structural decomposition analysis of sources of decarbonizing economic development in china 1992 2006 abstract to analyze and understand decarbonizing economic development in china this paper undertakes a structural decomposition analysis of the historical change in energy related carbon intensity in china between 1992 and 2006 the results show that the energy related carbon intensity in china decreased by about three fourths between 1992 and 2006 and reduced carbon emissions by about two billion tons the decline in the energy related carbon intensity was mainly caused by changes in production pattern especially changes in energy intensity within each sector between 1992 and 2002 however the most important driving force of carbon intensity from 2002 2006 was not the energy intensity within each sector but the input mix on the other hand changes in demand pattern pushed up the carbon intensity to further decarbonize the economy in the future it is important for china to further enforce policies on shaping the production pattern such as reducing energy intensity and pay more attention to increasing the sustainability of the demand pattern at the same time

price indexes inequality and the measurement of world poverty i discuss the measurement of world poverty and inequality with particular attention to the role of purchasing power parity ppp price indexes from the international comparison project global inequality increased with the latest revision of the icp and this reduced the global poverty line relative to the us dollar the recent large increase of nearly half a billion poor people came from an inappropriate updating of the global poverty line not from the icp revisions even so ppp comparisons between widely different countries rest on weak theoretical and empirical foundations i argue for wider use of self reports from international monitoring surveys and for a global poverty line that is truly denominated in us dollars

china s balance of emissions embodied in trade approaches to measurement and allocating international responsibility international trade is characterized not only by the flow of capital and goods but also by the energy and emissions embodied in goods during their production this paper investigates the evolving role that chinese trade is playing in the response to climate change by estimating the scale of emissions embodied in china s current trade pattern and demonstrating the magnitude of the difference between the emissions it produces some of which are incurred to meet the consumption demands of the rest of the world and the emissions embodied in the goods it consumes estimating china s emissions on a consumption rather than a production basis both lowers its responsibility for carbon dioxide co2 emissions in 2006 from 5 500 to 3 840mtco2 and reduces the growth rate of emissions from an average of 12 5 per cent p a to 8 7 per cent p a between 2001 and 2006 the analysis indicates that a reliable consumption based accounting methodology is feasible and could improve our understanding of which actors and states are responsible for emissions for example recent emissions reductions by developed countries may lack credibility if production has merely been displaced to countries such as china moreover in the current institutional context production methodologies encourage leakages through trade that may do more to displace than to reduce emissions both equity and efficiency concerns therefore suggest that emissions embodied in trade should receive special attention in the distribution of post kyoto abatement burdens

industry location in chinese provinces does energy abundance matter abstract we identify the driving factors of manufacturing activity across chinese provinces with a particular focus on energy endowments a model of production location is estimated including both comparative advantage and economic geography determinants the data set used consists of a panel of 28 chinese provinces and 12 manufacturing industries over the period 1999 2009 results confirm the relative importance of energy endowments we find that larger energy endowments are significantly correlated with larger production of energy intensive sectors disaggregation across energy carriers shows that coal exhibits the strongest impact these results are robust across alternatives

examining the global environmental impact of regional consumption activities part 2 review of input output models for the assessment of environmental impacts embodied in trade this paper offers a detailed review of recently described single and multi region input output models used to assess environmental impacts of internationally traded goods and services it is the second part of a two part contribution in part 1 turner k lenzen m wiedmann t and barrett j in press examining the global environmental impact of regional consumption activities part 1 a technical note on combining input output and ecological footprint analysis ecological economics we describe how to enumerate the resource and pollution content of inter regional and inter national trade flows with the aim to illustrate an ideal accounting and modelling framework for the estimation of ecological footprints a large number of such environment economic models have been described but only in the last few years models have emerged that use a more sophisticated multi region multi sector input output framework this has been made possible through improvements in data availability and quality as well as computability we identify six major models that employ multi sector multi region input output analysis in order to calculate environmental impacts embodied in international trade results from the reviewed studies demonstrate that it is important to explicitly consider the production recipe land and energy use as well as emissions in a multi region multi sector and multi directional trade model with global coverage and detailed sector disaggregation only then reliable figures for indicators of impacts embodied in trade such as the ecological footprint can be derived

international borrowing and time consistent fiscal policy we discuss optimal fiscal policy in open economies using an open economy version of a model used in the recent work by lucas and stokey an optimal allocation smooths out the tax distortions associated with financing a given sequence of government consumption and it also smooths out private consumption of goods and leisure by borrowing lending on the international capital market in periods with high low government consumption the main question we ask is how the optimal policy can be made time consistent when usccessive governments reoptimize with respect to current and future tax rates but most honor the government debt obligations we show that this requires government debt of sufficiently rich maturity to be issued first we treat a case with capital controls where only the government can borrow and lend abroad the there is a unique restructuring scheme for the domestic debt that is necessary to give succeeding governments incentives to continue following the optimal policy here we interpret and extend lucas and stokey s results for a small economy this scheme is also sufficient for time consistency but in an economy large enough to affect its terms of trade it is also necessary to follow a unique restructuring scheme for the government s and the country s foreign debt when there are no capital controls time consistency is no longer a problem in a small economy in a large economy what matters is total government debt and total foreign debt but not their composition and again there are unique maturity structures necessary and sufficient for time consistency an interesting observation is that in the distorted world we consider relaxing the capital controls actually deteriorates welfare

