inflation before and after central bank independence the case of colombia abstract in this paper we model the colombian inflation rate in terms of excess demand effects from asset goods and factor markets in contrast to previous results for a group of industrial economies we find that domestic factors are a far more powerful influence on inflation than are external factors the paper pays particular attention to the potential effects of the constitutional reform of 1991 which created a central bank independent from other parts of government we find that the creation of an independent central bank did change some of the parameters of the model as the disequilibria in goods and monetary markets were found to have a smaller effect on inflation after central bank independence was granted

the environmental kuznets curve and flow versus stock pollution the neglect of future damages in this paper we offer a possible explanation for the empirical finding that the pollution income relationship pir for flow pollutants is an environmental kuznets curve ekc i e inverted u shaped but that the pir for stock pollutants is monotonically rising we analyse an overlapping generations model with two pollutants the flow pollutant causes immediate damages but the stock pollutant harms the environment only in the future hence a succession of myopic governments lets stock pollution grow with income in contrast the flow pollutant follows an ekc whose downturn might be caused by the neglect of future damages and by ever rising stock pollution without the stock pollutant the pir for the flow pollutant can increase monotonically we also show that the turning point of the ekc for the flow pollutant lies at lower levels of income and of flow pollution if stock pollution is high and harmful this casts doubts on most empirical ekc studies because they assume that the turning point occurs at the same income level in all countries however it is consistent with recent empirical findings that the income level at the turning point of the ekc varies across countries

do individual preferences explain the environmental kuznets curve abstract some economists maintain the optimistic view that individual preferences of rich people eventually lead to a virtuous circle relationship between rising income and environmental degradation in this article i review some of the models that establish a relationship between individual preferences and environmental quality these models provide a basis for discussion of the key role played by two factors individual preferences and technology they do not however capture the distributive conflicts that occur between different social groups in the process of defining environmental policy neither do they provide a good basis for distinguishing between environmental costs caused by the decisions of particular consumers and those which affect the same consumers this point is related to the various manners in which environmental costs are displaced displacement often occurs within a country for current costs and is even clearer and more relevant when costs are transferred across a great distance or to a remote future in such cases there are few incentives to reduce consumption or alter its composition displacement moreover can become a strategy pursued more or less consciously for maintaining high and rising levels of consumption without dealing with the associated environmental costs

energy consumption and gdp causality relationship in g 7 countries and emerging markets abstract the causality relationship between energy consumption and income is a well studied topic in energy economics this paper studies the time series properties of energy consumption and gdp and reexamines the causality relationship between the two series in the top 10 emerging markets excluding china due to lack of data and g 7 countries we discover bi directional causality in argentina causality running from gdp to energy consumption in italy and korea and from energy consumption to gdp in turkey france germany and japan hence energy conservation may harm economic growth in the last four countries

economic development and co2 emissions a nonparametric panel approach we examine the empirical relation between co2 emissions per capita and gdp per capita during the period 1960 1996 using a panel of 100 countries relying on the nonparametric poolability test of baltagi et al baltagi b h hidalgo j li q 1996 a nonparametric test for poolability using panel data journal of econometrics 75 345 367 we find evidence of structural stability of the relationship we then specify a nonparametric panel data model with country specific effects estimation results show that this relationship is upward sloping nonparametric specification tests do not reject monotonicity but do reject the polynomial functional form which leads to the environmental kuznets curve in several studies

