transition towards a low carbon economy a computable general equilibrium analysis for poland in the transition to sustainable economic structures the european union assumes a leading role with its climate and energy package which sets ambitious greenhouse gas emission reduction targets by 2020 among eu member states poland with its heavy energy system reliance on coal is particularly worried on the pending trade offs between emission regulation and economic growth in our computable general equilibrium analysis of the eu climate and energy package we show that economic adjustment cost for poland hinge crucially on restrictions to where flexibility of emission abatement revenue recycling and technological options in the power system we conclude that more comprehensive flexibility provisions at the eu level and a diligent policy implementation at the national level could achieve the transition towards a low carbon economy at little cost thereby broadening societal support

energy price shocks and medium term business cycles abstract energy price shocks pose sudden challenges to economies this paper examines how oil price shocks have influenced the u s economy over the last decades and especially focuses on the productivity slowdown in the years following an oil price shock we extend the existing literature by considering medium term business cycles which consist of high frequency components conventional business cycles up to 8 years and medium frequency components 8 50 years we find that the medium frequency consequences of energy price shocks are considerable and explain a significant part of the productivity slowdown

wages and the composition of experience this paper provides evidence on the relation between alternative forms of experience and wages using data drawn from the national longitudinal survey of youth prior labor market experience is segmented into mutually exclusive categories based on industry and occupation to examine how subsequent employers value skills acquired on previous jobs we find that most forms of experience including tenure at the current job provide a comparable return however the wage return to prior experience in a different occupation and industry is significantly lower such career changes constitute over half of all prior work experience among workers in their mid 30s

resource allocation in a general equilibrium model of production under uncertainty the case of variable supply of labor abstract this paper examines the effects of a marginal change in uncertainty on resource allocation and factor rewards by relaxing the assumption of factor inelasticity we demonstrate that integrating a variable labor supply into batra s two sector uncertainty model can mitigate or reverse many of the earlier results specifically a marginal increase in uncertainty may trigger the resource to move from the certainty sector to the uncertainty sector in the presence of a backward bending labor supply curve

industry specific capital and the wage profile evidence from the national longitudinal survey of youth and the panel study of income dynamics using data from the national longitudinal survey of youth 1979 96 and the panel study of income dynamics 1981 91 i seek to determine whether there is any net positive return to tenure with the current employer once we control for industry specific capital including total experience in the industry as an additional explanatory variable i show that the return to seniority is markedly reduced using gls while it virtually disappears using iv gls at both the one digit and three digit levels therefore it seems that what matters most for the wage profile in terms of human capital is industry specificity not firm specificity

monetary policy and natural disasters in a dsge model in the immediate aftermath of hurricane katrina speculation arose that the federal reserve might respond by easing monetary policy this article uses a dynamic stochastic general equilibrium dsge model to investigate the appropriate monetary policy response to a natural disaster we show that the standard taylor rule response in models with and without nominal rigidities is to increase the nominal interest rate that finding is unchanged when we consider the optimal policy response to a disaster a nominal interest rate increase following a disaster mitigates both temporary inflation effects and output distortions that are attributable to nominal rigidities

the effects of energy price technology and disaster shocks on china s energy environment economy system abstract this paper constructs a dynamic stochastic general equilibrium dsge model to analyze the effects of energy price technology and disaster shocks on china s energy environment economy 3e system it also studies stylized facts as well as co integration and error correction dynamic analyses of this system the disaster shock is modeled as a two state markov switching process the results show that both technology and energy price shocks increase the ratio of environmental investment to gdp the improvement in technology and rising energy prices helps to reduce co2 pollution and improve economic restructuring among the three kinds of shocks technology shock is the most important the robustness of the model is tested through statistical methods

