interpreting economic time series this paper explores some of the implications for econometric practice of the principle that people s observed behavior will change when their constraints change in dynamic contexts a proper definition of people s constraints includes among them laws of motion that describe the evolution of the taxes they must pay and the prices of the goods that they buy and sell changes in agents perceptions of these laws of motion or constraints will in general produce changes in the schedules that describe the choices they make as a function of the information that they possess until very recently received dynamic econometric practice ignored this principle the practice of dynamic econometrics should be changed so that it is consistent with the principle that people s rules of choice are influenced by their constraints this is a substantial undertaking and involves major adjustments in the ways that we formulate estimate and simulate econometric models

spurious volatility in historical unemployment data this paper shows that the stabilization of the unemployment rate between the pre 1930 and post 1948 eras is an artifact of improvements in data collection procedures prewar methods are used to construct postwar unemployment data that are consistent with the historical data the constructed postwar series is nearly as volatile as the pre 1930 unemployment data the constructed postwar data are systematically more volatile than the actual postwar data because the cyclical behavior of the labor force and productivity are misspecified in the construction procedures the relationship between the actual and constructed postwar unemployment series is used to construct new historical data

optimal strategic oil stockpiling and import tariffs the case of china abstract as two of the most important instruments for dealing with the issues of energy supply security strategic petroleum reserves sprs and oil import tariffs have been proven effective in developed countries while china is currently building up its strategic oil reserves to ensure energy security it is of great importance to investigate china s optimal oil stockpiling policies while taking into account the possibility of imposing an import tariff or quota which can also be used for alleviating the energy insecurity of an oil importing country employing a dynamic programming framework this paper examines the optimal spr policies and oil import tariffs or quotas for china and the interactions between the two instruments under different scenarios for the world oil market the results show that the combination of optimal tariffs and spr policies can substantially reduce the expected oil insecurity cost for china the effect is larger when the probability that a disruption will continue is higher

theoretical approaches to monetary disinflation abstract during the 1980s many countries adopted tight monetary policies to reduce high inflation rates which were the legacy of the 1970s as inflation threatens to rise at the beginning of this decade this paper provides a survey of the 1980s literature which sought to provide theoretical understandings of how monetary disinflation is achieved four models are presented monetarist neo keynesian new classical and post keynesian each model s explanation of the recession which accompanies the monetary disinflation is outlined as well as possible policy measures to reduce the extent of the recession and to hasten the return to full employment

cyclical and causal relations between real wages and employment in the eu this paper analyses and compares the joint behaviour of real wages and employment over the business cycle in the european union eu economies using both annual and quarterly data since 1960 further investigation of the cointegrating properties and the existence of causal effects in the real wage employment relation is undertaken by employing appropriate var models the evidence suggests weak procyclical or acyclic behaviour of real wages relative to cyclical employment in the quarterly data and stronger procyclicality in the annual data thus confirming the dunlop tarshis result for the majority of the eu economies with a few exceptions no cointegrating relations were detected while the granger causality tests suggest either weak or lack of unidirectional causality finally the sensitivity analysis showed that the filtering method has not much influence on the results but the choice of deflator may overturn them in certain cases

monetary accommodation exchange rate regimes and inflation persistence stable url http links jstor org sici sici 0013 0133 28199205 29102 3a412 3c461 3amaerra 3e2 0 co 3b2 lthe economic journal is currently published by royal economic society your use of the jstor archive indicates your acceptance of jstor s terms and conditions of use available athttp www jstor org about terms html jstor s terms and conditions of use provides in part that unless you have obtainedprior permission you may not download an entire issue of a journal or multiple copies of articles and you may use content inthe jstor archive only for your personal non commercial use please contact the publisher regarding any further use of this work publisher contact information may be obtained athttp www jstor org journals res html each copy of any part of a jstor transmission must contain the same copyright notice that appears on the screen or printedpage of such transmission the jstor archive is a trusted digital repository providing for long term preservation and access to leading academicjournals and scholarly literature from around the world the archive is supported by libraries scholarly societies publishers and foundations it is an initiative of jstor a not for profit organization with a mission to help the scholarly community takeadvantage of advances in technology for more information regarding jstor please contact support jstor org http www jstor orgwed feb 13 07 34 49 2008

