collusion collective action and protection theory and evidence this paper provides a novel explanation forthe formation of protectionist lobby groupsin imperfectly competitive sectors thelevel of collusion is shown to be a crucialdeterminant of the ability of firms tosustain lobbying we show that greatercollusion reduces firm contributionsto tariff lobbying when the governmentvalues welfare sufficiently and thecross price elasticity between the domesticand foreign goods is sufficiently high the empirical evidence from the u s supports the theory greater collusionreduces the level of pac contributions

on the practical limits to substitution abstract this paper considers the arguments for weak vs strong sustainability the weak sustainability position held by many mainstream neoclassical economists such as solow and weitzman is that almost all kinds of natural capital can be substituted by man made capital the contrary position known as strong sustainability holds that many of the most fundamental services provided by nature cannot be replaced by services produced by humans or man made systems the paper discusses the limits of substitution from a physical point of view it concludes that while there is considerable scope for substitution in some domains the limits to substitutability in the medium term at least are real and important in effect the paper supports the strong sustainability position

political influence motives and the choice between tariffs and quotas abstract tariffs and quotas are not symmetric under a variety of circumstances this paper pursues the implications of one such circumstance domestic market power for the political choice of protectionist instrument in the context of a political support maximization model tariffs dominate quotas in the political model in the absence of revenue seeking motives in the presence of revenue seeking ambiguity arises but limits can be placed on the range of tariff or quota levels also some welfare implications emerge

positive feedback the impact of trade liberalization on industry demands for protection contrary to widely accepted theories of interest group demand for protection industries that experience high and rising import competition after a reduction in trade barriers often become less rather than more protectionist in the long term to unravel this paradox i propose and test a theory that explains variation in domestic producer groups demand for protection over time this model of industry behavior suggests that trade liberalization has a positive feedback effect on the policy preferences and political strategies of domestic industries compelling them to adjust to more competitive market conditions and thereby reducing their future demand for protection

uncertainty and disagreement in economic prediction the bank of england survey of external forecasters this article introduces a new source of survey data namely the bank of england survey of external forecasters the survey collects point and density forecasts of inflation and gdp growth and hence offers the opportunity of constructing direct measures of uncertainty we present a simple statistical framework in which to define and interrelate measures of uncertainty and disagreement the resulting measures are compared with other direct measures of uncertainty nationally and internationally a significant sustained reduction in inflation uncertainty followed the 1997 granting of operational independence to the bank of england to pursue a monetary policy of inflation targeting

is neoclassical microeconomics formally valid an approach based on an analogy with equilibrium thermodynamics abstract the relation between thermodynamics and economics is a paramount issue in ecological economics two different levels can be distinguished when discussing it formal and substantive at the formal level a mathematical framework is used to describe both thermodynamic and economic systems at the substantive level thermodynamic laws are applied to economic processes in ecological economics there is a widespread claim that neoclassical economics has the same mathematical formulation as classical mechanics and is therefore fundamentally flawed because 1 utility does not obey a conservation law as energy does 2 an equilibrium theory cannot be used to study irreversible processes here we show that neoclassical economics is based on a wrong formulation of classical mechanics being in fact formally analogous to equilibrium thermodynamics the similarity between both formalisms namely that they are both cases of constrained optimisation is easily perceived when thermodynamics is looked upon using the tisza callen axiomatisation in this paper we take the formal analogy between equilibrium thermodynamics and economic systems far enough to answer the formal criticisms proving that the formalism of neoclassical economics has irreversibility embedded in it however the formal similarity between equilibrium thermodynamics and neoclassical microeconomics does not mean that economic models are in accordance with mass energy and entropy balance equations in fact neoclassical theory suffers from flaws in the substantive integration with thermodynamic laws as has already been fully demonstrated by valuable work done by ecological economists in this field

explanations of the inconsistencies in survey respondents forecasts a comparison of the point forecasts and the probability distributions of inflation and output growth made by individual respondents to the us survey of professional forecasters indicates that the two sets of forecasts are sometimes inconsistent we evaluate a number of possible explanations and find that not all forecasters update their histogram forecasts as new information arrives this is supported by the finding that the point forecasts are more accurate than the histograms in terms of first moment prediction c 2009 elsevier b v all rights reserved

