on the estimation of hospital cost functions abstract data from 166 general hospitals in new york state 1981 is used to estimate a quadratic and logarithmic long run cost function both equations fit the data very well but give very different results the quadratic appears to confirm the commonly held view of a shallow u shaped average cost curve whereas the log function indicates significant economies of scale a total and average cost elasticity of 0 9 and 0 10 respectively using beds or patient days to measure output ramsey s reset test is used to discriminate between the two models and the quadratic is clearly rejected as a misspecification scale economies thus exist even where the usual quadratic suggests otherwise

independent central banks low inflation at no costs a widely held view suggests that politically independent central banks bring about relatively low and stable inflation rates a more debated question is whether one has to pay for this good outcome with more real instability in his seminal contribution kenneth rogoff 1985 suggests that an independent and inflation averse central bank reduces average inflation but as a result increases output variability the conservative central banker reduces the inflation bias due to the time inconsistency problem but stabilizes less however alesina and summers 1993 do not find that at least within the oecd countries more independent central banks are associated with more variability of growth or unemployment thus they conclude that independent central banks bring about low inflation at no apparent real costs the point of this paper is to provide theoretical underpinnings to this finding which is in contrast to rogoff 1985 2 the basic idea is that one can isolate two sources of output variability one is the economic variability induced by standard exogenous shocks that monetary policy is supposed to stabilize for instance money demand shocks or supply shocks the second source of variability is political or more generally policy induced this is the variability introduced in the system by the uncertainty about the future course of policy for instance alesina 1987 studies the effect of uncertain electoral outcomes in a model where the two contending parties have different preferences over inflation and unemployment an inflation averse independent central banker does not stabilize as much the economic variability in order to keep inflation low and stable this is rogoff s point however by insulating monetary policy from political pressures an independent central bank can reduce the political variability the overall effect of independence on output variability is thus ambiguous this result is consistent at least prima facie with the evidence in alesina and summers 1993 on the lack of correlation between centralbank independence and output variability in fact it is possible that when the politically induced output variability is predominant a more independent central bank reduces average inflation and the variance of output

whom can we trust to run the fed theoretical support for the founders views abstract the federal reserve has been called a bizarre policymaking structure this paper documents and formalizes a historical argument that the fed s structure was a response to public conflict over inflation s redistributive powers the paper shows that in the face of conflict over redistributive inflation policy by majority can lead to policy that is worse even for the majority than obvious alternatives in balancing the interests for and against surprise inflation the fed s structure can lead to a better outcome

rogoff s conservative central banker restored we show that delegation of monetary policy to a weight conservative central banker can be desirable although the government can also use an inflation contract an employment target an inflation target or any combination of these to control the central banker the key feature of our model is a stochastic inflation bias arising when wage setters receive some information about a supply shock prior to signing nominal wage contracts weight conservatism is found to be desirable if fully state contingent delegation is not possible and the stochastic inflation bias cannot be eliminated by optimal choice of the delegation parameters

central bank independence economic behavior and optimal term lengths the authors parameterize central bank independence in terms of partisanship and term length focusing on the implications of alternative policy structures for real economic activity while long terms of office for the central banker can reduce the role of electoral surprises term lengths that are too long are costly if societal preferences are subject to permanent shifts the appointment of a conservative central banker increases the optimal term length and leads to lower average inflation but need not increase the volatility of output copyright 1996 by american economic association

macroeconomic policy in a two party system as a repeated game this paper considers the interaction of two parties with different objectives concerning inflation and unemployment and rational and forward looking wage setters if discretionary policies are followed an economic cycle related to the political cycle results in equilibrium this cycle is significantly different from the traditional political business cycle reputational mechanisms due to the repeated interaction of the two parties and the public or commitments to a common policy rule can improve upon the discretionary outcome by reducing or eliminating the magnitude of the economic fluctuations

central bankers in government appointed committees abstract i study the policy choices of members of a central bank committee who are appointed by the government central bankers balance their desire to protect the central bank s reputation against their interest to be reappointed committees can be more successful than single central bankers at reducing inflation and insulating policy from government pressures these gains are only achieved if the turnover rate of committee members is low and the committee is small the former is associated with a low risk of being replaced for not supporting the government s preferred policy the latter meanwhile implies high probability that a single vote affects policy making any individual member more weary of potentially affecting the central bank s reputation through his vote

efficiency analysis of chinese industry a directional distance function approach two efficiency measures of chinese industry were estimated at the provincial level from 1994 to 2002 using a directional output distance function one is a traditional efficiency measure that considers only desirable output while the other considers both desirable and undesirable outputs simultaneously a comparison of the two measures revealed that efficiency levels are biased only if desirable output is considered five coastal provinces municipalities that have attracted a large amount of foreign direct investment are found to be the most efficient when only desirable output is considered and also when both desirable and undesirable outputs are considered however omitting undesirable output tends to lead to an overestimate of industrial efficiency levels in shandong sichuan and hebei provinces we also found that a province s industrial structure has significant effects on its efficiency levels