life cycle carbon emission flow analysis for electricity supply system a case study of china abstract the carbon emission embodied in trade is fundamental for allocation of responsibility between producers and consumers this paper quantitatively analyzes embodied carbon emissions along the life cycle of electricity supply based on network theory a modified carbon emission flow model is established based on life cycle assessment considering power losses there is also a case study of china s interregional electricity supply system in 2010 focusing on two carbon emission carriers electricity coal transportation and electricity transmission results show that the total carbon emission flow reached 169 355 mtco 2 eq i e 4 67 of the life cycle carbon emission of this 61 1 was carried by electricity coal transportation before power generation and transmission owing to an uneven distribution of coal resources the eastern and southern regions are the major net sinks of carbon emission flows representing 52 9 and 27 8 of the total respectively because of their enormous energy imports in contrast the sanxi region and central china are major net sources of carbon emission flow the proposed model may help allocate environmental responsibility among different regions to guarantee balanced trans regional development

debt restructuring with a public good endogenous government expenditure is introduced into lucas and stokey s 1983 model of optimal wage taxation so long as the government can precommit to taxes or to expenditures a debt maturity structure that keeps the value of the debt invariant to interest rate changes will make the optimal policies time consistent in the absence of partial precommitment debt restructuring cannot enforce time consistency but it can still limit the costs of time inconsistency numerical examples show 1 average debt is smaller than under the precommitment solution 2 the debt structure is much longer than under partial precommitment and 3 restricting the government to one period debt overstates the welfare losses from time inconsistency

the impact of domestic trade on china s regional energy uses a multi regional input output modeling to systematically reveal how domestic trade impacts on china s regional energy uses an interprovincial input output modeling is carried out to address demand derived energy requirements for the regional economies in 2007 based on the recently available data both the energy uses embodied in final demand and interregional trade are investigated from the regional and sectoral insights significant net transfers of embodied energy flows are identified from the central and western areas to the eastern area via interregional trade shanxi is the largest energy producer and interregional embodied energy deficit receiver in contrast to guangdong as the largest energy user and surplus receiver by considering the impacts of interregional trade the energy uses of most eastern regions increase remarkably for instance shanghai hainan zhejiang beijing jiangsu and guangdong have their embodied energy requirements 87 49 19 97 13 64 12 60 6 46 and 6 38 times of their direct energy inputs respectively in contrast the embodied energy uses of some central and western regions such as inner mongolia shanxi xinjiang shaanxi and guizhou decrease largely the results help understand the hidden network linkages of interregional embodied energy flows and provide critical insight to amend china s current end reduction oriented energy policies by addressing the problem of regional responsibility transfer

shared producer and consumer responsibility theory and practice abstract over the past decade an increasing number of authors have been examining the nexus of producer versus consumer responsibility often dealing with the question of how to assign responsibility for internationally traded greenhouse gas emissions recently a similar problem has appeared in drafting the standards for the ecological footprint while the method traditionally assumes a full life cycle perspective with full consumer responsibility a large number of producers businesses and industry sectors have started to calculate their own footprints see www isa org usyd edu au adding any producer s footprint to other producers footprints or to population footprints which all already cover the full upstream supply chain of their operating inputs leads to double counting the sum of footprints of producers and consumers is larger than the total national footprint the committee in charge of the footprint standardisation process was hence faced with the decades old non additivity problem posing the following dilemma for the accounting of footprints or any other production factor if one disallows double counting but wishes to be able to account for producers and consumers then one cannot impose the requirement of full life cycle coverage the supply chains of actors have to be curtailed somehow in order to avoid double counting this work demonstrates and discusses a non arbitrary method of consistently delineating these supply chains into mutually exclusive and collectively exhaustive portions of responsibility to be shared by all actors in an economy

an analysis of the driving forces of co2 emissions embodied in japan china trade abstract by using the latest china japan input output data sets and the index decomposition analysis ida approach this article analyzes the driving forces of co2 emissions embodied in trade between the two countries during 1990 2000 we found that the growth of trade volume had a large influence on the increase of co2 emissions embodiments in bilateral trade the dramatic decline in carbon intensity of the chinese economy is a primary cause in offsetting co2 emissions exported from china to japan over 1995 2000 we argue that a better understanding of the factors affecting co2 emissions embodied in international trade will assist in seeking more effective climate policies with wider participation in the post kyoto regime

do sticky prices increase real exchange rate volatility at the sector level abstract we introduce the real exchange rate volatility curve as a useful device to understand the relationship between price stickiness and the fluctuations in law of one price deviations in the presence of both nominal and real shocks the theory predicts that the real exchange rate volatility curve is a u shaped function of the degree of price stickiness using sector level us european real exchange rate data and frequency of price changes we estimate the volatility curve and find the predominance of real effects over nominal effects good by good variance decompositions show that the relative contribution of nominal shocks is smaller at the sector level than what previous studies have found at the aggregate level consistent with significant averaging out of good specific real microeconomic shocks

emissions embodied in chinese exports taking into account the special export structure of china abstract quantification of co 2 emissions embodied in china s trade is important for an informed debate on whom to blame for the recent rise in chinese emissions or the calculation of border carbon adjustments applying input output io techniques we calculate these emissions in 1 a standard model 2 a regionally disaggregated model taking into account that export production is concentrated in more advanced and more emission efficient provinces and 3 in a model with export processing taking into account that almost half of the chinese exports rely on a large share of imported intermediates and little domestic value and emissions added we compare year 2007 emissions embodied in chinese exports in a unified framework we also report emissions embodied in chinese imports used for intermediate production of exports by combining calculations for china with data from global io models we find that both a model with 30 provinces 1730 mt co 2 and a model accounting for export processing 1630 mt yield lower chinese emissions embodied in exports compared to the standard model 1782 mt in the regional model emissions are even lower 1522 mt if interprovincial trade is not taken into account