testing for superexogeneity of wage equations the superexogeneity of wage equations is tested in four major european countries this is an important issue because while only weak exogeneity is needed for estimation purposes and for testing and strong exogeneity for forecasting superexogeneity is required for policy analysis the procedure suggested by engle and hendry 1993 is adopted to carry out the empirical analysis in all cases the conditional model is not affected by the first and second moments of the residuals from the marginal models this invariance result implies that the estimated linear regression models are not subject to the lucas critique over the period examined differences in wage determination between the various countries can be plausibly interpreted as resulting from the bargaining environment

pricing option contracts on the strategic petroleum reserve in this article we examine the pricing of option contracts on the strategic petroleum reserve spr and consider how these can be used by both the government and refiners we analyze the interaction between the call and put option contracts taking into account the underlying game in the infinite markov decision process with discounting explaining the relationship between the valuation of options on the spr by refiners and the valuation of financial options on a marker crude in financial markets we conclude that the values of both call and put options on the spr increase with oil prices and decrease with total inventory furthermore our analysis shows that a more active management of the spr creates higher social welfare although refiners profit less from inventories and larger volatility in inventory profits decreasing private investment in petroleum stocks

developing effective policies for the sustainable development of ecological agriculture in china the case study of jinshan county with a systems dynamics model abstract this paper focuses on a search for concrete policy measures to facilitate the overall sustainability of ecological agricultural development at a county level for this purpose a system dynamics model aiseem has been developed to explore the potential long term ecological economic institutional and social interactions of ecological agricultural development through a case study of jinshan county in china the model provides an experimental platform for the simulation and analysis of alternative policy scenarios the results indicate that the diversification of land use patterns government low interest loans and government support for training are important policy measures for promoting the sustainable development of ecological agriculture at least in the case study context in addition the study reveals that environmentally sound technology e g biogas project alone cannot sufficiently induce farmers to adopt ecological agricultural practices limited availability of information risk aversion and high transaction costs are major barriers to the adoption of alternative agricultural practices in this regard the importance of capacity building and institutional arrangements are emphasised through the development of an improved policy making process on agricultural sustainability this case study highlights the importance of combining the ecological economics analytical framework with the system dynamics modelling approach as a feasible integrated tool to provide insight into the policy analysis of ecological agriculture and thus set a solid basis for effective policy making to facilitate its sustainable development on a regional scale

ecological and economic sustainability in fishery management a multi agent model for understanding competition and cooperation recent studies have shown that many marine ecosystems are experiencing an accelerating loss of population and biodiversity it is apparent that there is a growing disparity between the available supply of fish and the desire of the growing world population to catch them although studies have begun to question the ecological sustainability of managed fishery systems they often omit the corresponding effects on the economic sustainability of fishery industries this is particularly important in rural coastal areas where the fishing industry is often a dominant employer in this article we analyze the interactions between economic and ecological dynamic systems using a multi agent dynamic model of fishery management multiple agents fishers harvest multiple fish species and adapt the amount and allocation of their effort to their value functions which are given as net profits of the fish harvest sold for a market price this is largely unique in fishery models since many econometric studies view fishers as represented by homogenous average agents we introduce and compare two different decision rules governing the behavior of fishers engaged in a competitive market we demonstrate a situation where both behaviors lead to a decline of all fish stocks as well as profits for most fishers as an alternative we introduce a cooperative approach in which fisheries jointly set sustainable limits for total harvest and effort that are then distributed to the fishers according to distribution rules the simulation reveals that fish stocks and profits can stabilize at significantly higher levels in the cooperative case leading to a continuous accumulation of capital for all fishers this model demonstrates key aspects of overfishing conflicts that can be overcome through planned fishing quotas and cooperative market mechanisms it also demonstrates a novel approach for simulating the dynamic behavior of heterogeneous fishers

