the public choice of superior sanctions this paper analyzes the public choice of specific forms of sanctions current sanctions are essentially quantity constraints q sanctions which are like quotas in that they might bestow benefits on certain special interest groups in the target country revenue sanctions r sanctions may be able to recapture such benefits in the form of sender government revenue which could either compensate for the costs of sanctions to the sending country or finance other sanction enhancing activities aimed at the target country hence r sanctions may be superior to q sanctions in general or on the basis of target efficiency however public choice analysis suggests that q sanctions will generally be chosen over r sanctions by democratic countries

the impact of rural electric access on deforestation rates summary overpopulation and economic industrialization are two common explanations for deforestation political ecology however highlights that good governance and effective land management at the local level can offset the impact of population growth and development on environmental degradation in this paper we provide an innovative argument derived from political ecology to explain deforestation but rather than pursing a bottom up approach to governance we take a top down approach we argue that the state can ease deforestation rates by weaning rural populations off of the consumption of biomass for their energy needs by expanding rural electrification access using a panel analysis of 158 countries for the years 1990 2000 and 2010 we find that not only does rural electrification cause deforestation rates to decrease but also that it is more robust in explaining deforestation than population growth or development our study provides two innovations to political ecology it highlights that the state can help rather than hinder local populations with managing their local environments in a more sustainable way by providing them with public goods based energy alternatives and it supplements political ecology s qualitative focus on environmental degradation with a generalized quantitative analysis of state based initiatives on deforestation our results suggest that current global initiatives addressing deforestation specifically the reduction of emissions from deforestation and forest degradation redd agenda of the united nations framework convention on climate change should not only assist local land managers but also work with the state to ensure universal access to electricity

the american business cycle continuity and change in recent decades the american economy has experienced the worst peace time inflation in its history and the highest unemployment rate since the great depression these circumstances have prompted renewed interest in the concept of business cycles which joseph schumpeter suggested are like the beat of the heart of the essence of the organism that displays them in the american business cycle some of the most prominent macroeconomics in the united states focuses on the questions to what extent are business cycles propelled by external shocks how have post 1946 cycles differed from earlier cycles and what are the major factors that contribute to business cycles they extend their investigation in some areas as far back as 1875 to afford a deeper understanding of both economic history and the most recent economic fluctuations seven papers address specific aspects of economic activity consumption investment inventory change fiscal policy monetary behavior open economy and the labor market five papers focus on aggregate economic activity in a number of cases the papers present findings that challenge widely accepted models and assumptions in addition to its substantive findings the american business cycle includes an appendix containing both the first published history of the nber business cycle dating chronology and many previously unpublished historical data series

wheat from chaff meta analysis as quantitative literature review abstract this paper presents and develops a quantitative method of literature reviewing and evaluating empirical research meta regression analysis or mra economics is theory driven yet we must learn empirically if economics is to advance mra offers a more objective statistical method to summarize our empirical knowledge and to explain the wide study to study variation in economic research mra is used to assess the evidence for ricardian equivalence and its findings are contrasted to those of conventional narrative review furthermore mra establishes a platform from which to distinguish genuine empirical effect from the exploitable specification error that infests applied econometrics

international evidence on output inflation tradeoffs a bootstrap analysis abstract a bootstrap analysis of existing data on international output inflation tradeoffs is performed in contrast to some previous empirical work the results of the bootstrap analysis strongly support lucas 1973 rational expectations model of the natural rate hypothesis

price flexibility in developing countries evidence and implications using data for a sample of 50 developing countries the empirical investigation evaluates determinants and implications of asymmetric price flexibility price inflation is characterized by high flexibility to adjust towards full equilibrium further price inflation accelerates flexibly with unanticipated demand growth in both the upward and downward directions in most of the countries under investigation asymmetry indicates higher upward flexibility compared to downward flexibility in many countries aggregate uncertainty determines the degree of asymmetry such that price flexibility is higher with respect to expansionary demand shocks compared to contractionary shocks the higher the variability of aggregate demand across countries in contrast higher trend price inflation increases downward price flexibility across countries output variability decreases with both upward and downward price flexibility in the face of aggregate demand shocks a the views expressed in this article are those of the a

the economics of tropical deforestation and land use an introduction to the special issue this paper both introduces the special issue on the economics of tropical deforestation and land use and conducts a synthesis crosscountry analysis of tropical agricultural land expansion agricultural development is the main factor determining land expansion but institutional factors have an important influence income effects vary from region to region and do not always display an ekc relationship the case studies comprising this special issue provide further case study insights into tropical deforestation and land use through spatial analysis of locational factors cge modeling of policy scenarios assessing external market impacts on land clearing and modelling state interventions and taxation

