are future taxes discounted in this paper i examine empirically the question of whether or not the public recognizes the future taxes implied by current deficitfinanced expenditures as discussed by barro 1 it seems that such recognition does not occur but that by a new hypothesis presented here the aggregate economy behaves much as if it did this alternative hypothesis relies on the widely accepted efficient markets and permanent income hypotheses and it requires considerably less sophistication and information on the part of the average economic agent than does barro s hypothesis

euler equation tests of ricardian equivalence abstract tests of ricardian equivalence based on the euler condition can be written in several mathematically equivalent ways this paper shows that these alternative solutions may give rise to different empirical results when liquidity constraints are ignored this may be due to misspecification since a crucial assumption of the model is violated or due to the different parameter restrictions imposed by the different solutions the evidence suggests that misspecification is the most likely explanation previous evidence based on restricted specifications should be interpreted with caution

public prioritisation of energy affordability in the uk much research has focused on the so called energy trilemma i e three leading energy policy issues energy security affordability and climate change mitigation whilst substantial understanding exists of why people support climate friendly energy policies little is known about why they think affordability is important particularly what leads members of the public to identify this policy goal as more important than other objectives here we examine this question via a nationally representative survey of 2441 uk residents and demonstrate that concerns about personal costs explain a small amount of variation in the prioritisation of affordability as an energy policy goal a range of other factors also significantly contribute one such factor is beliefs about who is responsible for energy transitions these findings suggest policy actions to address affordability concerns should go beyond energy prices and include additional considerations such as distributive justice and equality

new tests of the life cycle and tax discounting hypotheses abstract we first test a version of the permanent income consumption function recently suggested by barro the results support the theory except that consumption expenditures show sensitivity to transitory income next we use the consumption model to test the tax discounting hypothesis which is strongly supported this support for tax discounting disagrees with results from some earlier studies using more traditional specifications of the consumption function however we show that when certain obviously inadequate estimation procedures are corrected the traditional models also support tax discounting this uniform support for tax discounting suggests that the sensitivity of consumption to transitory income is not due to liquidity constraints

geo economic approach to energy security measurement principal component analysis abstract currently there is no single accepted methodology for measuring energy security while the prevailing scientific attitude is that energy security should be defined and quantified in a way to be able to follow rapid developments on the global economic and geopolitical scene considering the fact that the national economies represent an integral part of a dynamic international economy where external shocks global financial and economic crisis political conflicts war etc have the impact on energy prices and energy security in general the paper proposes a new geo economic concept of energy security the new approach differs from the existing ones as regards the fact that in addition to basic indicators it takes into account sovereign credit rating as a measure of economic financial and political stability as one of the decisive factors which determines global energy trade and the ability of national economies to be stable and secure when it comes to energy determination and testing of geo economic index of energy security was conducted by using the principal component analysis in the european union and in the selected countries of the world over a period of ten years 2004 2013 the measured values of a newly proposed geo economic index of energy security demonstrate significant deviations from the data obtained by using usual indicators of energy security observed individually gdp per capita has the greatest impact on the change in final value of geo economic index of energy security while the impact of sovereign credit rating is slightly less the study has shown that the least impact on energy security is exerted by energy dependence which is traditionally used as a proxy indicator of energy security and production of energy from renewable sources which is defined by the eu policy as one of the methods for the improvement of energy security due to the results obtained it is necessary to conduct further analysis of sovereign credit rating and to review the type and significance of the impact of energy dependence indicator as a measure of energy security in general

finite lifetimes and the effects of budget deficits on national saving abstract even though realistic deficit policies shift sizable tax burdens to future generations the assumption of an infinite horizon is a good approximation for analyzing a deficit s short run saving effect on individuals who are neither liquidity constrained nor myopic recent u s experience casts significant doubt on these assumptions however and appears difficult to reconcile with the ricardian equivalence proposition that the timing of taxes does not affect national saving recent deficits have coincided with reduced national saving and a substantial increase in the share of gnp devoted to consumption

exogenous tax changes and interest rates testing for ricardian equivalence using an efficient markets model this article tests the ricardian theory i e barro 1974 using mishkin s 1981 1982 efficient markets model of interest rates employing romer and romer s 2010 measure exogenous tax changes i am able to test whether the u s bond market reacts in a keynesian or ricardian manner to exogenous tax policy changes this helps avoid the endogeneity problems associated with measuring the interest rate effects of deficits and provides a cleaner test of the pure ricardian thought experiment i find a significant negative relationship between tax changes and interest rates which is inconsistent with the ricardian model and support the keynesian crowding out framework

evaluating energy security in the asia pacific towards a more comprehensive approach the energy security conundrum how to equitably provide available affordable reliable efficient and environmentally benign energy services is a technology and policy challenge perhaps unlike any other the recent article on an energy security in the asia pacific by vlado vivoda is an excellent starting point for how to best capture the unique energy security challenges facing the region this article builds on vivoda s work but also points out some shortcomings with his analysis

the behavior of treasury securities monthly 1942 1984 abstract the monthly market value statistics on outstanding united states treasury debt are reported for the 1981 1984 period in addition a monthly series on privately held gross federal debt is reported for the extended 1942 1984 period together with monthly security price indices for various federal debt aggregates examination of the stochastic structure of t bill prices indicates that the riskiness of t bills has increased dramatically in recent years

