decarbonizing residential building energy a cost effective approach abstract given the problem of climate change the world economy must eventually switch to carbon neutral energy in this study we present a cost effectiveness approach given a goal of decarbonization the objective is to accomplish this at minimum cost for residential building energy we show that total cost is minimized by equating marginal cost of building energy conserved with marginal cost of obtaining carbon free energy where we express costs of both in dollars per kwh we describe how the cost of solar photovoltaic energy provides an upper bound on the marginal cost of carbon free energy and thus an upper bound on marginal cost of conserved energy one should not necessarily spend more on energy conservation than the cost of photovoltaic energy though there are several caveats a case study from vermont usa illustrates these principles and implementation issues with marginal analysis of energy conservation from a policy perspective the principles presented suggest that either carbon taxes or carbon limits could be used to decarbonize building energy at minimum cost but that approaches using renewable energy subsidies or prescriptive building codes result in greater decarbonization costs to society this suggests that new policy approaches be adopted

environmental and economic effects of the copenhagen pledges and more ambitious emission reduction targets abstract a multi region multi sector dynamic computable general equilibrium model is applied to explore the economic and welfare effects of the pledges submitted by developed countries annex i countries and major developing non annex i countries for 2020 under the copenhagen accord in addition to analyzing scenarios reflecting the upper and lower bounds of the copenhagen pledges one additional policy scenario where annex i countries as a group reduce co 2 emissions by 30 in 2020 compared to 1990 levels and where major non annex i countries reduce co 2 emissions 15 below baseline is also analyzed economic effects are measured as changes in gdp compared to baseline and welfare effects are measured via the equivalent variation assuming that countries with emission targets may trade certificates average reductions in gdp for countries with targets range between 0 1 and 0 7 in 2020 for the policy scenarios while the gdp losses are larger for major non annex i countries with emission targets compared to annex i countries this is not the case for the changes in welfare with the exception of mexico the welfare losses for the major non annex i regions as a percentage of projected gdp in 2020 are lower than for the large annex i countries

international factor movements repatriation and welfare abstract this paper analyzes two different ways of allowing foreign capital inflow introducing it into the domestic economy and introducing it into a duty free zone it shows how the ranking of the two policies depends on the production patterns in the duty free zone and the rules of factor income repatriation the result can be used to explain the discrepancy between the rankings of these policies in two recent papers the analysis also shows how the way of repatriating factor income could affect the equilibrium of factor movement the welfare of the factor owners and the welfare of the countries concerned

on the incentive effects of job rotation abstract a new employee may work hard to build his reputation this effect is greatest when he starts the longer he is employed at his job the more the firm will already have learned about his ability the incentives for an employee to influence the firm s perceptions of his ability decrease over time if rotating the employee to a different job leads to new uncertainty about his ability this generates a fresh impulse for effort however job rotation also reduces the employee s time horizon thus reducing future rents from reputation this trade off leads to a unique optimum we derive a simple rule of thumb for an optimal rotation time our main results still hold for cases of complete but imperfect information transmission the incentive effects of job rotation also prevail in a setting in which skills are job specific we study several extensions rotations across multiple employees absence of commitment to a rotation time different bargaining positions discounting over time and learning by doing effects

endogenous communication among lenders and entrepreneurial incentives if banks have an informational monopoly about their clients borrowers may curtail their effort level for fear of being exploited via high interest rates in the future banks can correct this incentive problem by committing to share private information with other lenders the fiercer competition triggered by information sharing lowers future interest rates and future profits of banks but provided banks retain an initial informational advantage their current profits are raised by the borrowers higher effort this trade off determines the banks willingness to share information their decision affects credit market competition interest rates volume of lending and social welfare article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

smuggling and the black market for foreign exchange this paper develops a model of the black market for foreign exchange in which black market currency is demanded and supplied by firms engaged in smuggling it is demonstrated that quotas or foreign exchange rationing are not necessary to induce the coexistence of legal and black foreign exchange markets variants of the model analyze the implications of capital flight unbalanced trade quotas foreign exchange licensing and economies with more than two goods

the rationale for energy efficiency policy assessing the recognition of the multiple benefits of energy efficiency retrofit policy the rationale for energy efficiency policy can be framed in terms of a variety of different benefits this paper considers how different benefits have been used within the overall rationale for energy efficient retrofit policy in different contexts we posit that different rationales may be used for the same policy response and that the form of rationale used may affect the design delivery or the level of policy support with different rationales making it easier to account for different results considering retrofit policy in the contexts of the uk germany new zealand and ireland we characterise policy rationale in each case assessing what the key perceived benefits have been and whether they have changed over time the analysis identifies some marked differences between cases with the recognition of benefits and the ensuing policy rationale resulting from a complex mix of political social and economic influences we find that recognition of multiple benefits may not equate with multiplied policy support and instead it is more likely that different rationales will have relevance at different times for different audiences the findings highlight that alongside evidence for policy it is important to also consider how the overall rationale for policy is eventually framed

managerial incentive problems a dynamic perspective the paper studies how a person s concern for a future career may influence his or her incentives to put in effort or make decisions on the job in the model the person s productive abilities are revealed over time through observations of performance there are no explicit output contingent contracts but since the wage in each period is based on expected output and expected output depends on assessed ability an implicit contract links today s performance to future wages an incentive problem arises from the person s ability and desire to influence the learning process and therefore the wage process by taking unobserved actions that affect today s performance the fundamental incongruity in preferences is between the individual s concern for human capital returns and the firm s concern for financial returns the two need be only weakly related it is shown that career motives can be beneficial as well as detrimental depending on how well the two kinds of capital returns are aligned it is well understood by now that informational externalities may place special demands on the organization of economic exchange simple price mediated markets will frequently fail in the presence of asymmetric information in that case more elaborate contractual arrangements have to be used as substitutes for the price system lately considerable effort has been devoted to the analysis of contracting under incomplete information with the objective to understand the range of economic institutions that emerge in response to the failure of the price system the analysis of moral hazard has played a prominent role in this development moral hazard problems arise when for some reason or another transacting parties cannot contract contingent on the delivery of the good for instance in buying labour services it may be that the amount of labour supplied is not directly observable precluding a simple exchange of wage for labour as a partial remedy to this problem an imperfect mutually observed signal about the supply of labour can be used as a proxy in the contract frequently output is taken as such a proxy the drawback is that output is often influenced by other factors than labour input which induce undesirable risk into the contract one is therefore faced with a tradeoff between allocating risk associated with incomplete observability and providing incentives for a proper supply of labour gaining insight into this tradeoff is important not only for understanding contracting in the small e g managerial incentive schemes but also because it is closely related to the fundamental tension between equity and efficiency in the society as a whole while our understanding of moral hazard has advanced a lot in past years it is clear that much work remains an important question that has received little attention until