confronting the environmental kuznets curve t he environmental kuznets curve posits an inverted u relationship between pollution and economic development kuznets s name was apparently attached to the curve by grossman and krueger 1993 who noted its resemblance to kuznets s inverted u relationship between income inequality and development in the first stage of industrialization pollution in the environmental kuznets curve world grows rapidly because people are more interested in jobs and income than clean air and water communities are too poor to pay for abatement and environmental regulation is correspondingly weak the balance shifts as income rises leading industrial sectors become cleaner people value the environment more highly and regulatory institutions become more effective along the curve pollution levels off in the middle income range and then falls toward pre industrial levels in wealthy societies the environmental kuznets curve model has elicited conflicting reactions from researchers and policymakers applied econometricians have generally accepted the basic tenets of the model and focused on measuring its parameters their regressions typically fitted to cross sectional observations across countries or regions suggest that air and water pollution increase with development until per capita income reaches a range of 5000 to 8000 when income rises beyond that level pollution starts to decline as shown in the conventional ekc line in figure 1 in developing countries some policymakers have interpreted such results as conveying a message about priorities grow first then clean up numerous critics have challenged the conventional environmental kuznets curve both as a representation of what actually happens in the development process and as a policy prescription some pessimistic critics argue that crosssectional evidence for the environmental kuznets curve is nothing more than a

neoclassical growth the j curve for abatement and the inverted u curve for pollution abstract this paper reexamines the neoclassical environmental growth model of forster to gain insights into the dynamic relationships among pollution abatement effort and economic development whereas the model has heretofore been used to examine steady state levels of capital consumption and environmental quality it also provides a theoretical basis for recent empirical research on j curves for abatement effort and inverted u curves for pollution

a theoretical basis for the environmental kuznets curve abstract this paper attempts to explain the environmental kuznets curve ekc or inverted u shaped relationship between income and environmental degradation in the framework of endogenous growth model considering a closed economy one part of capital is used for commodity production which generates pollution that degrades existing environment and the remaining part is used for abating pollution i e upgrading environment sufficient abatement activity improves restores environmental quality a sufficient abatement activity associated with commodity production could only lead optimally towards steady state the ratio of allocation of capital between two sectors production and abatement is fixed along the optimal path but it varies along the non optimal path that exists in the off steady state in the economy allocation of capital for abatement activity varies over time thus a change from insufficient to sufficient allocation of capital i e investment for abatement activity is the basis for an inverted u shaped relationship between environmental quality and economic growth

the forgotten history of domestic debt there is a rich scholarly literature on sovereign default on external debt comparatively little is known about sovereign default on domestic debt even today cross country data on domestic public debt remains curiously exotic particularly prior to the 1980s we have filled this gap in the literature by compiling a database on central government public debt external and domestic the data span 1914 to 2010 for most countries reaching back into the nineteenth century and earlier for many our findings here on debt sustainability sovereign defaults the temptation to inflate and the hierarchy of creditors only scratch the surface of what the domestic public debt data can reveal first domestic debt is big for the 64 countries for which we have long time series domestic debt accounts for almost two thirds of total public debt for most of the sample this debt carries a market determined interest rate except for the financial repression era between wwii and financial liberalization second the data go a long way toward explaining the puzzle of why countries so often default on their external debts at seemingly low debt thresholds third domestic debt has largely been ignored in the vast empirical work on inflation in fact domestic debt a significant portion of which is long term and nonindexed is often much larger than the monetary base in the run up to high inflation episodes last the widely held view that domestic residents are strictly junior to external creditors does not find broad support

identifying reduced form relations with panel data the case of pollution and income abstract in this paper we propose a solution to the non robustness that plagues the estimation of inverted u shaped relationships using panel data such as the relation between pollution and income when dependent and independent variable like pollution and income are both time related separating the effect of the independent variable from time effects brings about a fundamental identification dilemma the imposition of restrictions on the controls might drive the shape of the relationship between the dependent pollution and independent income variables our solution consists of imposing the very weak constraint that arbitrary cross sectional units have the same relationship we apply our methodology to two widely studied cases namely so 2 and co 2 emissions interestingly our estimates are insensitive to the required subjective choices but also strongly differ from the literature so far we find consistent positive income effects for both cases and time effect estimates with a clear u shaped trend for so 2 emissions but only slightly so for co 2 emissions