macroeconomic forecasting a survey developments in macroeconomic forecasting over the last twenty years are surveyed in this paper which takes the i969 presidential address to the royal economic society cairncross i969 as its starting point sir alec cairncross had found no previous occasion on which the royal economic society had discussed this new activity and so selected economic forecasting as the topic for his address as retiring chief economic adviser to the treasury he had been preoccupied with forecasting for the preceding few years and was well placed to reflect on the new kind of economic forecasting that was emerging and the new ways in which it was being organised at the time these were changing fast with forecasting becoming in particular more heavily based on computable models a conference in april i969 heard that in the treasury a more elaborate fully formalised model is being programmed for a computer roy i970 in august i969 at the national institute of economic and social research niesr an econometric model of the whole economy became an integral part of the quarterly forecasting exercises that had begun with the publication of the national institute economic review in i 959 these developments followed the inauguration by the london business school lbs in i966 of the first series of published forecasts based on the direct application of a complete statistical model of the economy in the late i960s and early i970s confidence in forecasting was growing extra resources were put in and there were hopes that the accumulation of data and more sophisticated techniques would lead to major improvements in accuracy of forecasts and understanding of the economy burns i986 this confidence rested in part on the wide acceptance of the neoclassical synthesis as a framework for macroeconomic analysis the phrase originated with samuelson who was largely instrumental in constructing and promulgating the grand neoclassical synthesis which was given considerable prominence in the third edition of his textbook here it was noted that economists instead of being keynesian or anti keynesian have worked toward a synthesis of whatever is valuable in older economics and in modern theories of income determination the result might be called neo classical economics and is accepted in its broad outlines by all but about 5 per cent of extreme left wing

recent developments in macroeconomics underlying the existence of macroeconomics as a separate field of study are the phenomena of economy wide fluctuations of output and prices and sometimes persistent high levels of unemployment two basic views of macroeconomic behavior have persisted even as conceptual innovati ons and the application of more powerful analytic and empirical techn iques have brought significant changes in understanding of the macroe conomy copyright 1988 by royal economic society

terms of trade shock and the current account in a monetary economy over the period 1973 81 the terms of trade of non oil developing countries deteriorated at about 2 per cent per annum this was accompanied by an increase in current account deficits in excess of 3 per cent above what they had been in the previous decade see khan and knight 1983 for a discussion these authors find the terms of trade shocks the major cause of the deficits this has led to a renewal of interest in the effects of changes in terms of trade for a small open economy the conventional wisdom first put forward by laursen and metzler 1950 and harberger 1950 emphasized the fact that a terms of trade worsening lowered real income which in turn lowered savings and worsened the current account the laursen metzler effect the recent reappraisal was initiated by obstfeld 1982 he showed in an infinite horizon optimizing framework with perfect capital mobilizing that if the discount rate was a function of the level of utility surpluses and not deficits accompany an unanticipated and permanent terms of trade worsening the long run level of the discount rate is tied down by the given world rate of interest this in turn fixes the long run level of utility the terms of trade shock tends to lower the level of utility and agents save to offset this across steady states there is only a substitution effect on the other hand if the discount rate is fixed and equal to the world interest rate then the economy adjusts to the terms of trade shock by immediately lowering real expenditure by the same amount as the decline in real income so that the current account is always balanced svensson and razin 1983 showed that in a two period framework this does not necessarily happen for the infinite horizon case they showed that if preferences were separable over time and the discount rate was increasing in instantaneous utility then obstfeld s results were indeed obtained in a two period overlapping generations model the results could be modified owing to the fact that human wealth and non human wealth are not perfect substitutes and a terms of trade shock affects these differently see matsuyama 1988 for a discussion but it is still true that an unanticipated permanent terms of trade shock has a one shot effect on the current account unless some ad hoc costs of adjustment are introduced see e g persson and svensson 1985 and matsuyama 1988 the uncertain lifetime model see e g frenkel and razin 1988 and matsuyama 1987 generates non trivial

the near optimality of mark up pricing mark up pricing policies result in a loss of profits compared to marginal pricing behavior these losses however are often very small even for large changes in the money supply but by adopting a simple pricing rule the firm does not have to forecast the future and avoids the informational and computational costs required to determine the profit maximizing price each period thus even if these costs are small mark up pricing policies may be optimal or approximately so at least for some firms in a macro model this is likely to imply large monetary non neutralities

optimal path for china s strategic petroleum reserve a dynamic programming analysis abstract this paper proposes a dynamic programming model to explore the optimal stockpiling path for china s strategic petroleum reserve before 2020 the optimal oil acquisition sizes in 2008 2020 under different scenarios are estimated the effects of oil price risks and elasticity value on inventory size are further investigated it is found that the optimal stockpile acquisition strategies are mainly determined by oil price and total inventory costs while oil supply disruption is not considered china s optimal stockpile acquisition rate increases from 19 2 to 52 million barrels from 2008 to 2020 if an oil supply disruption occurs the oil acquisition rate will be reduced significantly however it may not be a good strategy to interrupt oil reserve activities in order to minimize the total costs for the entire planning period