what caused the rise of conservatism a french view conservatism daniel cohen existing theories of political cycles fail to provide an adequate explanation for the widespread shift to conservative economic policies on one view political parties merely court the median voter but this theory is incomplete because it fails to explain why the median voter has become conservative other theories differentiate parties by their ideologies but they wholly fail to explain where changes of ideology come from this author proposes an explanation that does not need to rely on changes in the underlying preferences of voters or parties but in which changing economic conditions lead to different policy choices thus while ends remain unchanged the means to achieve these ends may vary over time the distinction between right and left is still portrayed by the classical trade off between economic efficiency and equity in order to promote equity the government can always redistribute wealth but in order to preserve economic efficiency wealth redistribution should not be expected to be repeated systematically hence the median voter will prefer a laissez faire to an interventionist government when the economy is understood to be affected by a persistent disturbance and the converse when disturbances are temporary thus the shift to conservatism is seen as the result of the sometimes belated realization by the electorate that the shocks of the 1970s were long lasting current forecasts that unemployment in europe is unlikely to fall suggest the continuation of conservative policies irrespective of whether they are implemented by the right or the left

from production based to consumption based national emission inventories abstract under the united national framework convention of climate change unfccc countries are required to submit national emission inventories nei to benchmark reductions in greenhouse gas ghg emissions depending on the definition and system boundary of the nei the mitigation options and priorities may vary the territorial system boundary used by the unfccc has been critiqued for not including international transportation and potentially causing carbon leakage to address these issues past literature has argued in favour of using consumption based nei in climate policy this article discusses several issues in moving from the standard production based nei to consumption based nei first two distinct accounting approaches for constructing consumption based nei are presented the approaches differ in the allocation of intermediate consumption of imported products second a consistent method of weighting production based and consumption based nei is discussed this is an extension of the previous literature on shared responsibility to nei third due to increased uncertainty and a wide system boundary it may be difficult to implement consumption based nei directly into climate policy several alternative options for incorporating consumption based inventories into climate policy are discussed

u s real exchange rate fluctuations and relative price fluctuations abstract traditional theory attributes fluctuations in real exchange rates to changes in the relative price of nontraded goods this paper studies the relation between the united states bilateral real exchange rate and the associated bilateral relative price of nontraded goods for five of its most important trade relationships we find that this relation depends crucially on the choice of price series used to measure relative prices and on the choice of trade partner the relation is stronger when we measure relative prices using producer prices rather than consumer prices the relation is stronger the more important is the trade relationship between the united states and a trade partner even in cases where there is a strong relation between the real exchange rate and the relative price of nontraded goods however a large fraction of real exchange rate fluctuations is due to deviations from the law of one price for traded goods

time consistency of fiscal and monetary policy a solution this paper demonstrates how time consistency of the ramsey policy the optimal fiscal and monetary policy under commitment can be achieved each government should leave its successor with a uniq

time consistent fiscal policy and government cash flow abstract this short paper provides an interpretation and some extensions of lucas and stokey s results on optimal fiscal policy the discussion relies heavily on the concept of government cash flow which is related but not equal to the budget surplus time consistency of the optimal policy requires that a positive cash flow is used to buy up some debt of each maturity and contingency

a structural decomposition analysis of the emissions embodied in trade abstract the aim of this study is to quantify the driving forces behind the growth of carbon dioxide emissions embodied in trade eet the world input output database is used to estimate eet in 40 countries during 1995 2007 after which a structural decomposition analysis is applied to avoid biases in the results we have used the input output tables in previous year s prices and chained the outcomes in many developed countries the growth of emissions embodied in imports is much higher than the growth of emissions embodied in exports a key reason for this finding is the change in the structure of trade both in intermediate and in final products emerging economies like the bric countries have increased their share in production and trade at the expense of developed countries producers and consumers in developed countries have shifted towards importing a larger share of products from emerging countries this is the distinguishing feature that led to an increase of emissions embodied in imports for developed countries and an increase of emissions embodied in exports for emerging countries these results suggest policy makers to monitor eet more carefully and take the effects of trade on emissions into consideration

trade and the greenhouse gas emissions from international freight transport we collect extensive data on worldwide trade by transportation mode and use this to provide detailed comparisons of the greenhouse gas emissions associated with output versus international transportation of traded goods international transport is responsible for 33 percent of world wide trade related emissions and over 75 percent of emissions for major manufacturing categories including transport dramatically changes the ranking of countries by emissions per dollar of trade we systematically investigate whether trade inclusive of transport can lower emissions in one quarter of cases the difference in output emissions is more than enough to compensate for the emissions cost of transport finally we examine how likely patterns of global trade growth will affect modal use and emissions full liberalization of tariffs and gdp growth concentrated in china and india lead to transport emissions growing much faster than the value of trade due to trade shifting toward distant trading partners

international evidence on tradables and nontradables inflation abstract using 1970 1985 sectoral data for the oecd we find that inflation in nontradable goods exceeds inflation in tradables we identify a demand shift towards nontradables and faster growth of total factor productivity in the tradable goods sector as the prime causes of the differential inflation in addition disinflation attempts and the exchange rate regime appear to have exerted significant influence on the relative inflation rate

a review of recent multi region input output models used for consumption based emission and resource accounting abstract the interest in consumption based emission and resource accounting has grown significantly many studies juxtapose consumer emissions carbon footprint and producer territorial emissions of greenhouse gases in order to demonstrate the effects of trade on the national emission budget to this end a respectable number of studies have been undertaken worldwide in order to estimate emissions embedded in international trade of numerous countries and world regions input output approaches and increasingly multi region input output mrio models are commonly chosen as they provide an appropriate methodological framework for complete carbon footprint estimates at the national and supra national level with increasing processing capabilities of computers and a wider availability of economic accounts environmental accounts and trade data such models are now being implemented on a wide scale after a brief overview of salient single region input output studies i provide an in depth review of the most recent multi region input output models used for the purpose of consumption based environmental accounting the main methodological features and important results are described for around twenty studies covering the years 2007 to 2009 this is followed by a detailed review of studies dealing with uncertainty in mrio analysis an area which has not received a lot of attention so far i conclude that further research is mainly needed in two areas a improvements in data availability and quality and b improvements in the accuracy of mrio modelling