sustainability and biophysics basis of technical and economic processes a survey of the reconciliation by thermodynamics abstract in spite of the existence of a generalized debate about sustainable development the natural constraints imposed by the irreversibility nature of technical and economic transformations are normally less discussed the second law of thermodynamics entropy law reveals the unidirectional and irreversible aspect of such transformations and it can be used as an auxiliary tool to deal with sustainability assessment the exergy a concept derived from entropy can offer qualitative measurements of resources depletion and environmental impact not covered by mass or energy this opens opportunities to enrich the sustainability discussion the multiple interactions among the ecosystem the economic environment and the technical level are highlighted along with discussions about how the entropy concept has improved the description of the three levels the aim of this paper is to review the environmental sustainability concept from the perspective of entropy law offering a survey of relevant applications of exergy available in literature

government policy and the firm s capital structure abstract the purpose of this paper is to examine the effects of commonly observed forms of government intervention on the firm s capital structure we show that since market claims against the firm are always properly priced the firm is forced to take market claimants interests into account on the other hand since government claims are usually not adjusted for risk the firm can take advantage of the government it does so by choosing strategies that extract maximum value minimum cost from these policies in particular the firm uses its capital capital structure to maximize the value of the policy thus leading to a determinate capital strucure

the political economy of declining industries senescent industry collapse revisited many observers have noted a strong tendency for protection once it is instituted to persist over time this paper first shows that persistent protection arises whenever lobbying is an alternative to costly adjustment with endogenous protection the level of tariffs is an increasing function of past tariffs the more an industry lobbies the greater the current protection it receives and the less it adjusts and the less the industry adjusts the more effective it is as a lobby in the future when the costs of lobbying and adjustment are fully variable declining industries contract more slowly over time and never fully adjust however the paper shows that adding a fixed cost of lobby formation or maintenance is sufficient to generate an endogenous collapse of protection such as that predicted by cassing and hillman 1986 american economic review 76 516 523 in which an industry abruptly terminates its lobbying and loses its protection finally the paper examines the well documented bias against growing industries in the lobbying process

a reexamination of the role of thermodynamics for environmental economics abstract as the discussion about the role of thermodynamics in environmental economics has not led to a conclusion yet a more fundamental approach seems to be necessary which also takes into consideration the relationship between economics and the natural sciences in general to this end value theory is chosen as a starting point because it is the centerpiece of every economic theory it is shown that neoclassical environmental economics suffers from serious deficiencies because of its value concept heedlessly copied from classical mechanics thermodynamics can be expected to be helpful to redress these defects because the economy can be thought of as a dissipative structure dependent on its environment the obvious way to integrate thermodynamics consists in the formulation of thermodynamic constraints to complement neoclassical environmental economics but this approach remains unsatisfactory because the neoclassical mechanical hardcore is incompatible with the entropy law and its implications evidently the neoclassical paradigm and its value concept have to be given up but the alternative of the energy theory of value must be rejected because its determinism cannot be reconciled with the richness of human behaviour as thermodynamic analogies offer no solution either there is a dilemma between the necessity and the apparent impossibility of adequately integrating thermodynamic concepts it turns out that a normative inconsistency is responsible which is due to the demand for intergenerational justice therefore the integration of thermodynamics into environmental economics hinges on a meta economic value decision if sustainability is adopted as the guiding principle the insights of thermodynamics call for a macro economic environmental policy setting absolute limits to the economy but this macro policy is incompatible with neoclassical economics so that a social reconstruction of economics based on a social theory of value becomes necessary in sum thermodynamics is important for environmental economics besides fulfilling a general heuristic function it also fulfils a decisive conceptual and an analytical function insofar as it helps to justify sustainability and to operationalize macro economic environmental policy

combining economic forecasts a method for combining forecasts may or may not account for dependence and differing precision among forecasts in this article we test a variety of such methods in the context of combining forecasts of gnp from four major econometric models the methods include one in which forecasting errors are jointly normally distributed and several variants of this model as well as some simpler procedures and a bayesian approach with a prior distribution based on exchangeability of forecasters the results indicate that a simple average the normal model with an independence assumption and the bayesian model perform better than the other approaches that are studied here

a dimensionally consistent aggregation framework for biophysical metrics abstract we develop a formal representation of the economy ecosystem interaction problem by distinguishing between stock flow and fund flux spaces georgescu roegen 1971 we then define dimensionless quantities in both the cardinal stock flow space and the ordinal fund flux space this leads to analytic definitions of natural capital and natural income in the fund flux space we show that a stock fund representation of the economy ecosystem interaction problem helps investigate aggregation properties of biophysical metrics in particular we show how a metric that is dimensionally consistent in the stock flow space can have dimensional problems in the fund flux space ecological footprint is used as an illustrative example finally we argue that dimensionally consistent metrics are keys to further the development of biophysical assessments as a tool for practical environmental policy

