limit cycles under a negative effect of pollution on consumption demand the role of an environmental kuznets curve since heal explorations in natural resource economics the johns hopkins university press for resources for the future baltimore 1982 there is a theoretical consensus about the occurrence of limit cycles through a hopf bifurcation under a positive effect of pollution on consumption demand compensation effect and about the impossibility under a negative effect distaste effect however recent empirical evidence advocates for the relevance of distaste effects our paper challenges the conventional view on the theoretical ground and reconciles theory and evidence the environmental kuznets curve ekc pollution first increases in the capital level then decreases plays the main role indeed the standard case a la heal limit cycles only under a compensation effect only works along the upward sloping branch of the curve while the opposite limit cycles only under a distaste effect holds along the downward sloping branch welfare effects of taxation also change according to the slope of the ekc

optimal health and environmental policies in a pollution growth nexus abstract this paper shows how policies aimed at insuring health risks and those intended to improve the environment are and should be deeply intertwined in the model economy inspired by recent chinese experience pollution raises the likelihood of future poor health prompting households to save more so as to self insure against anticipated medical expenses increased household saving generates more capital while capital use by firms generates more pollution along the transition such a pollution growth nexus may be attractive from a capital accumulation perspective however rising pollution via the health channel hurts welfare both insurance and environmental policies affect capital accumulation and can have additional dynamic benefits the availability of private health insurance to top up pay as you go coverage of medical bills along with a pigouvian tax on emissions and a profit tax can replicate the first best

fickle consumers durable goods and business cycles abstract this paper develops a three sector dynamic general equilibrium model with the specific aim of evaluating the role of consumer durables in the generation and propagation of business cycles the model displays indeterminacy at commonly considered realistic parameter restrictions and basically constant returns to scale if calibrated at modest increasing returns to scale the sunspots driven model version produces a close match to moments of aggregate u s data journal of economic literatureclassification numbers e00 e32

analyzing the analysts career concerns and biased earnings forecasts this paper examines the career concerns of security analysts we relate long histories of their earnings forecasts to job separations we find that relatively accurate past forecasts lead to favorable career outcomes such as remaining at or moving up to a high status large prestigious brokerage house controlling for accuracy optimistic forecasts relative to the consensus increase the chances of favorable job separations job separations depend much less on accuracy for analysts who cover stocks that are underwritten by their brokerage houses such analysts are also much more likely to be rewarded for optimistic forecasts than other analysts furthermore job separations were much less sensitive to accuracy and somewhat more sensitive to optimism during the stock market mania of the late 1990s these findings suggest that the well documented analyst forecast optimism bias is likely due to incentives to promote stocks

uniqueness and indeterminacy on the dynamics of endogenous growth abstract in this paper we study the dynamics of endogenous growth both in the model of lucas and in a generalization that incorporates a labor leisure choice we characterize the regions of the parameter space that give rise to unique equilibria as well as the regions that yield a continuum of equilibria with positive growth rates we find that such multiple equilibria exist for empirically very plausible parameters in particular when the lucas model is modified to incorporate endogenous labor journal of economic literature numbers e00 e3 o40

indeterminacy and sunspots with constant returns recently there has been a renewed interest in the possibility of indeterminacy and sunspots or alternatively put in the existence of a continuum of equilibria that arises in dynamic economies with some market imperfections much of the research in this area has been concerned with the empirical plausibility of indeterminacy in markets with external effects or with monopolistic competition and which exhibit some degree of increasing returns while the early results on indeterminacy relied on relatively large increasing returns and high markups more recently benhabib and farmer 1996a showed that indeterminacy can also occur in two sector models with small sector specific external effects and very mild increasing returns

information content of equity analyst reports abstract we catalog the complete contents of institutional investor all american analyst reports and examine the market reaction to their release including the justifications supporting an analyst s opinion reduces and in some models eliminates the significance of earnings forecasts and recommendation revisions analysts both provide new information and interpret previously released information the information in a report is most important for downgrades target prices and the analyst s justifications are the only significant elements for reiterations no correlation exists between valuation methodology and either analyst accuracy or the market s reaction to a report our adjusted r 2 s are much larger than those of studies using only summary measures