will economic restructuring in china reduce trade embodied co2 emissions we acknowledge the support of the national social science foundation of china project no project no 09 zd029 and the institute for energy environment and economy at tsinghua university which is supporting tianyu qi s doctoral research as a visiting scholar at the massachusetts institute of technology we further acknowledge the support of eni s p a icf international and shell international ltd initial sponsors of the china energy and climate project in the mit joint program on the science and policy of global change at mit none of the sponsoring organizations played a role in the study design collection analysis or interpretation of the data used for this study nor did they influence our decisions to submit the article for publication and all errors are our own we also acknowledge general industrial and government sponsors of the joint program on the science and policy of global change http globalchange mit edu sponsors all

china s provincial co2 emissions embodied in international and interprovincial trade trades create a mechanism of embodied co2 emissions transfer among regions causing distortion on the total emissions as the world s second largest economy china has a large scale of trade which results in the serious problem of embodied co2 emissions transfer this paper analyzes the characteristics of china s co2 emissions embodied in international and interprovincial trade from the provincial perspective the multi regional input output model is used to clarify provincial co2 emissions from geographical and sectoral dimensions including 30 provinces and 28 sectors two calculating principles production accounting principle and consumption accounting principle munksgaard and pedersen 2001 are applied the results show that for international trade the eastern area accounts for a large proportion in china s embodied co2 emissions the sectors as net exporters and importers of embodied co2 emissions belong to labor intensive and energy intensive industries respectively for interprovincial trade the net transfer of embodied co2 emissions is from the eastern area to the central area and energy intensive industries are the main contributors with the largest amount of direct co2 emissions the eastern area plays an important role in co2 emissions reduction the central and western areas need supportive policies to avoid the transfer of industries with high emissions

climate change and australia s comparative advantage in broadacre agriculture australia has long been a major exporter of the products of broadacre agriculture a production system well suited to the economic and climatic conditions of the country presumably it holds a comparative advantage in these products among which grain crops and grazing livestock predominate however the future plausibility of this proposition is sensitive to the projected impacts of climate change this article develops a framework to quantify the future patterns of comparative advantage in broadacre agriculture given the projections of several global climate models we find empirical support for the conventional wisdom and note substantial resilience and robustness in australia s comparative advantage under a number of scenarios

promises and pitfalls in environmentally extended input output analysis for china a survey of the literature abstract as the world s largest developing economy china plays a key role in global climate change and other environmental impacts of international concern environmentally extended input output analysis ee ioa is an important and insightful tool seeing widespread use in studying large scale environmental impacts in china calculating and analyzing greenhouse gas emissions carbon and water footprints pollution and embodied energy this paper surveys the published articles regarding ee ioa for china in peer reviewed journals and provides a comprehensive and quantitative overview of the body of literature examining the research impact environmental issues addressed and data utilized the paper further includes a discussion of the shortcomings in official chinese data and of the potential means to move beyond its inherent limitations

primary energy and greenhouse gases embodied in australian final consumption an input output analysis input output modeling of primary energy and greenhouse gas embodiments in goods and services is a useful technique for designing greenhouse gas abatement policies the present paper describes direct and indirect primary energy and greenhouse gas requirements for a given set of australian final consumption it considers sectoral disparities in energy prices capital formation and international trade flows and it accounts for embodiments in the gross national expenditure as well as the gross domestic product primary energy and greenhouse gas intensities in terms of mj and kg co2 e are reported as well as national balances of primary energy consumption and greenhouse gas emissions

input output analysis of co2 emissions embodied in trade and the driving forces processing and normal exports in recent years energy related co2 emissions embodied in international trade and the driving forces have been widely studied by researchers using the environmental input output framework most previous studies however do not differentiate different input structures in manufacturing processing exports and normal exports using china as an example this paper exemplifies how implications of results obtained using different export assumptions differ the study posits that the utilization of traditional i o model results in an overestimation of emissions embodied in processing exports and an underestimation in normal exports the estimate of co2 emissions embodied in china s exports drops by 32 when the extended i o model is used the choice of export assumption has more impact on the decomposition results for processing exports the study further highlights that for a country with an export structure similar to china it is meaningful to look into the impact of export assumption in embodied emission studies

global production sharing and trade in the services of factors this article develops an approach to measuring the factor content of trade when intermediate inputs are traded and techniques differ for reasons such as factor price differences an empirical section documents the importance of intermediates and shows that they mitigate cross country differences in the factor content of finished goods the performance of recent models of factor service trade is also evaluated existing approaches impute the factor content of imported intermediates with domestic techniques and tend to overstate how well those models perform the framework developed here can help reconcile generalequilibrium trade models with actual patterns of trade d 2005 elsevier b v all rights reserved

fiscal policy debt management and exchange rate credibility lessons from the recent italian experience abstract this paper explores some potential determinants of exchange rate credibility with reference to the italian experience of the 1990s the analysis relies on a nonlinear framework emphasizing shifts between credible and non credible states and assuming a significant degree of persistence in the above regimes almost all fiscal and debt management indicators display significant effects on devaluation expectations the main policy implications of the paper are that a restrictive fiscal stance a lengthening of average debt maturity and an increase in the share of foreign denominated debt are crucial to stabilize the lira exchange rate and to qualify italy in the former group of countries which will join emu