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

environmental expenditure spillovers evidence from an estimated multi area dsge model abstract this article constructs and estimates a multi area dynamic stochastic general equilibrium model with a spatial simultaneous equation taking beijing tianjin hebei region in china as an example we explain the dynamic effect of environmental expenditure shock and its spillover effects environmental expenditure has an obvious crowding out effect on consumption and investment in local area but has some positive influences on the economy of external regions over the business cycle environmental expenditure shock in local area can well explain the volatility of real output and social investment in the last 52 quarters however environmental expenditure shocks in external regions have little contribution to the volatility of output and investment in local area one interesting result is that the contribution of environmental expenditure shocks in external regions to the trend of pollution fluctuation is greater than that in local area

a formulation of the earnings function using the concept of occupational investment standard models of income determination specify income to be a function of two variables that measure postschool investment the years of labor market experience and the years of employer tenure this investigation develops a better proxy for general human capital investments by hypothesizing that the intensity of investment varies by occupation and that a proportion of the occupational skills are transferable with occupational change after developing exogenous measures of these features the occupational investment variable is calculated for the young men of the national longitudinal survey empirical work demonstrates that occupational investment is a strong determinant of income far superior to the experience variable

dividing the costs and returns to general training data from the national longitudinal survey of youth indicate that the employer often pays the explicit costs of not only on site training but also off site general training although few of these costs appear to be passed on to workers in the form of a lower wage while in training completed spells of general training paid for by previous employers have a larger wage effect than completed spells of general training paid for by the current employer a model where contract enforcement considerations cause employers to share the costs and returns to purely general training can explain these findings

wage distortion and resource allocation under uncertainty the effects of uncertainty on resource allocation have been examined in a two sector general equilibrium model of production constructing a model in which firms are risk indifferent and face uncertainty regarding the use of capital rothenberg and smith 9 considered the implications of uncertainty for welfare resource allocation and income distribution their model was refined by batra 3 to permit uncertainty in production to influence the firms decisions to hire both capital and labor batra s approach appears to be more general in that producers are assumed to be risk averse in lieu of risk neutral the writing of this paper is inspired by batra s contributions 2 3 batra s well known intermediate run equilibrium model is reformulated to allow for wage distortion utilizing the model several issues regarding the effects of changes in factor supplies in commodity prices and in the degree of wage distortion will be examined factor market distortions in the absence of uncertainty have been studied extensively in literature 2 their impacts on resource allocation in stochastic environment have not been explored however we argue that the introduction of the wage differential has a major impact on batra s results first relative value factor intensities generally replace relative physical factor intensities in determining signs of

adjustment to production uncertainty and the theory of the firm this paper considers the behavior of the firm which faces uncertainty in its production process but can adjust its output once the uncertainty is resolved ex post adjustment unlike previous treatments involves a marginal cost penalty if more output is required and a lowering of price if too much is produced with ex post adjustment allowed in this fashion it is found that nonlinear risk preferences do not affect the sign of the firm s marginal risk premium at optimum ex ante output the firm will produce less output than under certainty whether it is risk averse risk neutral or prefers risk

historical energy price shocks and their changing effects on the economy abstract the purpose of this paper is to identify the changes in the impact of energy shocks on economic activity with an interest in assessing if an economy s vulnerability and resilience to shocks improved with economic development using data on the united kingdom over the last three hundred years the paper identifies supply aggregate demand and residual shocks to energy prices and estimates their changing influence on energy prices and gdp the results suggest that the impacts of supply shocks rose with its increasing dependence on coal and declined with its partial transition to oil however the transition from exporting coal to importing oil increased the negative impacts of demand shocks more generally the results indicate that improvements in vulnerability and resilience to shocks did not progress systematically as the economy developed instead the changes in impacts depended greatly on the circumstances related to the demand for and supply of energy sources if these experiences are transferable to future markets a transition to a diversified mix of renewable energy is likely to reduce vulnerability and increase resilience to energy price shocks

the competitive firm with uncertainty in the rate of labor turnover the adoption of more sophisticated production techniques usually requires firms to increase their expenditures on worker training and to pay greater attention to the costs of labor turnover economists are beginning to explicitly incorporate both training expenditures and the rate of labor turnover into the theory of the firm at the same time they are extending the theory of the firm to cases in which the firm faces uncertainty in its environment for example uncertainty in the price of output the prices of inputs or the quantity of output that a given input mix will yield this paper seeks to extend both of these areas of research by first introducing uncertainty in the rate of labor turnover and then examining the consequences of this new form of uncertainty for optimal training expenditures the optimal wage and the optimal level of output at the firm the paper assumes that the firm can increase output by providing workers with more training and can discourage turnover by paying workers a higher wage the quantities of labor and capital that the firm employs are held constant throughout the analysis it is found that the introduction of uncertainty in the rate of labor turnover results in lower optimal expenditures for both training and wages the reduction in training also reduces the level of output per worker at the firm comparative static analysis of ceteris paribus changes in the mean and variance of the labor turnover rate are also performed an increase in the mean of the turnover rate with the variance held constant reduces the wage and the amount of training provided also an increase in the variance of the turnover rate with the mean held constant reduces the wage and the amount of training provided a number of authors have considered models of the competitive firm in which the firm must determine its output level in the presence of uncertainty sandmo 13 batra and ullah 2 hartman 7 ishii 9 ingene and yu 8 flacco 5 and many others consider the behavior of the competitive firm facing uncertainty in its output price blair 3 ratti and ullah 12 stewart 15 perrakis 11 macminn and holtman 10 and many others consider cases in which the firm faces uncertainty in its technology or factor prices in all of these models it is assumed that the firm must make its input and output decisions before the uncertainty is resolved without ex