an empirical model of labor supply in a life cycle setting this paper formulates and estimates a structural intertemporal model of labor supply using theoretical characterizations derived from an economic model of lifetime behavior a two step empirical analysis yields estimates of intertemporal and uncompensated substitution effects which provide the information needed to predict the response of hours of work to life cycle wage growth and shifts in the lifetime wage path

the ricardian equivalence hypothesis evidence from bangladesh this article examines the ricardian equivalence hypothesis reh and its sources of failure in the case of bangladesh using various theoretical specifications annual data from 1974 2001 and linear and nonlinear time series techniques the general findings tend to invalidate the reh a finite time horizon and the presence of liquidity constrained individuals are the sources of deviation from the reh empirical results reveal that real per capita private consumption c under various specifications is cointegrated generally at the 5 level with real per capita income y government expenditure before and after interest rate repayments g and g2 taxes t and the interest rate r results reveal that an increase in g g2 t and r reduces c and that an increase in budget deficits raises trade deficits these results highlight the importance of fiscal policies in boosting private consumption and controlling trade deficits which are the prime goals of stabilization policies being followed by bangladesh

government spending and private consumption this paper investigates the macroeconomic effects of anticipations about future fiscal expenditures within a simple perfect foresight general equilibrium model this paper extends s djajic 1987 by investigating an anticipated permanent increase in government spending an anticipated permanent increase may temporarily stimulate capital accumulation the questions of whether anticipated or unanticipated changes in government spending have a larger effect on capital accumulation and output is related to the questions of whether government spending is initially above or below the optimal level

uncertainty and the neutrality of government financing policy abstract some ideas from the theory of finance are applied to consider whether debt financed tax cuts affect desired consumption it is shown that government financing policy is a matter of indifference to infinitely lived households if a perfect substitute for public debt exists the analysis allows for uncertainty about future taxes and for missing markets in some kinds of assets income redistribution risk and the public insurance aspects of an income tax scheme qualify this neutrality result but in general the net effect is ambiguous the real resource costs of financial transacting as well as government superiority in the intermediation process may be one rationale for activist debt management policy a better understanding of functioning capital markets is essential to evaluate these arguments

optimal portfolios of external debt in developing countries the potential role of commodity linked bonds much of the spectacular growth in external borrowing by developing countries during the 1970s was in the form of general obligation loans denominated in u s dollars at floating interest rates it is now well understood that this strategy involved substantial risks an unexpected deterioration in a country s terms of trade can quickly erode its ability to service large debts in turn this may induce restricted access to new external credit and a period of forced adjustment in domestic consumption and investment these risks have become all

india s energy security a sample of business government civil society and university perspectives this article explores the concept of energy security perceived and understood by a sample of government business civil society and university stakeholders in india based on a literature review the authors hypothesize what energy experts suggest energy security is for india the article then tests these hypotheses through the use of a survey completed by 172 indian respondents the article begins by describing its methodology before summarizing the results of the literature review to distill seven working hypotheses related to energy security in india these hypotheses relate to 1 security of energy supply 2 equitable access to energy services 3 research and development of new energy technologies 4 energy efficiency and conservation 5 self sufficiency and trade in energy fuels 6 nuclear power and 7 the energy water nexus it then tests these hypotheses with our survey instrument before concluding with implications for energy policy in india and beyond

evaluating energy security in the asia pacific region a novel methodological approach this paper establishes an energy security assessment instrument based on a new and expanded conceptualisation of energy security the instrument is a systematic interrogative tool for evaluating energy security of individual states or regions it consists of eleven broad energy security dimensions associated with the current global energy system these energy security dimensions take into account numerous quantitative and qualitative attributes of each country s energy security and policy and include both traditional energy security concerns and many new factors such as environmental socio cultural and technological another dimension largely absent from previous analyses is the existence of and the issues addressed in energy security policy in each country this instrument serves as an assessment system with which to evaluate energy security in the asia pacific region the existing studies on energy security in the asia pacific region suffer from serious limitations no study to date examines regional energy security policies by adopting a more comprehensive energy security definition as a starting point most studies also focus on a single country or issue even if they examine energy security in major regional economies they lack critical comparative analysis the instrument is valuable as it may be utilised to draw a comprehensive map of regional energy security situation which can also include comparative analysis of energy security characteristics across the asia pacific region ultimately it may be utilised to set up a framework for improved regional energy cooperation with the aim of providing regional leaders with a blueprint for improving regional energy security and policy