watta satta bride exchange and women s welfare in rural pakistan in a setting where husbands wield considerable coercive power forms of marriage should adapt to protect the interests of women and their families the authors study the pervasive marriage custom of watta satta in rural pakistan a bride exchange between families coupled with a mutual threat of retaliation they show that watta satta may be a mechanism to coordinate the actions of two sets of in laws each of whom wish to restrain their sons in law but who only have the ability to restrain their sons the authors empirical results support this view the likelihood of marital inefficiency as measured by estrangement domestic abuse and wife s mental health is significantly lower in watta satta arrangements as compared with conventional marriages but only after properly accounting for selection

optimal fiscal and monetary policy in an economy without capital abstract this paper is concerned with the structure and time consistency of optimal fiscal and monetary policy in an economy without capital in a dynamic context optimal taxation means distributing tax distortions over time in a welfare maximizing way for a barter economy our main finding is that with debt commitments of sufficiently rich maturity structure an optimal policy if one exists is time consistent in a monetary economy the idea of optimal taxation must be broadened to include an inflation tax and we find that time consistency does not carry over an optimal inflation tax requires commitment by rules in a sense that has no counterpart in the dynamic theory of ordinary excise taxes the reason time consistency fails in a monetary economy is that nominal assets should from a welfare maximizing point of view always be taxed away via an immediate inflation in a kind of capital levy this emerges as a new possibility when money is introduced into an economy without capital

why do we have nominal government debt abstract we study the choice between nominal and indexed debt in a stochastic macroeconomic model with discretionary monetary and fiscal policy with distortionary taxes nominal debt provides valuable insurance against the budgetary effects of economic fluctuations we show that a welfare maximizing government always issues some nominal debt even though nominal debt increases inflation along the time consistent path of the economy the result is fairly robust with respect to changes in assumptions about policy constraints and about the macroeconomic setting

input output analysis of co2 emissions embodied in trade the effects of sector aggregation abstract energy related co2 emissions embodied in international trade have been widely studied by researchers using the environmental input output analysis framework it is well known that both sector aggregation and spatial aggregation affect the results obtained in such studies with regard to the latter past studies are often conducted at the national level irrespective of country or economy size for a large economy with the needed data studies may be conducted at different levels of spatial aggregation we examine this problem analytically by extending the work of su et al su b huang h c ang b w zhou p 2010 input output analysis of co2 emissions embodied in trade the effects of sector aggregation energy economics 32 1 166 175 on sector aggregation we present a numerical example using the data of china and by dividing the country into eight regions it is found that the results are highly dependent on spatial aggregation our study shows that for a large country like china it is meaningful to look into the effect of spatial aggregation

china s foreign trade and climate change a case study of co2 emissions abstract the globalization of trade has numerous environmental implications trade creates a mechanism for consumers to shift environmental pollution associated with their consumption to other countries carbon leakage exerts great influences on international trade and economy applying an input output approach the paper estimates the amount of carbon dioxide co2 embodied in china s foreign trade during 1997 2007 it is found that 10 03 26 54 of china s annual co2 emissions are produced during the manufacture of export goods destined for foreign consumers while the co2 emissions embodied in china s imports accounted for only 4 40 1997 and 9 05 2007 of that we also estimate that the rest of world avoided emitting 150 18 mt co2 in 1997 increasing to 593 mt in 2007 as a result of importing goods from china rather than manufacturing the same type and quantity of goods domestically during 1997 2007 the net additional global co2 emissions resulting from china s exports were 4894 mt then the paper divides the trade embodied emissions into scale composition and technical effect it was found that scale and composition effect increased the co2 emissions embodied in trade while the technical effect offset a small part of them finally its mechanism and policy implications are presented

the effect of trade between china and the uk on national and global carbon dioxide emissions we estimate the amount of carbon dioxide embodied in bi lateral trade between the uk and china in 2004 developing and applying the method of shui and harriss 2006 tile role of co2 embodiment in us china trade energy policy 34 4063 4068 the most recently available data on trade and co2 emissions have been updated and adjusted to calculate the co2 emissions embodied in the commodities traded between china and the uk it was found that through trade with china the uk reduced its co2 emissions by approximately 11 in 2004 compared with a non trade scenario in which the same type and volume of goods are produced in the uk in addition due to the greater carbon intensity and relatively less efficient production processes of chinese industry china uk trade resulted in an additional 117 mt of co2 to global co2 emissions in the same one year period compared with a non trade scenario in which the same type and volume of goods are produced in the uk this represents an additional 19 to the reported national co2 emissions of the uk 555 mt y in 2004 and 0 4 of global emissions these findings suggest that through international trade very significant environmental impacts can be shifted front one country to another and that international trade can but does not necessarily result in globally increased greenhouse gas emissions these results are additional to the environmental consequences of transporting goods which are not robustly quantified here c 2008 elsevier ltd all rights reserved

time consistency of fiscal and monetary policy the problem of time inconsistency arises from two different sources first as shown by guillermo a calvo 1978 the re is an incentive for each government to engage in an initial unanti cipated inflation second as discussed by robert e lucas and nancy l stokey 1983 there is an incentive for each government to deviat e from the path of taxes announced by the preceding government in th is paper it is shown that these two sources of time inconsistency ca n be removed by a particular method of debt management involving bot h nominal and indexed government bonds of various maturities copyright 1987 by the econometric society

why does hov fail the role of technological differences within the ec abstract this paper examines the role of international differences in production techniques in explaining the empirical failure of the heckscher ohlin vanek hov model it develops a modified hov model that relaxes the assumption of identical production techniques across countries and can be estimated using input output data of individual countries the contribution of international differences in techniques to net factor trade patterns is then isolated by comparing the performance of the strict and modified hov models the paper finds that allowing for international technique differences significantly improves the predictive power of the hov model