bankruptcy warranties and the firm s capital structure this paper examines the role of capital structure as an instrument for shifting risk between real and financial markets the author considers a firm whose contractual agreements involve both consumers and debtholders and shows that if consumers are risk averse whereas equity and debtholders are risk neutral the firm uses its capital structure to shift risk away from consumers the optimal allocation of risk across real and financial markets leads the firm to be fully equity financed copyright 1992 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

on the life cycle metaphor where ecology and economics diverge abstract there is an attractive analogy between nature and industry based on the similarity of natural functions and certain industrial activities for instance animals ingest eat and digest food finally there are metabolic wastes firms are analogous to organisms in several respects insofar as they consume material resources process digest them and produce output products and excrete wastes firms like organisms also compete with each other for resources curiously enough one of the apparent differences between natural and man made systems is actually not one like the industrial system the natural system does not recycle everything however there are at least four real and important differences between the biosphere ecology and the technosphere economy first there is no primary producer in the economic system analogous to what photosynthesizers play in the biosphere inputs to the economy are mostly natural resources capital services and labor second in the economic system output is a heterogeneous mix of manufactured products and services labor in economics is an input but not an output the economic system recycles much less than the ecological system but utilizes a far greater suite of elements in the biosphere there are no products as such growth is tantamount to accumulation of embodied solar exergy in the form of cellulose sugars lipids and proteins the biosphere produces only wastes and more of itself plus dead matter third in the biosphere there are no markets there is no medium of exchange like money and there is nothing analogous to paid labor exchanges are involuntary i e by predation parasitism or theft fourth evolution in nature is driven by differentiation by random mutations of the genome and darwinian selection based on reproductive success in economics differentiation is based on discovery invention and innovation by intelligent economic agents and selection is based on competition at the individual or firm level either way the economic system is not closely analogous to an ecosystem attempts to use ecological concepts in an economic context are often misleading and unjustified the paper discusses the implications of the eco eco mismatch for resource accounting and life cycle analysis

the failure of the profit motive e f schumacher used the phrase the failure of the modern experiment by modern experiment he meant two interrelated things in its 300 year or so duration modernity occupies an eye blink of time in the vast span of millennia of human history secondly it is an experiment because this is the first time in this vast history that a society attempted to live without motives and principles that were higher than the material or economic that is without some form of the transcendental schumacher proposed that this experiment is a failure because in its brief history modern society is well on its way to destroying both the natural and the social world the absence of higher motives or principles means that another organizing and motivational principle takes its place and that this principle becomes the core characteristic of modern society the thesis is advanced here that this principle is the profit motive both as a personal psychology and as an economic institution in other words the absence of the transcendental means the presence of the profit motive and the failure of modern society means the failure of the profit motive since the profit motive means the continuous expansion of economic wealth a society based on the profit motive must by necessity be a society committed to perpetual economic growth modern society then present us with a yield equation of terms self interest profit motive growth many writers advocating sustainability still endorse this equation and expect the profit motive with proper manipulation to yield a sustainable society they do not recognize that traditional economic motivation must be replaced by something else if this new sustainable economic world is to come into being this article makes the claim that the replacement of the profit motive does not require a change in human nature but a restoration of human nature in this restoration the profit motive will be replaced by a concern for the common good which can be seen as a practical implementation of the transcendental as an illustration of how this can be brought about it is shown that the motivational principle of the common good can be instituted through two policies a maximum wage that is a ratio of the minimum wage and the statutory transformation of all companies into non profit then we have common good non profit sustainability

the decline of organizations and the rise of administrators parkinson s law in theory and practice abstract parkinson reported observing substantial growth of administrators as organizations were declining such behavior has usually been considered proof of an inherent tendency for bureacracies to grow in this paper we offer a different interpretation expansion of administration during periods of decline is the result of promotions of line workers to administrative positions promotions are a means of protecting from layoff or dismissal those employees who have accumulated network capital with their superiors all large organizations private firms as well as public bureaus can be expected to behave in this way and parkinson s observations are simply evidence of the existence of implicit contracts within organizations we report empirical tests which provide convincing evidence for parkinson s law in two very different organizations a public sector bureau education and a private sector industry steel