consumption wealth and finite horizons tests of ricardian equivalence i introduction a continuing debate in macroeconomics concerns the ability of fiscal policy to affect aggregate demand in other words if the government reduces taxes and finances a given level of government spending by issuing new bonds does it generate an increase in aggregate demand the answer to this question depends on the degree to which consumers treat government debt as net wealth under the textbook model the tax cut would raise current disposable income and cause consumers to increase spending while this spending increase may be offset to some extent by the effects of higher interest rates the net effect would be an increase in aggregate demand in contrast under ricardian equivalence interest in which was rekindled by barro s 1974 seminal paper permanent income consumers who are connected to future generations by operative inter generational transfers would not consider the current tax cut and increase in disposable income as permanent they would recognize that the government s intertemporal budget constraint implies that for a given level of government spending a tax cut now implies a tax increase in the future under certain conditions one of which is the assumption of infinite planning horizons see sweeney 1988 for a discussion of the potential importance of this and other conditions imposed in barro s model the present value of the future tax increase implied by the current tax cut would exactly equal the present value of the concomitant increase in government debt as a result consumers will save their increased disposable income to cover their future taxes and the tax cut will not affect aggregate demand put differently consumers would not treat government bonds as net wealth although many empirical tests of the ricardian proposition have appeared in the literature see seater 1993 and the literature cited therein most have used somewhat ad hoc estimating equations that do not properly nest the ricardian hypothesis with a reasonable alternative hypothesis it was not until blanchard s 1985 elegant representation of the behavior of consumers with finite planning horizons that a clear path for empirical work was delineated blanchard s paper spawned a series of empirical papers designed to test ricardian equivalence within the framework of his model which does nest both the ricardian hypothesis and a non ricardian alternative in a widely cited paper evans 1988 was the first to derive the empirical implications of blanchard s model the model reduces the test of ricardian equivalence to a test of whether wealth affects current consumption after accounting for the effect of consumption in the previous period if it does then the model implies that consumers have finite planning horizons and treat government bonds as net wealth although evans s results cannot reject ricardian equivalence they do not resolve the controversy about the ricardian hypothesis other equally well grounded empirical studies e g graham and himarios 1991 and references therein find results that favor the finite horizon interpretation in the first part of the paper we re estimate evans s 1988 model using a better approximation of the market value of wealth contrary to evans s conclusions we find that ricardian equivalence should be rejected in favor of a non ricardian alternative hypothesis in which consumers have finite planning horizons 1 our results differ from evans s primarily because our wealth measure takes account of available information on the market value of corporate equity held by households our series is markedly more volatile than evans s as a result of the decidedly larger movements in the market relative to the book value of corporate assets in the second part of the paper we test whether the long run properties of the data are consistent with our regression results in contrast to earlier work by gali 1990 we find that they are

fiscal policy and private consumption instrumental variables tests of the consolidated approach since barro s 1974 restatement of the debt neutrality proposition economists have directed considerable research toward determining whether fiscal policy can affect aggregate demand most of the debate both theoretical and empirical has focused on the net wealth content of privately held government debt although existing research has hardly provided a definitive resolution to this debate see for example blinder and deaton 1985 bernheim 1987 barro 1989 recent efforts feldstein 1982 kormendi 1983 aschauer 1985 leiderman and razin 1988 have followed bailey 1971 and broadened the scope of the investigation to include the possibility that government expenditures substitute for private consumption expenditures in doing so feldstein kormendi and aschauer have shown that fiscal neutrality implies certain restrictions on private consumption behavior the first of these restrictions is what feldstein 1982 calls ex ante crowding out for complete ex ante crowding out government spending on goods and services must substitute dollar for dollar for private spending consequently an increase in government expenditures on consumption goods should lead to an equivalent decrease in private consumption expenditures a second restriction is that government finance decisions should not affect private consumption barro 1974 has derived conditions under which this result will obtain essentially maximizing consumers are assumed to be rational and forward looking accurately foreseeing future taxes implied by

inflation and government deficits there is a pronounced positive correlation of inflation andgovernment deficits in the united states since world war ii the purpose of this paper is to test the three leading explanationsof this correlation these three explanations are a a deficitincreases prices through a wealth effect b a deficit results inthe federal reserve purchasing debt thus increasing the moneysupply and prices and c expected inflation increases the deficit which is the change in the nominal value of bonds no supportis found for either of the first two hypotheses the results indi cate that expected government deficits have no significance forfuture inflation since world war ii the united states has experienced large federal government deficits and a sustained peacetime inflation three differentconnections between the deficits and inflation are prominent in theliterature the most direct connection between government deficits and inflationis that by increasing the real value of outstanding bonds and perceived netwealth a deficit can raise total spending and the price level this connec tion is also the most long standing and is suggested by metzler 1951 andpatinkin 1965 for example monetarists generally and buchanan and wagner 1977 in particularhave emphasized a different link between deficits and inflation they sug gest that the federal reserve purchases government bonds when the trea sury sells bonds thus increasing high powered money the money supply and the price level the federal reserve might behave this way for exam ple because it is attempting to hold down interest rates on governmentsecurities when deficits occur recently barro 1978 1979 has put forward a hypothesis that deficitsare a result of inflation rather than inflation being a result of deficits thegovernment deficit is the change in the nominal value of outstanding gov ernment bonds if the anticipated inflation rate increases then the nomi nal value of bonds must increase i e the government will run a deficit tokeep the same anticipated real amount of bonds all three of these possible connections between government deficitsand inflation are consistent with the observed positive correlation of defi cits and inflation the implications however are strikingly different con

ricardian equivalence long run leviathan abstract this paper presents a heterogenous overlapping generations with altruism model in which intergenerational discounting is stochastic the model nests three popular macroeconomics models those of ramsey economic journal 38 152 1928 543 559 diamond american economic review 55 1965 1126 1150 and a variant of the blanchard journal of political economy 93 2 1985 223 247 buiter the economic journal 98 391 1988 279 293 weil journal of public economics 38 2 1989 183 198 model it is shown that under a mild condition originally derived by weil journal of monetary economics 19 3 1987 377 391 the long run capital intensity is robust to practically every popular theoretical criticism of the standard ricardian model these criticisms include the imperfect inheritability of time preference parameters and hence finite horizons on the part of all households myopia in the form of overly discounting the future borrowing constraints distortionary labor taxation exchange strategic bequest motives common cultural constraints egalitarian bequests and primogeniture endogenous fertility and joy of giving while precautionary saving can theoretically violate long run neutrality the asymptotic capital intensity is still bounded below by preference parameters the overall conclusions are sharply at odds with those found in most articles dealing with the theoretical foundations of ricardian equivalence

