the growth and distributional consequences of international trade in natural resources and capital goods a neo austrian analysis abstract the problem explored is the role of natural resources in economic growth a neo austrian model is constructed which can represent either a single autarchic country or a pair of trading countries one of which can export natural resources and the other can export manufactured capital it is shown that under autarchy the price of the natural resource has no effect on economic growth while under conditions of trade it has a significant influence falling natural resource prices slow the growth in the resource exporting country and stimulate it in the capital exporting country some policy implications of this finding are explored

real exchange rates and time varying trade costs this paper re examines the empirical modeling of purchasing power parity ppp deviations in the presence of commodity market frictions first we show that a specific type of smooth transition models can closely approximate the functional form of the theoretical adjustment mechanism derived by dumas 1992 dynamic equilibrium and the real exchange rate in a spatially separated world review of financial studies 5 2153 180 for the case of constant as well as changing trade costs second we develop for the first time an empirical model of the real exchange rate which allows for changes in the degree of market integration by employing a long span of data on the dollar sterling real exchange rate and a micro founded proxy for trade frictions we provide novel evidence of a significant relationship between the persistence of the real exchange rate and the level of trade costs this finding suggests that both the difficulty of detecting ppp and the extend of rogoff s puzzle vary over time with the degree of trade restrictiveness finally we highlight policy repercussions of our results

emission standards and stochastic waste load empirical work regarding the impact of environmental regulations on firm behavior has been developed under the assumption that emissions of pollutants are deterministic the implication is that the regulation is effective only when the constraint is exactly satisfied in real life however it is seldom the case that emission constraints are exactly satisfied the purpose of this paper is to find out whether regulation schemes are ineffective or whether the structure is an optimal reaction to random fluctuations in emissions the swedish pulp and paper industry is used as an empirical illustration

macro scale economic influences on tropical forest depletion abstract the paper examines the influence of global and domestic factors on forest depletion in 45 tropical developing countries from 1967 to 1985 it links forest depletion with conditions in the international markets and with domestic macroeconomic and demographic factors calculated elasticities suggest that real exchange rate devaluation debt service food self sufficiency income and export prices of forestry and agricultural output had significant influence on the depletion of tropical forests during the study period

weighted average source points and distances for consumption origin tools for environmental impact analysis abstract this paper presents two methods to quickly assess how local people s consumption is dependant on sources other than local or domestic weighted average source points wasps or weighted average source distances wasds for consumption origin are calculated and used to illustrate the extent to which the goods consumed come from places other than where the consumer lives two case studies show the practicability of the methods the first is a comparison between the consumption origins of tomatoes and carrots and the second a comparison between grape consumption origins in 1965 and 1992 both the wasp and the wasd methods are easy to use and the results can be communicated in illustrative ways these methods however give only an estimate of possible environmental impacts

abatement investments and green goodwill this paper develops and estimates a dynamic model that links profits to green goodwill assuming that abatement investments generate green goodwill and using data from the swedish pulp industry we are able to test the effects of green goodwill on firm level output price and profits the results suggests that swedish pulp plant output prices and profits may be positively related to changes in green goodwill furthermore no evidence is found to support the existence of adjustment costs due to abatement investments

trade accumulation and uneven development abstract this paper develops a two country model of capital accumulation and growth where the industrial sector exhibits increasing returns to scale it shows that uneven development is a necessary outcome in such a model an initial discrepancy in capital labor ratios between the two countries will cumulate over time leading to the division of the world into a capital rich industrial region and capital poor agricultural region which region takes on which role depends on primative accumulation that is on which region starts with more capital if capital is mobile internationally the model can given rise to a two stage pattern of development a first stage where trade is the engine of growth in the leading country and a second in which foreign investment takes on that role which is reminiscent of the hobson lenin theory of imperialism

the north american free trade agreement an ecological economic synthesis for the united states and mexico abstract the prospect of a north american free trade agreement nafta has alarmed environmentally concerned professionals and citizens because of potential for exacerbated environmental destruction in each country the concern in the trade and business community is that provisions for environmental protection would hobble the trade agreement and could effectively negate the positive economic benefits the purpose of this paper is to consider the various environmental and economic implications of nafta and suggest policies that should allow for both a functional nafta and environmental protection this paper summarizes the various potential environmental impacts along with existing free trade mechanisms for environmental protection it evaluates the rationale for a transition from current free trade doctrines to those of sustainable free trade also recommended are several suggestions including the creation of a companion north american environmental protection treaty naept this treaty would contain trade related policies beneficial to the environment but inappropriate to a trade agreement it would include short term expansion of gatt articles for protection of the environment and longer term transformation of gatt into a general agreement on trade and the environment gate a form of countervailing duties called recompensing duties and a form of pigovian tax called a retributive environmental impact rei tax designed to ease adverse social economic and environmental impacts during the transitional period of upward harmonization of standards are proposed specific recommendations for nafta naept and gate are provided