inflation unemployment and the median voter abstract we combine an econometric analysis of survey data on the relative seriousness of inflation and unemployment with the median voter theorem to derive the equilibrium rate of inflation if the natural rate of unemployment is 7 percent then the equilibrium inflation rate is 5 4 percent

the approach to realizing the potential of emissions reduction in china an implication from data envelopment analysis abstract by proposing a three hierarchy meta frontier data envelopment analysis dea this paper first decomposes co 2 emissions efficiency and the potential for emissions reduction into the following three components structural technical and management based on these components we then conduct an empirical analysis of china s total factor co 2 emissions efficiency its potential for co 2 emissions reduction and its corresponding implementation path the results show that co 2 emissions efficiency in mainland china is relatively low because of structural inefficiency technical inefficiency and management inefficiency the chinese government is expected to realize a large quantity of co 2 emissions reduction potential nearly 40 of the current total co 2 emissions through adjusting the industrial structure narrowing the technology gap among regions promoting the reform of marketization and strengthening environmental regulation the causes of co 2 emissions inefficiency and the distribution of potential reductions in emissions show a distinct spatial difference characteristic therefore this paper also formulates emissions reduction strategies for china s 30 provinces according to their specific situations noting the direction of the industrial structure adjustment and the path to improving co 2 emissions efficiency

efficient energy saving targets for apec economies abstract energy saving target ratios estr for 17 apec economies during 1991 2000 are computed in a total factor framework all nominal variables are transformed into real variables by the purchasing power parity ppp at the 1995 price level the data envelopment analysis dea approach is used to find the energy saving target est for apec economies without reducing their maximum potential gross domestic productions gdps in each year energy labor and capital are the three inputs while gdp is the single output our major findings are as follows 1 china has the largest est up to almost half of its current usage 2 hong kong the philippines and the united states have the highest energy efficiency 3 the energy efficiency generally increases for apec economies except for canada and new zealand 4 chile mexico and taiwan have significantly improved their energy efficiency in the last 5 years 5 an inverted u shape relation exists between per capita est and per capita gdp 6 estr has a positive relation with the value added percentage of gdp of the industry sector and a negative relation with that of the service sector

optimal inflation contracts and inflation targets with uncertain central bank preferences accountability through independence this paper examines some problems which arise when monetary policy is delegated to an independent central bank and where the central bank s preferences are unknown two key conclusions emerge from the paper first even with optimal targets or contracts central bank independence may not always be desirable because central banks may have distorted preferences relative to society second if the delegation solution is preferable and the independent central bank responds to information about supply shocks the central bank may be made more accountable by allowing it to set its own inflation targets i e by making it goal independent

can market oriented economic reforms contribute to energy efficiency improvement evidence from china since china accelerated its market oriented economic reforms at the end of 1992 its energy intensity has declined 3 6 annually over 1993 2005 however its energy intensity declined 4 2 annually during its first reform period 1979 1992 therefore can we conclude that the accelerated marketization since the end of 1992 has made no contribution to its energy efficiency improvement in order to answer this challenging question we examine the changes of energy own price elasticity as well as the elasticities of substitution between energy and non energy capital and labor in china during the periods of 1979 1992 and 1993 2003 generally in transition or developing economies holding the technology and output level fixed if the energy own price elasticity algebraic value declines or the substitution elasticity between factors rises they will contribute to energy efficiency improvement our empirical study finds that 1 during 1979 1992 the energy own price elasticity is positive 0 285 and capital energy labor energy are both morishima complementary which indicates a distorted energy price and inefficient allocation and 2 during 1993 2003 the own price elasticity for energy is negative 1 236 and capital energy and labor energy are both morishima substitute all factor demands become more elastic and all elasticities of substitution increase the implication is that the accelerated marketization contributes substantially to energy efficiency improvement since 1993 c 2006 elsevier ltd all rights reserved

mechanisms for achieving monetary stability inflation targeting versus the erm first we modify the barro gordon model so that a credibility stabilization trade off will remain even when a performance contract of the type envisaged by walsh 1995 is imposed on the central bank governor we do this by modeling a real interest rate bias along with the inflation bias then we discuss how various inflation penalties might actually be imposed on a central bank and ask whether inflation targeting supported by one or another of the penalties is likely to bring a better resolution to the credibility stabilization trade off than the erm