structural federal deficits and interest rates some causality and co integration tests the relationship between federal budget deficits and interest rates has been the focus of extensive research recently cebula 4 examined this relationship empirically and concluded that the federal budget deficit does in fact exercise a positive and significant impact upon the nominal moody s aaa rated corporate bond rate 4 208 such a finding is at odds with the great majority of recent empirical studies in this area if valid this finding assigns to large deficits significant adverse effects on both private investment crowding out and on trade balance via an overvalued dollar given these profound public policy implications cebula s finding warrants further examination

the methodological challenges of creating a comprehensive energy security index this short article defends the methods utilized in creating an energy security index it explains why an energy security index is needed and then justifies research interviews as a data collection tool next it responds to the three strands of professor cherp s critique before offering a few general conclusions for readers concerned about energy security

consumers are not ricardian evidence from nineteen countries i introduction in conventional macroeconomic analysis government debt affects the economy because households view it as net wealth the larger the government debt is the wealthier households feel and the more they consume in principle however households need not view government debt as net wealth david ricardo pointed out that they might conceivably treat the future taxes servicing the government debt as exactly offsetting it 1 robert barro 1974 has shown that maximizing households will actually do so if they accurately anticipate future taxes if they face perfect capital markets and if they have effectively infinite horizons ricardian equivalence is said to hold if households do treat future servicing taxes as an exact offset to the government debt many empirical papers on consumption have investigated whether ricardian equivalence is consistent with observation kochin 1974 barro 1978 tanner 1979 seater 1982 kormendi 1983 aschauer 1985 seater and mariano 1985 kormendi and meguire 1986 1990 leiderman and razin 1988 evans 1988 and evans and hasan 1993 have reported evidence consistent with ricardian equivalence by contrast blinder and deaton 1985 feldstein 1978 1982 boskin and kotlikoff 1985 modigliani and sterling 1986 1990 and feldstein and elmendorf 1990 have reported evidence inconsistent with ricardian equivalence unfortunately most of these studies do not estimate regression equations that derive from well specified theoretical models nesting both ricardian equivalence and an alternative theory in which budget deficits and current taxes are not equivalent consequently their results are often hard to interpret moreover these studies consider the data for only one country typically the united states as a result the tests that are performed may not have much power to distinguish an economy for which ricardian equivalence would be a good approximation from one for which it would be a bad approximation olivier blanchard 1985 has provided one of the few models in the literature that tractably nests ricardian equivalence and an alternative in which households view government debt as net wealth depending upon whether a crucial parameter is zero or positive households have infinite horizons internalize all future generations and exhibit ricardian behavior or have finite horizons are at least somewhat disconnected from future generations and exhibit non ricardian behavior that strengthens as the parameter becomes larger the model has testable implications that this paper examines using annual data for nineteen countries when the data for the countries are pooled the tests have sufficient power not only to reject ricardian equivalence in favor of blanchard s alternative but also to yield a precise estimate of the deviation from ricardian equivalence this estimated deviation is approximately what one would expect if capital and insurance markets were perfect and households did not have altruistic bequest motives the deviation is however also economically unimportant for many purposes the rest of the paper is organized as follows section ii lays out blanchard s model and derives the testable implications of ricardian equivalence section iii tests these implications section iv summarizes the findings of the paper and interprets them ii empirical implications of ricardian equivalence in the stochastic variant of blanchard s model formulated in this section the economy is inhabited by a constant population of households that have finite horizons and face perfect capital and insurance markets 2 each household has a finite horizon because it has a probability p of dying each period and being replaced by another household from which it is entirely disconnected with the population normalized to unity the number of households born 0 1 2 periods earlier is always p p 1 p p 1 p sup

differing cultures of energy security an international comparison of public perceptions this study reviews how energy users perceive the importance of energy security dimensions it asks how does the sense of energy security vary with culture its primary source of data is a summary of survey distributed in eight languages to almost 2500 respondents in brazil china denmark germany india kazakhstan japan papua new guinea saudi arabia singapore and the united states it utilizes an energy literacy test in denmark as a secondary data tool the survey results are used to test nine hypotheses about national economic political professional and epistemic cultures the study concludes by affirming the complexity of energy security as a cultural topic by emphasizing how answers among respondents tended to converge more than diverge and by calling for further research