recent developments in the theory of rules versus discretion policymaker this perspective on rules versus discretion was changed by kydland and prescott 1977 who looked at rules as a form of commitment a commitment amounts to a binding contract which specifies in advance the actions that someone will take possibly contingent on some exogenous variables that everyone can observe in contrast under discretion a person promises only to take those future actions that will best further his objectives later on such promises are easy to keep thus discretion is the special case of a rule or contract in which none of today s provisions restrict a person s future actions in the area of private business dealings it is natural to think about optimal forms of contracts which would not usually be pure discretion similarly for public policy the perspective becomes the optimal form of rules or prior restrictions even the smart benevolent policymaker is likely to desire and use

the general validity of the heckscher ohlin theorem despite a number of attempts to extend it the heckscher ohlin theorem remains woefully restricted in terms of the generality of the assumptions needed for its proof in its traditional form as a statement about the commodity composition of trade the theorem is valid only in the highly abstract environment of the two factor two good twocountry model that has been the mainstay of trade theory for half a century a weaker version of the theorem involving the factor content of trade rather than its commodity composition has been proved for any number of factors goods and countries but this generality has so far been bought only at the cost of other and perhaps equally restrictive assumptions 2 the purpose of this paper is to provide statements and proofs of the heckscher ohlin h o theorem that are more general than those currently available the approach taken is similar to that used in my 1980 article for an extension of the theory of comparative advantage in terms of correlations between autarky prices and trade in section i i lay out the assumptions on which the analysis is based these assumptions provide the outlines of a reasonably general model in which there may be any numbers of goods and factors and in which factor prices may be equalized or not trade impediments in the form of tariffs or export taxes are permitted though transportation costs are not 3 in section ii i discuss the difficulty of inferring the factor content of trade in a world of unequal factor prices and i provide several alternative definitions of that concept for use later in the paper these together with the assumptions of section i are used in section iii to prove a theorem on the value at autarky prices of the factor content of trade in section iv this theorem is used to prove a first corollary that makes a more direct statement about the pattern of trade it says that worldwide there must be a negative correlation between the factor content of trade by factor and country and the corresponding autarky factor prices it is precisely these autarky factor prices that constitute the ohlin measure of factor scarcity therefore the corollary provides a formal statement of the general idea that countries tend to export the services of those factors which they have in relative abundance and it may be regarded as a generalization of the factor content version of the h o theorem finally a generalization of the commodity version of the theorem is proved in section v the concept of a covariance is generalized university of michigan i have benefitted greatly from the comments of paul degrauwe wolfgang mayer michael mussa carl simon and robert stern as well as others who participated in seminars at the universities of michigan chicago and cincinnati and at the national bureau of economic research an anonymous referee also made valuable comments with additional goods and factor price equalization the theorem runs afoul of the indeterminacy of production and trade noted by paul samuelson 1953 and james melvin 1968 without factor price equalization trade impediments and intermediate production can cause reversals of the pattern of trade as shown in my 1979 article if additional factors and countries are also added it becomes difficult even to state the theorem let alone to prove it 2melvin stated such a theorem for the three good two factor case and jaroslav vanek 1968 proved it for the general case but only by assuming factor price equalization trent bertrand 1972 and jon harkness 1979 were able to drop the factor price equalization assumption but replaced it with restrictions on consumption of either goods or factors by country of origin it is unclear to me however that these restrictions can ever be met in a model that is otherwise plausible harkness 1978 has also used the factor content version of the theorems as the motivation for a regression equation relating commodity trade to factor intensities this bears some resemblance to my analysis below in section v see however james anderson 1981 and edward leamer and harry bowen 1981 who have criticized his result with a reply by harkness 1981 3for ease of exposition i do not allow here for transportation costs these were included in an earlier version of this paper following the technique in my 1980 article

accounting for u s regional real exchange rates we examine the relationship between the relative price of nontradables and real exchange rate movements for fixed exchange rate regimes using bls cpi data we show that purchasing power parity holds strongly for tradables across u s regions as a result nontradables play a central role in u s regional real exchange rate movements indeed changes in the relative price of nontradables explain up to 80 of regional real exchange rate changes over medium and long run horizons we also argue that nontradables can account for a large portion of real exchange rate changes internationally with high nontradables expenditure shares

a test of the heckscher ohlin vanek theorem the leontief commonplace abstract this paper provides a logically complete empirical test of the hov theorem for the united states by comparing measures of factor intensities trade and factor endowments under the appropriate computations of the factor contents of trade and production u s data are shown to diverge often from their values as predicted by hov as a result it appears that paradoxical outcomes may be common in empirical applications of the theorem

an evaluation of factor endowments and protection as determinants of japanese and american foreign trade we consider the relationship between the factor content of japanese and american foreign trade and examine empirically whether discrepancies between the heckscher ohlin theoretical predictions and the observed patterns of trade can be attributed to protection the michigan model of world production and trade is used for computational purposes we find some evidence of discrepancies between predicted and observed trade patterns but removal of protection either worsens these discrepancies or reduces them by only a small amount some possible reasons for the empirical shortcomings of the heckscher ohlin theory are offered in conclusion