measuring globalization of industries using a national industry approach empirical evidence across five countries and over time this paper presents an objective measurement of industry globalization although crucial in understanding firm strategies industry globalization has been largely subjectively measured consisting of mostly case studies this research develops a two pronged measure of industry globalization based on a the extent of an industry s international linkages lit and b the integration of value added activities within the industry iit in addition of providing a quantitative equivalent to porter 1986 and bartlett and ghoshal s 1989 conceptual industry categorizations this measure permits the examination of important but previously untested notions regarding globalization using data for chemical and manufacturing industries for five major trading nations we find that 1 chemical industries are less global than manufacturing industries despite high levels of fdi found in chemical industries 2 u s globalization frequently assumed to be representative of worldwide globalization of industries is less than that of other major industrial countries and 3 industries in both sectors are globalizing over time consistent with the literature

the environmental kuznets curve and equilibrium indeterminacy abstract we illustrate that the existence of the environmental kuznets curve ekc could be the result of indeterminacy of equilibria in a simple neoclassical growth model with a single environmental externality in households utility function and with public abatement we characterize the condition on the parameters in preferences and in the pollution technology leading to local indeterminacy of equilibrium estimates of the crucial parameters of the model using data from economies that display the ekc satisfy the theoretical indeterminacy condition we find that the presence of abatement activities is not a necessary condition for indeterminacy equilibria and hence an ekc to arise on the other hand non separability of consumption and pollution in the utility function is crucial

capacity utilization under increasing returns to scale abstract this paper overcomes an important objection against the empirical relevance of the benhabib farmer model as a potential account of actual business cycle fluctuations this is attributable to an elasticity effect and a returns to scale effect of capacity utilization these effects are closely related to the empirical puzzles that capital appears to play an insignificant role in explaining cyclical movements in output and that the estimated labor elasticity appears to be larger than labor s share due to these effects multiple equilibria and persistent fluctuations can easily occur in a growth model for externalities mild enough so that the aggregate labor demand curve is downward sloping analyses show that the propagation mechanism generated by capacity utilization under mild increasing returns is capable of explaining the periodic patterns of u s business cycles documented by watson journal of economic literature classification numbers e32 e22 c52

sunspots and the business cycle in a finance constrained economy abstract this paper examines the cyclical properties of a finance constrained economy populated by two classes of households with heterogeneous preferences and featuring social increasing returns to scale the model exhibits indeterminacy for externalities mild enough so that the labor demand curve is downward sloping furthermore simulation results show that endogenous fluctuations driven by expectations are quantitatively relevant in opposition to standard real business cycles and sunspot models with single type of households our finance constrained economy reveals to be able to mimic both an acyclical pattern of the real wage and strong procyclical movements of aggregate consumption journal of economic literature classification numbers e2 e32

indivisible labor and the business cycle abstract a growth model with shocks to technology is studied labor is indivisible so all variability in hours worked is due to fluctuations in the number employed we find that unlike previous equilibrium models of the business cycle this economy displays large fluctuations in hours worked and relatively small fluctuations in productivity this finding is independent of individuals willingness to substitute leisure across time this and other findings are the result of studying and comparing summary statistics describing this economy an economy with divisible labor and post war u s time series

do analysts herd an analysis of recommendations and market reactions this article develops and implements a new test to investigate whether sell side analysts herd around the consensus when they make stock recommendations our empirical results support the herding hypothesis stock price reactions following recommendation revisions are stronger when the new recommendation is away from the consensus than when it is closer to it indicating that the market recognizes analysts tendency to herd we find that analysts from larger brokerages analysts following stocks with smaller dispersion across recommendations and analysts who make less frequent revisions are more likely to herd the author 2009 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oxfordjournals org oxford university press

durable goods inter sectoral linkages and monetary policy barsky house and kimball 2007 show that introducing durable goods into a sticky price model leads to negative sectoral comovement of production following a monetary policy shock and under certain conditions to aggregate neutrality these results appear to undermine sticky price models in this paper we show that these results are not robust to two prominent and realistic features of the data namely input output interactions and limited mobility of productive inputs when extended to allow for both features the sticky price model with durable goods delivers implications in line with var evidence on the effects of monetary policy shocks