government debt government spending and private sector behavior a current period tax reduction financed by issuing government debt shifts the timing of tax collection from the current period to the future if the future taxes implied by government debt are not fully perceived and discounted by the private sector there will be a net wealth effect that increases private sector consumption thus reducing capital accumulation and growth if on the other hand the implied future taxes are perceived and discounted by the private sector the current period tax reduction will be used to increase private saving to pay for the future taxes and government debt will be absorbed without any real effects on the economy the effects of government spending financed by current period taxation also depend upon private sector perceptions 2 if the benefits of government spending are ignored private sector consumption will decrease in accordance with the reduction in permanent disposable income to the extent that government spending is on consumption type goods that are perceived as substitutes for privately provided consumption goods there will be a relatively greater reduction in private sector consumption to the extent that government spending is on investment type goods yielding future goods and services that are perceived as substitutes for future privately provided consumption goods there will be a relatively smaller reduction in private sector consumption the standard approach to modeling private sector consumption saving behavior involves a rather asymmetric set of assumptions as to how the private sector perceives the various elements of government fiscal policy 3 current period taxes are assumed to be fully perceived but current period government spending is implicitly assumed to be completely ignored by the private sector in considering permanent personal disposable income the private sector is assumed to be forward looking in its assessment of income and taxation the stock of government debt is nevertheless included as part of the stock of private wealth the implicit assumption associate professor of economics graduate school of business university of chicago 1101 east 58th street chicago il 60637 i thank eugene fama levis kochin michael mussa paul evans and an anonymous referee for helpful comments i am particularly grateful to daniel benjamin for contributing many hours of discussion and laura lahaye who was a research assistant and valuable adviser on earlier drafts the theoretical debate on the burden of the debt has been long standing gerald o driscoll 1977 documents ricardo s nineteenth century position robert barro 1974 reopened the debate by introducing the fundamental issue of intergenerational transfers also discussed in merton miller and charles upton 1974 the empirical side of the debate was initiated by levis kochin s 1974 attempt to test for the effects of deficits on consumption and by martin feldstein s 1974 attempt to test for the effects of social security wealth on consumption other empirical contributions include jess yawitz and laurence meyer 1976 myself 1978 and j earnest tanner 1978 1979 with respect to the effects of government deficits and debt and barro 1978 michael darby 1979 and dean leimer and selig lesnoy 1982 with respect to social security wealth see also interesting recent papers by john seater 1982 who generates detailed tests of the effects of deficits and debt on consumption charles plosser 1982 who explores the effects of government spending and debt shocks on interest rates and feldstein 1982 who attempts tests similar to some in this paper see fn 29 2martin bailey s 1962 1971 development of the effects of government spending on private consumption and aggregate economic activity is the seminal contribution paul david and john scadding 1974 extend bailey s ideas and provide some supporting empirical evidence more recently willem buiter 1977 and myself 1978 developed models based on bailey s earlier work barro 1981 has an interesting paper on related issues see also david aschauer 1982 3the standard approach incorporates fiscal policy through the concept of personal disposable income and by including the stock of government debt as part of personal wealth see for example the empirical specification of albert ando and franco modigliani 1963 which has been the basis of most empirical consumption studies since and feldstein 1974 for one of the more influential papers based on the ando modigliani specification

polices for increasing energy efficiency thirty years of experience in oecd countries energy efficiency improvement was an important phenomenon in the global energy balance over the past 30 years without energy efficiency improvements the oecd nations would have used approximately 49 more energy than was actually consumed as of 1998 this paper first reviews energy intensity trends for the major oecd nations since 1973 considering how much of the overall reduction in e gdp was due to energy efficiency improvement and how much was due to structural change the bulk of the paper examines the energy efficiency policies and programs adopted in japan united states and western europe commenting on their effectiveness and energy savings impacts where possible the paper also reviews the energy efficiency policies and programs adopted in california this experience shows that well designed policies can result in substantial energy savings as demonstrated in the united states where nine specific policies and programs reduced primary energy use in 2002 by approximately 11 substantial energy savings also occurred in japan some european countries and in the electricity sector in california

government spending and private consumption some international evidence this paper investigates the relationship between private consumption and publicly provided goods and services for a number of countries the empirical results show that in the aggregate private and government consumption are best described as complementary in the sense that an increase in one raises the marginal utility of the other the strength of this relationship is shown to be negatively affected by the government size these findings are robust across all specifications tried copyright 1994 by ohio state university press

assessing long term energy security the case of electricity in the united kingdom there is a growing body of research into the potential security risks and trade offs which may emerge over the long term development of energy systems as part of this body of research this paper aims to develop and demonstrate a set of indicators for assessing the security of long term national electricity scenarios this paper extends the empirical work of existing frameworks by including reliability and cost parameters alongside a range of other important aspects of energy security such as diversity trade and acceptability and by using both qualitative and quantitative indicators without aggregation in order to identify trade offs this paper uses the indicators to assess the energy security implications of three plausible long term scenarios for the uk electricity system the results indicate that a major risk may be experienced by a lack of flexible responsive supply capacity in low carbon electricity pathways reducing overall energy demand is found to be the most beneficial policy for improving energy security in terms of generating benefits in multiple dimensions the paper finds that energy security is often conceptualised as the avoidance of causes of insecurity such as insecure fuel imports but that an equally important aspect of security lies in maximising responses to insecurity for example by increasing the flexibility and responsiveness of both supply and demand

are consumers ricardian when some are liquidity constrained evidence for the united states this paper formulates and estimates a revised specification of evans 1988 test for ricardian equivalence which incorporates the possible presence of liquidity constrained consumers if liquidity constrained consumers are significant in number tests using aggregate consumption data may tend to reject the ricardian equivalence hypothesis when the model allows for liquidity constraints a test which incorporated liquidity constrained consumers could not reject ricardian equivalence over the sample period 1946 91 while the proportion of aggregate consumption which is liquidity constrained is found to be significant it does not appear large enough to affect the test for ricardian equivalence