examining the global environmental impact of regional consumption activities part 1 a technical note on combining input output and ecological footprint analysis in recent years there have been a number of attempts to develop a more comprehensive approach to the issue of measuring resource use and or pollution generation embodied in trade flows including contributions that combine input output techniques and ecological footprint analysis in this two part paper we describe how to enumerate the resource and or pollution content of inter regional and inter national trade flows part 1 and we present a literature review of recent methodological and empirical developments part 2 it is straightforward in principle to extend the basic input output approach to capture international trade flows however in practice problems of data availability and compatibility and of computability of extended input output matrices mean that simplifying assumptions are generally applied but with the implications of these assumptions often not made fully explicit what appears to be absent from previous applications is an account of the analytical method by which ecological footprints should ideally be estimated in an international input output accounting analysis this allows an explicit analysis of the problems that prevent the application of the full method and identification of the most appropriate short cut methods in a transparent way the objective of this paper is to provide such an account

foreign trade and declining pollution in sweden a decomposition analysis of long term structural and technological effects this article examines whether there exists any causal relationship between foreign trade and declining pollution in developed countries in other words do developed countries outsource their problems to less developed countries rather than solve them the case study is the swedish economy and the two environmental indicators employed are energy consumption and co2 emissions no causal relationships are found since sweden has long been a net exporter of embodied energy and co2 and continues to be so after 1970 when energy consumption stabilizes and co2 emissions decline in addition the ratios of net exported energy and co2 to total consumption remain stable which means there were no effects on the energy intensity or co2 intensity either these results suggest that internal forces like efficiency improvements changed consumption patterns and transformation of the energy system have been crucial for relative environmental improvement in sweden while foreign trade has played no role

china s regional co2 emissions characteristics inter regional transfer and emission reduction policies abstract this paper analyzes the characteristics of china s regional co 2 emissions and effects of economic growth and energy intensity using panel data from 1997 to 2009 the results show that there are remarkable regional disparities among eastern central and western areas regional elasticities of per capita gdp and energy intensity on co 2 emissions which reflect the regional differences in economic development economy structure and restraining function of energy intensity decrease on the emission energy intensity reducing is more effective to emission abatement for provinces with higher elasticity of energy intensity but may not be significant for provinces with lower elasticity the inverse distribution of energy production and consumption regional unfairness caused by institutional factors like energy price and tax system result in inter regional co 2 emission transfer embodied in the power transmission the calculation indicates that the embodied emission transfer was gradually significant after 2003 from eastern area to the central and western areas especially energy production provinces in central area which leads to distortion on the emission and emission intensity the regional emission reduction targets and supporting policies should be customized and consistent with the actual situations rather than setting the same target for all the provinces

quo vadis mrio methodological data and institutional requirements for multi region input output analysis abstract in order to understand wider sustainability impacts of consumption and to successfully promote and implement sustainable consumption and production policies there is a need to capture the whole life cycle impact of products and services across international supply chains multi region input output mrio databases are a well described and suitable foundation for global sustainability analyses addressing a wide range of policy and research questions in this paper we reflect on the reasons for the recent boom in mrio compilation summarise the current state of development and discuss future options for mrio analysis we list in detail the requirements for efficient and effective mrio research and propose systemic and institutional changes we deliberately try to go beyond existing ambitions for mrio compilation and thus intend to stimulate discussion and to lay out the options for the future of mrio research

debt restructuring and the time consistency of optimal policies clever debt restructuring ensures that the optimal taxes on the purchase of consumption goods and on labor income are time consistent even if the government chooses public consumption and public investment for this result two types of debt are needed claims on consumption goods debt indexed by the gross of tax consumption prices and claims on leisure debt indexed by the net of tax wage rate this rescues robert e lucas and nancy l stokey 1983 from the criticism that debt restructuring cannot ensure time consistency when the government chooses public consumption or public investment this paper analyzes a closed economy copyright 1994 by ohio state university press

the purchasing power parity debate originally propounded by the 16th century scholars of the university of salamanca the concept of purchasing power parity ppp was revived in the interwar period in the context of the debate concerning the appropriate level at which to re establish international exchange rate parities broadly accepted as a long run equilibrium condition in the post war period it first was advocated as a short run equilibrium by many international economists in the first few years following the breakdown of the bretton woods system in the early 1970s and then increasingly came under attack on both theoretical and empirical grounds from the late 1970s to the mid 1990s accordingly over the last three decades a large literature has built up that examines how much the data deviated from theory and the fruits of this research have provided a deeper understanding of how well ppp applies in both the short run and the long run since the mid 1990s larger datasets and nonlinear econometric methods in particular have improved estimation as deviations narrowed between real exchange rates and ppp so did the gap narrow between theory and data and some degree of confidence in long run ppp began to emerge again in this respect the idea of long run ppp now enjoys perhaps its strongest support in more than 30 years a distinct reversion in economic thought

accounting for u s real exchange rate changes this study measures the proportion of u s real exchange rate movements that can be accounted for by movements in the relative prices of nontraded goods the decomposition is done at all possible h

debt structure as an indicator of central bank independence kydland and prescott 8 demonstrated that as a government with discretion often has an incentive to deviate from previously announced policy the optimal policy under commitment is not time consistent under discretion moreover as the optimal time consistent policy under discretion usually leads to a welfare loss relative to the optimal policy under commitment social welfare can be increased by adopting a credible policy commitment since that finding many authors have examined how a carefully designed debt management strategy can serve as an effective means of commitment to low inflation for example persson persson and svensson 12 and calvo and guidotti 3 illustrate that by trading in nominal and indexed debt the government can eliminate its incentive to engineer inflationary surprises and thus increase social welfare in a rational discretion world in a somewhat related paper missale and blanchard 10 demonstrate how effective debt maturity can serve as a credible means of committing to no inflation 2 the above models of debt management as commitment to low inflation implicitly assume that the fiscal authority has access to the process of money creation when that is the case the optimal structure of government debt depends crucially on how that structure affects expectations of inflation however when the central bank is independent of the central government in the sense that money growth targets are set by the central bank and independently of the federal debt and deficits the expected rate of inflation will be unaffected by the debt management decision thus unlike a government with close ties to its central bank a government that does not control inflation will be able to choose the structure of its debt without affecting the expected rate of inflation this implies that the optimal debt management strategies for governments with and without independent central banks will differ and suggests that one can look at the particular structure of a given government s debt in order to obtain inferences about the state of its central bank s independence