an empirical analysis of the dynamic programming model of stockpile acquisition strategies for china s strategic petroleum reserve abstract the world s future oil price is affected by many factors the challenge therefore is how to select optimal stockpile acquisition strategies to minimize the cost of maintaining a reserve this paper provides a new method for analyzing this problem using an uncertain dynamic programming model to analyze stockpile acquisition strategies for strategic petroleum reserve using this model we quantify the impact of uncertain world oil price on optimal stockpile acquisition strategies of china s strategic petroleum reserve for the period 2007 2010 and 2011 2020 our results show that the future stockpile acquisition is related to oil prices and their probability and if not considering the occurrence of oil supply shortage china should at least purchase 25 million barrels when world oil price is at an optimal level the optimal price of stockpile acquisition of every year has a stronger relationship with the probability of high price and the optimal expected price and size of stockpile acquisition is different in each year

the development of renewable energy in resource rich region a case in china abstract with the largest population living in rural areas the lack of clean energy supply is an important problem in china and the utilization of renewable energy not only meets the demand of energy but also provides a basis for environmental protection and sustainable development this paper reviews use of clean energy in a resource rich region including the basic principle of the development of recycling agriculture the potential the present status and the future of renewable energy in the region rural areas if the project will be finished there will be 300 000 families benefiting from it and it can bring at least 2 2 108 us dollars revenue increase directly the indirect revenue increase will be 0 15 billion us dollars the environment will be improved and the living standard in jincheng s rural areas is also be greatly improved because of developing biogas project based on the developing status and constraint conditions the solutions to further promote renewable energy projects in this region are also proposed

oil stockpiles and import reductions a dynamic programming approach this paper analyzes oil stockpiling policies using models in which u s policy choices are restricted to just two instruments stockpiles and disruption tariffs the model considers the influence of u s and in general oecd import demands upon the opec price for oil and the duration and severity of oil disruptions induced by disturbances among the opec nations our development is based upon a probabilistic view of disruptions analyzed by applying dynamic programming

strategic oil stockpiling for energy security the case of china and india abstract compared with the developed countries the developing countries could be more vulnerable to oil supply disruptions due to their lack of strategic petroleum reserves sprs several developing countries including china and india are establishing their sprs to ensure energy security in the common world oil market one country s spr decisions can be affected by the decisions of other countries this paper investigates the spr policies of china and india two of the largest developing countries in a game theoretic framework where the interactions between the two countries are taken into account the results show that players equilibrium stockpiling strategies and total expected costs could vary significantly with the initial oil market state stockpile acquisition capacity and the probabilities for disruptions to persist

a dynamic programming model of china s strategic petroleum reserve general strategy and the effect of emergencies abstract to protect the security of energy supply china is building national strategic petroleum reserve spr we present a dynamic programming model to determine the optimal stockpiling and drawdown strategies for china s spr under various scenarios focusing on minimizing the total cost of reserves in contrast to previous research the oil price given in our model is exogenous on a monthly instead of annual basis with a view to more realistic simulation of optimal strategies each year our model results show that in the case where stockpiling affects oil prices a given spr size will be achieved earlier than when stockpiling does not affect oil prices in different emergency conditions the optimal stockpiling and drawdown strategies of china s spr are very different when an emergency occurs the shock of stockpiling on the oil price per barrel could range 0 49 6 35 while the impact of drawdown on the oil price per barrel could range 6 22 to 0 48

developing a market based approach to managing the us strategic petroleum reserve abstract the strategic petroleum reserve has not been used effectively to manage the consequences of oil shocks in the united states the main reason is that political decision makers tend to hoard the reserves during crises and bureaucratic processes delay the sale of the reserves also the enabling legislation focused on ameliorating shortages whereas disruptions result price spikes rather than shortages we develop a markov game of the buildup and drawdown of the reserve in which a public player aims to maximize consumer welfare at the same time private holders of inventory maximize their profit the methodological contribution in this paper is the development of financial options to implement the public player s optimal policy we use the solution of this game to calculate the number and value of options necessary for the private marketplace to trigger the optimal buildup and drawdown of the reserve