the political economy of the tariff cycle how can protectionism and free trade succeed one another our answer focuses on the changing balance of private actors political demands these actors acquire interests in tariff policies because their assets are spatially concentrated and trade in these assets is subject to various limitations actors in regions experiencing no new investment in an established industry old regions have interests that sometimes differ from those in regions where there is new investment we show that old regions have no reason to be involved in tariff politics at business cycle peaks during troughs whether a state becomes more or less protectionist depends ceteris paribus on the relative political strength of old import competing and old exporting interests if old import competing industries outweigh the old exporters then protection will tend to increase at the trough and decrease at the peak of a business cycle the opposite result occurs when old exporters are more influential

unprotective tariffs ineffective liberalization and other mysteries an investigation of the endogenous dimensions of trade policy formation in australia 1 introductionsince its formation as a federation in 1901 australia embraced a fairly comprehensive tariff schedule in relation to imported manufactures 1 tariff rates fluctuated considerably over the years however over the course of the century they remained sufficiently high to earn australian manufacturing the reputation of one of the most heavily protected manufacturing sectors in the industrialized world 2 in recent years a number of liberalization waves have surfaced the most notable of these took place in 1973 1977 1988 1991 and most recently in 1994 with the signing of the uruguay round of the gatt agreement still tariffs remain a principal actor in australia s menu of industrial policies in a recent edition of the annual report of the productivity commission 3 published in november 1999 it is noted that although tariffs have dropped considerably since 1994 they remain an important form of assistance tariff assistance still accounts for around 90 of measured effective assistance to the manufacturing sector 4 p 52 given the pervasiveness of australian tariff policy the significant welfare implications of changes in that policy and the particular importance of international trade for this country ensuing from its idiomorphic cultural resource endowment and geographic characteristics 5 considerable research effort has been invested in the examination of various dimensions of this issue at the forefront of pertinent empirical research two items have attracted considerable interest 1 the host of determinants of the highly dispersed tariff concessions and 2 the impact of liberalization on imports research that falls in the category that examines the former including anderson 1980 conybeare 1984 aislabie 1988 and feaver and wilson 1998 is consistent at varying degrees with the theory of endogenous trade policy formation 6 according to the foundations of this theory tariff concessions may be viewed as public outcomes that facilitate a political equilibrium the mechanics are rather elementary when the profit loss that arises from import competition exceeds the transaction cost of a successful lobbying campaign for protection private interests will undertake such lobbying activities the higher the loss from foreign competition the more fervent the lobbying effort hence an increase in import penetration is likely to trigger greater protection7 trefler 1993 p 139 unlike this line of inquiry the critical causal relationship of interest to studies that fall in the category that investigates item 2 including simmons and smith 1994 relates to the effects of tariff changes on imports rather than the reverse the causal directions of the nature examined by studies that investigate issues 1 and 2 are of course not mutually exclusive higher import penetration increases tariffs and higher tariffs in turn decrease import penetration however despite the simultaneity of these variables studies of australia s trade policies associated with research lines 1 and 2 followed separate paths by only considering unidirectional causal relationships and yet these paths do converge the meeting point perplexing results on the one hand studies of endogenous protection such as anderson 1980 and aislabie 1988 have consistently failed to establish the expected result that an increase in import penetration will lead to higher tariffs on the other studies of trade liberalization often find that tariff reduction shave asurprisingly small effect on imports with a study by simmons and smith 1994 concluding that at least in relation to the examined industry removal of the tariff would have no effect on the level of imports p 57 it is important to note that analogous and equally puzzling findings pertaining to improbably smalle ffect so fliberalization on imports have been identified in the caseofothercountries suchastheunitedstates byanumberofauthors

pricing and regulating affect environmental ethics effluent charges and tradeable permits are economically efficient but rarely used a new explanation for this discrepancy is offered pricing may crowd out environmental ethics in the pricing and via spillovers also in non pricing sectors pricing may therefore increase pollution providing a reason why decision makers tend to reject environmental pricing five propositions showing the conditions for counterproductive effects are advanced they are consistent with available empirical evidence regulation by setting standards and subsidies damage environmental ethics less than pricing because pollution is condoned damaging environmental ethics may prevent political action in favor of the environment

domestic politics foreign interests and international trade policy reply this paper incorporates the foreign interest in the determination of a country s international trade policy into a model of political competition between candidates contesting elective office we envisage foreign and domestic producer interests as expressing political support for a candidate via campaign contributions and candidates as making trade policy pronouncements to maximize political support from producer interests tariffs are divisive but vers are consistent with conciliatory policy positions yielding mutual gain to foreign and domestic interests no candidate has an interest in formulating a trade policy position using a tariff if a ver is a policy option protection in the developed countries has in recent years often taken the form of bilaterally negotiated voluntary export restraints vers rather than the more traditional unilaterally imposed import restrictions the use of voluntary export restraints has been paralleled by interest in the theoretical literature the effects of vers have been compared with tariffs and quotas and vers have been examined in a political economy framework with a view to identifying the gainers and losers from this form of restric