impact of inter sectoral trade on national and global co2 emissions an empirical analysis of china and us abstract this paper attempts to discuss the co2 emissions embodied in sino us international trade using a sector approach based on an input output model established in this study we quantify the impact of sino us international trade on national and global co2 emissions our initial findings reveal that in 2005 the us reduced 190 13 mt co2 emissions through the consumption of imported goods from china while increasing global co2 emissions by about 515 25 mt similarly china reduced 178 62 mt co2 emissions through the consumption of us goods while reducing global co2 emissions by 129 93 mt sino us international trade increased global co2 emissions by 385 32 mt as a whole of which the chemical fabricated metal products non metallic mineral products and transportation equipment sectors contributed an 86 71 share therefore we suggest that accelerating the adjustment of china s trade structure and export of us advanced technologies and experience related to clean production and energy efficiency to china as the way to reduce the negative impact of sino us trade on national and global co2 emissions this behavior should take into account the processing and manufacturing industries as a priority especially the chemical fabricated metal products non metallic mineral products and transportation equipment sectors

the carbon content of japan us trade we analyze the greenhouse gas emissions embodied in trade between japan and the us extending the japanese government s linked japan us input output model to include carbon emission coefficients for each sector we estimate that in 1995 japan us trade reduced us industrial emissions by 14 6 million tons of co2 equivalent and increased emissions in japan by 6 7 million tons for a global savings of 7 9 million tons these quantities are less than one percent of each country s total emissions trade with the rest of the world reduced emissions by much larger amounts roughly four percent of each country s emissions the sectoral patterns of carbon intensity are strongly correlated between japan and the us in addition greater carbon intensity has a small but significantly positive effect on net exports policies that tax or otherwise regulate carbon emissions are needed to discourage this destructive route to competitiveness however the most important policy implication may be that us industry could cut its carbon emissions by more than half if it matched the environmental performance of industry in japan r 2007 elsevier ltd all rights reserved

the recursive core core allocations may be defined for infinite horizon capital accumulation models if agents cannot trust each other in the sense of gale then agents may renege on their commitments their decisions appear time inconsistent a core allocation is a recursive core allocation provided no coalition can improve upon its consumption stream at any time given its accumulation of assets up to that period we show for every allocation of consumption in the initial core one can find a distribution of capital stocks among the agents where no coalition of agents will break the initial core contract at any date it follows that if the proper distribution of the streams of capital is achieved then the allocation in the core is also in the recursive core the latter therefore forges a link between the distribution of wealth capital the problem of trust and time consistent intertemporal contracts

the role of co2 embodiment in us china trade abstract this study examines the influence of us china trade on national and global emissions of carbon dioxide co2 the three basic questions are as follows 1 what amount of co2 emissions is avoided in the us by importing chinese goods 2 how much are co2 emissions in china increased as a result of the production of goods for export to the us and 3 what are the impacts of us china trade on global co2 emissions our initial findings reveal that during 1997 2003 1 us co2 emissions would have increased from 3 to 6 if the goods imported from china had been produced in the us 2 about 7 14 of china s current co2 emissions were a result of producing exports for us consumers and 3 us china trade has increased global co2 emissions by an estimated 720 million metric tons we suggest that the export of us technologies and expertise related to clean production and energy efficiency to china could be a win win strategy for both countries for reducing their trade imbalance and mitigating global co2 emissions improved international accounting methodologies for assigning responsibility for co2 emissions must be designed to account for the dynamic nature of international trade

on the optimal and best sustainable taxes in an open economy abstract we study a representative agent open economy in which government provided services that enter the domestic production function must be financed with distortionary taxes and focus on the optimal size of government and the associated optimal tax rate if the government can precommit its actions it maximizes individual welfare by announcing and implementing a constant tax rate which we refer to as the first best tax rate this tax rate is time inconsistent and under discretion the government implements a tax that maximizes each period s output which may be higher or lower than the first best rate depending on whether the elasticity of substitution in production between private and public inputs is below or above one in this paper we characterize the best sequence of tax rates that can be sustained through trigger strategies this best sustainable sequence of tax rates is constant and lies between the first best and discretionary extremes

a century of missing trade in contemporary data the measured factor content of trade is far smaller than its predicted magnitude in the pure heckscher ohlin vanek framework the so called missing trade mystery authors wonder if this problem has been there from the beginning that is authors ask if the heckscher ohlin theory was so much at odds with reality at its time of conception authors apply contemporary tests to historical data focusing on the major trading zone that inspired the factor abundance theory the old and new worlds of the pre 1914 greater atlantic economy this places autor s analysis in a very different context than contemporary studies an era with lower trade barriers higher transport costs a more skewed global distribution of the relevant factors especially land and comparably large productivity divergence these conditions might seem more favorable to the theory but the results are still very poor

a positive theory of foreign currency debt abstract this paper makes a case for foreign currency debt as a hedging device in an open economy subject to stochastic shocks to output a government can reduce uncertainty in wealth and in consumption by issuing foreign or domestic currency debt if unexpected domestic and foreign inflation are negatively correlated with domestic output foreign currency debt is desirable in comparison to domestic currency debt if growth rates of output of both countries are closely related and if domestic inflation is relatively uncertain it has an additional advantage if domestic debt creates time consistency problems