ecological total factor energy efficiency of regions in china most existing energy efficiency indices are computed without taking into account undesirable outputs such as co2 and so2 emissions this paper computes the ecological total factor energy efficiency etfee of 30 regions in china for the period 2005 2009 through the slack based model sbm with undesirable outputs we calculate the etfee index by comparing the target energy input obtained from sbm with undesirable outputs to the actual energy input findings show that china s regional etfee still remains a low level of around 0 600 and regional energy efficiency is overestimated by more than 0 100 when not looking at environmental impacts china s regional energy efficiency is extremely unbalanced the east area ranks first with the highest etfee of above 0 700 the northeast and central areas follow and the west area has the lowest etfee of less than 0 500 a monotone increasing relation exists between the area s etfee and china s per capita gdp the truncated regression model shows that the ratio of r d expenditure to gdp and the degree of foreign dependence have positive impacts whereas the ratio of the secondary industry to gdp and the ratio of government subsidies for industrial pollution treatment to gdp have negative effects on the etfee

on central bank independence and the stability of policy targets it is argued that impediments to the establishment of an independent central bank arise in the presence of unstable policy targets changing policy targets may occur with an officemotivated policymaker this differs from politico economic models where targets change depending on the partisanship of the politicians in office in the model the principal faces a tradeoff between the credibility benefits of an independent central bank and the flexibility to pursue shifts in his policy targets allowed by a regime of policy discretion an empirical section addresses the issue of the correlation between central bank independence and the stability of policy targets

policy boards and policy smoothing partisan politics and random election outcomes generate policy uncertainty and partisan business cycles to reduce policy uncertainty society must design the policy making environment to overcome electoral uncertainty and partisanship i show that delegating policy to an independent policy board with discretionary powers will produce substantial policy smoothing and lower policy uncertainty relative to a simple model in which elected officials set policy board members are chosen in a partisan noncooperative environment yet in the benchmark model policy variability is eliminated and the cooperative bargaining solution is replicated

understanding the disinflations in australia canada and new zealand using evidence from smooth transition analysis abstract this paper investigates the disinflation experiences of three countries australia canada and new zealand unlike previous approaches which have sought to use institutional data to pre determine the causes speed and duration of the transitions to low inflation regimes this paper allows price data itself to determine the speed and timing of the reforms using smooth transition analysis the results show that the process of transition is related to two factors central bank independence and the general slowdown in economic activity which occurred during the early 1990s in all oecd countries other reforms to the labor market and fiscal policy were less influential

designing monetary policy committees we integrate monetary policy making by committee into a new keynesian model to assess the consequences of the committee s institutional characteristics for inflation output and welfare our analysis delivers the following results first we demonstrate that transparency about the committee s future composition is typically harmful second we show that short terms for central bankers lead to effective inflation stabilization at the expense of comparably high output variability third larger committees generally allow for more efficient stabilization of inflation but possibly for less efficient output stabilization fourth large committees and short terms are therefore socially desirable if the weight on output stabilization in the social loss function is low fifth we show that a central banker with random preferences may be preferable to a central banker who shares the preferences of society

energy efficiency evolution of china s paper industry abstract china s paper industry accounts for a larger proportion of the global paper industry and consumes large amounts of energy energy conservation and pollution reduction of the industry have become the focus of china s national development strategy energy efficiency is an important index which directly determines the amounts of energy consumption and pollution emissions to understand the energy efficiency evolution of china s paper industry this paper establishes an input output data of the paper industry for 29 provinces in china and applies dea method and econometric models to estimate and comprehensively discuss the energy efficiency issues based on the framework of total factor efficiency our results indicate that china s paper industry has a large energy saving potential even though its energy efficiency has improved during the period 1990 2013 the saving potential is about 65 under the meta frontier and 44 under the group frontier moreover there are significant differences between different regions in production technology and energy efficiency the performance of eastern china is better than other regions but the technology gaps between the different regions are shrinking and converging over time finally some policy recommendations are proposed to improve the energy efficiency of the industry

the benefits of central bank s political independence abstract we consider a two tier model of monetary policy where the central banker is both subject to the explicit influence of elected political principals through contracts and the implicit influence of interest groups willing to capture monetary policy we analyze the impact of granting independence to the central banker on the scope for capture and the agency costs of delegating the monetary policy to a central banker political independence increases those agency costs but significantly stabilizes the politically induced fluctuations of inflation and improves ex ante social welfare