biophysical assessments in evaluating industrial development an experience from taiwan freshwater aquaculture abstract herman e daly noted in 1992 that maintaining the scale of the physical economy within ecological capacity is vital in pursuing sustainability leading to the use of biophysical assessments as a central concept in sustainability analysis from the perspective of ecological economics accordingly this study provides an empirical support for the key role of biophysical assessments in sustainability analysis by presenting the pictures of taiwan freshwater aquaculture from monetary and biophysical perspectives the analytical results demonstrate that freshwater aquaculture contributes to taiwan s economic prosperity from a monetary perspective but causes land subsidence from the biophysical perspective results of this study also indicate the critical role of spatial dimension in biophysical assessments

the impact of environmental regulations on industry productivity direct and indirect effects abstract the paper develops an approach to measuring the impact of environmental regulations on total factor productivity growth which is less restrictive than a simple growth accounting approach environmental regulations have a direct impact on productivity growth due to the diversion of resources toward required abatement capital there can be a further indirect effect however as conventional inputs and production processes are changed in response to requirements to purchase abatement capital we estimate this indirect effect using a flexible functional form cost function total factor productivity and the direct and indirect productivity effects of environmental regulations are presented for five polluting industries we find that the indirect effect can be either positive or negative and in all industries is energy using the net impact of environmental regulations on total factor productivity growth is fairly small given that these are the most polluting industries they account for about 10 30 of the productivity decline of the 1970s in these industries

ecologically accelerated trade liberalisation a set of disciplines for environment and trade agreements abstract a set of disciplines strict guidelines for environmental agreements that affect trade objectives and trade agreements that affect environmental objectives is developed recognising the advantages of further liberalising world trading conditions and encouraging countries to pursue national solutions to environmental problems a new form of international agreement is proposed they deal with products that are like in every way except for the way they are produced such agreements would simultaneously accelerate progress towards more liberal trading conditions improve environmental quality and give economic advantage to those who pursue vigorous tightly targeted domestic environmental policies these ecologically accelerated trade liberalisation agreements eatlas are perceived to be of particular interest to nations not well placed to enter into a regional free trade agreement or join a common market the case for a gatt code or protocol on production process standards and international agreements on the environment is examined

international trade and environmental quality a survey abstract international trade has been incorporating various aspects of environmental issues since 1970 the extent to which environmental problems might affect many facets of trade or vice versa has been the subject of considerable debate over these years in this article we have attempted to establish some of the links between international trade and environmental quality by performing a comprehensive literature review we discuss issues such as establishing direct and indirect effects of international trade on environmental quality effects of trade on economic development environmental quality and energy and their relation with each other and finally the role of governments and international organizations in this context studies have so far revealed some linkages between trade and environment through conventional trade theory however interactions between international trade and types of pollution their sink and assimilative capacity need to be analyzed using a general equilibrium approach currently very little knowledge and agreement on the nature of interactions between trade theories development process and environmental quality exist existing studies have shown that the structure of environmental regulations should be modified to reflect the existence of trade under imperfect competition therefore further research on the interaction between new trade theory and environmental regulation is needed also theoretical and quantitative analysis regarding the effects of environmental regulations on competitiveness and location decision is needed the intensity and type of environmental measures vary across issues and countries therefore harmonizing environmental measures creates an inefficient atmosphere and to assume that trade restrictions will either improve or reverse the environmental damages is a serious mistake given the dynamic and intricate nature of the problem trade and environment debate continues despite vast research and poses a challenge for researchers and policy makers in the foreseeable future

environmental kuznets curves real progress or passing the buck abstract recent research has examined the hypothesis of an environmental kuznets curve ekc the notion that environmental impact increases in the early stages of development followed by declines in the later stages these studies have focused on the relationship between per capita income and a variety of environmental indicators results imply that ekcs may exist for a number of cases however the measures of environmental impact used generally focus on production processes and reflect environmental impacts that are local in nature and for which abatement is relatively inexpensive in terms of monetary costs and or lifestyle changes significantly more consumption based measures such co2 emissions and municipal waste for which impacts are relatively easy to externalize or costly to control show no tendency to decline with increasing per capita income by considering consumption and trade patterns the author re examines the concept of the ekc and proposes the use of alternative consumption based measures of environmental impact the author speculates that what appear to be improvements in environmental quality may in reality be indicators of increased ability of consumers in wealthy nations to distance themselves from the environmental degradation associated with their consumption