the use and abuse of meta analysis in environmental and natural resource economics an assessment motivated by the 2006 report of a work group appointed by the environmental protection agency epa this paper examines the present state of meta analysis in environmental economics and offers recommendations for its future use to this end we summarize and assess 140 meta analyses from 125 published and unpublished studies covering 17 topical categories in environmental and resource economics first we provide several generic meta analysis models as reference points and discuss major estimation issues five econometric issues are identified as part of a complete analysis 1 sample selection criteria 2 basic data summary 3 primary data heterogeneity 4 heteroskedasticity and 5 non independence of multiple observations from primary studies second a tabular summary is presented for the 140 meta analyses with respect to estimation methods third a narrative summary is presented for 19 meta analyses including the three value of statistical life studies examined by the epa work group and one analysis from each of 16 other categories fourth we offer a set of best practice guidelines for future meta analyses in this and other areas of economics last the paper comments on the use of meta analytic methods for benefit transfers of environmental values

relationship between forest resources and economic growth empirical evidence from china abstract natural resources especially forests are critical to china s sustainable development in recent years effective utilization of forest resources has become a significant concern in china in this study on the basis of the environmental kuznets curve ekc hypothesis the relationship between forest resources and economic growth is examined using panel data from 30 provinces in china for the period 2002 2015 and the generalized method of moments gmm approach to control for potential endogeneity the empirical results indicate that with continuous economic growth the timber output and area of afforestation would at first increase and then decrease after reaching the corresponding turning points given the considerable regional gap in economic and social development three regions of china were investigated to perform a more in depth analysis evidence observed for the country and the three regions suggests an ekc for forest resources these findings indicate positive effects of china s pursuit of a more balanced growth path where forest resources would be less consumed and more actively protected

green goals and full employment are they compatible abstract two empirical correlations are studied one between economic growth and environmental impacts and the other between the lack of economic growth and unemployment it is demonstrated that at a global level economic growth is strongly correlated with environmental impacts and barriers to fast decoupling are large and numerous on the other hand low or negative growth is highly correlated with increasing unemployment in most market economies and strategies to change this lead to difficult questions and tradeoffs the coexistence of these two correlations which have rarely been studied together in the literature on green growth degrowth and a growth justifies ambivalence about growth to make key environmental goals compatible with full employment the decoupling of environmental impacts from economic output has to be accompanied by a reduction of dependence on growth in particular strategies to tackle unemployment without the need for growth several of which are studied in this article need much more attention in research and policy

governance and deforestation a meta analysis in economics abstract understanding which aspects of forest governance have the potential to effectively reduce deforestation is central to reversing trends in global deforestation there is a multitude of empirical studies examining this relationship using various measures of governance and study designs coming to diverse conclusions in order to identify the source of variation across studies this article conducts a meta analysis of 32 empirical cross country studies in the field of economics containing 227 estimates of the impact of different governance measures on deforestation using an ordered probit model we find that the choice of the governance measure is the main factor in explaining variations in the outcomes of the studies in particular studies using environmental policy ownership rights presence of environmental ngos and rule of law as measures of governance are more likely to find that better governance reduces deforestation in contrast studies using democracy and rights as a measure of governance are more likely to find that deforestation increases when governance is improved the finding that not all aspects of governance improvements are equally supportive of forest conservation suggests that more nuanced analyses of specific aspects of environmental governance are required to guide evidence based policy making

wage stickiness and the non neutrality of money a cross industry analysis abstract the paper provides an empirical test of sticky wage models of business fluctuations by focusing on industry level cross sectional implications that emerge this breaks the observational equivalence existing at the aggregate level between rational expectations long term contracting and imperfect information models the specific implication tested is whether output responses to nominal disturbances industry phillips curve slopes are inversely related to wage indexation elasticities the phillips curve slopes are found to vary across industries for the canadian economy but bear no relationship to indexation elasticities casting doubt on the role of nominal wage rigidity in generating the observed non neutrality of money

effect of public subsidies on farm technical efficiency a meta analysis of empirical results abstractinvestigating the impact of public subsidies on farm technical efficiency is becoming a critical issue in applied agricultural policy analysis this article presents a meta analysis of empirical results on this issue based on data gathered from a systematic literature review we find that in the empirical literature subsidies are commonly negatively associated with farm technical efficiency meta regression estimation results show that the direction significantly negative significantly positive or non significant of the observed effects is sensitive to the way subsidies are modelled in the empirical studies