exploring different views of exchange rate regime choice the empirical distinction between de facto and de jure exchange rate regimes raises a number of interesting questions which factors may induce a de facto peg why do countries enforce a peg but do not announce it why do countries break their promises we show that a stable socio political environment and an efficient political decision making process are a necessary prerequisite for choosing a peg and sticking to it challenging the view that sees the exchange rate as a commitment device policymakers seem rather concerned with regime sustainability in the face of adverse economic and socio political fundamentals

inflation and output dynamics with state dependent pricing decisions this paper studies a state dependent pricing model in which firms face a fixed cost of changing their pricing plans a pricing plan specifies an entire sequence of time varying future prices allowing firms to choose a pricing plan rather than a single price generates inflation inertia in the response of the economy to small changes in the growth rate of money allowing firms to choose when to change their pricing plan generates a non linear response of inflation and output to small and large changes in the money growth rate the non linear solution method also reveals that the model generates an asymmetric response of output and inflation to monetary expansions and contractions

the environmental kuznets curve ekc theory part a concept causes and the co2 emissions case abstract the main purpose of this study is to capture the main features of the environmental kuznets curve ekc concept according to the ekc theory the process of economic growth is expected eventually to limit the environmental degradation created in the early stages of development the ekc concept leads many researchers from the early 1990s to assume that each economy should focus on its growth and any environmental problems will be eventually eliminated by the process of economic growth several studies attempt to test empirically the ekc hypothesis using data on many countries and examining various types of environmental degradation while other studies examine the underlying factors that may drive such a relationship this article reviews the evolution of the ekc concept and the possible causes of an ekc pattern like the distribution of income the international trade pollution haven hypothesis structural changes technical progress and improvements in energy efficiency institutions and governance and consumer preferences as co2 emissions are a pollutant with global effects several studies deal with the possible ekc pattern for co2 emissions and these studies are discussed separately the various critiques on the ekc concept are reviewed in the second article of this work

a quantitative analysis of inflation as a tax on the underground economy abstract inflation rates are more dispersed and are persistently higher in developing countries this paper quantifies the importance of the public finance motive for inflation in the presence of a tax evading sector the underground economy the approach is motivated by the observation that the underground economy is especially large in poor countries the analysis builds on a general equilibrium monetary model with two production sectors where income in one of the sectors cannot be taxed a benevolent government finances its budget using an optimal combination of the income tax rate and the inflation rate the model is first calibrated to the u s economy and is then used for a cross country simulation the resulting relationships between the size of an underground economy inflation rate income tax rate and the share of seigniorage in the government revenue rationalize the cross country data quantitatively well

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

does trade openness improve environmental quality the literature on trade openness economic development and the environment is largely inconclusive about the environmental consequences of trade this study treats trade and income as endogenous and estimates the overall impact of trade openness on environmental quality using the instrumental variables technique we find that whether or not trade has a beneficial effect on the environment varies depending on the pollutant and the country trade is found to benefit the environment in oecd countries it has detrimental effects however on sulfur dioxide so2 and carbon dioxide co2 emissions in non oecd countries although it does lower biochemical oxygen demand bod emissions in these countries we also find the impact is large in the long term after the dynamic adjustment process although it is small in the short term

labor markets and adjustment in open asian economies the republic of korea and malaysia this article deals with the adjustment following external shocks in two open asian economies the republic of korea and malaysia there were important differences in the economic structure of the two countries as well as significant differences in the way external events produced crises that interrupted their dynamic economic growth detailed analyses of economic cycles in the two decades preceding 1987 88 show that the behavior of factor markets particularly the markets for labor and foreign exchange helped korea to adjust quickly to the shocks but in malaysia actually caused the crisis to deepen for economies heavily dependent on exports the unit cost of labor in dollars is of central importance as an index of the competitiveness of exports and hence of their ability to mount a sustained recovery after a difficult period accordingly the heart of the analysis is the determination of the unit cost of labor and the factors affecting its change throughout the cycles concentration on this critical variable helps to spotlight the crucial differences in the factor markets of the two economies