measuring international capital mobility a review many barriers to the international movement of capital across national boundaries have been dismantled over the course of the last 20 years financial integration was greatly enhanced by the removal of capital controls on the part of the united states germany canada switzerland and the netherlands after 1973 the recycling of surpluses to developing countries through the euromarkets in the 1970 s the removal of capital controls in the united kingdom and japan beginning in 1979 financial integration among european community countries including france and italy in preparation for 1992 recent moves toward financial liberalization in smaller countries in the pacific and the steady process of technical and institutional innovation that has proceeded around the world some popular tests of international capital mobility however appear to show anomalous results martin feldstein and charles horioka upset conventional wisdom in 1980 when they concluded that changes in countries rates of national saving had very large effects on their rates of investment and interpreted this finding as evidence of low capital mobility the argument

reconciling trade and environment towards a comparative advantage for long term policy goals abstract for an economic order to remain within ecological boundaries countries need to respond to ecological feedback effects resulting environmental compliance costs have so far hardly influenced trade flows and firm location decisions future developments of economic integration and the increasing urgency of stricter environmental objectives are shown to change this picture primarily for the case of transnational and global environmental problems countries will need to be relieved from the threat of competitive disadvantage caused by environmental production process regulation that the current international regulatory trade framework implies the first option to do so international harmonization of environmental regulation is connected to a range of shortcomings especially for countries differing in natural endowments and preferences for counterbalancing measures two regulatory frameworks are analyzed based on a a physical inventory system or b a direct environmental compliance cost comparison the adequacy of the physical system is shown to be limited whereas the cost basis option can be applied on a broader range it cannot fully re establish the optimal situation that would be achieved by an often unlikely environmental agreement but would encourage countries to take necessary unilateral environmental action changing current trade regulation in that respect will be crucial to foster sustainable development

an optimal path to extinction poverty and resource degradation in the open agrarian economy this paper constructs a model of the open agrarian economy in order to explore the tendency of many such economies to evolve along paths characterised by severe environmental degradation it pays special attention to the importance of commodity prices and the transfer system in determining agricultural activity levels in ecologically delicate systems

trade environment and development the issues in perspective abstract this special issue on trade and the environment brings together a number of papers that are constructively critical of the conventional economic wisdom on the topic we think that this criticism is warranted because of the decidely uncritical way in which free trade has been advocated in much of the literature and especially in policy the papers analyse the validity of the underlying assumptions on which the conventional wisdom is based and provide suggestions for ways to facilitate trade that is also adequately protective of the environment sustainability and other social values in this introductory piece we discuss trade the environment and sustainability summarizing arguments in the papers included in this issue and adding a few additional points not covered by them

a real options approach to abatement investments and green goodwill in this paper we adopt the green goodwill argument as to why firms voluntarily invest in abatement capital we investigate the effects on the abatement investment decision of changes in uncertainty about future green goodwill competitor abatement investments regulations etc using a real options framework our results indicate that increased uncertainty about consumers willingness to pay for green products in the future discourage voluntary abatement investments the model also suggests that voluntary abatement investments are promoted by an increased threat of regulation and competitor abatement investments furthermore the benefit cost ratio of the abatement investment project at the point where it is optimal to invest is independent of what regulatory regime stringent or lenient the firm operates in we also conclude that despite the fact that voluntary abatement investment exists there may still be room for environmental policy

effects of pollution control on industry productivity a factor demand approach four major manufacturing industries are examined the abatement effect on capital and labor productivity are determined from parameters of a system of factor demand equations which allow for disequilibrium in factor markets the system is estimated for each industry with annual time series data from 1960 to 1980 abatement requirements were found to retard both average capital productivity and average labor productivity in three of the four industries paper chemicals and primary metals for several industries in which factor productivity was slower after 1973 environmental controls accounted for a significant proportion of that slow down

forest resource trade between japan and southeast asia the structure of dual decay abstract forest resource trade between southeast asia and japan has been noteworthy because of its documented effects on the deforestation of southeast asia s environment this paper expands the focus of this issue to include an examination of the effects of this trade on japanese domestic forests our goal is to redefine the scope of discussions of trade environment issues we assert that the environmental problems of the importer and the exporter can be understood as a set of structurally connected phenomena which we refer to as dual decay we examine the underlying dynamics of renewable resource trade and the effects of trade liberalization on both importers and exporters environments