on non uniqueness in rational expectations models an attempt at perspective abstract many macroeconomic models involving rational expectations give rise to an infinity of solution paths even when the models are linear in all variables some writers have suggested that this non uniqueness constitutes a serious weakness for the rational expectations hypothesis one purpose of the present paper is to argue that the non uniqueness in question is not properly attributable to the rationality hypothesis but instead is a general feature of dynamic models involving expectations it is also argued that there typically exists in a very wide class of linear rational expectations models a single solution that excludes bubble or bootstrap effects one that occur only because they are arbitrarily expected to occur a systematic procedure for obtaining solutions free from such effects is introduced and discussed in addition this procedure is used to interpret and reconsider several prominent examples with solution multiplicities including ones developed by fischer black and john b taylor

a stochastic dynamic nash game analysis of policies for managing the strategic petroleum reserves of consuming nations in this paper we present a nash dynamic game model of interactions among oil inventory and tariff policies for oil importing countries the inventory policies consist of the rates for building up and drawing down strategic oil reserves while the tariff policies consist of setting tariffs as a function of the state of the world oil market the model represents a stochastic game in which countries are grouped into two players where each player in the game chooses its individual policies to maximize expected social welfare we use the model to present empirical results about the sizes of the stockpiles as a function of disruption probabilities tariff policies and cooperation versus noncooperation between nations in addition to results regarding the build up and draw down rates as a function of the amount of disruption or probability of future disruption our central conclusion is that build up and drawdown policies are essentially the same with or without international cooperation due to the current inventory limits on u s and foreign strategic petroleum reserves

the timing of markets and monetary transfers in cash in advance economies in cash in advance models do the timing of markets and the timing of the monetary transfer affect equilibrium money demand the timing of markets generates different individual money demands however under the common assumption that agents are identical these differences do not affect the behavior of equilibrium real balances in contrast the timing of the monetary transfer has important implications for agent s information sets these implications can influence the equilibrium characteristics of real balances

china s optimal stockpiling policies in the context of new oil price trend abstract optimizing the size of oil stockpiling plays a fundamental role in the process of making national strategic petroleum reserve spr policies there have been extensive studies on the operating strategies of spr however previous literatures have paid more attention to a booming or stable international oil market while few studies analyzed the impact of a long term low oil price on spr policy as a supplement this paper extends a static model to study china s optimal stockpiling policy under different oil price trends and in response to different current oil prices a new variable fc which demonstrates the appreciation and depreciation of the reserved oil economic value has been taken into account to assess the optimal size of spr in this paper a more multi perspective of view is provided to consider the policies of china s spr especially under the different trend of international oil price fluctuations

ecological economics in china origins dilemmas and prospects abstract this paper is a first step towards articulating a chinese version of ecological economics over the last decade ecological economics has attracted increasing attention in the west similarly since the early 1980s scholars in china have undertaken specific research on existing ecological economic issues in accordance with chinese political economic socio cultural and ecological conditions however this endeavor is hardly known in the west and little attention has been given so far to the potential role of chinese attitudes in the international ecological economics movement this paper is designed to make up for that neglect and attempts to address the following questions what social and cultural traditions are required for chinese ecological economics to operate what are the political and institutional implications of ecological economics in china will chinese ecological economists feel comfortable in a society where open debate is viewed as unacceptable behavior in order to clarify the chinese interpretation of ecological economics and its impact on the policy making process a preliminary overview of its emerging background evolutionary history key viewpoints and theories nature and policy influence is presented three major intellectual sources of chinese ecological economics are identified and the theoretical applications are emphasized then some theoretical and practical issues that may arise in future research are discussed along with implications of chinese ecological economics for the international community in addition to biophysical functions and ecological conditions socio political structures and processes need to be explicitly addressed in extending the research agenda of ecological economics

a dynamic nash game model of oil market disruptions and strategic stockpiling in this paper we present and analyze a nash dynamic game model for investigating public and private sector oil inventory policies in unstable world oil markets conceptual results about the model include simple verifiable conditions for uniqueness and stability of solutions along with characterizations of optimal policies we also present results and discuss computational issues that arise in determining subgame perfect infinite horizon equilibria using a steady state policy iteration approach