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

commercial policy and intra industry trade abstract this paper constructs a model of intra industry trade within a multi product industry whose output range is limited to that obtainable from a particular type of capital intra industry trade is a natural outcome in this structure without requiring increasing returns to scale or imperfectly competitive markets and with its pattern determined along traditional relative factor abundance lines the volume of this trade will vary inversely with the level of trade restrictions as observed empirically other policies are then considered for their influence on the range rather than the level of domestic production since the former is the more likely policy objective under these circumstances

eu participation and the external trade of greece an appraisal of the evidence this paper investigates the trade effects caused by the accession of greece to the eu a large part of the analysis is in terms of trade flows disaggregated by the 21 categories of the greek tariff schedule these series are original data sets which have been constructed by the author to be used here for the first time the main message is that after 1981 events took a turn closer to the pessimistic pre accession predictions our findings indicate that during the post integration period the external trade of greece has been reoriented towards the eu countries and greece lost part of its comparative advantage in those sectors in which such an advantage exists we also suggest that as far as imports are concerned eu participation has caused gross trade creation for imports from the eu countries and gross trade diversion for imports from the rest of the world as far as exports are concerned the results indicate that eu participation has caused only a modest increase in greek exports to the eu market

economic models for the environmental kuznets curve a survey abstract the environmental kuznets curve ekc refers to an inverted u shaped relationship between some pollutant level and per capita income i e the environmental quality deteriorates at early stages of economic growth and subsequently improves at a later stage since the early 1990s a considerable number of empirical studies have been conducted on the ekc and although there is no conclusive proof it has been recognized that the ekc emerges as an empirical regularity however some recent studies cast doubt on the concept and methodology of empirical results and evidence of the existence of the ekc has been questioned in fact how economic growth affects the environmental quality i e the shape of the ekc is still controversial in order to identify the actual relationship between the environmental quality and economic growth it is essential to develop economic models from various points of view this paper overviews the current stage of theoretical models that explain such relationship

indeterminacy home production and the business cycle a calibrated analysis abstract in this paper i present a business cycle model with one market sector that produces a standard good and another that produces a non market or home good the model can have multiple equilibria and therefore cycles driven only by self fulfilling expectations with low externalities to market production in particular an upward sloping aggregate labor demand as e g in farmer and guo j economic theory 63 1994 42 72 is not required for indeterminacy the effect of technology shocks is also studied in all cases the time series that are generated have properties that are comparable to the real us postwar series

impatience pollution and indeterminacy abstract this paper examines an equilibrium growth model in which production activities generate environmental pollution that has a negative welfare effect and in which individual households subjective discount rate is a function of individual consumption which is internal to each household and of total pollution which is an external factor to the individual agents it is shown that there may exist multiple steady states and that the dynamic equilibrium may display indeterminacy depending on the properties of the discount rate function the pollution capital relationship in production technology and the pollution consumption relationship in instantaneous utility the long run effects of tighter environmental policy are subsequently examined and the results are also found to be dependent on the above factors

divergence in economic performance transitional dynamics with multiple equilibria abstract special pairs of the utility functions and the production functions are used in this paper to uncover the transitional dynamics in a lucas model of growth the main findings are as follows a continuum of equilibria exists if the external effect of human capital in goods production is sufficiently large the process of lagging behind catching up with and overtaking that we often observe in the world economy can be explained finally some equilibrium paths are shown to have such complicated patterns that the dynamics conjectured by lucas are too simple to be correct journal of economic literature classification numbers o41 c61

can environmental taxation stimulate growth the role of indeterminacy in endogenous growth models with environmental externalities abstract this paper examines the effects of environmental taxation on long run growth in an infinitely lived representative agent model of endogenous growth with negative pollution externalities the novelty of this paper lies in its investigation of how the long run effects of environmental taxes are affected by the possible emergence of indeterminacy of equilibria in romer s 1986 increasing returns and long run growth journal of political economy 94 1002 1037 learning by doing model with endogenous labor supply the analysis shows that environmental taxation generally enhances harms long run growth when the balanced growth path is indeterminate determinate

intra industry specialization in a multi country and multi industry framework the paper tests alternative hypotheses as to the factors determining the extent of intra industry trade defined as the share of this trade in total trade in a multi country and multi industry framework the empirical results show that the extent of intra industry trade in a particular industry between any two countries depends on the characteristics of the industry and the countries concerned the explanatory power of the regressions for the entire group of countries exporting manufactured goods as well as for trade among the developed countries is relatively high and practically all the hypotheses concerning the impact of industry trade are supported by the empirical results lower coefficients of determination have been obtained for trade between developed and developing countries and for trade among developing countries but the estimates generally support the hypotheses put forward in the paper in these cases also