sensitivity of consumption to income and to government purchases some specification and estimation issues the paper derives a nonlinear error correction model ecm for consumption and shows that existing models that are based on quadratic utility combine permanent income and current income consumption and nest or could nest the hypothesis of substitutability between private consumption and government purchases are special cases of the ecm the importance of some econometric issues that have not received proper attention in the literature is demonstrated by estimating the models using us aggregate quarterly data 1953 1 1992 4 the evidence suggests that the ecm produces more reliable estimates than do the existing restrictive models

implications for the energy policy derived from the relation between the cultural dimensions of hofstede s model and the consumption of renewable energies abstract this paper aims to determine the relation between national culture and the consumption of renewable energies in several european countries according to the renewable energy directive of the european commission there have been set common goals for the share of consumption of renewable energies in the european union but each country is responsible for the action plan to achieve these targets these targets have been set based on the initial values of the renewable energies and on the natural resources of each country cultural aspects and energy consumption patterns have not been taken in consideration for the analysis of the willingness and motivation of consumers to switch towards renewable energies in this paper a panel data analysis has been carried out in order to measure the relation between hofstede s cultural dimensions and the share of renewable energies in final consumption the results show a highly significant relation between the masculinity index and the share of renewable energies and an acceptable relation for the long term orientation index the energy policy of the european union and of its countries should consider the cultural characteristics in the development of the national action plans for the implementation of renewable energies

does ricardian equivalence hold when expectations are not rational this paper considers the ricardian equivalence proposition when expectations are not rational and are instead formed using adaptive learning rules we show that ricardian equivalence continues to hold provided suitable additional conditions on learning dynamics are satisfied however new cases of failure can also emerge under learning in particular for ricardian equivalence to obtain agents expectations must not depend on government s financial variables under deficit financing

letting the energy gini out of the bottle lorenz curves of cumulative electricity consumption and gini coefficients as metrics of energy distribution and equity energy services are fundamental determinants of the quality of life as well as the economic vitality of both industrialized and developing nations few analytic tools exist however to explore changes in individual household and national levels of energy consumption and utilization in order to contribute to such analyses we extend the application of lorenz curves to energy consumption we examined the distribution of residential electricity consumption in five countries norway usa el salvador thailand and kenya these countries exhibit a dramatic range of energy profiles with electricity consumption far more evenly distributed across the population in some industrialized nations than others and with further significant differences in the lorenz distribution between industrialized and industrializing economies the metric also provides critical insights into the temporal evolution of energy management in different states and nations we illustrate this with a preliminary longitudinal study of commercial and industrial electricity use in california during the economically volatile 1990s finally we explore the limits of lorenz analyses for understanding energy equity through a discussion of the roles that variations in energy conversion efficiency and climate play in shaping distributions of energy consumption the lorenz method which is widely employed by economists to analyze income distribution is largely unused in energy analysis but provides a powerful new tool for estimating the distributional dimensions of energy consumption its widespread use can make significant contributions to scientific and policy debates about energy equity in the context of climate change mitigation electric power industry deregulation and restructuring and the development of national infrastructure

long term energy services security what is it and how can it be measured and valued abstract the paper reviews some recent approaches towards measuring the extent of long term energy security and security externality valuation it starts out to discuss the contextual connotations of notions of energy security in medium to long term time frames and reviews some indicators that have been proposed to quantify it special attention is paid to two of these approaches which the authors helped to develop i e diversity based indices and the supply demand index the paper takes issue with conventional welfare economic approaches that neglect i the scope on the demand side for raising security and ii negative feedback mechanisms of socio political impacts of international rent transfers in fossil fuels exporting countries the concept of energy services security is proposed with a demand side focus this enables application of an integrated approach to gauge the resilience of a society to meet the needs of its population for energy services over longer timescales ahead from various interrelated perspectives propositions are made on the attribution of security externalities to the use of fossil fuels policies and suggestions for further improvements of measures for energy services security

optimal hedging in a futures market with background noise and basis risk abstract this paper examines hedging behavior in an incomplete market in which there exists an unhedgeable and uninsurable independent background risk in the case of a basis risk that satisfies the regressibility property the background risk might be partly endogenous background risk generally has an ambiguous effect on the optimal hedge ratio however if preferences exhibit standard risk aversion and the background risk is fully exogenous the qualitative effect of the added background risk is determinate and depends on the direction of any bias in the futures market in all cases the speculative component of the hedge ratio is reduced in the presence of background risk when the background risk is a basis risk and futures prices exhibit normal backwardation this qualitative effect need not hold and it depends in part on the direction of regressability for spot and futures prices

residential energy efficient technology adoption energy conservation knowledge and attitudes an analysis of european countries abstract relationships between measures of household energy use behavior and household characteristics are estimated using a unique dataset of approximately 5000 households in 10 eu countries and norway family age composition patterns are found to have a distinct impact on household energy use behavior households with young children are more likely to adopt energy efficient technologies and energy conservation practices and place primary importance on energy savings for environmental reasons by contrast households with a high share of elderly members place more importance on financial savings and have lower levels of technology adoption energy conservation practice use and knowledge about household energy use education levels also matter with higher levels associated with energy efficient technology adoption and energy conservation practice use similarly university education increases the stated importance of energy savings for greenhouse gas reductions and decreases the stated importance for financial reasons education impacts also vary greatly across survey countries and there is some evidence of an eastern western european divide with respect to attitudes towards energy savings these cross country differences highlight the need to balance a common eu energy efficiency policy framework with flexibility for country specific policies to address unique constraints to energy efficient technology and conservation practice adoption