ecological economics as a policy science rhetoric or commitment towards an improved decision making process on sustainability abstract with sustainability issues currently attracting increasing political and policy attention this paper examines the impact of the rise of ecological economics in the policy world and its potential influence on the decision making process this study emphasises that ecological economics development is coevolved with and modified to fit specific social economic political and cultural contexts as a policy science ecological economics is context sensitive and action oriented explaining why it is so and what to do about it has become imperative for ecological economists this paper attempts to address the questions such as what are the macroeconomic conditions and political processes that make the formulation and implementation of ecological economic policy possible how should this alternative social reality engage with the dominant decision making process does ecological economics provide the necessary means for prescribing policy measures to achieve sustainable development endeavouring to understand these dimensions of ecological economics has been a dynamic social process and understanding this complex process might provide an opportunity to bridge the divide between policy rhetoric and reality in practice rather than maintain the status quo in order to achieve an improved decision making process on sustainability it highlights the imperative to explicitly study the institutional setting through which sustainable development policy discourse is mediated

recasting alternative agriculture as a management model the value of adept scaling abstract this paper identifies the significance of scale considerations as applied to agricultural resource management scaling is the act of defining the spatiotemporal level or levels of interest when attempting problem solving a goal commonly proposed by the diverse interests working toward an alternative agriculture is sustainability to date advocates of sustainability have failed to scale meaningfully both their critique of conventional agriculture and the alternatives they represent because sustainability is inherently sensitive to changes in analytic context i e is scale relative in the absence of explicit scaling sustainability is unworkable as a measure of system performance the importance of scale as applied to the concept of sustainability in hierarchical systems has been noted lowrance et al 1986 am j altern agric 1 169 173 however the implications of this finding have not been confronted in the subsequent literature going beyond lowrance et al 1986 this paper describes the error that accompanies improperly scaled assessment of agricultural sustainability and identifies two important considerations that emerge through explicit scaling 1 the necessity of consistent and timely integration of local information into upper level decision making and 2 the necessity of recognizing the scalar level of the downside of resource allocation trade offs and addressing them accordingly the first of these considerations suggests the need for agricultural systems that are resilient to collapse from unpredictable and potentially fundamental disturbance through incorporation of local information it is possible to maintain coherent strategies aimed at upper level objectives e g biodiversity conservation while supporting the integrity of lower level sub systems e g community economic vitality the second consideration that arises from explicit scaling indicates the value of developing systems which are buffered against political paralysis caused by negative impacts of resource allocation decisions victims or losers result from allocation and reallocation functions these individuals and or institutions must be addressed recent enthusiasm regarding win win scenarios in many cases is buoyed by scaling error explicit recognition of the implications of necessary trade offs both positive and negative promotes the development of mechanisms to support losers failure to confront the fact that losers are consistently produced exaggerates the negative impact they have on system performance we define holistic management as identifying assimilating and acting on information in a manner consonant with the contextual spatiotemporal scale of the problem at hand the fundamental challenge facing agriculture is integration of multiple considerations across levels in the system explicitly scaled analysis and action in a holistic setting is proposed as a means by which alternative agriculture can respond to this challenge

positive externalities of domestic biogas initiatives implications for financing domestic biogas programs are often justified on the basis of the private benefits and costs accruing to the individual households in terms of providing a superior cooking fuel improved indoor air quality and saving of time spent on collecting firewood this paper contends however that the economic surpluses from domestic biogas programs are realized beyond such narrowly defined project boundaries the paper maintains that economic value addition from the consumptive use of the biogas for cooking and the non consumptive and indirect value derived from the biogas plant providing feedstock for other processes and other such benefits as greenhouse gas mitigation positive externalities need to be accounted for the process approach adopted by this paper would enable an integrated view of the value chain and consequently a mechanism to reallocate costs and to distribute such surpluses

energy price slump and policy response in the coal chemical industry district a case study of ordos with a system dynamics model we employ system dynamics method towards a coal chemical industry district economy evolution model using coal industry the coal chemical industry their downstream industries and the manufacture related service industry moreover we construct energy price and policy response scenarios based on ordos management experience the results show that the energy price slump had a negative impact on the overall economic development of the coal chemical industry district despite promoting non resource industries furthermore policies had different effects on the industry s output value and profit in the long term developing alternative industries ai helps increase the industrial output value and profit decreasing value added tax vat has immediate results and a distinctive effect on industrial short term production value and profit its long term effect being limited the effect of production limit pl on industrial profit is stronger than output value and financial support fs is more conducive to improve the latter however coal mining and coal chemical loan increases decrease the gross industrial profit level technology innovation ti has the best individual policy overall effect on production value and profits furthermore the simultaneous implementation of pl ti and ai can generate the synergy effect for each of them and the simultaneous implementation of vat and one or couple of other policies will generate the crowding out effect both for vat and other policies