industrial output variability and real wage fluctuations determinants and implications i introduction the study of business cycles has been at the heart of macroeconomic theory for decades theoretical efforts have focused on providing an adequate explanation for sources of economic fluctuations and toward this explanation new keynesian models have emphasized rigidity that interferes with market forces and exacerbates the effects of demand fluctuations on the supply side of the economy the form of rigidity is in sharp contrast between sticky wage and sticky price models sticky wage models have emphasized rigidity in the labor market to explain economic fluctuations labor contracts specify in advance the nominal wage that prevails for the contract duration following contract negotiation a positive disturbance to aggregate demand raises the price of the output produced in the absence of any stipulation for wage indexation the increase in price lowers the real product wage faced by firms causing it to fall below its market clearing value the fall in the real wage causes output and employment to rise above their natural full equilibrium levels output adjustments moderate the increase in price that is necessary to clear the product market in addition sticky price models have emphasized rigidity in the product market to explain economic fluctuations monopolistically competitive firms face small menu costs when they change prices menu costs are resources involved in announcing and implementing a price change firms may opt therefore to change prices at specific intervals given price rigidity producers adjust output in the face of demand shocks accordingly an increase in the real wage correlates with an increase in output in the face of demand shocks to test competing theoretical explanations efforts have focused on the cyclical behavior of the real wage and accompanying output fluctuations in the face of demand shocks 1 the evidence appears conflicting and therefore does not convincingly support a given explanation 2 unlike previous empirical research on the subject the objective of this investigation is to study the cyclical behavior of the real wage and the relative response of the nominal wage and price to demand shocks toward this objective the present investigation estimates the time series response of real wage rates to aggregate demand shocks in each of 28 private industries of the united states listed in appendix table a1 differences in the response across industries are then used to discriminate between sticky wage and sticky price explanations the evidence establishes the relation between output fluctuations and the response of the real wage to demand shocks across industries the results across industries of the united states produce the following evidence contrary to the implications of sticky wage models the price response to demand shocks does not move closely with the nominal wage response consistent with the implications of sticky wage models however an increase in nominal wage flexibility rigidity moderates exacerbates industrial output fluctuations in the face of demand shocks nonetheless an increase decrease in price flexibility relative to nominal wage flexibility moderates increases the output response to demand shocks across industries consistently industrial output fluctuations increase with the cyclical response of the real wage to demand shocks for example an increase in the real wage correlates with an increase in real output during periods of expansionary demand in general industrial prices adjust independently of the nominal wage to demand shocks increasing real wage variability further industrial real output variability does not vary significantly with nominal wage flexibility in the face of demand shocks in contrast an increase in the price response to demand shocks moderates output variability across industries consistently an increase in the real wage response to demand shocks correlates with an increase in industrial real output variability as predicted by sticky price models of business cycles

real wages over the business cycle evidence from panel data one topic on which keynes did not disagree with classical economists was the cyclical behavior of real wages keynes 1936 as well as various classical writers predicted that real wages should move countercyclically quoting the general theory p 17 in general an increase in employment can only occur through the accompaniment of a decline in real wages thus i am not disputing this vital fact which the classical economists have rightly asserted as indefeasible this prediction is based on the premise of competition and a given short run capital stock increases in employment then correspond to more intensive use of capital and through diminishing product lower real wages for this reason evidence by dunlop 1938 and tarshis 1939 that real wages move procyclically was viewed as paradoxical both dunlop and tarshis based their findings on an observed positive correlation between real and money wages which given the procyclical movement of money wages implies a positive correlation between

military expenditures and bureaucratic competition for rents this paper has provided empirical evidence on the relationship between transfers to the military and the degree of political competition in a country it has been argued that in both democratic and autocratic rent seeking societies the military may have a significant advantage in capturing government transfers in democratic societies the role of the military as guardian of national security puts it in a unique position to seek transfers as a result military elites in these countries have been quite successful in influencing the political system to increase rents to them and members of their group in dictatorships violence is an important rent seeking behavior since the military has a comparative advantage in violence it has emerged as the dominant rent seeking interest group in these countries as a result military groups dominate resource allocations in most politically unstable countries

sticky wage or sticky price analysis of the cyclical behavior of the real wage the study of business cycles has been at the heart of macroeconomic theory for decades theoretical efforts have focused on providing an adequate explanation for sources of economic fluctuations new keynesian explanations have emphasized rigidity that interferes with market forces increasing the effect of demand shocks on the output produced the form of rigidity is in sharp contrast between sticky wage and sticky price models the former imposes rigidity on the shortrun adjustment of wages to demand shocks 20 47 the latter in contrast imposes rigidity on the short run price adjustment to demand shocks 2 34 40 9 43 4 the theoretical plausibility of competing explanations of business cycles has stimulated interest to establish their empirical validity 32 28 1 8 11 23 21 26 these efforts have focused attention on cyclical fluctuations of the real wage in response to demand shocks the real wage may move procyclically or countercyclically according to the relative adjustment of wages and prices the interest in studying the cyclical behavior of the real wage relates to its implications to the real effects of aggregate demand shocks in the context of sticky wage models nominal wage rigidity reinforces the countercyclical response of the real wage to demand shocks and the real effect of these shocks on output growth sticky price models in contrast advocate that price rigidity increases the procyclical response of the real wage to demand shocks and their real effect on output growth the results of earlier investigations of the cyclical behavior of the real wage appear conflicting and therefore do not lend support to a given explanation 2 the present investigation seeks to contribute to this literature unlike previous empirical research on the subject the objective of this investigation is to study the cyclical behavior of the real wage and the relative flexibility of the nominal wage and the price level that determines this behavior in response to demand shocks using data for the united states in the preand post world war ii sample periods the cyclical