markets for energy efficiency exploring the implications of an eu wide tradable white certificate scheme recent developments in european energy policy reveal an increasing interest in implementing the so called tradable white certificate twc schemes to improve energy efficiency based on three evaluation criteria cost effectiveness environmental effectiveness and distributional equity this paper analyses the implications of implementing a european wide twc scheme targeting the household and commercial sectors using a bottom up model quantitative results show significant cost effective potentials for improvements ca 1400 twh in cumulative energy savings by 2020 with the household sector gas and space heating representing most of the twc supply in terms of eligible sector fuel and energy service demand respectively if a single market price of negative externalities is considered a societal costeffective potential of energy savings above 30 compared to the baseline is observed in environmental terms the resulting greenhouse gas emission reductions are around 200mt co2 eq by 2010 representing nearly 60 of the eu kyoto target from the qualitative perspective several embedded ancillary benefits are identified e g employment generation improved comfort level reduced fuel poverty security of energy supply whereas an eu wide twc increases liquidity and reduces the risks ofmarket power autarky compliance strategies may be expected in order to capture co benefits nationally cross subsidies could occur due to investment recovery mechanisms and there is a risk that effects may be regressive for low income households assumptions undertaken by the modelling approach strongly indicate that high effectiveness of other policy instruments is needed for an eu wide twc scheme to be cost effective less

a theory of wage dynamics a dynamic equilibrium model of long term implicit labour contracts under incomplete but symmetric information is developed workers are assumed to be risk averse and of unknown ability or productivity risk neutral firms learn as do workers about each worker s productivity by observing the worker s output over time it is shown that equilibrium contracts provide for wages which never decline with age and increase only when the worker s market value increases above his current wage in addition to characterizing the equilibrium wage contract we also derive some of its implications for the behaviour of aggregate wages across various groups of workers these implications explain some findings in the recent empirical literature on ageearnings profiles in particular our model can explain why earnings may be positively related to experience even after controlling for productivity as some empirical studies have indicated

optimal incentive contracts in the presence of career concerns theory and evidence this paper studies optimal incentive contracts when workers have career concerns concerns about the effects of current performance on future compensation we show that the optimal compensation contract optimizes total incentives the combination of the implicit incentives from career concerns and the explicit incentives from the compensation contract thus the explicit incentives from the optimal compensation contract should be strongest for workers close to retirement because career concerns are weakest for these workers we find empirical support for this prediction in the relation between chief executive compensation and stock market performance

willingness to pay for energy saving measures in residential buildings this paper uses a choice experiment to evaluate the consumers willingness to pay for energy saving measures in switzerland s residential buildings these measures include air renewal ventilation systems and insulation of windows and facades two groups of respondents consisting respectively of 163 apartment tenants and 142 house owners were asked to choose between their housing status quo and each one of the several hypothetical situations with different attributes and prices the estimation method is based on a fixed effects logit model the results suggest that the benefits of the energy saving attributes are significantly valued by the consumers these benefits include both individual energy savings and environmental benefits as well as comfort benefits namely thermal comfort air quality and noise protection

improving the economics of building energy code change a review of the inputs and assumptions of economic models abstract building energy code change in australia and many other developed nations is subject to standardised economic tests with a net present value calculation at the heart of the economic analysis although many nations have introduced minimum energy efficiency standards for residential and commercial buildings increases in stringency have been hindered by limitations to the range of private and societal impacts typically incorporated in regulatory impact assessments given the policy move towards net zero energy homes a more comprehensive set of inputs and robust assumptions are needed to support further regulatory change yet the literature provides substantial evidence of many private and societal costs and benefits not commonly incorporated into the economic assessments that underpin regulatory change drawing on a case study of australian and uk residential regulatory change assessments this paper highlights limitations to the range of inputs and assumptions currently incorporated within the economic arguments applied during residential energy code change processes and presents a more comprehensive economic argument that could support further stringency improvements

the eu 20 20 2020 targets an overview of the emf22 assessment three computable general equilibrium models are used to estimate the economic implications of a stylized version of eu climate policy if implemented at the lowest possible cost the 20 emissions reduction would lead to a welfare loss of 0 5 2 0 by 2020 second best policies increase costs a policy with two carbon prices one for the ets one for the non ets could increase costs by up to 50 a policy with 28 carbon prices one for the ets one each for each member state could increase costs by another 40 the renewables standard could raise the costs of emissions reduction by 90 overall the inefficiencies in policy lead to a cost that is 100 125 too high the models differ greatly in the detail of their results the ets non ets split may have a negligible impact on welfare while the renewables standard may even improve welfare the models agree however that the distortions introduced by total eu package imply a substantial welfare loss over and above the costs needed to meet the climate target the marginal total and excess costs reported here are notably higher than those in the impact assessment of the european commission

regionalism and conflict peace creation and peace diversion abstract we investigate the implications of preferential trade agreements ptas for interstate conflict we set up a two stage game with three competing importers where first two of the countries decide on whether to initiate war against each other and subsequently all three countries select their import tariffs we show that ptas produce both a peace creation effect and a peace diversion effect whereby they reduce the likelihood of conflict between member countries peace creation but render the eruption of war between member and non member countries more likely peace diversion this paper is the first to identify and explicitly model the peace diversion effect of ptas and is also the only one in this literature to endogenize countries terms of trade we use data from the correlates of war project to empirically test these predictions and after controlling for endogeneity we find robust evidence of both peace creation and peace diversion in relation to pta establishment

corporate tournaments human capital acquisition and the firm size wage relation this paper provides a possible explanation for the empirically observed size wage effect and inter industry wage differences it develops a model in which incentives for workers to accumulate general human capital are provided by corporate tournaments where workers with the highest level of general human capital win promotions given that the prizes in such tournaments are determined by outside market conditions the investment and the equilibrium wages depend on firm and industry characteristics the model implies that workers in bigger firms and in more technology intensive and profitable firms and industries acquire more human capital and receive higher wages and benefits

trade blocs trade flows and international conflict the relationship between foreign trade and political conflict has been a persistent source of controversy among scholars of international relations existing empirical studies of this topic have focused on the effects of trade flows on conflict but they have largely ignored the institutional context in which trade is conducted in this article we present some initial quantitative results pertaining to the influence on military disputes of preferential trading arrangements ptas a broad class of commercial institutions that includes free trade areas common markets and customs unions we argue that parties to the same pta are less prone to disputes than other states and that hostilities between pta members are less likely to occur as trade flows rise between them moreover we maintain that heightened commerce is more likely to inhibit conflict between states that belong to the same preferential grouping than between states that do not our results accord with this argument based on an analysis of the period since world war ii we find that trade flows have relatively little effect on the likelihood of disputes between states that do not participate in the same pta within ptas however there is a strong inverse relationship between commerce and conflict parties to such an arrangement are less likely to engage in hostilities than other states and the likelihood of a military dispute dips markedly as trade increases between them