monetary policy delegation and polarisation there is by now a comprehensive literature beginning with rogoff 1985 arguing that a government should delegate monetary policy to a central banker who is independent and more conservative than the government itself this will reduce the inflationary bias typically at the cost of stabilisation for a democratic society this result would suggest that the median voter should prefer that monetary policy is delegated to an independent central banker who is more conservative than herself typically the central banker is chosen by the government and the government is chosen by the electorate thus there is some albeit perhaps a weak link between the preferences of the electorate and the central banker although the central banker presumably should be chosen for a long period of time waller and walsh 1996 he has to be chosen at some point in time this paper contains a political economy model where the central issue in politics is the choice of central banker and

what induced china s energy intensity to fluctuate 1997 2006 abstract china is the second largest energy consumer in the world during 1997 2002 china s energy intensity declined by 33 however it rose by 10 7 over 2003 2005 and declined by 1 2 in 2006 what induced china s energy intensity to fluctuate so drastically industry accounts for approximately 70 of the total energy consumption in china in this paper we decompose china s industrial energy intensity changes between 1997 and 2002 into sectoral structural effects and efficiency effects measured by sectoral energy intensities at two digit level and including the shifts of product mix in the sub sector or firm level using tornqvist and sato vartia index methods the results show that in this period efficiency effects possibly contributed to a majority of the decline while the contribution from structural effects was less during 2003 2005 the excessive expansion of high energy consuming sub sectors and the high investment ratio were foremost sources of the increasing energy intensity attributed to the government efforts the energy intensity has started to decline slightly since july 2006 in future to save more energy in addition to technical progress china should attach more importance to optimizing its sectoral structure and lowering its investment ratio

central banking as a political principal agent problem i introduction conventional wisdom holds that during election periods political leaders have incentives to misuse policy instruments to enhance their chances of reelection rogoff and sibert 1988 construct a rational political economy model of monetary policy based on this theme 1 the results of their model can be interpreted in the following way 2 society elects a leader every other period whose competence affects the level of output in the economy and private agents will tend to vote for the incumbent if the level of output is expected to be higher than that which can be provided by an unknown challenger voters have imperfect information regarding the politician s true impact on output and exogenous shocks to output and consequently cannot disentangle the effects of one from the other in an election period this asymmetry of information gives the incumbent an incentive to expand output through the use of inflationary monetary policy in order to appear more competent than he really is however rational voters are aware of this incentive to inflate and adjust their expectations such that in equilibrium no gain in output occurs and the economy suffers from excessive inflation an implication of the rogoff sibert model is that unless a society does away with elections as a way to choose policymakers excessive inflation and a political inflation cycle will be an unavoidable cost of democracy however societies can try and have tried to avoid these ill effects by taking the power of money creation away from the elected officials and giving it to an appointed independent central banker who will presumably pursue the public good but can this approach actually work the problem with this proposal is that the central bankers well being in many respects reappointment post central bank employment opportunities avoidance of public criticism etc often hinges on pleasing their political benefactors giving the central bankers incentives to act in the interest of elected officials 3 as a result the central banker could pursue objectives different from society s and may actually function as a veil for the elected policymaker in the real world this veil is not complete but partial and hence we can characterize the relationship between the monetary authority and society as a principal agent problem the advantage of delegating power to an appointed central banker and then erecting appropriate institutions is that the inflation problems may be resolved without abandoning the electoral process in this paper we develop a rational political business cycle model that starts from the foundations laid down by rogoff and sibert we depart from their model by having monetary policy delegated to a central banker who is appointed by the elected leaden the concern about reappointment is what motivates the agency problem the central banker would like to be reappointed and this desire leads her to partially accommodate the wishes of the current administration which in turn may not coincide with the desires of the electorate we then analyze the problem faced by a central banker who is concerned about her own selfinterest as well as social well being it is this feature that turns the setting of monetary policy into a political principal agent problem the contributions of our approach to modelling the agency problem of central banking are 1 it explicitly incorporates reappointment concerns into the decision process of the central banker which heretofore has not been done in the literature and 2 we explicitly model the source of the agency problem unlike previous research that simply assumes an agency problem exists our key results are as follows in equilibrium the pursuit of her own self interest leads the central banker to create a socially inefficient inflation bias while rogoff and sibert also obtain this result our explicit functionalform model allows us to analyze this bias in more detail and tie it directly to the strength of the relationship between the central banker and the current administration

an argument in favor of long terms for central bankers drawing on the canonical new keynesian model we assess the impact of central bankers term duration on governments appointment choices we show that longer terms induce the government to appoint more conservative central bankers which is socially desirable