are there limits to growth a simple theoretical model of pollution is developed that generates an inverted u shape relationship between per capita income and environmental quality this model is then used to study long run growth the same inverted u shape is shown to appear in time series and the prospects for sustained growth are shown to hinge on whether increasingly strict environmental regulation is compatible with a constant rate of return on capital implementation is also studied tax and voucher schemes are shown to have an advantage over direct regulation because they provide the correct incentives for capital accumulation copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the postsocialist transitions in comparative perspective policy issues and recent experience abstract this paper examines the postsocialist transition in eastern europe the reforms in china and the postdirigiste transitions in latin america the paper analyzes the initial conditions that gave rise to processes of reform in the different countries the main strategies for economic reform shock treatment gradualism and mixed strategies discussing their conditioning factors and rationale the actual record of these policies in terms of key indicators of economic performance such as inflation gdp growth external sector sustainability progress in privatization and the social costs of adjustment in addition the paper discusses interdependencies between economic and political reforms during the course of systemic transformation

carbon dioxide emissions and economic growth an assessment based on production and consumption emission inventories working with a new dataset on comparable global co2 production and consumption inventories spanning the 1997 2011 period we investigate the relationship between real gross domestic product gdp per capita and co2 emissions per capita associated with both production and consumption activities by including linkages between production based emissions in one country and final consumption in another via cross border value chains we focus on the entire carbon chain we estimate polynomial and threshold models accounting for reverse causality and identification problems we find that the income elasticity for both inventories is regime dependent and reflects small carbon efficiency gains from economic development carbon footprints show larger income elasticities while national policy instruments targeting production can clearly be circumvented by carbon embodied in intermediate trade this implies problems of environmental sustainability that may require consumption based policy instruments

a reversal of fortune for korean women explaining the 1983 upward turn in relative earnings between 1971 and 1983 korea s mean gender earnings ration remained virtually stagnant at 47 percent but after 1983 the earnings ration took a distinct turn upward in other words not until after 1983 did korean women make any progress in closing the gender earnings gap when controlling for education the analysis reveals a surprising drop in relative earning across education groups in the 1970s and early 1980s and a recover thereafter the author uses an extremely rich set of microdata suitable for decomposition to explain the trends in korea s earnings differential results indicate that most of the 1983 reversal is attributable to a strong compression in market returns to skills and to narrowing gender differences in education and experience the widening gender earnings differential across education groups before 1983 resulted primarily from a growing gender gap in unobserved characteristics growing gender differences in unmeasured ability or increased wage discrimination could explain this trend after 1983 women with high school education or less benefit primarily from a dramatic narrowing in the economy s distribution of market payoffs to skills enough for women to begin to catch up to men relative earnings a compression in the return to skills helped only some groups women with college educations did not experience increased benefits from changes in the market payoff to skills stricter enforcement of korea s equal pay for equal work provision could help reduce the outright discrimination against women workers that might be the underlying problem by boosting the potential of korea s female labor force stronger enforcement of korea s equal opportunity provisions would improve the country s economic productivity

the heterogeneity of carbon kuznets curves for advanced countries comparing homogeneous heterogeneous and shrinkage bayesian estimators we investigate carbon kuznets curves ckc relationships for advanced countries grouped in policy relevant groups north america and oceania south europe north europe by means of various homogeneous heterogeneous and shrinkage bayesian panel estimators we try to provide an answer to the question how sensitive are the ckc estimates to changes in the level of parameters heterogeneity we do find that in coherence with their policy and economic commitment to carbon reductions and environmental market based instruments implementation bell shapes are present only for northern eu which leads the group of advanced countries the other two lag behind we show for the first time that ckc shapes are present if we net out europe of the southern and less developed countries this is coherent with the kuznets paradigm the negative side of the tale is that they characterize a bunch of few countries other advanced countries lag behind and are far from reaching a ckc dynamics heterogeneous and bayesian