voting and paying for public goods an application of the theory of the core abstract let any coalition with a majority of all voters have the power to choose the quantities of public goods under rule i a majority coalition bears a cost of its decision that is proportional to its size under rule ii it must bear the whole cost of its decision thus rule i imposes costs on minorities although they have no power to choose the quantities of public goods while rule ii allows goods to have some attributes of semiprivate goods it is shown that a nonempty core under rule i implies a nonempty core under rule ii but not conversely necessary and sufficient conditions in terms of the properties of the von neumann morgenstern characteristic function are given

trade liberalization through asset markets abstract political economy expositions of trade policy have traditionally described asset or factor ownership as not subject to change asset markets however allow individuals to change the composition of income sources we consider an economy with stochastic productivity to show how the equilibrium composition of asset portfolios influences individual attitudes toward free trade the model links financial market completeness and trade liberalization in the second half of the 20th century and provides a contributing answer to why governments in poorer countries without well developed financial markets have failed to liberalize trade

lobbying incentives and the pattern of protection in rich and poor countries in seeking to explain why poor countries tend to choose policies that tax agriculture relative to manufacturing while rich countries do the opposite archetypical parameters for a poor agrarian economy and a rich industrial one are inserted in a computable general equilibrium model to simulate the medium term effects on income distribution of policies that distort the relative prices of tradables the model includes a non tradables sector and intermediate inputs realistic features that ensure even greater skewness in the distributional effects of protection than simpler models suggest the magnitude of the results helps explain the tendency for countries to change gradually from taxing to subsidizing agriculture relative to manufacturing as their economies develop the paper draws out the implications of the analysis for agricultural and trade policy reform in the 1990s this abstract was borrowed from another version of this item

entropy structure and organisational change abstract the paper sets out a basis for rigorous thermodynamic characterisation of structural change and of organisational interdependencies between economic and environmental processes many attempts have been made to exploit entropy as a generic explanatory variable it has widely been proposed that entropy is a measure of the level of dis order of a system of how mixed up things are then as organisation is often thought synonymous with some notion of order it has been a small step to propose that increasing organisation is the converse of increasing entropy another suggestion has been that social system structure and change can be explained in terms of a tendency towards maximum entropy production the lotka principle of maximum energy dissipation all these notions must be rejected the putative entropy order connection has its inspiration in boltzmann s probabilistic interpretation of thermodynamic entropy as a measure of microscopic disorder this order principle is simply not applicable under conditions far from thermodynamic equilibrium prigogine conditions which prevail for all important economic and ecological processes under such conditions the relationship between entropy production and changes in structure or organisation is multi faceted and situation specific attempts to account for the specificity of societal activities in terms of a generic scalar measure of organisation or dissipation are largely after the fact and in no way do away with the need for analysis of institutional and ethical dimensions of human action in their own right when properly allied to institutional analysis however the far from equilibrium thermodynamics furnishes a rich impetus for a coevolutionary perspective in ecological economics with promise of incisive treatments of in particular issues of system environment codependency and of the time in determinacies of economy environmental change

is it better to average probabilities or quantiles we consider two ways to aggregate expert opinions using simple averages averaging probabilities and averaging quantiles we examine analytical properties of these forecasts and compare their ability to harness the wisdom of the crowd in terms of location the two average forecasts have the same mean the average quantile forecast is always sharper it has lower variance than the average probability forecast even when the average probability forecast is overconfident the shape of the average quantile forecast still offers the possibility of a better forecast using probability forecasts for gross domestic product growth and inflation from the survey of professional forecasters we present evidence that both when the average probability forecast is overconfident and when it is underconfident it is outperformed by the average quantile forecast our results show that averaging quantiles is a viable alternative and indicate some conditions under which it is likely to be more useful than averaging probabil

debt and tariffs an empirical investigation of the evolution of revenue systems abstract this paper presents a theoretical framework where government chooses fiscal structure so as to maximize political support and where the evolution of fiscal systems is determined by changing economic political and administrative factors estimating equations are derived and the model is used to explain the development of revenue structure in canada from 1871 to 1913 a period when major revenue sources consisted of the tariff debt and excises the empirical analysis distinguishes between government plans and ex post observations of public revenues and places particular emphasis on the derivation of hypotheses linking economic political and administrative variables to revenue structure