total factor energy efficiency of regions in china abstract this paper analyzes energy efficiencies of 29 administrative regions in china for the period 1995 2002 with a newly introduced index most existing studies of regional productivity and efficiency neglect energy inputs we use the data envelopment analysis dea to find the target energy input of each region in china at each particular year the index of total factor energy efficiency tfee then divides the target energy input by the actual energy input in our dea model labor capital stock energy consumption and total sown area of farm crops used as a proxy of biomass energy are the four inputs and real gdp is the single output the conventional energy productivity ratio regarded as a partial factor energy efficiency index is computed for comparison in contrast to tfee our index is found fitting better to the real case according to the tfee index rankings the central area of china has the worst energy efficiency and its total adjustmentof energy consumption amount is over half of china s total regional tfee in china generally improved during the research period except for the western area a u shape relation between the area s tfee and per capita income in the areas of china is found confirming the scenario that energy efficiency eventually improves with economic growth

the dynamic in efficiency of monetary policy by committee this paper develops a model where the value of the monetary policy instrument is selected by a heterogenous committee engaged in a dynamic voting game committee members differ in their institutional power and in certain states of nature they also differ in their preferred instrument value preference heterogeneity and concern for the future interact to generate decisions that are dynamically inefficient and inertial around the previously agreed instrument value this model endogenously generates autocorrelation in the policy variable and helps explain the empirical observation that the distribution of actual interest rate changes has a mode of zero

energy savings potential in china s industrial sector from the perspectives of factor price distortion and allocative inefficiency abstract china s industrial energy consumption accounted for 70 82 of national and 14 12 of world energy usage in 2011 in the context of energy scarcity and environmental pollution the industrial sector in china faces unsustainable growth problems by adopting the stochastic frontier analysis sfa framework this paper analyzes the factor allocative efficiency of china s industrial sector and estimates the energy savings potential from the perspective of allocative inefficiency this paper focuses on three issues the first is examining the factor allocative inefficiency of china s industrial sector the second is measuring factor price distortion by the shadow price model the third is estimating the energy savings potential in china s industrial sector during 2001 2009 major conclusions are thus drawn first factor prices of capital labor and energy are distorted in china due to government regulations moreover energy price is relatively low compared to capital price while is relatively high compared to labor price second the industry wide energy savings potential resulted from energy allocative inefficiency was about 9 71 during 2001 2009 the downward trend of energy savings potential implies the increasing energy allocative efficiency in china s industrial sector third a transparent and reasonable pricing mechanism is conducive to improving energy allocative efficiency

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

credibility may require discretion not rules abstract we reexamine the common argument that rules produce greater credibility than discretion rules limit the actions of agents restricting observations of the agents preferences or types in a second best world where rules cannot be everlasting a regime of discretion in some periods may produce superior credibility and dominate a regime of rules

the political economy of inflation labour market distortions and central bank independence using the citizen candidate model we study the government s choice of institutions for the labour market and the central bank and derive the implications for inflation and employment we derive conditions for the existence of equilibria in which the labour market is distorted and the central bank is dependent or independent under a range of conditions affecting central bank dependence the post election cycle in inflation and employment and inflation bias our results imply that average inflation and inflation variability are lower under an independent central bank whereas employment variability can be lower or higher consistent with evidence for oecd countries many democratic societies delegate key tasks to non elected and independent institutions a prominent example being independent central banks the belief in the advantage of central bank independence is nursed by the cross country evi

decomposition of energy efficiency and energy saving potential in china a three hierarchy meta frontier approach abstract considering both regional heterogeneity and industrial heterogeneity this paper proposes a three hierarchy meta frontier data envelopment analysis dea to decompose energy efficiency and energy saving potential into three components i e industrial structure regional balance development and management based on this approach the paper then analyses the historical evolution and current status of energy efficiency in china the results show the following 1 from 2001 to 2015 mainland china s energy efficiency increased by a factor of 2 48 primarily because of technological progress and the optimization of its industrial structure 2 nonetheless the current energy efficiency in mainland china remains very low and energy inefficiency is as high as 0 5922 indicating that 59 22 of total energy consumption is invalidly used severe industrial structure inefficiency and regional balance development inefficiency are the two main factors responsible for the very low energy efficiency 3 by promoting industrial restructuring regional balance development and management improvement mainland china is expected to save respectively 13 67 24 54 and 61 73 of its current total invalid energy consumption based on the estimation results this paper formulates strategies to improve energy efficiency and save energy for china s provinces based on their specific situations considering not only the direction of industrial restructuring in both the short and long terms but also the path to improved energy efficiency in addition a brief discussion about the applicability and the preconditions for an application of the multi hierarchy meta frontier approach is given at the end of the paper

caution and conservatism in the making of monetary policy does society benefit from the delegation of monetary policy to cautious and conservative central bankers we offer a critical view on the delegation literature and relax seemingly innocuous assumptions about uncertainty and preferences first caution improves credibility but does not obviate the need for central bank conservatism second previous models of delegation have focused on suboptimal forms of conservatism we derive optimal concepts of conservatism that mitigate or eliminate any residual problem of credibility third we rationalize why credible monetary policy may be conducive to stable inflation and output