a theory of risk smuggling and welfare abstract this paper argues that the existing models of smuggling do not provide a proper treatment of risk the paper develops a smuggling model which is an application of james tobin s celebrated risk analysis to the smuggling situation the paper shows that a large number of existing key smuggling related results are fundamentally modified the paper then develops special cases using this properly specified risk model these special cases help identify the assumptions one needs to obtain results in the existing smuggling literature it is shown that the required assumptions for these results to hold are generally quite unrealistic

cost benefit assessment of energy efficiency investments accounting for future resources savings and risks in the australian residential sector this article focuses on the impact of the discount rate on cost benefit assessment of investment options for residential building efficiency an integrated thermal modeling life cycle costing approach is applied to an extensive sample of dominant house designs for australian conditions the relative significance of predicted thermal performance and the applied discount rate on the present value of energy savings from alternative investment scenarios is investigated costs and benefits are also evaluated at the economy wide scale including carbon pricing considerations and for a test case household faced with alternative investment options at the point of construction the influence of the applied discount rate on produced cost benefit calculations is investigated as is the interaction between critical cost benefit input parameters findings support that the discounting framework is the primary driver of difference in estimates about costs and benefits of higher standards of efficiency in the residential sector results demonstrate that agreement on a low discount rate based on sustainability principals would prioritise those projects with significant environmental benefits

heat savings and heat generation technologies modelling of residential investment behaviour with local health costs abstract the trade off between investing in energy savings and investing in individual heating technologies with high investment and low variable costs in single family houses is modelled for a number of building and consumer categories in denmark for each group the private economic cost of providing heating comfort is minimised the private solution may deviate from the socio economical optimal solution and we suggest changes to policy to incentivise the individuals to make choices more in line with the socio economic optimal mix of energy savings and technologies the households can combine their primary heating source with secondary heating e g a woodstove this choice results in increased indoor air pollution with fine particles causing health effects we integrate health cost due to use of woodstoves into household optimisation of heating expenditures the results show that due to a combination of low costs of primary fuel and low environmental performance of woodstoves today included health costs lead to decreased use of secondary heating overall the interdependence of heat generation technology and heat saving choice is significant the total optimal level of heat savings for private consumers decrease by 66 when all have the option to shift to the technology with lowest variable costs

bonuses and promotion tournaments theory and evidence standard models of promotion tournaments do not distinguish between wages and bonuses and thus cannot explain variation in the use of bonuses we combine classic and market based tournament theories to develop a model in which wages and bonuses serve distinctly different roles we use this model to derive testable predictions which we test employing both a single firm data set and a data set encompassing a large segment of the finnish economy our empirical analysis supports the testable predictions and shows that our theoretical approach better matches the data than alternative theories of bonus determination based on arguments already in the literature

information and the market for lemons this paper revisits akerlofs 1970 classic adverse selection market and asks the following question do greater information asymmetries reduce the gains from trade perhaps surprisingly the answer is no better information on the selling side worsens the buyers curse thus lowering demand but may shift supply as well whether trade increases or decreases depends on the relative sizes of these effects a characteization is given on the other hand improving the buyers information i e making private information public unambiguously improves trade so long as market demand is downward sloping

managerial turnover in a changing world we develop a dynamic theory of managerial turnover in a world in which the quality of the match between a firm and its managers changes stochastically over time shocks to managerial productivity are anticipated at the time of contracting but privately observed by the managers our key positive result shows that the firm s optimal retention decisions become more permissive with time our key normative result shows that compared to what is efficient the firm s contract induces either excessive retention at all tenure levels or excessive firing at the early stages of the relationship followed by excessive retention after sufficiently long tenure

economic obstacles to expanding intra african trade abstract the paper extends the gravity model to examine the impact of infrastructure availability economic policy and internal political tensions on intra african trade to highlight specific obstacles hampering such a trade bilateral trade between africa and developed countries is also analyzed the results show that besides traditional gravity variables poor infrastructure economic policy mismanagement and internal political tensions have a negative impact on trade among african countries except for political tensions the identified obstacles are specific to intra african trade since they have no impact on african trade with developed countries

trade conflict and political integration explaining the heterogeneity of regional trade agreements many historians argue that the main goal of european trade integration was the preservation of peace this paper investigates whether this reasoning is relevant for the eu and other regional trade agreements rtas i provide empirical evidence that customs unions and common markets deep rtas do reduce the probability of war between members partial scope and free trade agreements shallow rtas however have no effect on war probabilities accordingly international insecurity has a differential impact on incentives to create rtas deep rtas are signed between countries that are involved in many interstate disputes and that have low trade costs with the rest of the world whereas the opposite is true for shallow rtas

black markets and optimal evadable taxation in a simple model of evadable indirect taxation some surprises emerge because of a market thinning effect of high prices high taxes induce multiple equilibria low price black markets and high price legal markets further evadability introduces a bifurcation to optimal taxation for less effective tax administrations the optimal tax system follows a cash cow pattern with one sector bearing all of the tax but for relatively effective administrations the optimum follows a slightly modified ramsey rule this discontinuity results from the mathematics of evasion incentives and may help explain tax reforms commonly seen over the course of economic development

international factor mobility non traded goods tariffs and the terms of trade the present paper develops a general model with one imported one exported many non traded goods where some factors of production are internationally mobile within this framework the analysis establishes the validity of some earlier results and extends others that is 1 a tariff increase reduces the country s welfare 2 tariff induced international factor flows reduce a country s welfare 3 an improvement in a country s terms of trade in the presence of a tariff raises its welfare more when factors are internationally mobile than when not and 4 with preferential trading agreements trade creation always improves the country s welfare while trade diversion may or may not

zero energy homes are they economically viable whilst net zero energy homes are espoused in many policy circles and many bespoke examples have been constructed to demonstrate their technical feasibility there is a scarcity of evidence demonstrating such a standard would be economically rational particularly for large scale housing development where orientation and aspect may not always be optimal drawing on energy monitoring evidence and construction economics associated with a nearly zero energy housing estate in adelaide australia this paper explores the economic feasibility of the net zero energy home policy in warm temperate climates the results demonstrate that using economic tools and assumptions typically applied for building energy regulatory policy changes net societal economic benefits significantly outweigh costs the clear economic outcomes combined with expected health and productivity benefits from improved levels of thermal comfort should provide security to policy makers to progress home energy standards towards net zero energy performance

empirical determinants of purchasing power parity deviations abstract this paper investigates the empirical determinants of purchasing power parity ppp deviations over the recent period of flexible exchange rates transitory ppp deviations arise in a world in which prices are sticky but where exchange rates respond instantaneously to news permanent ppp deviations occur when price indices differ across countries and the world is subject to real shocks regressions consistent with the hypothesis that current exchange rate changes create immediate ppp deviations which are slowly dissipated but not eliminated imply that both sticky prices and real shocks are responsible for the recent failure of ppp