indicators for energy security the concept of energy security is widely used yet there is no consensus on its precise interpretation in this research we have provided an overview of available indicators for long term security of supply sos we distinguished four dimensions of energy security that relate to the availability accessibility affordability and acceptability of energy and classified indicators for energy security according to this taxonomy there is no one ideal indicator as the notion of energy security is highly context dependent rather applying multiple indicators leads to a broader understanding incorporating these indicators in model based scenario analysis showed accelerated depletion of currently known fossil resources due to increasing global demand coupled with increasing spatial discrepancy between consumption and production international trade in energy carriers is projected to have increased by 142 in 2050 compared to 2008 oil production is projected to become increasingly concentrated in a few countries up to 2030 after which production from other regions diversifies the market under stringent climate policies this diversification may not occur due to reduced demand for oil possible benefits of climate policy include increased fuel diversity and slower depletion of fossil resources

an international assessment of energy security performance energy security has in recent years grown as a salient policy and political issue to better understand energy security and sustainability concerns this study s main objective is to present an energy security index which measures national performance on energy security over time based on three years of research involving interviews surveys and an international workshop this study conceptualizes energy security as consisting of the interconnected factors of availability affordability efficiency sustainability and governance it then matches these factors with 20 metrics comprising an energy security index measuring international performance across 18 countries from 1990 to 2010 it offers three case studies of japan top performer laos middle performer and myanmar w orst performer to provide context to the index s results it then presents four conclusions first a majority of countries analyzed have regressed in terms of their energy security second despite the near total deterioration of energy security a great disparity exists between countries with some clear leaders such as japan third tradeoffs exist within different components of energy security fourth creating energy security is as much a matter of domestic policy from within as it is from foreign policy without

an investigation of ricardian equivalence in a common trends model abstract to empirically discriminate between ricardian and non ricardian behaviour we have to use a method that distinguishes between expected and unexpected as well as permanent and transitory changes in taxes and government consumption one method that provides these distinctions between different types of changes is the common trends framework used in this paper which is a var model with cointegrating constraints in the empirical study of us data there is some support for the ricardian hypothesis but there are also some deviations from its predictions however the differences do not lend support to a keynesian view of budget deficits but rather to the view of expansionary fiscal contractions this can be motivated theoretically by uncertainty about future taxes in combination with prudent households

diversification of oil import sources and energy security a key strategy or an elusive objective this paper explores the relationship between the diversification of sources of imported oil and energy security of oil importing countries it examines the importance of diversification policy for oil importers explains why oil importers implement oil diversification policy and contextualizes the oil import diversification strategy in the overall energy security policy of oil importers the paper analyzes the factors and the contexts that affect the level of importance assigned to oil import diversification policy in oil importing countries and the limitations that may affect the successful implication of oil import diversification policy the examples are drawn from the world s top three oil importers the united states japan and china the policymakers in these and other oil importing countries place much importance on energy security the diversification of oil import sources is used as one of the strategies to enhance energy security in oil importing countries this paper is important for policymakers in oil importing countries as it provides them with a qualitative conceptual framework with which to evaluate the need to diversify their countries sources of imported oil and with which to identify the likely limitations to the successful implementation of oil import diversification policy

ricardian equivalence and the public and private saving nexus in india abstractthis study tests the ricardian equivalence theorem ret and examines the responsiveness of private saving to public saving in india most estimators do not provide support for the empirical validity of ret and long run cointegration between public and private saving the increases in household saving hhs seem to have been engendered by the provision of saving incentives institution of saving schemes self driven motivation to save and the precautionary accumulations induced by uncovered uncertainties in incomes rather than by ricardian behaviour of households the self imposed aversion to debt and debt bequest borrowing and liquidity constraints and the intertemporal smoothing of consumption have been the added catalysts that contributed to the increases in hhs the households with binding borrowing constraints inadequate or no insurance and uncovered uncertainties in incomes seem to have been saving more to pay for higher inflation tax the fiscal consolidation and generation of public s

debt and distortionary taxation in a simple perfect foresight model abstract we examine the real effects of a temporary substitution of debt for distortionary income taxation we find that such a policy may reduce consumption increase investment and reduce interest rates these results arise even though we examine the same model used by barro where temporary substitution of debt for lump sum taxes was shown to have no real effects we show that these anti keynesian effects on consumption are as significant as various pro keynesian effects such as finite lives hence the impact of debt is an empirical issue and ricardian neutrality appears to be a reasonable benchmark

are consumers ricardian evidence for the united states this paper derives three empirical implications of a well specified model of consumer behavior a model that nests both ricardian equivalence and an alternative non ricardian theory ricardian equivalence is then tested against this alternative the tests reveal that ricardian equivalence cannot be rejected

blanchard s model of consumption an empirical study this article derives several empirically testable implications for blanchard s consumption model which has been widely used in analytical macroeconomic research cointegration methods are applied the parameter that measures the life horizon of households is estimated and the consumption model is tested quarterly canadian data are used there is no empirical evidence against the assumption that households behave as if they live forever within blanchard s framework blanchard s model of consumption is strongly rejected by the data however