central bank independence economic behavior and optimal term lengths comment in an earlier article in this review christopher j waller and carl e walsh 1996 hereafter ww the greater this influence the weaker is the independence of the central bank institutional arrangements designed to overcome the time inconsistency problem and political uncertainty constitute another dimension of central bank independence since these legal arrangements are ex ante choices which should not be dismissed ex post w w examine two legal arrangements the length of the central banker s term in office and the degree of conservativeness expressed as the weight attached to the inflation target while partisanship and the degree of conservativeness are assumed to be exogenous w w only allow the length of the term in office to be optimally determined they successfully obtain a finite optimal term length by introducing persistent shifts in long run social preferences of inflation furthermore they conclude that the appointment of a conservative central banker increases the optimal term length and results in lower average inflation but need not necessarily increase output volatility the obvious question is then why should a conservative central banker be appointed as shown in many studies e g kenneth rogoff 1985 the highest degree of conservativeness is actually not optimal from the point of view of social welfare maximization moreover since several types of economic distortions exist in w w s economy that is heterogeneity of the preferred inflation rate political uncertainty over the short run median voter s preferred inflation rate persistent shifts in social preferences of inflation and discretionary ways of implementing monetary policy social welfare would further increase if more instruments were available to society in this comment i extend w w s study by endogenizing the determination of the optimal degree of conservativeness a simplified w w model is set up in section i and some of the arguments in w w are then clarified in section ii concluding remarks are given in section iii

median voter preferences central bank independence and conservatism this paper studies how the independence and theconservatism of a central bank relate to the structureand stability of the median voter preferences this isdone by means of a model of endogenous delegationwhere an opportunistic policy maker chooses themonetary regime independence and conservatism tomaximise the welfare of the median voter the resultsshow that a high degree of inflation aversion ofmonetary policy is not necessarily associated with ahigh degree of central bank independence a high andstable degree of inflation aversion of society i e of the median voter may lead to establish a dependentcentral bank which is highly inflation averse this suggests that the negativecorrelation between inflation and central bankindependence indices detected by several empiricalstudies may reflect a link between inflation and somedeep features of social preferences

strategic discipline in monetary policy with private information optimal targeting periods this paper analyzes a multiperiod monetary targeting procedure as a possible resolution to the credibility problem in pol icy when the monetary authority has some private information by limitin g the degree of flexibility permitted in policy this procedure mitiga tes the credibility problem as the length of the targeting horizon decreases the severity of the credibility problem falls but at the expense of weakening the monetary authority s ability to pursue its stabilization goals based on model simulations the analysis studi es the determinants of the optimal targeting horizon that balances the benefits of flexibility and discipline in policy copyright 1993 by american economic association

voting transparency in a monetary union we examine whether the monetary policy committee of a monetary union should publish its voting records when members are appointed by national politicians we show that the publication of voting records lowers overall welfare this finding also holds for arbitrary levels of private benefits from holding office and if governments incur costs when replacing committee members high private benefits of committee members always lower overall welfare as they induce nonpartisan members to care more about being reappointed than about beneficial policy outcomes nonrenewable but long terms for national committee members and delegating the appointment of all committee members to a union wide authority would be desirable

industrial energy efficiency with co2 emissions in china a nonparametric analysis abstract global awareness on energy security and climate change has created much interest in assessing economy wide energy efficiency performance a number of previous studies have contributed to evaluate energy efficiency performance using different analytical techniques among which data envelopment analysis dea has recently received increasing attention most of dea related energy efficiency studies do not consider undesirable outputs such as co 2 emissions in their modeling framework which may lead to biased energy efficiency values within a joint production framework of desirable and undesirable outputs in this paper we construct both static and dynamic energy efficiency performance indexes for measuring industrial energy efficiency performance by using several environmental dea models with co 2 emissions the dynamic energy efficiency performance indexes have further been decomposed into two contributing components we finally apply the indexes proposed to assess the industrial energy efficiency performance of different provinces in china over time our empirical study shows that the energy efficiency improvement in china s industrial sector was mainly driven by technological improvement

a review of optimal energy policy instruments on industrial energy efficiency programs rebound effects and government policies abstract industrial energy efficiency programs ieeps are defined as one of the most popular government policies that aim to reduce energy consumption in industrial energy intensive sectors in this paper we review and classify the most important academic studies that have addressed the environmental and economic aspects of ieeps using a systematic review the classification of energy policy instruments has been developed based on an analytical approach we discuss also the outputs benefits and barriers of ieeps besides a comprehensive argument about the restrictive policies on the rebound effects made after the implementation of these programs the results disclose that china usa and sweden are the most addressed countries on ieeps and their applications in this regard incentive energy policies e g voluntary agreements and subsidies have been applied more than others in the last decade furthermore most of the reviewed studies emphasize energy price reform as an effective practical policy while a few analytical methods can be seen to help policy makers determine the optimal levels of decision variables finally according to the state of the art analysis the authors provide some novel recommendations to improve the performance of ieeps using some restrictive policies on the negative impacts of rebound effects