building energy efficiency a research branch made of paradoxes abstract the literature dealing with building energy efficiency has long since debated about the possible occurrence of the so called jevons paradox in a nutshell benefiting from energy savings due to transition to high performance buildings may the same savings cause a kind of rebound effect by acting as an incentive to increase consumptions on closer inspection this is not the only paradox affecting the research branch that focuses on the energy used by the buildings and the building industry a second paradox is that investments in energy efficient solutions may contribute to energy price control which in turn lends itself to make the same investments not profitable a third paradox lies in the need to adopt energy intensive materials in order to achieve substantial energy savings in operation hence sometimes we just substitute a certain amount of operating energy with a more or less commensurate amount of embodied energy here we argue that the joint consideration of the paradoxes mentioned above should not be neglected since it brings with itself several implications needing to be disentangled whether we aim to get further enhancements in this disciplinary field

are preferential trade agreements with non trade objectives a stumbling block for multilateral liberalization in many preferential trade agreements ptas countries exchange not only reductions in trade barriers but also cooperation in non trade issues such as labor and environmental standards intellectual property etc we provide a model of ptas motivated by cooperation in non trade issues and analyze its implications for global free trade and welfare we find that such ptas increase the cost of multilateral tariff reductions and thus cause a stumbling block to global free trade this occurs because multilateral tariff reductions decrease the threat that can be used in ptas and thus the surplus that can be extracted from them by explicitly modeling the interaction between preferential and multilateral negotiations we derive a testable prediction and provide novel econometric evidence that supports the model s key prediction the welfare analysis shows that the current wto rules allowing this type of ptas may be optimal for economically large countries thus the model can predict the rules we observe we also analyze alternative rules that constitute a pareto improvement

alliances preferential trading arrangements and international trade c oncerns about the stability of the international trading system have become widespread in recent years many observers feel that the relatively liberal system forged after world war ii is being undermined by the proliferation of preferential trading arrangements these concerns have spawned a great deal of empirical research much of which has found that such arrangements exert a substantial effect on trade flows yet these studies have neglected the role political military alliances play in shaping patterns of commerce this omission is important because there is ample reason to expect that alliances guide trade flows and preferential trading arrangements often are comprised of allies as a result extant analyses risk confusing the effects of alliances and preferential trading arrangements on commerce and systematically overstating the effects of the latter in this study we analyze the effects of alliances and preferential trading arrangements on bilateral trade flows both factors are likely to promote trade among members but we argue that the interaction between them is central to explaining patterns of commerce the combination of an alliance which creates political incentives for participants to engage in trade and a commercial institution which liberalizes trade among members is expected to provide a considerable impetus to commerce among parties to both 1

on the economic theory of smuggling earlier models of smuggling involve indeterminate equilibria for individual firms but they are deficient in their tr eatment of risk and or transport costs a model is constructed for an intra eec type of framework with due regard to such costs unique eq uilibria result smuggling of agricultural goods is an increasing cos t industry not because of implausible unspecified externalities as i n some earlier papers but because of increasing transport costs as t he extensive margin for smuggling is expanded predictions of the mod el are supported by studies of trade between the republic of ireland and northern ireland copyright 1988 by the london school of economics and political science

why do temporary help firms provide free general skills training the majority of u s temporary help supply ths firms offer nominally free unrestricted computer skills training a practice inconsistent with the competitive model of training i propose and test a model in which firms offer general training to induce self selection and perform screening of worker ability the model implies and the data confirm that firms providing training attract higher ability workers yet pay them lower wages after training thus beyond providing spot market labor ths firms sell information about worker quality to their clients the rapid growth of ths employment suggests that demand for worker screening is rising

pricing and depletion of an exhaustible resource when there is anticipation of trade disruption this paper considers pricing and depletion of an exhaustible nonrenewable resource in an economy wherein domestic consumption is provided for by supplementing extraction from the economy s own resource stock with imports the future supply of which is not assured the socially optimal response to threat of trade disruption is a more conservationist depletion program for the domestic resource stock than would be called for if import supplies were assured to persist competitive domestic firms adopt the socially optimal conversationist program however firms anticipating domestic market power after the disruption of import supplies are revealed to overextract the domestic resource stock 33 references 2 figures

the appeal of the green deal empirical evidence for the influence of energy efficiency policy on renovating homeowners abstract the green deal is a major new energy policy designed to support the diffusion of energy efficiency measures in uk homes this paper provides one of the first empirical examinations of the green deal s success in influencing homeowners renovation decisions using a repeated measures design in which households were questioned before and after the green deal s launch in january 2013 we assess the policy s success in raising awareness of energy efficiency in particular we test the effectiveness of the green deal s positioning to overcome barriers to renovation among homeowners already interested in or considering energy efficiency measures using the innovation decision process rogers 2003 as a conceptual framing of the renovation decision process we examine whether new information on energy efficiency provided by the green deal strengthened intentions and its antecedents we find that 1 energy efficiency is of potential appeal to all renovators regardless of their attitudes about energy efficiency 2 energy efficiency opportunities need to be identified in the early stages of renovation when homeowners are thinking about ways to improve their home and 3 homeowners intentions towards energy efficiency are weakened by uncertainty about financial benefits helping to explain the relatively slow uptake of the green deal to date

regional integration as diplomacy regional integration agreements rias are examples of second best and have an ambiguous impact on welfare contend the authors they build a model in which rias unambiguously raise welfare by correcting for externalities it assumes that trade between neighboring countries increases trust between them and reduces the likelihood of conflict the optimum intervention in that case is a subsidy on imports from the neighbor the authors show that an equivalent solution is for the neighboring countries to tax imports from the rest of the world that is to form an ria together with imposing some domestic taxes in fact security threats have moved neighboring countries to form rias examples include the creation of the european coal and steel community 1951 and the european economic community 1957 to reduce the threat of war in europe as well as various rias among developing countries the authors show among other things that 1 the optimum tariffs on imports from the rest of the world are likely to decline over time 2 deep integration implies lower optimum external tariffs if it is exogenous 3 but if deep integration is endogenous it implies higher optimum external tariffs before it occurs and lower ones thereafter and 4 enlargement of a bloc in terms of symmetric countries has an ambiguous impact on external tariffs but improves welfare and some form of domino effect exists in the sense that enlargement increases the incentive for nonmembers to seek accession although externalities associated with security matters imply that an ria may maximize welfare this model suggests that the ria is a transitory arrangement in the sense that optimum trade preferences are highest at the time the ria is formed when security is low and tend to decline over time in other words the ria s external trade policy becomes increasingly open over time as well as following deep integration

endogenous choice of trade policy instruments abstract recently developed theories of endogenous trade policy formation have attempted to explain tariffs as the result of economic interest seeking by individuals or groups this note demonstrates that tariffs will not emerge as a policy choice if income is redistributed solely through trade policy induced factor price changes a production tax cum subsidy will be adopted as both gainers and losers are better off than with a tariff