energy limits on recycling abstract increasing efficiency of resource use is a major ecological economics goal opportunities for large efficiency increases have been found in every area carefully investigated what are the limits energy analysis offers powerful insights ayres has argued that even with unlimited available energy over time it becomes necessary to have ever more dilute waste reservoirs if correct this would significantly limit the potential of a hypothetical sustainable spaceship and of a spaceship economy however we know the world is self contained and long lived and that stable laboratory microcosms have been built thus this assertion appears to violate reality i argue that the alleged problem does not exist given available energy there is no concentration limit on sustainability my result is consistent with the work of georgescu roegen and others i estimate some numerical examples to show that present systems are extremely far from theoretical limits for a long time to come there will be vast opportunities to improve efficiency the paper includes a classification schema for recycling based on chemical bonding and thermodynamic considerations

rent seeking market structure and growth we study the role of productive and unproductive entrepreneurship in economic growth in a setting where firms compete in both economic and political markets specifically firms compete for market share through cost reducing technological innovation and they vie for influence over government transfer policy through rent seeking activities we find that rent seeking affects growth in two ways it allows firms to ignore economic competition leading to less innovation and it alters the number of firms that are supported in equilibrium the former effect is negative while the latter is ambiguous we show how these effects depend on various characteristics of economic and political markets

the economics of special interest politics the case of the tariff this paper investigates the interaction of politicians and special interest lobbies the goal is to model the equilibrium levels of redistributive policies such as taxes subsidies tariffs and regulatory decisions the model is applied throughout to the setting of tariffs by contributing to political campaigns special interest lobbies generate economic returns higher tariffs generate revenue for import competing industries through higher product prices higher milk support prices raise dairy farm income and so forth the lobby invests to maximize these net economic returns in evaluating their chances of election politicians weigh the favorable effects of special interest money against the unfavorable association with the lobby and the social cost of the redistributive policy section i explores the lobby s problem it describes a formalization of mancur olson s discussion of the voluntary provision of public goods and optimal contributions by lobbies to political campaigns section ii describes determination of the equilibrium tariff positions of each politician in a political campaign

digitalization and energy consumption does ict reduce energy demand abstract this article investigates the effect of digitalization on energy consumption using an analytical model we investigate four effects 1 direct effects from the production usage and disposal of information and communication technologies ict 2 energy efficiency increases from digitalization 3 economic growth from increases in labor and energy productivities and 4 sectoral change tertiarization from the rise of ict services the analysis combines empirical and theoretical findings from debates on decoupling energy consumption from economic growth and from debates on green it and ict for sustainability our main results effects 1 and 3 tend to increase energy consumption effects 2 and 4 tend to decrease it furthermore our analysis suggests that the two increasing effects prevail so that overall digitalization increases energy consumption these results can be explained by four insights from ecological economics a physical capital and energy are complements in the ict sector b increases in energy efficiency lead to rebound effects c ict cannot solve the difficulty of decoupling economic growth from exergy d ict services are relatively energy intensive and come on top of former production in future digitalization can only boost sustainability when it fosters effects 2 and 4 without promoting effects 1 and 3

the kennedy round evidence on the regulation of international trade in the united states the purpose of this paper is to analyze and provide empirical evidence regarding the regulation of international trade flows our goal is to provide an explanation of the changes in the interindustry pattern of trade restrictions which emerged from the kennedy round of tariff negotiations the principal conclusion of the analysis is that the pattern of protection which resulted from the kennedy round was shaped to minimize the domestic political disruption resulting from liberalization industries which faced significant import threats and whose characteristics enhanced their potential political influence were able to maintain tariff protection in the face of overall liberalization the potential impact of the agreed upon tariff reductions was partially undermined by the introduction of offsetting nontariff trade barriers ntbs in addition ntbs were introduced systematically in industries that were becom

comparing the point predictions and subjective probability distributions of professional forecasters we use data from the survey of professional forecasters spf to compare point predictions of gross domestic product gdp growth and inflation with the subjective probability distributions held by forecasters we find that most spf point predictions are quite close to the central tendencies of forecasters subjective distributions tend to be asymmetric with spf forecasters tending to report point predictions that give a more favorable view of the economy than do their subjective means medians modes

inducing political action by workers a firm aiming to influence a governmental policy may benefit from political action by its stakeholders such as workers this article studies the behavior of such a firm showing that workers will have a greater incentive to engage in costly political activity against the governmental policy the greater their number and the higher the wage the firm may therefore profit from paying above market wages and from hiring what might appear to be an inefficiently large number of workers and because unions may overcome free rider problems of uncoordinated political effort a firm may favor unionization or be less opposed to unionization than it would otherwise be the results of this article can also explain why firms may little reduce wages in a recession and why the higher wages paid by unionized firms do not reduce survival rates of these firms