causality between income and emission a country group specific econometric analysis abstract empirical studies of the environmental kuznets curve ekc examine the presence or otherwise of an inverted u shaped relationship between the level of pollution and the level of income customarily in the diagram of ekc the level of income is shown on the horizontal axis and that of pollution on the vertical axis thus it is presumed that the relationship between income and pollution is one of unidirectional causality with income causing environmental changes and not vice versa the validity of this presumption is now being questioned it is being asserted that the nature and direction of causality may vary from one country to the other in this paper we present the results of a study of income co 2 emission causality based on a granger causality test to cross country panel data on per capita income and the corresponding per capita co 2 emission data briefly our results indicate three different types of causality relationship holding for different country groups for the developed country groups of north america and western europe and also for eastern europe the causality is found to run from emission to income for the country groups of central and south america oceania and japan causality from income to emission is obtained finally for the country groups of asia and africa the causality is found to be bi directional the regression equations estimated as part of the granger causality test further suggest that for the country groups of north america and western europe the growth rate of emission has become stationary around a zero mean and a shock in the growth rate of emission tends to generate a corresponding shock in the growth rate of income in contrast for the country groups of central and south america oceania and japan a shock in the income growth rate is likely to result in a corresponding shock in the growth rate of emission finally causality being bi directional for the country groups of asia and africa the income and the emission growth rates seemed to reinforce each other

trade and the environment a partial synthesis there is an emerging consensus in the environmentalist community opposing free trade while some economists view this as simply another outlet for protectionism recent work has begun to move beyond the rhetoric to probe more deeply into the theoretical and empirical relationships between international trade and environmental quality the purpose of the present paper is twofold we first integrate some of the existing literature by using the simple concepts of general equilibrium pollution supply and demand our survey of the trade and environment literature is more

estimating country specific environmental kuznets curves from panel data a bayesian shrinkage approach designing an efficient global climate policy turns out to be a difficult yet crucial task since there are noteworthy cross country differences in energy and carbon intensities in this article the environmental kuznets curve ekc hypothesis is tested for carbon dioxide co2 emissions and as a modelling technique the iterative bayesian shrinkage procedure is employed to handle the cross country differences the results suggest that first the ekc hypothesis is rejected for 47 out of the 51 countries considered when the heterogeneity in countries energy efficiencies and cross country differences in the co2 emissions trajectories are accounted for second a classification of the results with respect to the development levels of the countries concerned reveals that the emergence of an overall inverted u shaped curve is due to the fact that in high income countries increase in gross domestic product gdp decreases emissions while in low income countries emissions and gdp are positively correlated

the co2 emissions income nexus evidence from rich countries the paper attempts to test the environment kuznets curve ekc hypothesis for 36 high income countries for the period 1980 2005 the test is based on the suggestion of narayan and narayan 2010 various panel data unit root and co integration tests are applied carbon dioxide co2 emissions and gdp series are integrated of order one and co integrated especially after controlling for cross sectional dependence additionally the blundell bond system generalised methods of moments gmm is employed to conduct a panel causality test in a vector error correction mechanism vecm setting unidirectional causality running from real per capita gdp to per capita co2 emissions is uncovered in both the short run and the long run the empirical analysis based on individual countries provides evidence of an ekc for greece malta oman portugal and the united kingdom however it can be observed that for the whole panel a 1 increase in gdp generates an increase of 0 68 in co2 emissions in the short run and 0 22 in the long run the lower long run income elasticity does not provide evidence of an ekc but does indicate that over time co2 emissions are stabilising in the rich countries