economic viability in thermal retrofit policies learning from ten years of experience in germany abstract germany aims to reduce co2 emissions by 80 by 2050 compared to 1990 levels and has merged this target with mandatory energy saving regulations for thermal renovation of existing homes the policy uses the criterion of economic viability whereby renovations must pay back through the space and water heating fuel savings they produce this paper explores the extent to which economically viable thermal renovations can contribute to the 80 goal based on an analysis of germany s experience it finds that the theoretical savings being achieved based on calculated pre and post renovation consumption are around 33 while actual savings based on measured consumption are likely to be around 25 the difference appears to be due to the effects of household behaviour further average measured consumption is estimated to be around 150 180 kwh m2a nationally and this would have to be reduced to 30 35 kwh m2a to meet the 80 policy goal this is beyond the limits of economically viable renovation technology which currently achieves around 100 kwh m2a the paper suggests that policymakers should de couple the criterion of economic viability from the 80 goal emphasise other reasons for renovating to economically viable levels and consider a more systematic approach to facilitate household behaviour change

risk aversion and willingness to pay for energy efficient systems in rental apartments abstract this paper uses a random utility model to estimate consumers valuation of energy efficient insulation and ventilation systems in rental apartments given consumers limited experience in residential buildings and the perceived uncertainty about their comfort benefits and resulting energy savings these relatively new technologies might be undervalued by risk averse consumers using the concept of certainty equivalence this paper proposes a model to assess the consumers risk aversion for adopting energy efficient systems these systems are treated as risky assets while conventional commodities are assumed to be risk free the curvature of the utility function is interpreted as a measure of aversion to perceived risks as opposed to explicit risks measured by observed variances the proposed formulation is applicable in stated preference data with qualitative variables the model is applied to data from a choice experiment conducted among 264 apartment tenants in switzerland the estimated curvatures reject the risk neutrality hypothesis the range of the estimated risk premiums suggests that risk considerations remain a central issue in dealing with energy efficiency in residential buildings the analysis also indicates that assuming same risk attitudes toward new and conventional systems could bias the estimates of the willingness to pay especially when the system is comprised of several components

landlords versus tenants information asymmetry and mismatched preferences for home energy efficiency abstract new zealand homes are poorly insulated by international standards there are government subsidies available for people to improve the energy efficiency of their homes but uptake has been relatively low among owners of rental properties this paper presents the results of a choice experiment used to investigate the preferences of home owners and tenants for insulation and heating upgrades the responses indicate that landlords may underestimate how cold their rental properties are in winter considering the level of discomfort reported by tenants median willingness to pay wtp for improved insulation by landlords is only 50 70 of owner occupier values landlords are willing to pay more for a heating appliance than any other retrofit option in contrast tenants have a low wtp for the heating appliance and would prefer under floor insulation tenants express a willingness to pay higher rent in exchange for improved energy efficiency at a rate that would appear to make such upgrades economic for the landlord information asymmetry and lack of appropriate market signals may be a large part of the reason why many landlords are not willing to pay market prices for energy efficiency upgrades

contracts as a barrier to entry it is shown that an incumbent seller who faces a threat of entry into his or her market will sign long term contracts that prevent the entry of some lower cost producers even though they do not preclude entry completely moreover when a seller possesses superior information about the likelihood of entry it is shown that the length of the contract may act as a signal of the true probability of entry

smuggling and price disparity abstract this paper proposes a model of smuggling consistent with the coexistence of smuggling legal trade and price disparity defined as a domestic price which exceeds is less than the return from legal export import these phenomena have been found to characterize indonesian smuggling a framework is presented in which legal trade is used to cloak smuggling activity with the implication that the greater the volume of legal trade the less the costs of smuggling this model is then used to explain the observation noted above and to show that smuggling may be welfare increasing vis a vis the non smuggling situation and that even if the suppression of smuggling is costless tax revenue maximization may require a positive level of smuggling in addition the model is applied to coffee and rubber exports from indonesia

ex ante evaluation of eu ets during 2013 2030 eu internal abatement abstract this study investigates co 2 emission reduction within the eu resulting from the emissions trading scheme ets up to 2030 this is performed by constructing a baseline scenario without the ets and assessing the impacts of the ets as currently designed the results indicate that the ets will start to impact emissions primarily after 2025 due to the prevalence of a sizable allowance surplus the impact of approved i e back loading and 2 2 linear reduction factor lrf and proposed i e market stability reserve msr policy interventions and the inclusion of aviation could accelerate the exhaustion of surplus and increase emission reductions during the investigated period however these measures would be insufficient to restore the scarcity of allowances and the corresponding carbon price before the start of ets phase iv and the effectiveness of eu internal abatement cannot be guaranteed until 2023 the effectiveness could be further reduced in the case of the economic shocks or the exclusion of international aviation to restore the scarcity of allowances other reform options are necessary this paper extends the reasoning for the early removal of the back loaded 900 mtonne allowances by 2020 and broadening the scope of ets to other sectors with potential high demand for allowances

feasible multilateralism and the effects of regionalism recent research has underlined the efficiency of the gatt wto rules from the standpoint of politically motivated governments emphasizing that the current multilateral rules are capable of delivering a politically efficient equilibrium such an equilibrium is however economically inefficient global free trade in particular is generally unattainable even in a fully cooperative world provided that governments have distributive motivations in such a context we show that regional trade agreements can help move the world towards a welfare superior equilibrium the reason is that as members of regional trade agreements lower trade barriers against one another they are induced to reduce their multilateral tariff sa s well once we account for these endogenous changes and only then we find that regionalism can raise world welfare even in a fully cooperative but political world we also find however that members are likely to gain too much from regional integration thereby harming outsiders

job assignments signalling and efficiency this article analyzes a model in which information about a worker s ability is only directly revealed to the firm employing the worker other firms however use the worker s job assignment as a signal of ability three results recur throughout the analysis first wage rates tend to be more closely associated with jobs than with ability levels second there is frequently an inefficient assignment of workers to jobs i e even when a firm has complete information about a worker s output third the severity of this inefficiency tends to be negatively correlated with the level of firm specific human capital in the economy

evaluation of the impact of environmental public policy measures on energy consumption and greenhouse gas emissions in the french residential sector a cut in energy consumption by 2050 to reach 50 kwhpe m2 year and reduce ghg emissions by 75 are important objectives of environmental policy in france the residential sector represents a significant potential source of energy savings in this paper our main objective is to construct a simulation model and to evaluate the impact of environmental public policy measures we model energy consumption and ghg emissions the decision to invest in energy saving renovations and the dynamics of the housing stock particular attention is paid to household investment decisions regarding home renovation to generate the dynamics and the structure of the housing stock through 2050 we introduce socioeconomic variables that alter the number of renovations and new constructions this study has three major outputs first we estimate the energy consumption and ghg emissions of the residential sector in france through 2050 second we study the impact of environmental public policy measures lastly we propose different means to reach the objectives the results show that while current policies are effective they are not sufficient to reach the objectives