the advantage of tying one s hands ems discipline and central bank credibility abstract it is often argued that the ems is an effective disciplinary device for inflation prone countries in europe since it forces the respective policy makers to pursue more restrictive monetary policies than they would otherwise it is not clear however why these countries should submit themselves to such discipline this paper argues that to answer this question appropriately one must consider that ems membership brings potentially large credibility gains policy makers in inflation prone countries the reason is that not only it attaches an extra penalty to inflation in terms of real appreciation but makes the public aware that the policy maker is faced with such penalty and thus helps to overcome the inefficiency stemming from the public s mistrust of the authorities

new classical macroeconomics a sympathetic account the essential ingredients of new classical nc macroeconomics are 1 adoption of the equilibrium approach to model construction 2 acceptance of the natural rate hypothesis 3 a belief in the superiority of policy based on rules and 4 a strong skepticism regarding the empirical relevance for macroeconomic issues of rational bubble phenomena recent keynesian analyses stressing the interaction of monopolistic competition with pricechange menu costs are not incompatible with the nc approach but have not been highly successful a nc policy strategy that recognizes current weaknesses in macroeconomic understanding is described and rationalized and an analytical basis for nc skepticism regarding bubbles sunspots etc is outlined

inventory investment over the business cycle in the eu and the us abstract this paper investigates the business cycle properties of aggregate inventory investment in the countries of the european union eu and the us given the experience of the latest recessions this issue becomes particularly interesting for the study of the propagation mechanism of business cycles the kydland prescott methodology was used to derive and organize the business cycle features the results showed that business cycle fluctuations in the eu are more volatile than those in the us the contribution of the declines of inventory investment in recessions has also been greater in the eu important similarities though were identified as to the extent of the destabilizing effect of inventory investment cycles in the overall economic activity

using stockpile delegation to improve china s strategic oil policy a multi dimension stochastic dynamic programming approach abstract there has been much attention paid to oil security in china in recent years although china has begun to establish its own strategic petroleum reserve spr to prevent potential losses caused by oil supply interruptions the system aiming to ensure china s oil security is still incomplete this paper describes and provides evidence for the benefits of an auxiliary strategic oil policy choice which aims to strengthen china s oil supply security and offer a solution for strategic oil operations with different holding costs in this paper we develop a multi dimension stochastic dynamic programming model to analyze the oil stockpile delegation policy which is an intermediate policy between public and private oil stockpiles and is appropriate for the chinese immature private oil stockpile sector the model examines the effects of the oil stockpile delegation policy in the context of several distinct situations including normal world oil market conditions slight oil supply interruption and serious oil supply interruption operating strategies that respond to different oil supply situations for both the spr and the delegated oil stockpile were obtained different time horizons interruption times and holding costs of delegated oil stockpiles were examined the construction process of china s spr was also taken into account

on socioeconomic causes of wait unemployment abstract this paper discusses implications of wait unemployment in a two sector model with a dual labour market primary sector firms pay efficiency wages the wage rate in the secondary sector is determined by labour supply and demand most queueing models assume that workers for the primary sector are only recruited from the pool of unemployed instead this paper explains wait unemployment by assuming that people care about their relative status in society the model is presented in general terms and a closed form solution is obtained by specifying functional forms the results emphasize the need for proper manpower policies to reduce structural unemployment

what is new keynesian economics this research was supported by the national science foundation i am grateful to george williams for help with the data and to steven allen laurence ball olivier j blanchard timothy bresnahan charles calomiris dennis carlton robert chirinko russell cooper stanley fischer herschel grossman r glenn hubbard david laidler john leahy assar lindbeck n gregory mankiw david romer julio rotemberg dennis snower john taylor andrew weiss and two anonymous referees for comments on one or more earlier drafts i am also indebted to michael parkin and edmund s phelps for helping to establish the etymology of the phrase new keynesian

monopolistic competition technology shocks and aggregate fluctuations abstract we analyze a real business cycle rbc model in which aggregate production exhibits increasing returns to specialization in conjunction with imperfect competition and free entry and exit of firms over the business cycle we show that the requirements of both high variance and high persistence in technology shocks that have been noted by critics of rbc theory may arise from the assumptions of perfect competition and constant returns to scale rather than from the general proposition that real productivity shocks can significantly account for the business cycle