a political agency theory of central bank independence we propose a theory to explain why and under what circumstances a politician endogenously gives up rent and delegates policy tasks to an independent agency we apply this theory to mon etary policy by extending a stochastic general equilibrium model this model provides a theory of central bank independence that is unrelated to the standard time inconsistency problem which underlies all formalized theories of central bank independence we derive five key predictions of the model and show that they are broadly consistent with the data finally we show that while instrument independence of the central bank is desirable goal independence is not

agricultural eco efficiency loss under technology heterogeneity given regional differences in china abstract what influences chinese agricultural eco efficiency aee taking the underlying technology heterogeneity into account we proposed an analytical framework which combines meta frontier analysis and a non separable hybrid model with undesirable output meta hybrid u the general aim of this study is to apply the proposed framework to measure the aee in 30 provinces in china from 1997 to 2015 under the group frontier and meta frontier the dimensions of management and technology were used for the deconstruction of the agricultural eco inefficiency aei of various provinces the dagum gini coefficient method was used for decomposition of regional differences in the aee in china three main results were found first the mean aee of all chinese provinces under the meta frontier is low and there is much room for improvement secondly at the national level the aei is caused by both the management inefficiency mi and technology gap inefficiency tgi at the regional level the aei in eastern china is wholly caused by the mi while the aei in the central and western regions is caused by both the mi and tgi finally during the studied period there is an increasing trend for the overall gini coefficient of the aee in china the regional differences in the aee in china are mainly due to the inter regional differences and the intensity of transvariation the paper also includes some suggestions for policies to improve china s aee and to reduce the inter regional differences in china s aee

how does administrative pricing affect energy consumption and co2 emissions in china despite reforms china still largely applies the cost plus pricing mechanism for the energy sector government administrative energy pricing leads to energy price distortions which could result in not only the excessive and wasteful energy consumption but also environmental deterioration thereby undermining energy conservation and emission abatement using fossil fuel subsidies as a proxy for the level of energy price distortions this paper estimates the subsidy of 22 chinese departments during the period 2006 2010 and adopts the price gap approach to analyze the impacts of subsidy removal on energy consumption and co2 emissions for the various sectors and energy types the results demonstrate that removing energy subsidies would reduce energy consumption and emissions by 3 77 and 2 85 respectively but the effects vary across sectors the transport storage and post sector and the electricity gas and water supply sector are much more affected by energy subsidies removal than other sectors with respect to energy types fuel oil and natural gas are sensitive to subsidies indicating the magnitude of their consumption this suggests that removing subsidies on these fuel types could significantly reduce co2 emissions finally we comprehensively discuss relevant policy issues on energy price formation reform

voting on the budget deficit this paper analyzes a model in which a group of rational individuals votes over the composition and time profile of public spending all voters agree that a balanced budget is ex ante optimal however if there is disagreement between current and future majorities a balanced budget is not a political equilibrium under majority rule under certain conditions a majority of the voters favors a budget deficit and the equilibrium deficit is larger the greater is the polarization among voters copyright 1990 by american economic association

central banker contracts incomplete information and monetary policy surprises in search of a selfish central banker approaching monetary policy as a principal agent problemprovides a useful framework for interpreting alternativedelegation schemes in this paper we consider theeffectiveness of central banker incentive schemes when theprincipal delegates monetary policy through contracts butremains uncertain about the central banker s responsiveness tosuch schemes we adopt a simple principal agent model andassume that the central banker s trade off between socialwelfare and the incentive scheme is private information weconsider two types of central bankers one who responds to theincentive scheme selfish and one who does not and onlycares about social welfare benevolent we demonstratethat when a benevolent central banker accepts a contractdesigned for a selfish central banker positive inflationsurprises occur and output exceeds its natural rate wefurther show that a benevolent central banker with aninflation bias has an incentive to masquerade as selfish mechanisms exist that solve that problem by achievingpreference revelation we consider a simple mechanism indominant strategies that induces the benevolent type eithernot to breach or not to accept the appointment contract inthe first place this multi period mechanism works with eitherinflation targets or the appointment of a conservativecentral banker our results suggest that more complicatedincentive schemes embedded within broader constitutionalarrangements are required in the presence of privateinformation for them to work effectively