environmental regulations and productivity growth the case of fossil fueled electric power generation this paper measures and analyzes the effect of sulfur dioxide emission restrictions on the rate of productivity growth in the electric power industry over the 1973 79 business cycle a firm specific measure of regulatory intensity is developed which depends on the severity of the emission standard the extent of enforcement and the unconstrained emission rate relevant to each utility the results indicate that emission regulations result in significantly higher generating costs primarily from the increased use of low sulfur fuels the average rate of productivity growth was reduced by 0 59 percentage points per year for constrained utilities

the costs of water pollution regulation in the pulp and paper industry this paper studies plant level data on actual and permitted levels of water pollution emissions for the pulp and paper industry there is widespread and substantial overcompliance with the relevant regulations aggregate bod emissions in 1992 were only 50 of the amount allowed overcompliance appears to imply a zero marginal abatement cost and its prevalence therefore has the potential to substantially change the debate over the costs of regulation we show instead that plants incurred substantial costs to overcomply marginal abatement costs were roughly 13 000 ton in 1992 we discuss possible explanations for costly overcompliance and their implications for estimation

an ecological economic assessment of deregulation of international commerce under gatt this paper discusses the ecological economic implications of deregulation of trade as promoted by the general agreement on tariffs and trade gatt 1 this includes both environmental2 and socio economic factors such as standards of living and equity we outline fifteen overlapping problems with deregulation or free trade we argue that many environmental problems cannot be resolved equitably efficiently or sustainably by unregulated markets and that there is no alternative to public intervention in certain situations we repeat the 1987 brundtland commission s question of how far into international trade should regulation penetrate wced 1987 the commission s call for gatt s environmental reform 3 has not yet been heeded

why does sovereign risk differ for domestic and external debt evidence from scandinavia 1938 1948 abstract this study shows empirically that the political costs of sovereign default can differ considerably for domestic and external debt the analysis uses new evidence from danish and swedish bond markets around world war ii a time when markets went from being fully integrated to fully segmented overnight by linking the exogenous wartime shocks to changes in default costs on domestic and external debt it is found that these costs explain a significant part of the variation in the sovereign yield spread across markets the results suggest that governments can choose strategically on which debt the domestic or the external to default on and that this decision hinges on the relative size of the political default costs

erratum standards versus standards the effects of different pollution restrictions when economists refer to pollution standards they almost universally mean uniform restrictions on pollution emissions e g william j baumol and wallace e oates 1975 ch 13 susan rose ackerman 1973 david besanko 1978 however in practice standards take many forms not only emissions restrictions but restrictions on pollution per unit of output or per unit of an input restrictions on the use of a polluting input or mandated use of a particular pollution control technology these specifications of regulations will have a variety of effects on a firm s resource allocation decisions for instance allowing pollution per unit of output as the standard instead of directly restricting the level of pollution gives the firm some choice in addition to reducing pollution it can increase its output to dilute the pollution this paper examines the effects of five different forms of pollution standards on input decisions the level of production and firm profits the results show that the different standards by providing firms with different incentives change the firm s allocation decisions and affect the relative profitability of the standards section i reviews the existing literature on the incentives of different instruments the following section describes the model to be used five different forms of pollution constraints are individually examined in section iii using a graphical approach their relative effects as well as some special cases are assessed in section iv finally section v raises the case of different standards when firms are not identical

trade development and sustainability a critical assessment of the free trade dogma abstract mainstream economic theory argues that trade and especially free trade isbeneficial to everyone involved this fundamental idea which has the character of a dogma still plays an important role in international discussions on trade issues notably in relation to development and environment the purpose of this article is to critically assess the free trade dogma and to investigate the validity of widely used arguments concerning the relations between trade and development and between trade and environment it is argued that the trading system is not something inherently good and especially the developing countries benefits from trade have been very dubious furthermore the trading system has contributed to environmental problems in several ways e g generating undervaluation of natural resources stimulating economic growth with environmental deterioration as a consequence and magnifying and creating externalities the critical approach makes a case for reducing trade