marginal costs and co benefits of energy efficiency investments the case of the swiss residential sector abstract key elements of present investment decision making regarding energy efficiency of new buildings and the refurbishment of existing buildings are the marginal costs of energy efficiency measures and incomplete knowledge of investors and architects about pricing co benefits and new technologies this paper reports on a recently completed empirical study for the swiss residential sector it empirically quantifies the marginal costs of energy efficiency investments i e additional insulation improved window systems ventilation and heating systems and architectural concepts for the private sector first results on the economic valuation of co benefits such as improved comfort of living improved indoor air quality better protection against external noise etc may amount to the same order of magnitude as the energy related benefits are given the cost benefit analysis includes newly developed technologies that show large variations in prices due to pioneer market pricing add on of learning costs and risk components of the installers based on new empirical data on the present cost situation and past techno economic progress the potential of future cost reduction was estimated applying the experience curve concept the paper shows for the first time co benefits and cost dynamics of energy efficiency investments of which decision makers in the real estate sector politics and administrations are scarcely aware

economic analysis of a low carbon path to 2050 a case for china india and japan abstract this article studies the economic implications that different global ghg emission mitigation policies may have in the major asian economies namely china india and japan the analysis covers the period 2010 2050 and is performed by means of a recursive dynamic computable general equilibrium model gem e3 four scenarios are investigated the three standard ame scenarios and a fourth scenario with a ghg emission reduction path compatible with the 2 c target reducing global ghg emissions in 2050 by 50 relative to 2005 the scenarios are compared with the already adopted and announced policies of the respective countries in the context of the copenhagen pledges for 2020 and their long term objectives in 2050 we further discuss the role of energy efficiency measures and zero carbon power technologies in order to reach the long term 2 c target we find that postponing significant emission reductions may not accrue an economic benefit over time whereas it may increase some risks by possibly overstretching the reliance on zero carbon technologies

the optimal disclosure policy when firms offer implicit contracts the observability of history is crucial for the sustenance of implicit or relational contracts when a firm hires a sequence of short lived workers turnover adversely affects the observability of history the old worker may leave the firm before communicating the history to the young however turnovercanalsoenhanceprofitsifmatchinggainscanbeextractedupfront disclosure of the workers productivity information affects turnover by mitigating adverse selection thus the optimal disclosure policy trades off matching efficiency with the sustainability of implicit contracts i show that i opaqueness can be optimal only for firms with moderate reputation concerns and ii an opaque firm s profit may decrease with its reputation concern

modelling energy savings in the danish building sector combined with internalisation of health related externalities in a heat and power system optimisation model abstract a substantial untapped energy saving potential rests in the building sector and is expected to play an important role in achieving reduction of environmental impacts of energy in order to utilise this potential effective policy measures need to be adopted to remove the existing barriers and create incentives for that purpose the cost effective energy saving options together with an optimal level of savings and expected environmental benefits have to be identified the paper reports on a study that analyses these questions by including heat saving measures in buildings into an energy system optimisation model of the danish heat and power sector the achieved optimal level of heat savings reaches 11 of projected heat demand in 2025 under the model assumptions moreover the analysis reveals the importance of considering energy conservation options in a system wide perspective furthermore the results suggest that changes in the energy generation sector are the prime driver behind the reduction of environmental externalities of energy heat savings in buildings play only a small role under model assumptions

the economics of career concerns part ii application to missions and accountability of government agencies the paper uses a simple multitask career concern model in order to analyse the incentives of government agencies officials incentives are impaired by the agency pursuing multiple missions a lack of focus is even more problematic in the case of fuzzy missions that is when outsiders are uncertain about the exact nature of the missions actually pursued by the agency consequently agencies pursuing multiple missions receive less autonomy the paper further shows that professionalization creates a sense of mission for the agency and that the specialization of officials raises their incentives last the paper compares its predictions with the stylized facts on government bureaucracies 1999 the review of economic studies limited

should the wto require free trade agreements to eliminate internal tariffs abstract in a three country model of endogenous free trade agreements ftas we study the effects of requiring fta members to eliminate tariffs on one another as is essentially stipulated under current wto rules we explain why in the absence of such a requirement ftas members impose positive tariffs on each other even when maximizing their joint welfare we show that requiring fta members to eliminate internal tariffs induces them to lower their external tariffs such external trade liberalization by fta members undermines the prospects of global free trade since it reduces the non member s incentive to enter into trade agreements with them

the synthesis of bottom up and top down approaches to climate policy modeling electric power technologies and the cost of limiting us co2 emissions abstract in the us the bulk of co 2 abatement induced by carbon taxes comes from electric power this paper incorporates technology detail into the electricity sector of a computable general equilibrium model of the us economy to characterize electric power s technological margins of adjustment to carbon taxes and to elucidate their general equilibrium effects compared to the top down production function representation of the electricity sector the technology rich hybrid specification produces less abatement at a higher welfare cost suggesting that bottom up models do not necessarily generate lower costs of abatement than top down models this result is shown to be sensitive to the elasticity with which technologies generating capacities adjust to relative prices

the environmental consequences of trade evidence from subnational trade flows abstract the debate over the environmental consequences of free trade is not only quite heated but also entails significant policy ramifications recently cross sectional analysis at the country level has made use of exogenous determinants of trade to identify the causal effect of trade on the environment finding moderate evidence of a beneficial impact of expanded trade on environmental quality given the stakes involved we revisit this finding using subnational data on trade flows across us states and several measures of pollution not only does the analysis shed further light on the debate at the international level but also addresses a heretofore unexamined question does greater inter regional commerce at the subnational level harm the environment our findings are striking providing further evidence against a negative environmental impact of trade for the majority of measures analyzed however several sources of heterogeneity arise that are noteworthy

understanding the uneven diffusion of building scale renewable energy systems a review of household local and country level factors in diverse european countries abstract this review focuses on renewable energy technology deployment in residential buildings which is part of current targets to develop net zero carbon buildings in europe and to promote the deployment of renewable energy we focus on the adoption of four technologies heat pumps solar photovoltaics solar thermal systems for domestic hot water and space heating and advanced biomass heating while there are several studies on households investment criteria a research gap exists because building owners across europe are quite diverse and the european markets exhibit different stages of maturity this article conducts a critical review of the literature on the diffusion of building scale renewable energy solutions in order to answer the following questions 1 to what extent can findings from studies on household adoption criteria be generalized from one country to another and 2 what insights does the literature offer on factors that might explain the differences in adoption patterns between european countries

political institutions and international patterns of agricultural protection this paper analyzes the influence of political systems and rights in patterns of agricultural protection across commodities countries and over time four political systems and a qualitative index of political rights account for differences in political institutions the analysis incorporates the effects of development of constraints on tax collection feasibility and of comparative advantages and terms of trade pluralistic systems are associated with higher agricultural protection levels although in a nonlinear fashion access to pluralism appears to be important although further democratization partly dissipates protection copyright 1994 by mit press