impacts of increasing renewable energy subsidies and phasing out fossil fuel subsidies in china abstract subsidies to fossil fuel consumption have made china s energy system fragile and unsustainable it is necessary for china to reform fossil fuel subsidies and reflect the resource cost and environmental cost in energy prices considering the life cycle external costs this paper estimates the scale of fossil fuel subsidy and the true cost of renewable energy in 2010 and evaluates impacts of increasing renewable energy subsidies and phasing out fossil fuel subsidies on macro economy and energy system in china based on scenario analysis simulation results show that the negative impacts on economic growth can be reduced from 4 460 to 0 432 if only 10 of fossil fuel subsidies were removed increasing subsidies for renewable energy has positive impacts on macroeconomic variables although the economic benefits per unit of subsidies for renewable energy are lower than those for fossil fuels by 0 06 0 19 cny the revenue gap can be narrowed by shifting more subsidies from fossil fuels to renewables increasing subsidies for renewable energy helps optimize china s energy system in three ways the first is making energy consumption structure cleaner the second is improving energy efficiency and the third is addressing the problem of imbalanced distribution and consumption of energy

metafroniter energy efficiency with co2 emissions and its convergence analysis for china this paper measures the energy efficiency performance with carbon dioxide co2 emissions in 30 provinces in china during the period of 1997 2011 using a meta frontier framework with the improved directional distance function ddf we construct a new environmental production possibility set by combining the super efficiency and sequential data envelopment analysis dea models to avoid discriminating power problem and technical regress when evaluating efficiency by ddf then it is used in a meta frontier framework to reflect the technology heterogeneities across east central and west china the results indicate that eastern china achieved the highest progress inefficiency relative to the metafrontier followed by western and the central china by focusing on technology gaps we offer some suggestions for the different groups based on group frontier and meta frontier analyses the inefficiency can be attributed to managerial failure for eastern and western china and technological differences for central china the convergence analysis shows that energy and co2 emission governance will produce negative effects on economic growth and it is suitable and acceptable to introduce rigorous environmental measures in eastern china

analysis of energy efficiency and energy savings potential in china s provincial industrial sectors abstract because industrial sectors in china are energy intensive improving energy efficiency and promoting energy savings in these sectors are of great importance for the further sustainable development of china s economy using a proposed meta frontier data envelopment analysis dea this paper analyzes the total factor energy efficiency and energy savings potential in china s provincial industrial sectors for the years 2000 2014 from three perspectives namely the technology gap management and scale the results indicate that 1 driven by technological progress energy efficiency during the sample period was greatly improved though the expansion of technology gaps between regions and the decline in scale efficiency represented two significant handicaps 2 the current energy efficiency in china s industrial sectors remains extremely low indicating that there is considerable potential for energy efficiency improvement and energy savings and 3 the sources of energy inefficiency and energy savings potential in china s industrial sectors exhibit spatially distinct characteristics accordingly it is determined that most of china s eastern provinces should focus on improving scale and management efficiency whereas most of its central and western provinces should concentrate on three factors narrowing the regional technology gap improving management efficiency and optimizing the industrial scale

accountability transparency and inflation targeting inflation targeting regimes define a performance measure for the central bank a regime that places a large small weight on achieving the target is analogous to a high low powered incentive scheme high powered incentive structures promote accountability but may distort stabilization policy the optimal power under inflation targeting is derived under perfect and imperfect information the fundamental trade off between accountability and stabilization depends on the degree of transparency defined as the ability to monitor the central bank s performance multiplicative uncertainty increases the optimal weight to place on achieving an inflation target

environmental efficiency and economic growth of china a ray slack based model analysis abstract the chinese economy has been experiencing rapid growth since the implementation of the reform and opening up policy however at the same time it faces issues regarding resource savings and environmental protection which are important aspects of the new industrialization therefore this study conducts data envelopment analysis dea to evaluate the environmental efficiency of chinese regions certain existing dea models account for undesirable outputs and do not elucidate the weak disposable relationship between undesirable and desirable outputs thus polar theory is introduced among the dea modeling in this study first drawing on stochastic frontier analysis ray stochastic frontier analysis and dea we propose a ray slack based model rsbm to evaluate provincial environmental efficiencies in china from 2004 to 2012 subsequently an rsbm malmquist luenberger total factor productivity index is structured finally economic growth environmental efficiency and energy consumption are analyzed using spatial panel econometrics as this study treats industrial waste as undesirable outputs the rsbm results show that the environmental efficiencies in the east are the highest while those in the central regions are the lowest the spatial econometric analysis reveals that the ratios of direct to total elasticity and those of direct to total effect for capital labor and energy input variables are fixed furthermore the study provides policy implications and suggestions for future research