global appropriation of resources causes high international material inequality growth is not the solution abstract high levels of resource consumption cause detrimental environmental change very low consumption may fail to meet basic needs a major challenge for a sustainability transformation is to reduce inequalities and achieve a globally sustainable level of resource flows by providing access to resources beyond national boundaries trade could either lead to more equal international distribution or aggravate unequal distribution of material resources for a sample of 173 countries between 1993 and 2010 we studied the role of trade and the upstream global appropriation of resources in international material inequality until the turn of the century per capita material extraction was as unequally distributed as material consumption extraction plus imports minus exports import and export flows as such do not greatly affect inequality the global appropriation of materials associated with trade however decisively increased inequality until 2000 in the 21st century decreasing inequality coincided with a sharp rise in global material extraction appropriated by high and upper middle income countries such growth led reduction of inequality is not environmentally sustainable it has until now been enabled by global trade patterns distributing resources in a way that can never be globally inclusive putting especially the world s poorest countries at risk

heterodox theories of economic growth and income distribution a partial survey heterodox theories of economic growth and income distribution are surveyed focusing on major theories and recent contributions first a general framework for examining growth and distribution is discussed in terms of which classical marxian and post keynesian kaleckian and other theories are presented since this framework examines how variables are determined in equilibrium second dynamics behind equilibria are examined focusing on goods market and labor market changes third the framework is extended in a variety of ways to examine additional models addressing productivity growth and technical change money and inflation finance and debt additional distributional considerations multisector issues open economy questions and the environment it is concluded that the literature on heterodox theories of growth and distribution is vibrant large and growing and addresses many issues that are ignored or neglected in orthodox theories including power unemployment and aggregate demand

administrative costs and instrument choice for stochastic non point source pollutants this paper extends the empiricalanalysis of non point source pollution to thecase where the pollutant is stochastic andalternative regulatory instruments havedifferent administrative costs it also appliesa method of stochastic programming whereemissions are log normally distributed forthe kennet catchment in south west england werank a range of policies in terms of abatementcosts alone and total costs abatement andadministrative costs on the basis ofabatement costs alone a uniform emission taxis the cost minimising policy but on the basisof total cost a nitrogen input tax is theleast cost policy furthermore the policyranking based on total costs changes as thereliability standard increases

the dynamic impact of unilateral environmental policies this paper builds a two country two sector polluting nonpolluting trade model with directed technical change examining whether unilateral environmental policies can ensure sustainable growth the emission rate of the polluting sector depends on its relative use of a clean and a dirty input a unilateral policy combining clean research subsidies and a trade tax can ensure sustainable growth while unilateral carbon taxes alone increase innovation in the polluting sector abroad and generally cannot ensure sustainable growth relative to autarky and exogenous technical change respectively trade and directed technical change accelerate environmental degradation either under laissez faire or with unilateral carbon taxes yet both help reduce environmental degradation under the appropriate unilateral policy i characterize the optimal unilateral policy analytically and numerically using calibrated simulations knowledge spillovers have the potential to reduce the otherwise large welfare costs of restricting policy to onecountry

ecolocical certification of forest products economic challenges abstract with increasing rates of forest depletion worldwide increasingly the question is being asked can markets play a role in mitigating the deleterious environmental and social impacts of forestry activities the forest stewardship council and others have proposed systems of ecological certification where otherwise very similar products are viewed by consumers as different products because additional information on the products history is provided the certification assures the consumer that the products have been produced with practices that meet fundamental ecological and social standards for ecological certification systems to be viable and deliver products to the market over the long term the relationships among key components must evolve economically and institutionally consisting of local forest management firms local certifying non government organizations international non government organizations timber and product markets the ecological certification system transcends local forests and communities to international markets conceptually the system is a series of principal agent relationships this paper in addition to developing the concept of ecological certification analyzes the relationships among the many actors and the relationship of the actors to the forest

measuring financial market integration over the long run is there a u shape abstract using long time series for sovereign bond markets of fifteen industrialized economies from 1875 to 2009 i find that financial market integration by the end of the 20th century was higher than in earlier periods and exhibited a j shaped trend with a trough in the 1920s the main reason for the higher financial integration seen today is the recent extensive globalization around the turn of the 20th century countries frequently drifted apart conversely in recent years the bond markets of most countries have moved together both policy variables and the global market environment play a role in explaining the time variation in integration while unexplained changes in the overall level of country risk are also empirically important my methodology based on principal components analysis is immune to outliers and accounts for global and country specific shocks and hence can capture trends in financial integration more accurately than standard techniques such as simple correlations