rent seeking and institutional stability in developing countries although developing countries are most often associated with institutional instability most are fairly stable and may be considered extremely stable if one takes into account the fact that policies adopted by many of these nations are highly inefficient in a large number of cases post independence economic policies adopted by developing countries have resulted in very slow stagnant or even negative economic growth in more advanced and democratic countries such policies would prevent the reelection of leaders although a small fraction of the population enjoys an extremely high standard of living the majority of the population in developing countries have not experienced any significant gains in their standard of living since independence yet while there have been several coups and attempted coups many governments have remained relatively stable with some leaders remaining in power for over a quarter of a century in other cases leaders have served until their death and successors have continued uninterrupted with remarkable stability even when such leaders adopt what may be considered extremely inefficient policies why then have many institutions remained so stable the present paper argues that the stability observed in many developing countries is a result of a rent seeking equilibrium between well organized interest groups in the population that compete for wealth transfers generated by the relatively weaker and more poorly organized groups in this equilibrium the military is one of the most important interest groups that benefit from the transfers because rent seeking in these countries often involves violence the

real wages employment and the phillips curve a recent study by bils found real wages to be procyclical contradicting previous findings by geary and kennan who found no consistent relationship and neftci who found countercyclical movements in real wages these studies differed in both methodology and sample period in this study we found that real wages were either procyclical or countercyclical depending on the sample period chosen employment changes generated by aggregate supply shocks were associated with procyclical real wage movements while during years dominated by shifts in aggregate demand real wages were highly countercyclical

an empirical analysis of forest transition and land use change in developing countries abstract deforestation is a major environmental issue in developing countries and agricultural land expansion is its main cause the objective of this paper is twofold 1 to identify the macroeconomic determinants of ending deforestation and 2 to explain cumulative deforestation and other land uses to do this we first study the probability of a turning point for deforestation i e the switch from decreasing to expanding forest areas based on the forest transition hypothesis second we adapt a land use model to explain the trade off between forest and agriculture during development to take the link between both phenomena into account we estimate a dynamic panel seemingly unrelated regression sur model along with a switching regression model applied to a dataset of 57 developing countries observed over four time periods the estimation results reveal that economic development and institutions play a significant role in long term deforestation our results also suggest that after the first development stage agriculture and forest are not always competing land uses these results provide new insights into public policies such as redd

economic statism private capital and the dilemmas of accumulation in nigeria abstract nigeria s persistent economic stagnation is attributable to a mutually reinforcing political dynamic comprising a weak developmental state and pervasive rent seeking within the private sector this syndrome was a source of nigeria s initial economic crisis in the early 1980s and it continues to impede structural adjustment initiatives economic policy reform has been compromised by state strategies designed to preserve the gains of elite rentier groups while private entrepreneurs have responded to policy change by seeking new rental havens in finance and other nontradable sectors in consequence structural adjustment has failed to elicit a supply response or to generate significant political support for a more propitious enabling environment nigeria s experience reinforces the perception that changes in nominal incentives must be accompanied by broader institutional transformation if economic reform is to be effective

a meta analysis of contingent valuation forest studies abstract forest ecosystems provide a variety of valuable goods and services this paper presents a meta analysis of forest studies using the contingent valuation cv method to value the provision of forest values around the world in this meta analysis we estimate the marginal value of different management programs that provide a variety of forest goods and services our results show that willingness to pay wtp estimates for forest management programs are sensitive to the program s objectives particularly when linked to the provision of recreational services other variables such as the type of forest location survey mode or the type of respondent were also found to significantly affect the wtp estimates

economic growth and environmental degradation the environmental kuznets curve and sustainable development abstract in this paper we critically examine the concept of the environmental kuznets curve ekc it proposes that there is an inverted u shape relation between environmental degradation and income per capita so that eventually growth reduces the environmental impact of economic activity the concept is dependent on a model of the economy in which there is no feedback from the quality of the environment to production possibilities and in which trade has a neutral effect on environmental degradation the actual violation of these assumptions gives rise to fundamental problems in estimating the parameters of an ekc the paper identifies other econometric problems with estimates of the ekc and reviews a number of empirical studies the inference from some such ekc estimates that further development will reduce environmental degradation is dependent on the assumption that world per capita income is normally distributed when in fact median income is far below mean income we carry out simulations combining ekc estimates from the literature with world bank forecasts for economic growth for individual countries aggregating over countries to derive the global impact within the horizon of the bank s forecast 2025 global emissions of so 2 continue to increase forest loss stabilizes before the end of the period but tropical deforestation continues at a constant rate throughout the period

environmental kuznets curve for co2 in canada abstract according to the environmental kuznets curve hypothesis the relationship between per capita gdp and per capita pollutant emissions has an inverted u shape this implies that past a certain point economic growth may actually be profitable for environmental quality most studies on this subject are based on estimating fully parametric quadratic or cubic regression models while this is not technically wrong such an approach somewhat lacks flexibility since it may fail to detect the true shape of the relationship if it happens not to be of the specified form we use semiparametric and flexible nonlinear parametric modeling methods in an attempt to provide more robust inferences we find little evidence in favour of the environmental kuznets curve hypothesis our main results could be interpreted as indicating that the oil shock of the 1970s has had an important impact on progress towards less polluting technology and production

