race we also find that followers catch up investments increase with the capacity of the leader that employs the state of the art technology these results are robust to variations in specification and alternative accounts of effects we discuss our findings and contributions in light of the technology race literature

dynamic r d competition the authors study a simple two stage stochastic patent race involving two firms they examine the behavior of the participants as they gain the lead or fall behind in the race the authors find that the leader engages in rd 2 a policy of issuing patents for intermediate research results and 3 the effects of research joint ventures whereby the firms coordinate their initial research efforts and share their results copyright 1987 by royal economic society

free trade areas in east asia discriminatory or non discriminatory ver the past decade we have witnessed the worldwide proliferation ofregional trade arrangements rtas even after the launch of the wtomultilateral trading system rtas have continued to spread however there havebeen marked variances across regions in terms of the degree to which regionaltrade integration has been carried out the east asian region is characterised bythe dearth of rtas regional integration moves have involved merely partial orloosely institutionalised groupings i e afta asean free trade area andapec asia paci c economic cooperation in particular the major three eastasian countries china japan and korea have tended to bypass the prevalenttrend of regionalism and instead have generally preferred multilateral trade liberal isation approaches under the gatt and wto regulations regarding rtas their stance against regionalism has mainly been for the following reasons i relative predominance of interregional trade and investment relations overintraregional transactions ii historical animosities stemming from the legaciesof japanese colonialism iii lack of central leadership and iv diversities inculture race language and level of economic development within the region in recent years however the region s support has shifted from multilateraltrade arrangements to rtas a turning point was the outbreak of the east asian nancial crisis in 1997 besides triggering massive economic unrest in east asia the crisis revitalised the demand for regional economic cooperation which calledfor more cooperation and policy coordination among neighbouring economies

the great industry gamble market structure dynamics as a survival contest industry dynamics are studied as an endogenous tournament with infinite horizon and stochastic entry in each period firms investments determine their probability of surviving into the next period this generates a survival contest which fuels market structure dynamics while the evolution of market structure constantly redefines the contest more concentrated markets endogenously generate less profit rivals that are more difficult to outlive and more entry the unique steady state distribution exhibits ongoing turbulence correlated exit and entry rates and shakeouts the model s predictions fit empirical findings in markets where firms trade off profits for smaller risk of failure e g banking

are causal relationships sensitive to causality tests 1987 are causal relationships sensitive to causality tests applied economics vol 19 no 4 pp 459 465