environment kuznets curve for co2 emissions a cointegration analysis for china abstract this study examines the long run relationship between carbon emissions and energy consumption income and foreign trade in the case of china by employing time series data of 1975 2005 in particular the study aims at testing whether environmental kuznets curve ekc relationship between co 2 emissions and per capita real gdp holds in the long run or not auto regressive distributed lag ardl methodology is employed for empirical analysis a quadratic relationship between income and co 2 emission has been found for the sample period supporting ekc relationship the results of granger causality tests indicate one way causality runs through economic growth to co 2 emissions the results of this study also indicate that the carbon emissions are mainly determined by income and energy consumption in the long run trade has a positive but statistically insignificant impact on co 2 emissions

a further inquiry into the pollution haven hypothesis and the environmental kuznets curve abstract empirical research on the relationship between economic growth and its impact on the environment often tests the environmental kuznets curve ekc a hypothesis that rising national output leads to increases in pollution emissions until an economy reaches a certain size and decreases thereafter this paper addresses a branch of ekc literature focused on the role international trade plays in shaping this relationship in particular we test the pollution haven hypothesis which posits that emission reductions observed in developed nations are partly the result of shifting dirty production to developing nations with lax environmental standards we estimate ekcs for seven oft studied pollutants and find little evidence that pollution havens play a significant role in shaping the ekc we also find that confidence intervals around ekc turning points are very wide often including values well above the range of the data this leads us to be skeptical of the optimistic view that economic growth naturally leads to improvements in environmental quality

the no exit economy soft budget constraints and the fate of economic reforms in developing countries abstract the paper investigates the general issues of the costs and sustainability of economic reforms in the light of the current economic transformation of central and eastern europe using the conceptual framework of kornai s soft budget constraint macro and microeconomic indicators of budget softness are derived with the help of factor analysis budget softness may be represented as a linear combination of these indicators in a three factor model the role of soft budget constraints is tested to substantiate two hypotheses first macroeconomic stabilization is only credible and sustainable if appropriate microeconomic incentives in the form of hard budget constraints for enterprises exist second the costs of economic adjustment to exogenous price shocks in terms of short run growth and investment performance are related to the speed with which budget constraints can be hardened while the first two hypotheses are supported by the evidence the paper does not settle a third issue raised by the conceptual framework namely whether no exit economies also grow slower in the long run

pooled mean group estimation of an environmental kuznets curve for co2 abstract we apply the pooled mean group estimator to test for the existence of an environmental kuznets curve for co2 in 22 oecd countries this approach allows for more flexible assumptions in a panel data framework the period goes from 1975 to 1998

an overlapping generations model of growth and the environment this article analyzes the potential conflict between economic growth and the maintenance of environmental quality in an overlapping generations model short lived individuals make decisions which have long lasting effects on both factor productivity and the environment the model provides a theoretical explanation of observed correlations between environmental quality and income whereby economic growth is associated first with declines then improvements in environmental quality it suggests circumstances in which multiple pareto ranked steady state equilibria may arise and in which sustained growth of both capital and environmental quality may occur overmaintenance of the environment analogous to dynamically inefficient overaccumulation of capital may emerge copyright 1994 by royal economic society

growth and pollution convergence theory and evidence stabilizing pollution levels in the long run is a pre requisite for sustainable growth we develop a neoclassical growth model with endogenous emission reduction predicting that along optimal sustainable paths pollution growth rates are i positively related to output growth scale effect and ii negatively related to emission levels defensive effect this dynamic law reduces to a convergence equation that is empirically tested for two major and regulated air pollutants sulfur oxides and nitrogen oxides with a panel of 25 european countries spanning the years 1980 2005 traditional parametric models are rejected by the data more flexible regression techniques confirm the existence of both the scale and the defensive effect supporting the model predictions

energy consumption income and carbon emissions in the united states abstract this paper investigates the effect of energy consumption and output on carbon emissions in the united states earlier research focused on testing the existence and or shape of an environmental kuznets curve without taking energy consumption into account we investigate the granger causality relationship between income energy consumption and carbon emissions including labor and gross fixed capital formation in the model we find that income does not granger cause carbon emissions in the us in the long run but energy use does hence income growth by itself may not become a solution to environmental problems