is there an environmental kuznets curve for deforestation abstract this paper examines the relationship between deforestation and gross domestic product gdp per capita in particular whether an inverted u relationship indicative of worsening then improving deforestation exists between them we note that previous work has used models with restrictive assumptions and recommend a more flexible random coefficients specification which allows for a greater degree of cross country heterogeneity empirical results using data for 76 developing countries between 1961 1992 suggest that the inverted u shaped relationship observed in other studies does not appear to be an empirical regularity with our less restrictive specification statistical tests indicate that this specification is supported by the data we argue that such results are not surprising in view of the wide diversity of physical and social characteristics that exist across countries

meta regression analysis a quantitative method of literature surveys abstract pedagogically literature reviews are instrumental they summarize the large literature written on a particular topic give coherence to the complex often disparate views expressed about an issue and serve as a springboard for new ideas however literature surveys rarely establish anything approximating unanimous consensus ironically this is just as true for the empirical economic literature to harmonize this dissonance we offer a quantitative methodology for reviewing the empirical economic literature meta regression analysis mra is the regression analysis of regression analyses mra tends to objectify the review process it studies the processes that produce empirical economic results as though they were any other social scientific phenomenon mra provides a framework for replication and offers a sensitivity analysis for model specification in this brief essay we propose a new method of reviewing economic literature mra and discuss its potential

the output inflation trade off when prices are costly to change the output inflation trade off is investigated in a rational expectations equilibrium economy in which costly price setting makes it inefficient for agents to vary their prices at every instant it is shown that sticky prices are not some exogenous source of output fluctuation but result from the monetary policy process an economy with slow and counterinflationary money growth exhibits staggered changes in sticky prices as assumed in some new keynesian analyses an economy with fast money growth and a high degree of monetary accommodation exhibits either flexible prices or bunched frequently changing sticky prices

a near rational model of the business cycle with wage and price inertia this paper presents a model in which insignificantly suboptimal behavior causes aggregate demand shocks to have significant real effects the individual loss to agents with inertial price wage behavior is second order in terms of the parameter describing the shock while the effect on real economic variables is first order thus significant changes in business activity can be generated by anticipated money supply changes provided that some agents are willing to engage in nonmaximizing behavior which results in small losses

work incentives hierarchy and internal labor markets this paper argues that contracts with payment based on a ranking of employee performance can provide performance incentives even under asymmetric information that prevents payment based on individual performance only being enforceable such contracts also fit with five features of labor markets that have aroused considerable interest 1 hierarchical wage structures 2 internal promotion 3 wage rates that rise with seniority and experience more than productivity 4 the variance of earnings increasing with experience and 5 wage rates attached to jobs rather than individuals with differentials set by administrative procedures rather than by reference to external market wages

the relative adjustment of wages and prices direct tests within a multiple equation system in order to assess the relative rigidity of the aggregate price level and the nominal wage rate most researchers have focused on the implied behaviour of the real wage rate in response to a purely demand disturbance the present work examines the explicit behaviour of the two variables and is therefore able to analyse the variables short run responses within the context of their defined long run behaviour while the paper reports evidence of long run stability in the real wage rate additional evidence is presented which supports both sticky price and sticky wage models the determining factor is the choice of lag

the empirical measurement of rent seeking costs this survey focuses on the efforts carried out mainly by public choice scholars to measure the social cost of rent seeking the concept introduced by gordon tullock in 1967 and coined by anne krueger in 1974 is well known and accepted by the profession but its empirical measurement has fallen behind with respect to its theoretical formulation an often criticized lack in the literature although there are good general surveys none has specifically focused on reviewing the empirical efforts made to measure the phenomenon the purpose of this paper is to provide such a survey it could be said that the rent seeking concept has been fully integrated into economic jargon it is commonly used when some agent seeks to obtain an artificial transfer usually from government and covers all the actions efforts or expenses that the agent has to carry out to obtain the prize the key issue however is the possible social waste that arises in these situations the empirical efforts to measure such waste constitute the main purpose of this survey the concept of rent seeking was introduced by tullock 1967 although the term was first coined by krueger 1974 in a paper not related to the former in a recent paper tullock himself wrote of the history of the concept and the intellectual context within which it arose tullock 2003 starting with the pioneering work by harberger 1954 several studies were conducted during the 1950s in which the calculation of the social cost of monopolies and tariffs always gave the result of very modest figures the first response to these results was made by leibenstein 1966 and his x efficiency which refers to a hypothetical loss in efficiency due to the absence of competition shortly after leibenstein s paper appeared tullock argued that the deadweight costs of monopoly and tariffs understate the true social cost because the expenditures made to capture related rents have to be included so rectangles as well as harberger s triangles have to be included in the calculations let us see this argument once more figure 1 depicts the iconic tullock graphic analysis of rent seeking it represents the demand schedule d for a monopolized good where pm is the monopoly