a dynamic model of the environmental kuznets curve turning point and public policy we set up a simple dynamic macroeconomic model with i polluting consumption and a preference for a clean environment ii increasing returns in abatement giving rise to an ekc and iii sustained growth resulting from a linear final output technology there are two sorts of market failures caused by external effects associated with consumption and environmental effort the model is employed to investigate the determinants of the turning point and the cost effectiveness of different public policies aimed at a reduction of the environmental burden moreover the model offers a potential explanation of an n shaped pollution income relation it is shown that the model is compatible with most empirical regularities on economic growth and the environment

do financial analysts long term growth forecasts matter evidence from stock recommendations and career outcomes abstract prior literature portrays long term growth ltg forecasts as nonsensical from a valuation perspective instead we hypothesize that ltg forecasts signal high effort and ability to analyze firms long term prospects we document stronger market response to stock recommendation revisions of analysts who publish accompanying ltg forecasts we also hypothesize and find that these analysts are less likely to leave the profession or move to smaller brokerage houses consistent with reg fd s intention to promote fundamental analysis of long term earnings prospects post reg fd observations drive our results overall we identify previously undocumented benefits accruing to analysts who publish ltg forecasts

ekc type transitions and environmental policy under pollutant uncertainty and cost irreversibility abstract previous studies have suggested that some pollutant levels first increases due to the economic growth and then start decreasing the pattern being called the environmental kuznets curve ekc we examine ekc type transitions of pollutant levels not with respect to economic growth but more generally in time assuming that each policy maker optimally executes the two switching options of regulation and unregulation for pollution the switching dynamics of environmental policy can be described by an alternating renewal process it is shown that the double laplace transform of transition density of a pollutant level can be obtained by a novel application of renewal theory the expected level of overall pollutants is then calculated numerically and found to exhibit either a shaped or an n shaped pattern in time our results present a simple explanation for the ekc type transitions of pollutant levels within a real options framework

the determinants of intra european trade in manufactured goods abstract the determinants of intra european trade in manufactured goods are examined using three models the first model tests whether inter industry specialization between pairs of countries can be explained in terms of inter industry differences in factor intensities and inter country differences in factor endowments the second model tests the effects of country and industry characteristics in the extent of intra industry specialization the third model combines the first two to analyse the determinants of bilateral gross trade in individual industries the empirical results support the specific hypotheses put forward to specify the models

real business cycles and the animal spirits hypothesis abstract we calibrate a quantitative equilibrium macroeconomic model with an aggregate technology that is subject to increasing returns and show that this model may display fluctuations at business cycle frequencies even when there are no shocks to the fundamentals of the economy these fluctuations are due to the self fulfilling beliefs of investors which we call animal spirits we compare the impulse response functions predicted by our model and by two other more standard models with a four variable vector autoregression on u s data our animal spirits economy is the most successful of the three at matching broad features of the dynamic responses in the data journal of economic literature classification numbers e00 e3 e32

eec integration towards 1992 some distributional aspects gains and losses from 1992 damien j neven this paper examines how the benefits and costs of the internal market programme will be shared across member states the main conclusion is that the northern european countries stand to gain little from 1992 the only exception is the uk which will benefit from integration because initially it is less integrated than its northern neighbours the main beneficiaries will be the southern european countries they will benefit both from a better exploitation of their comparative advantage in labour intensive commodities and from the gains from unexploited scale economies which have already been substantially exploited in northern europe although northern countries have a comparative advantage in goods which are intensive in human capital southern markets for these goods are relatively small that is why it is the southern countries which stand to gain most even if in addition ec trade with the rest of the world is liberalized at the same pace as within the ec labour intensive production especially clothing and footwear in the south could increase by as much as 14 after 1992 areas in the north where such industries are concentrated may be the largest losers from 1992

economic growth and transitions between renewable and nonrenewable energy resources abstract we study transitions between nonrenewable and renewable energy forms at different development stages of an economy it is shown that in the historical context the emphasis on energy production may evolve from renewables to nonrenewables and back to renewables typically both energy forms are used simultaneously along the equilibrium path nonrenewable resource consumption may increase and their price decrease an inverted u relation between carbon emissions and income level may follow even without environmental policy