resource allocation with factor price differentials under price uncertainty the authors adapt the price uncertainty model to examine the implications of four types of marginal changes in price uncertainty changes in commodity price level the variance of price a proportional change in both the mean and the standard deviation of price and an equiproportionate change in the moments the analysis focuses on the effect of price uncertainty on sectoral capital labor ratios factor employment output levels factor rewards and expected profits the stability issue and its meaning for the determinant of the basic system is also discussed 11 references

the southern wage gap human capital and the quality of education this suggests that school quality can play an important role in explaining the racial wage gap welch 28 and smith 19 both provide anecdotal evidence that relates the narrowing of school quality to the falling racial gap in earnings the rising rate of return for black workers on years of school documented by weiss and williamson 27 welch 28 and smith and welch 20 also is consistent with the improving quality of their education nevertheless school quality has not been incorporated into systematic statistical analysis of the racial wage gap this is the main focus of this paper i examine 15 southern states which had data on the segregated white and black school systems i have attempted to link the demonstrated lower quality of education during segregation in the south to the persistent southern wage gap in addition i have tried to

uncertainty domestic distortions and the optimal tariff a number of studies have appeared in recent years incorporating uncertainty in a two sector general equilibrium model of trade particularly noteworthy are the contributions by batra 1 and ingene and yu 4 283 95 among others 3 6 326 31 the literature on the optimal trade policies under domestic factor market distortion in a non stochastic framework is also vast 8 but there has not been any attempt to formulate optimal tariff policy in a stochastic model of international trade characterized by uncertain relative price and factor market distortion recently itagaki 5 292 97 has analyzed the issue of optimal tariff under relative price uncertainty but without any domestic distortions in this context he has shown that for a small open economy facing uncertain terms of trade the optimal tariff is not zero however the analysis of optimal trade policies under domestic distortion along with uncertain terms of trade is conspicuously absent this paper extends their analysis and derives a generalized formula for the optimal tariff in such an economy where a tariff is considered as the only available trade policy a thorough understanding of the optimal trade policies in the presence of domestic factor market distortion and uncertain terms of trade will be useful for many ldc s plagued by growing distortions in this paper we assume that producers maximize their profits and consumers maximize their utility after the import tariff is levied by the policymakers and both international and domestic prices have been observed and the policymakers take into account the behavior of the producers and consumers when they are choosing the optimal tariff rate in the next section the model is presented then we derive the optimal tariff formula for the economy with uncertain terms of trade in the presence of domestic factor market distortions section iii contains a summary and some concluding remarks

the resilience of the indian economy to rising oil prices as a validation test for a global energy environment economy cge model this paper proposes to test the global hybrid computable general equilibrium model imaclim r against macroeconomic data to do so it compares the modeled and observed responses of the indian economy to the rise of oil price during the 2003 2006 period the objective is twofold first to disentangle the various mechanisms and policies at play in india s economy response to rising oil prices and second to validate our model as a tool capable of reproducing short run statistical data with default parametrization the model predicts a significant decrease in the indian growth rate that is not observed however this discrepancy is corrected if three additional mechanisms identified by the international monetary fund are introduced namely the rise in exports of refined oil products the imbalance of the trade balance allowed by large capital inflows and the incomplete pass through of the oil price increase to indian customers this work is a first step toward model validation and provides interesting insights on the modeling methodology relevant to represent an economy s response to a shock as well as on how short term mechanisms and policy action can smooth the negative impacts of energy price shocks or climate policies