real wages over the business cycle a band spectrum approach this paper presents new evidence on the cyclical relationship between real wages and aggregate employment as is well known models that attribute fluctuations in output to movements in aggregate demand and retain the assumption of flexible product prices the adpf hypothesis imply countercyclical real wage movements as employment adjusts along a downward sloping aggregate demand for labor schedule in contrast real business cycle theories 10 15 13 suggest procyclical movements as workers substitute work for leisure along dynamic labor supply schedules the empirical evidence on these propositions remains mixed some influential studies report a negative relationship 4 5 25 others report a positive relationship 2 12 18 and geary and kennan gk 7 to identify the purely business cycle correlation and distinguish it from correlations at very high and very low frequencies the frequency domain decomposition provides a simple framework for reconciling the conflicting conclusions of previous studies and for focusing attention on the business cycle relationship i show that the highly significant positive or negative correlations reported in previous studies are attributable to variations at frequencies far too high or far too low to be associated with the business cycle the true business cycle relationship is quite different from that revealed by simple regressions of real wages on employment i find a weak but statistically significant negative relationship over business cycle frequencies for the post war u s data when wages are deflated by the producer price index ppi the negative relationship is particularly strong over the subperiod 1947 70 but becomes weak and insignificant over the last sixteen years 1971 86 this finding is consistent with the widely held belief that in the former period cyclical movements in employment were determined by changes in aggregate demand while real shocks dominated in the 1970s however when wages are deflated by the consumer price index cpi the business cycle relationship is weak and not statistically significant over both subperiods these results contrast sharply with those of previous studies that do not isolate business cycle components

the political economy of distribution in developing countries a rent seeking approach economic development in many third world countries after independence has been biased in the sense that some mainly urban social groups have gained much more than the majority of the population who lives in rural areas or urban shantytowns that bias is to a large extent caused by government policy and accordingly by an uneven distribution of political influence this paper contains an analytical model reflecting the bias in the distribution of the benefits and costs of public sector activities where those activities are determined by the distribution of political influence the main elements of the distribution of political influence are determined in a rent seeking game between society different social groups

political instability in africa a rent seeking approach the foregoing analysis developed the paradigm of self interest motivated revolutionary activities in effect the construct presented differs from the by product theory developed by tullock only in its specific modeling of government created rents as the engine which drives the violent political behavior the empirical test of the positive relationship between rent creation by the government and the amount of destabilizing political activity yields strong support for the structuring of politically destabilizing activities as rent seeking in nature it is the authors hope that further empirical investigation and a more general and rigorous modeling of revolution as a rent seeking activity will become an important part of the literature in public choice

monopolistic competition and the effects of aggregate demand how important is monopolistic competition to an understanding of the effects of aggregate demand on output we ask the question at three levels can monopolistic competition by itself explain why aggregate demand movements affect output can it together with other imperfections generate effects of aggregate demand in a way that perfect competition cannot if so can it give an accurate account of the response of the economy to aggregate demand movements the answers are no yes and yes

variation in the effects of aggregate demand shocks evidence and implications across industrial countries over a sample of nineteen industrial countries more variable aggregate demand and or higher mean inflation attenuates augments the effect of aggregate demand shocks on real output growth wage and price inflation while having no effect on the response of the real wage to such shocks in all countries examined aggregate demand shocks are positively negatively correlated with nominal variables real output among explanations of the business cycle based on shocks to aggregate demand this evidence favors the new keynesian sticky wage explanation over the sticky price and the new classical imperfect information explanations

cross regime evidence of macroeconomic rationality rational expectations macromodels predict that the short run effects of monetary shocks on real output x should be negatively related across policy regimes to the variability of such shocks this paper presents cross regime tests of this and related propositions based on a sample of 47 countries the within regime estimates reveal a consistent pattern of positive short run real output effects with neutrality of money holding in the long run the cross regime tests show that x is negatively related to the variance of monetary shocks positively related to the variance of real output shocks negatively related to the variance of velocity shocks and unrelated to either the mean or variance of anticipated money growth

forest loss and economic inequality in the solomon islands using small area estimation to link environmental change to welfare outcomes abstract to study welfare effects of environmental change data from household surveys may be linked to remote sensing data using spatial aggregation to link risks ecological fallacy since surveys are usually representative for areas larger than the spatial scale of decision making units this paper uses survey to census imputation to estimate welfare indicators for small areas to study the effect of deforestation on subsequent inequality in the rural solomon islands this country depends on logging for almost half of foreign exchange and one sixth of government revenue and most forested land remains under customary ownership a sharp increase in log exports to seven times the sustainable yield and a major shift in export destinations as other countries withdrew from the tropical log trade represents an exogenous shock that helps to identify effects of deforestation on inequality rather than the reverse relationship a standard deviation increase in the rate of forest loss over 2000 to 2012 raises the gini index of inequality in 2013 by one third of a standard deviation mean incomes and poverty rates are also higher implying that deforestation makes some households richer while others become poorer these precisely estimated effects would be obscured using more spatially aggregated data