energy policymaking in denmark implications for global energy security and sustainability denmark is arguably the most energy secure and sustainable country in the organization of economic cooperation and development oecd the country has reduced its dependence on foreign sources of energy to zero and become self sufficient in its own energy production and use offering important lessons for other nations around the world this study explores the core of denmark s successful approach a commitment to energy efficiency prolonged taxes on energy fuels electricity and carbon dioxide and incentives for combined heat and power chp and wind turbines through these commitments the study shows how denmark transitioned from being almost 100 percent dependent on imported fuels such as oil and coal for their power plants in 1970 to becoming a net exporter of fuels and electricity today the country leads the world in terms of exportation of wind energy technology with a hold on roughly one third of the world market for wind turbines it was able to phase out the use of virtually all oil fired power plants in less than five years and implemented a progressive moratorium on future coal fired power plants in the 1990s their most recent strategy seeks to achieve 30 percent of total energy supply from renewable energy by 2025

government financing decisions and asset returns abstract this paper presents an empirical investigation of the relation between government financing decisions and asset returns in particular the focus is on whether a substitution of debt financing for tax financing of a given level of expenditures is associated with an increase in interest rates the paper brings a different perspective to empirical investigations of government fiscal policies by examining the response of asset prices in an efficient capital market to such policies rather than focusing on aggregate consumption behavior the results are consistent with the idea that asset prices are unrelated to how the government finances its expenditures the results however also indicate that the capital market is not indifferent with respect to the level of government expenditures as higher interest rates are associated with increases in government purchases

a test of steady state government debt neutrality a test of steady state government debt neutrality this paper investigates whether in the steady state the real interest rate is an increasing function of both the government debt and government spending using data from the period between january 1981 and march 1986 the paper finds no evidence of such a relationship these data afford an especially powerful test because the ratio of federal debt to trend output which had fallen from 93 to 33 percent between january 1948 and december 1980 reversed course after the enactment of the economic recovery tax act reaching 47 percent in march 1986 i introduction in conventional macroeconomic analysis government debt is not neutral because households view it as contributing to their net wealth as a result the larger the government debt is the wealthier households feel and the more they consume more consumption in turn spells less investment over time and thus a lower steady state capital stock as a result output is ultimately lower and the real interest rate higher in principle however households need not view government debt as net wealth 1 if households accurately foresee the future taxes that will service the government debt if they face perfect capital markets if taxes do not distort their decisions and if they internalize future generations then they treat the future taxes servicing the government debt as an exact offset consequently government debt is neutral since it does not make households feel wealthier and hence affects nothing 2 nevertheless because most macroeconomists doubt that households accurately foresee future servicing taxes have access to perfect capital markets and internalize future generations they do not model government debt as neutral like perfect competition however government debt neutrality may be a good approximation in many applications even if the assumptions underlying it are unrealistic therefore empirical analysis rather than introspection should determine how one models government debt this paper provides such an empirical analysis the empirical analysis focuses on the steady state relationship between government debt and the real interest rate 3 in the steady state a larger government debt leads to a smaller capital stock and hence a higher marginal product of capital if households view government debt as net wealth consequently the real interest rate is also higher if instead government debt is neutral nothing should happen to the real interest rate u s data from the period between january 1981 and march 1986 have been used here to investigate whether a larger government debt leads to a higher real interest rate in the steady state and hence whether government debt is neutral these data afford an especially powerful test because the ratio of federal debt to trend output which had fallen from 94 to 33 percent between january 1948 and december 1980 reversed course after the enactment of the economic recovery tax act reaching 47 percent by march 1986 moreover this upward trend is likely to continue well beyond 1986 such an enormous increase in federal debt should have raised by steady state real interest rate appreciably if households view government debt as net wealth to any important extent in the absence of evidence that the steady state real interest rate did rise government debt is judged to be neutral in the steady state section ii formulates the model which is estimated in sections iii and iv section v summarizes the paper and then briefly reviews an extensive literature consistent with government debt neutrality ii formulation of the econometric model the appendix demonstrates that if households view government debt as net wealth the real interest rate should be an increasing function of both the government debt and government spending in the steady state see also evans 1988 for this analysis

empowered evaluating japan s national energy strategy under the dpj administration abstract in august 2009 after 54 years of virtually unbroken rule japan s liberal democratic party ldp was ousted from power by the democratic party of japan dpj the dpj s campaign platform included a pledge to facilitate extreme reductions in greenhouse gas ghg emissions yet at the cop16 meeting in cancun japan announced that it would not accept further emission reduction targets without broader commitment from all nations this paper seeks to explain this dichotomy by employing a targeted stakeholder evaluation based on surveys with 321 japanese citizens to assess the extent to which influential stakeholder groups in japan supports a potentially costly transition to a low carbon energy infrastructure amidst severe economic challenges that the nation faces findings help explain japan s adversarial role in cop16 negotiations in cancun despite the stated ghg reduction ambitions of japan s current ruling party the analysis concludes that if the dpj does embrace aggressive co2 reduction targets in the future the strategic focus will likely mirror the former ruling party s energy policy of bolstering nuclear power generation capacity and promoting energy efficiency improvements while exhibiting lukewarm commitment to supporting capacity development in alternative sources of energy supply such as solar panels and wind turbines