endogenous tariff formation the case of mercosur mercosur appears as an interesting case study for analyzing the determinants of exceptions in regional trade agreements its member countries argentina brazil paraguay and uruguay intended to make mercosur a full customs union by january 1995 this goal turned out to be too ambitious and the protocol of ouro preto and other agreements signed in december 1994 led to a hybrid solution overall out of a total of 9 119 tariff lines around 30 percent are subject in at least one member country to either external deviations from the common external tariff or internal deviations from free trade thus an important set of holes remains under the existing agreement leading some authors to consider mercosur an incomplete customs union this article compares the results of the theoretical literature on endogenous tariff formation with evidence from mercosur the results show that mercosur common external tariff and member countries deviations from it and from internal free trade can be explained by sector or industry lobbying as predicted by the endogenous tariff literature if a viable political economy is a key to success then mercosur is here to stay

subjective discount rates in the general population and their predictive power for energy saving behavior why do people sometimes refrain from saving energy even if it would pay off in monetary terms subjective discount rates present one possible explanation for this lack of foresight but little is known about their level and reliability in the general population with regard to behavior persons with lower discount rates are expected to accept additional costs upfront more readily than those with higher discount rates based on a representative nation wide study the swiss environmental survey 2007 and a follow up survey our analyses reveal that on average subjective discount rates are well above market interest rates and moderately stable over a time interval of four years income and education are negatively correlated with discount rates contrary to expectations we did not find convincing support for an impact of discount rates on energy saving behavior

explaining the energy efficiency gap expected utility theory versus cumulative prospect theory abstract energy efficiency is one of the key factors in mitigating the impact of climate change and preserving non renewable resources although environmental and economic justifications for energy efficiency investments are compelling there is a gap between the observable and some notion of optimized energy consumption the so called energy efficiency gap behavioral biases in individual decision making have been resonated by environmental research to explain this gap to analyze the influence of behavioral biases on decisions upon energy efficiency investments quantitatively we compare expected utility theory with cumulative prospect theory on basis of a real world example we illustrate how the extent of the gap is influenced by behavioral biases such as loss aversion probability weighting and framing our findings indicate that cumulative prospect theory offers possible explanations for many barriers discussed in literature for example the size of the gap rises with increased risk and investment costs because behavioral biases are systematic and pervasive our insights constitute a valuable quantitative basis for environmental policy measures such as customer focused and quantitatively backed public awareness campaigns financial incentives or energy savings insurances in this vein this paper may contribute to an accelerated adaption of energy efficiency measures by the broader public

expanding international trade beyond the rta border the case of asean s economic diplomacy abstract we examine the roles of regional trade agreements rtas not only in regionalization processes but also in globalization of trade results from various specifications of the gravity equation model confirm that a country can noticeably increase directional trade through diplomatic relations as well as through membership

the silent success of customs unions an earlier version of this paper is part of arevik gnutzmann mkrtchyan s thesis essays on the economics of trade agreements 2014 http hdl handle net 1814 34561

tourism welfare and de industrialization in a small open economy this paper investigates the effects of an expansion of tourism on welfare output and factor prices in the host country using a general equilibrium international trade model in the absence of taxes foreign ownership and distortions an increase in foreign visitors will increase welfare only if the price of nontradables increases factor mobility and foreign ownership tend to reduce the gains from tourism while commodity taxes tend to increase them conditions under which an increase in tourism can lead to deindustrialization are also discussed copyright 1991 by the london school of economics and political science

the economics of career concerns part i comparing information structures many incentives in organizations arise not through explicit formal incentive contracts but rather implicitly through career concerns this paper models career concerns through agents trying to manipulate the market assessment of their future productivity the information flow from current actions to market assessment is therefore crucial in determining the nature of these incentives improved information may either increase or reduce incentives the impact of information provides a major distinction between the explicit and implicit incentives model the paper derives general results on comparisons of information structures which serve as counterparts to the standard results on information structures in the principal agent model sufficient statistic impact of a blackwell garbling comparison of inclusive information structures 1999 the review of economic studies limited

residential bioenergy heating a study of consumer perceptions of improved woodstoves abstract consumers choices play a key role for the development of biomass heating in the residential sector the city of oslo has granted subsidies to households who change to new improved low emission woodstoves the purpose of this study is to expand the knowledge about users experiences and attitudes to residential biomass heating an adapted model of the theory of planned behavior was used to model households inclination to continue using their woodstoves for heating more than 800 questionnaires were collected from households that recently had invested in an improved woodstove the respondents were satisfied with the new woodstoves the respondents also considered themselves competent to use and maintain the stove and few had problems acquiring fuelwood further analyses showed that the intention to continue to use the new woodstove depends on economic benefits heating performance perceived time and effort to operate the stove environmental effects of heating as well as perceived subjective norm the results imply that when marketing a modern technology for bioenergy heating both public authorities and producers should consider issues related to the users perception of subjective norm such as perceived status of using bioenergy or environmental concerns when designing campaigns to promote the use of woodstoves

up or out contracts a signaling perspective a firm will typically gather information concerning its own workers that is not available to other potential employers while other firms will attempt to reduce this information asymmetry by observing the actions of the initial employer i argue that this process can be important in environments characterized by up or out contracts in that the retention decision can serve as a signal of productivity the article investigates this argument in an environment where up or out contracts are employed because they provide workers with an incentive to accumulate general human capital and where learning takes place in a diffuse fashion

economic potential of energy efficient retrofitting in the swiss residential building sector the effects of policy instruments and energy price expectations the aim of this paper is to analyse the profitability of energy efficient retrofit investments in the swiss residential building sector from the house owner s perspective different energy price expectations policy instruments such as subsidies income tax deduction and a carbon tax as well as potential future cost degression of energy efficiency measures were taken into account the discounted cash flow method was used for the investment analysis of different retrofit packages applied to a model building scheduled for renovation i e a single family house constructed between 1948 and 1975 the results show that present swiss policy instruments push investments for energy efficient retrofitting to profitability cost degression has a minor significance for investment profitability however the most relevant factor for the investment analysis is the expected energy price expecting a future fuel oil price at the level of 2005 efficiency investments are close to profitability even without policy support if higher energy prices were expected energy efficient retrofitting would be an attractive investment opportunity