environmental and ecological economics a citation analysis this study looks at two distinct questions dwhat have been the most influential journal articles in environmental economics and ecological economics over the 10 year period 1994 2003 t and dhow much overlap is there between the fields of environmental and ecological economics t we examine the references in all articles published in jeem and ecological economics ee over this period for each of these two fields a list of the top articles and top journals cited by articles published in jeem and ee is presented we also present some results based on our study of the isi journal citation reports we find that there is a significant overlap between the two fields at the journal level the two journals cite similar journals there is a correlation of 0 34 between the number of citations received by the journals that are most cited and the correlation is even higher if journal self citation is excluded the main differences are that ecological economics tends to cite but not be cited by general natural science journals more often than environmental economics does environmental economics cites more heavily from journals rather than other publications and citations in environmental economics are more concentrated on particular journals and individual publications however there is much less similarity at the level of individual articles nonmarket valuation articles dominate the most cited articles in jeem while green accounting sustainability and the environmental kuznets curve are all prominent topics in ee d 2005 elsevier b v all rights reserved

estimation of limited dependent variable models with dummy endogenous regressors applied economists have long struggled with the question of how to accommodate binary endogenous regressors in models with binary and nonnegative outcomes i argue here that much of the difculty with limited dependent variables comes from a focus on structural parameters such as index coefcients instead of causal effects once the object of estimation is taken to be the causal effect of treatment several simple strategies are available these include conventional two stage least squares multiplicative models for conditional means linear approximation of nonlinear causal models models for distribution effects and quantile regression with an endogenous binary regressor the estimation strategies discussed in the article are illustrated by using multiple births to estimate the effect of childbearing on employment status and hours of work

is the environmental kuznets curve for deforestation a threatened theory a meta analysis of the literature abstract although widely studied deforestation remains a common research topic the relationship between economic development and deforestation is still in question this paper presents a meta analysis of environmental kuznets curve ekc studies for deforestation using 69 studies offering 547 estimations we shed light on why ekc results differ we investigate the incidence of choices made by authors such as econometric strategy measure of deforestation geographical area and presence of control variables on the probability of finding an ekc after a phase of work corroborating the ekc we find a turning point after the year 2001 building on our results we conclude that the ekc story will not fade until theoretical alternatives are provided

the employment real wage relationship an international study the neoclassical and keynesian theories of employment both predict an inverse relationship between employment and real wages in the short run the observed correlation between employment and real wages however has usually failed to conform to this prediction dunlop 1938 and tarshis 1939 reported a positive correlation between real and money wages which given procyclical movement of money wages was interpreted as evidence against the theoretical prediction the statistical significance of these results was however challenged by ruggles 1940 and tobin 1948 more recent studies by kuh 1966 and bodkin 1969 failed to detect a significant relationship between real wages and employment these findings stimulated a series of contributions by solow and stiglitz 1968 barro and grossman 1971 1976 and others developing alternative models not apparently refuted by the evidence barro and grossman recast macro theory under the assumption that markets did not clear modigliani 1977 argued that the observed relationship between employment and real wages could be accounted for in an oligopolistic model of firm behavior thus both the competitive and equilibrium assumptions of the classical model were diagnosed as the sources of its apparent empirical refutation

does contractual wage rigidity play a role in determining real activity interest in nominal wage ridigity as a source of macroeconomic fluctuations has waxed and waned over the past half century the most recent wave of interest was triggered by the rational expectations revolution of the 1970s which inspired an improved sticky wage paradigm the paradigm posits the existence of short term contractual arrangements that in their simplest form fix wage schedules in nominal terms for a predetermined period the life of the contract and leave employment at the discretion of the firm the most influential examples of the paradigm incorporate rational expectations and satisfy the natural rate hypothesis 9 14 thus meeting the new minimum standards for demand driven theories of the business cycle nominal wage contracting models have been vigorously criticized for both a lack of theoretical rigor and an absence of empirical support despite their critics however the models have remained a popular analytical tool and after almost a decade of inattention economists are showing a renewed interest in empirical tests of nominal contracting models the studies produced to date are small in number and offer conflicting conclusions they are perhaps as important for the objections they provoke as for the answers they provide while the work reported in this paper

what has driven deforestation in developing countries since the 2000s evidence from new remote sensing data summary using newly released and globally available high resolution remote sensing data on forest loss we update the assessment of the cross country determinants of deforestation in developing countries we validate most of the major determinants found in the previous literature generally based on earlier time periods except for the role of institutional quality agricultural trade hitherto relatively neglected is found to be one of the main factors causing deforestation focusing on the effect of international trade we show that countries with different levels of relative forest cover react differently to a shock in agricultural exports value we also emphasize that taking countries development into account may be critical in assessing global deforestation trends the impact of trade is high in countries still endowed with a large proportion of forest cover while it is lower in countries with smaller remaining forest cover we finally estimate through a simple calibration exercise the requirements for a cost effective redd policy for compensating trade losses in an open economy exporting agricultural commodities and endowed with tropical forests we conclude that in a world with increasing global demand it might be costly to compensate totally and thus to offer the right incentives for developing countries to limit deforestation