the relative stickiness of wages and prices i introduction a continuing challenge to macroeconomics is to explain how a purely nominal disturbance produces short term aggregate real effects in the classical paradigm in which wages and prices are perfectly flexible a positive nominal aggregate demand disturbance will cause nominal wages and output prices to rise in the same proportion leaving real wages unchanged thus neither employment nor output will be affected consequently many business cycle theories posit the existence of wage and or price stickiness to explain how nominal aggregate demand disturbances generate real macroeconomic effects according to these theories the failure of nominal wages or prices to fully adjust in the short run to purely nominal disturbances explains why shocks to aggregate demand will cause both employment and output to temporarily deviate from their natural rates the relative importance of wage and price stickiness in the transmission of nominal shocks to the real economy however remains an unsettled issue the purpose of this paper is to exploit evidence on the behavior of real wages in an attempt to assess the relative importance of these two sources of stickiness first consider models emphasizing sticky or slowly adjusting nominal wages 1 if for example output prices are free to adjust but nominal wages are sticky a positive aggregate demand shock will cause prices to rise and real wages to temporarily fall below market clearing levels the fall in real wages will stimulate employment and thus output as the aggregate demand shock induces movement along a stable labor demand curve consequently sticky wage models predict a negative correlation between aggregate demand shocks and real wages if on the other hand wages are flexible while output prices are sticky 2 aggregate demand disturbances and real wages will tend to be positively correlated in the short run in sticky price models imperfectly competitive firms may resist adjusting output prices in response to changes in demand perhaps due to menu costs instead increases in demand are met by corresponding increases in output this requires an increase in labor inputs which in turn requires an increase in the real wage rate if wages are flexible and the labor supply curve is positively sloped thus when prices are sticky but wages are flexible a positive aggregate demand shock is associated with an increase in real wages it may be that neither prices nor wages are fully flexible if prices and wages both exhibit stickiness we would expect real wages to be positively correlated or negatively correlated with aggregate demand shocks depending in large part on whether prices or wages are stickier thus knowledge of the direction of the short run response of real wages to aggregate demand disturbances would offer important evidence on the relative stickiness of nominal wages and output prices if all business cycle fluctuations are due solely to aggregate demand disturbances such evidence could be obtained by examining the cyclical behavior of real wages since regardless of the source of stickiness aggregate demand disturbances are positively correlated with employment and output countercyclical procyclical real wages would indicate that nominal wages are stickier more flexible than output prices indeed some consider the stylized fact of slightly procyclical real wages 3 to be an important challenge to models that emphasize wage stickiness for example bennett mccallum 1986 argues for the superiority of models with sticky output prices since if wage stickiness alone were responsible for the real effects of monetary actions with product prices adjusting flexibly then we should observe countercyclical movements in the real wage that we do not has recently been reconfirmed in a study by bils 1985 gregory mankiw 1987 107 has concluded the final and perhaps most serious problem with the unadorned nominal wage story is that real wages do not move over the business cycle as the theory predicts

the effects of money growth on inflation and interest rates across spectral frequency bands band spectral regression techniques are used to identify the frequency bands that are most important in the relationships between money growth and inflation and between money growth and the nominal interest rate the results show that cycles in the growth rate of m1 from one to two years long produce higher frequency cycles in inflation and two distinct sets of higher frequency cycles in changes in the nominal interest rate the results support models where predictable changes in money growth produce liquidity and anticipated inflation effects on nominal interest rates copyright 1994 by ohio state university press

the phillips curve the persistence of inflation and the lucas critique evidence from exchange rate regimes comment we present evidence from the united states and the united kingdom that the persistence of price inflation is significantly higher under managed exchange rate regimes than under gold based fixed exchange rate regimes these differences are also reflected in expectations augmented phillips curves we use a two country macro model with forward looking price setters to demonstrate that higher monetary accommodation of inflation and exchange rate accommodation of inflation differentials increase inflation persistence the evidence does not contradict this hypothesis it supports the hypothesis of forward looking price setters and highlights the empirical significance of the lucas critique jel e31 e42 f33

a model of income unemployment and inflation for the usa a simple three equation macroeconomic model is developed to explain the dynamics of output umemployment and inflation for the usa the model is estimated with the annual data for 1946 1989 insights gained through some recent developments are used to specify and estimate the model