urban unemployment uncertainty and economic expansion the hypothesis that economic growth may be immiserizing in the presence of market distortions was first explored more than thirty years ago bhagwati 4 201 5 5 481 5 and johnson 11 151 4 amongst others analyzed cases in which factor growth can cause a loss of real income in a small open economy while there are many types of market distortions a particularly interesting one was introduced by harris and todaro 7 126 42 to provide a theoretical rationale for migration patterns in lesser developed economies in the harris todaro henceforth h t model there exists a rigid minimum wage in manufacturing the urban sector that exceeds the freely determined agricultural rural wage rural workers migrate to the urban area until the rural wage equals the expected urban wage where expected is taken to mean the minimum wage times the probability of obtaining employment note that the probability can also be interpreted as the proportion of time that an urban laborer is employed corden and findlay 6 59 78 extended the h t model to the case of intersectorally mobile capital thereby bringing it into alignment with the neo classical trade model they also provided a geometric analysis of the effects of factor accumulation and hicks neutral technical change upon output levels and factor utilization other researchers have examined the mobile capital ht model in terms of its dynamic stability 14 219 34 effects of wage subsidies and taxes 13 69 80 customs unions 15 311 19 and various growth issues including immiserization 12 245 56 as important as these contributions have been they share the common assumption of certainty or certainty equivalence yet the development literature makes clear that the agricultural sector of ldc s is characterized by uncertainty 3 thus just as the neo classical trade literature has been extensively investigated under uncertainty 1 9 so can the h t based literature be extended this has been done only twice by ingene and yu 10 who examined the effect of a change in the minimum wage and ingene 8 who looked at changes in the degree of uncertainty

prices versus policy an analysis of the drivers of the primary fossil fuel mix abstract energy policymakers often attempt to shape their countries energy mix rather than leave it purely to market forces by calibrating and simulating a dynamic stochastic general equilibrium dsge model this paper analyzes the primary fossil fuel mix in the usa and compares it to germany and the uk given the different evolution of the mixes and the different roles played by relative prices and policy in north america and europe it is found that the model explains well the evolution of the primary fossil fuel mix in the usa for the period 1980 2014 suggesting that relative fossil fuel prices generally dominated in determining the mix during this time however this is not the case for germany and the uk for both countries the model performs well only for the period after the market oriented reforms in the 1990s additionally the volatility of private consumption and output for the pre and post reform periods is evaluated for germany and the uk and it is found that the liberalized energy markets brought about a transition from coal to natural gas but with increased macroeconomic volatility

a note on adjustment to production uncertainty and the theory of the firm this paper analyzes the impact of production uncertainty on the firm s optimal output decision if uncertainty is introduced by an additive risk variable then short run optimal output is unchanged but the owner manager s expected utility can change causing long run output effects if uncertainty is introduced by a multiplicative random variable then short run output can change as well

research on a single policy or policy mix in carbon emissions reduction abstract existing literature on the optimal type of carbon mitigation policy and whether it is better to apply a policy mix instead of a single policy is still unclear this paper assesses the policy effectiveness under exogenous shocks by applying a dynamic stochastic general equilibrium dsge model comparing the differences between the carbon mitigation and economic impacts of a policy mix versus a single policy carbon tax or carbon trading scheme the results showed that energy demand is rigid in response to technological shocks therefore there is no significant difference for the energy consumption related carbon emissions in response to the technological progress under three different policy scenarios a carbon tax scenario i a carbon trading scheme scenario ii and a carbon policy mix scenario iii overall carbon emissions policy has a negative impact on the economy compared to the other two policies a carbon trading scheme has a relatively slight impact on the economy a mandatory carbon price would have a more significant impact than would a market based carbon price the policy mix formed by a carbon tax and a carbon trading is comprehensive in terms of both price flexibility and coverage scope

fiscal policy and occupational employment dynamics we document substantial heterogeneity in occupational employment dynamics in response to government spending shocks in the united states employment rises most strongly in service sales and office pink collar occupations by contrast employment in blue collar occupations is hardly affected by fiscal policy we provide evidence that occupation specific changes in labor demand are key for understanding these findings we develop a business cycle model that explains the heterogeneous occupational employment dynamics as a consequence of composition effects due to heterogeneous employment changes across industries and occupation specific within industry employment shifts due to differences in the short run substitutability between labor and capital services across occupations

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