small menu costs and large business cycles a macroeconomic model of monopoly i introduction the conflict between modern neoclassical and traditional keynesian theories of the business cycle centers upon the pricing mechanism in neoclassical models prices are fully flexible they represent the continuous optimization of economic agents and the continuous intersection of supply and demand in keynesian models prices are often assumed to be sticky they do not necessarily equilibrate all markets at all times one of the reasons for the resurgence of the equilibrium approach to macroeconomics has been the absence of a theoretical underpinning for this keynesian price stickiness this note shows that sticky prices can be both privately efficient and socially inefficient the business cycle results from the suboptimal adjustment of prices in response to a demand shock to the extent that policy can stabilize aggregate demand it can mitigate the social loss due to this suboptimal adjustment in some keynesian models prices are simply exogenously fixed 2 in others agents must set their prices in advance of the transaction date the act of altering a posted price is certainly costly these costs include such items as printing new catalogs and informing salesmen of the new price yet these menu costs are small and therefore generally perceived as providing only a weak foundation for these fixed price models however this inference is flawed small menu costs can cause large welfare losses the claim that price adjustment costs are small does not rebut the claim that they are central to understanding economic fluctuations

unexpected inflation real wages and employment determination in union contracts this paper examines the effect of nominal contracting provisions on employment determination in union contracts in most contracts the nominal wage rate is wholly or partially predetermined real wage rates therefore contain unanticipated components that reflect unexpected price changes and the degree of indexation the empirical analysis based on a large sample of indexed and nonindexed contracts suggests that unexpected real wage changes are associated with systematic employment responses in the opposite direction the author concludes that nominal contracting provisions play a potentially important role in the cyclical properties and persistence of employment movements in the union sector copyright 1990 by american economic association

is environmental degradation an inevitable consequence of economic growth tunneling through the environmental kuznets curve abstract economywide reforms often contribute simultaneously to economic social and environmental gains however unintended adverse side effects occur in many cases when such growth inducing reforms are undertaken while neglecting other policy market or institutional imperfections the remedy does not generally require reversal of the original economywide reforms but rather the ex ante implementation of additional complementary measures that remove such imperfections the ekc approach seeks to relate the state of the environment to the stage of development developing countries could learn from the experiences of industrialized nations and restructure growth and development to tunnel through any potential ekc thereby avoiding going through the same stages of growth that involve relatively high and even irreversible levels of environmental harm an environmentally adjusted measure of national income could significantly change the shape of the development environment relationship recommendations for decision making include actively seeking win win policies that simultaneously yield both economic and environmental gains pre empting environmental harm through ex ante remedial measures and fine tuning reform policies to avoid severe environmental damage the adoption of more sustainable policies will facilitate the attainment of higher levels of development at a lower environmental cost

real business cycles in this paper we demonstrate how certain very ordinary economic principles lead maximizing individuals to choose consumption production plans that display many of the characteristics commonly associated with business cycles our explanation is entirely consistent with i rational expectations ii complete current information iii stable preferences iv no technological change v no long lived commodities vi no frictions or adjustment costs vii no government viii no money and ix no serial dependence in the stochastic elements of the environment we also provide a completely worked out example of the type of artificial economy we have in mind the time series properties of the example exhibit some major features of observed business cycles although this type of model may not be capable of explaining all of the regularities in actual business cycles we believe that it provides a useful well defined benchmark for assessing the relative importance of factors e g monetary disturbances

asymmetric effects of positive and negative money supply shocks this paper examines whether positive and negative money supply shocks have symmetric effects on output the results are consistent with the hypothesis that positive money supply shocks do not have an effect on output while negative money supply shocks do have an effect on output this finding is independent of whether or not expected money is assumed to affect output the results reported in this paper imply that the fed could increase the growth rate of real output by reducing the standard deviation of unexpected changes in the money supply

rich enough to go renewable but too early to leave fossil energy abstract typically environmental kuznets curve ekc studies on energy concentrate on the emissions produced from energy production or consumption and neglect the aspect of exhaustion of a natural resource which is an irreversible result against any definition of sustainability and intergenerational equity this paper investigates whether there is an environmental kuznets curve for renewable energy whether there should be one and if there is what it should stand for for this reason the paper employs balanced panel data for 33 european member and candidate state countries that produce crude oil natural gas coal and renewable energy for the years 1990 2010 to investigate the relationship between their scale of economic activity fossil energy production and the production of renewable energy results from random effects models together with arellano bond estimator models identify the u shape for the environmental kuznets curve only for renewable energy and coal production a theoretical justification on the mechanisms possibly driving the environmental kuznets curve for renewable energy are also discussed