a dynamic model of endogenous trade policy empirical evidence suggests that past levels of protection are significant determi nants of current levels of protection we investigate dynamic interactions among interest groups and resulting endogenous links between current and future trade policies we explore these intertemporal links in a small open economy in which lobbying and tariff policies are the outcome of a dynamic game among factor owners the model can generate cycles with prolonged periods of free trade and or prolonged periods of restricted trade i e persistent trade policies an interesting aspect of the environment is the role of lobbying as a partial

exogenous tariff changes with an endogenous lobbying response as pointed out by krueger 1993a 1993b changes in policy which are exogenous to the lobbying process may lead to a vicious circle of protectionism a sector which receives protection will tend to grow thereby increasing the constituency for greater protection and reducing the constituency which opposes protection the possibility of such a vicious circle is examined in the context of a trade model where capital which is immobile in the short run may lobby for a sector specific import tariff if costs associated with overcoming the free rider problem do not rise too quickly exogenous policy changes will be reinforced by the endogenous lobbying response as capital flows into the protected sector in the long run the implications of lobbying by third parties versus lobbying by the specific factors themselves are also examined

trimmed opinion pools and the crowd s calibration problem we introduce an alternative to the popular linear opinion pool for combining individual probability forecasts one of the well known problems with the linear opinion pool is that it can be poorly calibrated it tends toward underconfidence as the crowd s diversity increases i e as the variance in the individuals means increases to address this calibration problem we propose the exterior trimmed opinion pool to form this pool forecasts with low and high means or cumulative distribution function cdf values are trimmed away from a linear opinion pool exterior trimming decreases the pool s variance and improves its calibration a linear opinion pool however will remain overconfident when individuals are overconfident and not very diverse for these situations we suggest trimming away forecasts with moderate means or cdf values this interior trimming increases variance and reduces overconfidence using probability forecast data from u s and european surveys of professional forecasters we present empirical evidence that trimmed opinion pools can outperform the linear opinion pool this paper was accepted by rakesh sarin decision analysis

percentage and relative error measures in forecast evaluation properties of two large families of scale free forecast accuracy measures that include popular measures such as mean absolute percentage error relative error and squared percentage error are examined in this paper we describe the optimal reports when forecasts are evaluated using these measures we also provide analytic expressions for the optimal bayes act associated with these measures under a general power transformation for several well known probability distributions we then show that using measures from these two families may inadvertently provide incentives for either pessimism or optimism among forecasters i e rewarding underforecasts or overforecasts relative to some reference measure of central tendency as an illustration of these concepts we examine the use of these measures for model selection in a forecast aggregation example using stock price forecasts derived from the thomson reuters institutional brokers estimate system this example illustrates how aggregation methods that alw

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

sustainability analysis of a society based on exergy studies a case study of the island of samso denmark abstract the danish island samso has since 1997 initiated a process through which the island should reach a state where it would be able to supply its own energy such a situation was reached since 2005 after having established 21 windmills and the island is now a net exporter of electricity to the danish power network at the same time the buildings in the more habituated areas were connected to 4 district heating plants which generate heat from combustion of straw in some cases combined with supplementary inputs from photo thermal devices meanwhile certain activities on the island such as running the ferries cars factories and heating in more distant areas are still dependent on significant input of fossil fuels the inhabitants have recently stated a wish to move on towards being independent of fossil fuels in 2030 and carbon neutral during the next decades as a consequence the idea came up to develop a method for the sustainability analysis of a society which would assist in governing the transitional process in the direction of increasing sustainability therefore a framework has been developed based on the concept exergy that may reveal where large consumptions are taking places such areas are likely to be sensible targets for action or at least increased attention basic methods have been developed that allows to account for infrastructure transfers inputs and outputs and consumption in terms of exergy and taking into account whether the exergy storages or flows can be considered to be renewable or not the framework has been developed for six societal sectors the energy sector the public sector the private households the agricultural sector the industry commerce and trade sector and nature nature is here considered an activity that provides the society with an exergy that may also be of value to our societies often referred to as ecosystem services based on the estimated amount of infrastructure and transfers inputs and outputs a number of sustainability indicators have been developed that may be monitored over time and which may serve to indicate whether potential measures undertaken also lead the society in the right direction an attempt to evaluate the potential importance of wastes has also been carried out as in organic waste could play an important role in acquiring the amount of bio diesel required to run the ferries in the future the results demonstrate that the already existing overhead in production of electricity leaves the island with many options and a great opportunity to be independent of fossil fuels in near future in fact it might well be that socio economical perspectives will turn out to be the more severe obstacles in the transition process adjacent to this work a carbon model has also been set up to reveal the consequence of proposed measures and strategies to the carbon budget of the island jorgensen and nielsen 2014