formulas and flexibility in trade negotiations sensitive agricultural products in the world trade organization s doha agenda many trade negotiations involve large cuts in high tariffs while allowing smaller cuts for an agreed share of politically sensitive products the effects of these flexibilities on market access opportunities are difficult to predict creating particular problems for developing countries in assessing whether to support a proposed trade agreement some widely used ad hoc approaches for identifying likely sensitive products such as the highest bound tariff rule suggest that the impact of a limited number of such exceptions on average tariffs and market access is likely to be minor applying a rigorous specification based on the apparent objectives of policymakers in setting the prenegotiation tariff enables more accurate assessment of the implications of sensitive product provisions for average agricultural tariffs economic welfare and market access under the doha negotiations the analysis concludes that highest tariff rules are likely to seriously underestimate the impacts on average tariffs and that treating even two percent of tariff lines as sensitive is likely to have a sharply adverse impact on economic welfare the impacts on market access are also adverse but much smaller perhaps reflecting the mercantilist focus of the negotiating process

market presence contestability and the terms of trade effects of regional integration abstract this paper examines the impact of market presence and contestability on the price behavior of us exporters in brazil s market when mercosur and mfn trade liberalization take place using detailed panel data on trade and tariff rates we find that both the preferred supplier s market presence and threat of entry lower raise the us price reaction to mfn preferential trade liberalization with similar quantitative effects thus presence in or threat of entry into partners markets implies lower optimal mfn tariffs and regional agreements can have pro competitive effects in contestable markets we also examine the symmetry hypothesis between the effect of tariffs and exchange rates

international factor mobility minimum wage rates and factor price equalization a synthesis this paper examines the behavior of a small open economy facing perfectly elastic supply curves for some of its productive factors in particular the paper derives some comparative statics properties of such economies compares them with the properties of otherwise identical economies in which all factor prices are determined endogenously and investigates the relationship between factor price rigidities factor price equalization and the pattern of specialization among the new results which are proved it is shown that as more and more factor price rigidities are imposed on an economy it comes closer to a state of factor price equalization

smuggling trade and price disparity a crime theoretic approach abstract we provide a simple but fairly general model of smuggling capable of handling both the bhagwati hansen type of illegal trade through illegal entry points and the pitt type of illegal trade through legal entry points the paper focuses on the latter type of trade we take explicit account of the risk and uncertainty associated with illegal activity and moreover treat the real costs of smuggling as a choice variable of the firm it is shown that smuggling legal trade and price disparity may coexist as in pitt the economy s response to increased enforcement of laws against smuggling is explicitly analyzed it is shown that increased enforcement raises real per unit costs of smuggling and the domestic price of importables but lowers both the absolute quantity and the share of illegal imports in total imports the effect on welfare is ambiguous

sensitivity of modeling results to technological and regional details the case of italy s carbon mitigation policy model differences in technological and geographical scales are common but their contributions to uncertainties have not been systematically quantified in the climate policy literature this paper carries out a systematic assessment on the sensitivity of computable general equilibrium models to technological and geographical scales in evaluating the economic impacts of carbon mitigation policies in particular we examine the impacts of sub national details and technological details of power generation on the estimate of carbon price and economic cost taking italy as an example we find that the estimation for carbon price and the economic cost of a de carbonization pathway by means of a model with technological and regional details can be lower than a model without such details by up to 40 additionally the effect of representing regional details appears to be far more important than the effect of representing the details of electricity technology in both the estimated carbon prices and the estimated economic impacts our results for italy highlight the importance of modeling uncertainties of these two key assumptions which should be appropriately acknowledged when applying cge models for policy impact assessment our conclusions can be generalized to different countries and policy scenarios not in terms of absolute numbers but in terms of economic explanations in particular intra national trade and the sub national sectoral technological specialization are important variables for understanding the economic dynamics behind these outcomes

modelling decisions on energy efficient renovations a review the buildings sector accounts for more than 30 of global greenhouse gas emissions despite the well known economic viability of many energy efficient renovation measures which offer great potential for reducing greenhouse gas emissions and meeting climate protection targets there is a relatively low level of implementation we performed a citation network analysis in order to identify papers at the research front and intellectual base on energy efficient renovation in four areas technical options understanding decisions incentive instruments and models and simulation the literature was reviewed in order to understand what is needed to sufficiently increase the number of domestic energy efficient renovations and to identify potential research gaps our findings show that the literature on energy efficient renovation gained considerable momentum in the last decade but lacks a deep understanding of the uncertainties surrounding economic aspects and non economic factors driving renovation decisions of homeowners the analysis indicates that the socio economic energy saving potential and profitability of energy efficient renovation measures is lower than generally expected it is suggested that this can be accounted for by the failure to understand and consider the underpinning influences of energy consuming behaviour in calculations homeowners decisions to renovate are shaped by an alliance of economic and non economic goals therefore existing incentives typically targeting the economic viability of measures have brought little success a deeper understanding of the decisions of homeowners is needed and we suggest that a simulation model which maps the decision making processes of homeowners may result in refining existing instruments or developing new innovative mechanisms to tackle the situation

trade diversion and declining tariffs evidence from mercosur abstract this paper empirically examines the alternative posed by richardson j intern econ 34 1993 39 to the traditional view that trade integration may exacerbate inefficiencies richardson s hypothesis boldly predicts that trade diversion and trade creation may actually cause tariffs to decline the hypothesis is fundamentally attributable to the presence of a political component in the governments objective functions a cross sectionally rich data set on trade and tariffs from the mercosur pact countries primarily argentina is used the evidence yields surprising conclusions about the validity of endogenous tariff determination in models of trade integration

career concerns matching and optimal disclosure policy raiders may suffer from information disadvantage since the current employer is often better informed about his workers quality when workers have career concerns and matching influences productivity the initial employer can strategically disclose information to influence incentives and matching efficiency long term complete contracts induce full disclosure when raiders are perfectly competitive the optimal short term contract induces full disclosure if raiders are perfectly competitive and the workers are risk neutral and are not liquidity constrained these conditions are not only sufficient but also almost necessary for full disclosure partial disclosure may be optimal if any of these conditions is relaxed

the transhipment problem smuggling and welfare in paraguay abstract this paper studies the effects of contraband on resource allocation and welfare using parguayan data a major portion of exports from this economy involves the transhipment of goods from third countries through paraguay to brazil and argentina to avoid trade taxes both explicit and implicit via quantitative restrictions and multiple exchange rates using international and paraguayan databases for 1990 we calculate that contraband accounted for 58 of exports and 31 of imports finally we estimate that such trade increased welfare by 2 1 of gdp

the protectionist bias of duty drawbacks evidence from mercosur in a political economy setting where tariffs and duty drawbacks are endogenously chosen through industry lobbying it is shown that full duty drawbacks are granted to exporters who use imported intermediates in their production this in turn decreases their incentives to counter lobby against high tariffs on their inputs in equilibrium higher tariffs will be observed on these goods the creation of a regional block will change the political equilibrium duty drawbacks will be eliminated on intra regional exports which in turn will lead to lower tariffs for goods used as inputs by intra regional exporters evidence from mercosur suggests that the elimination of duty drawbacks for intra regional exports led to increased counter lobbying by users of intermediate products in its absence the common external tariff would have been on average 3 5 percentage points 25 percent higher