political systems and distortions an empirical study this paper studies empirically why price distortions are more prevalent in some countries than in others we find no significant difference between democracies and dictatorships but frequent regime changes reduce distortions political systems factional subordinate that encourage redistributive activities rda tend to have more distortions allowing for different effects of rda in democracies and dictatorships there is a positive and significant effect of rda on distortions in dictatorships in democracies distortions destroying lobbying seems more important since no significant relation between rda and distortions can be found

lobbying and adjustment in declining industries abstract this paper explains the persistence of protection in terms of interaction between industry adjustment lobbying and the political response faced with a trade shock owners of industry specific factors can respond in two ways they can undertake costly adjustment or they can lobby politicians for trade protection and thereby mitigate the need for adjustment the choice will depend on the relative returns from adjusting relative to lobbying by introducing an explicit lobbying process it can be shown that the current level of protection is an increasing function of past protection and that declining industries contract more slowly over time the more responsive are politicians to lobbying in addition the model makes clear that the type of senescent industry collapse predicted by cassing and hillman 1986 is only possible under fairly special assumptions about the technology of lobbying

the second law the fourth law recycling and limits to growth abstract despite counter examples in nature it has been argued that total recycling is impossible for an industrial society as a consequence of the second law of thermodynamics in this paper it is shown that there is no such limitation however it is also shown that there must be a large stockpile of inactive materials as well as an exogenous source of exergy e g from the sun for a stable steady state recycling system to function the paper also discusses briefly some of the implications for economic growth

economic de growth vs steady state economy in recent years the concept of economic de growth decroissance based on the literature of nicolas georgescu roegen e g 1 3 has found a revival in france italy spain and other countries in the popular as well as in the academic literature therein authors took on board georgescu roegens categorical rejection of a steady state economy sse as proposed by herman daly 4 they argue that economic degrowth is the only viable alternative goal to the growing economy this position is challenged in this article and it is concluded that the two concepts are in fact complements economic de growth is not a goal in itself but the rich north s path towards a globally equitable sse moreover the de growth literature can benefit from the strong economic historic roots of the sse and from daly s macroeconomic concepts while in return being able to give lessons about bottom up approaches this would be particularly important for the population issue where daly proposes limited birth licences unfortunately statements on demography are inconsistent and underdeveloped in the de growth literature further it is concluded that most criticisms of the sse are due to a too narrow and technocratic interpretation of the concept instead the sse should be defined as a quasi steady state resting in a dynamic equilibrium and as an unattainable goal which can and probably should be approximated

from microscopic to macroscopic theories entropic aspects of ecological and economic processes abstract the paper discusses the relevance of thermodynamics and related theories to ecological economics it is argued that it is not useful to apply the entropy term directly to economic processes physical entropy terms defined on a microscopic level for isolated systems are quite far from economic and ecological reality only theories that deal with the development of open systems far from thermodynamics equilibrium provide the important link between entropy and evolution towards higher complexity major new impulses for ecological economics come especially from evolutionary ecological theories these quite recent theoretical approaches incorporate the knowledge of far from equilibrium thermodynamics and explain dynamic changes in ecosystems on a macroscopic level from a thermodynamic perspective thermodynamic approaches provide a heuristic base for the analysis of economy environment interactions important implications of these approaches concern time irreversibility ecological efficiency and the interdependencies of environmental problems and evolution

the political economy of coal subsidies in europe abstract both the mining and the burning of coal is polluting so we might expect to observe taxes on coal production and consumption yet several countries of western europe subsidize coal production and most east european countries subsidize coal consumption the first part of this paper shows that those subsidies which are emulated by other rich and poor countries respectively have become enormous neoclassical political economy is used to examine why governments adopt such inappropriate policies when they are so wasteful of resources and damaging to the environment several new and offsetting political forces have been at work in western europe in recent years though causing some countries to dismantle their coal producer subsidies the paper concludes that these pressures for reform will continue to operate in the few remaining protectionist countries if coupled with more commercial diplomatic pressure from coal exporting countries they could be sufficient to see the end of such protection by early next century