can economic causes of tropical deforestation be identified at a global level this paper contributes to the literature on the macro scale economic determinants of the increase in global forest depletion by performing a regression analysis based on a panel dataset for fifty tropical countries over an eighteen year period while the initial findings appear at first to confirm a common causality pattern of selected macroeconomic variables in influencing tropical deforestation subsequent statistical tests question the significance of the results more specifically testing for autocorrelation which has been downplayed in previous studies appears to represent a critical issue when the initial results are corrected for autocorrelation the significance of the parameters declines substantially below statistically acceptable levels the implications are twofold first regression analyses that seek to explain deforestation at the global level need to be carefully scrutinised and checked to ensure that they meet standard statistical tests second tropical deforestation might ultimately depend upon case specific factors and further research may render more effective policy suggestions if conducted at a more disaggregated local level

technological change trade and the environment abstract trade policies and environmental policies have evolved largely independently and until recently their interactions attracted little attention there is much discussion of the institutional arrangements and economic instruments needed to embody environmental concerns in trade policy but relatively little discussion of the role of technology this paper describes the long term environmentally motivated technological change involved in shifting from an end of pipe approach for capturing pollutants after they are generated to a focus on the prevention of environmental degradation the new engineering field of industrial ecology promotes design and manufacturing practices that are based on an examination of the full life cycle of a product in order to improve environmental performance industrial ecology is spreading quickly in the industrialized countries but its repercussions are transmitted widely through international trade plastics provide a good example of both the opportunities and the difficulties surrounding environmental protection technological change and trade concerns over solid waste in the rich countries may result in new market opportunities for biomass based polymers but the success of these products depends upon a complex set of factors including very different alternative ways individual countries may choose to deal with solid waste the implications for the developing countries are examined for the case of plastics and more generally

environmentally sensitive productivity growth a global analysis using malmquist luenberger index abstract we examine conventional and environmentally sensitive total factor productivity tfp in 41 developed and developing countries over the period of 1971 to 1992 due to the non availability of reliable input and co 2 emissions price data the study uses directional distance function to derive malmquist luenberger ml productivity index the index allows us to decompose the tfp into measures of technical and efficiency changes dea is used to compute the directional distance functions we find that tfp index value is not different when we account for the co 2 emissions relative to the situation when they are freely disposable but for the components of tfp change technical and efficiency changes the null hypothesis of whether the indexes are the same under two different scenarios cannot be accepted issues of catch up and convergence or in some cases possible divergence in productivity are examined within a global framework the paper also studies the impact of openness on conventional and environmentally sensitive measures of productivity

international interest rate linkages and the exchange rate regime abstract return differentials between instruments denominated in canadian dollars and instruments denominated in american dollars are investigated the study compares the properties of return differentials in the period of fixed exchange rates during the 1960s and in the period of flexible exchange rates during the 1970s and 1980s both real and nominal return differentials are investigated the results indicate that the change in exchange rate regime is not associated with a change in the average level of ex post return differentials between canada and the united states models which predict ex ante return differentials from available information in a rational expectations framework show a surprisingly large amount of structural stability across the regime change the major impact of the flexible exchange rate regime is on the variance of ex post return differentials and not on the average level of ex post or ex ante return differentials jel e42 e58 g15

real exchange rate behavior the recent float from the perspective of the past two centuries using annual data spanning two centuries for dollar sterling and franc sterling real exchange rates we find strong evidence of mean reverting real exchange rate behavior using simple stationary autoregressive models estimated on prefloat data we easily outperform nonstationary real exchange rate models in dynamic forecasting exercises over the recent float such stationary univariate equations explain 60 80 percent of the in sample variation in real exchange rates although the degree of short run persistence may be high the econometric estimates imply a half life of shocks to the real exchange rate of about 6 years for dollar sterling and a little under 3 years for franc sterling

economic growth and environmental degradation the environmental kuznets curve and sustainable development abstract in this paper we critically examine the concept of the environmental kuznets curve ekc it proposes that there is an inverted u shape relation between environmental degradation and income per capita so that eventually growth reduces the environmental impact of economic activity the concept is dependent on a model of the economy in which there is no feedback from the quality of the environment to production possibilities and in which trade has a neutral effect on environmental degradation the actual violation of these assumptions gives rise to fundamental problems in estimating the parameters of an ekc the paper identifies other econometric problems with estimates of the ekc and reviews a number of empirical studies the inference from some such ekc estimates that further development will reduce environmental degradation is dependent on the assumption that world per capita income is normally distributed when in fact median income is far below mean income we carry out simulations combining ekc estimates from the literature with world bank forecasts for economic growth for individual countries aggregating over countries to derive the global impact within the horizon of the bank s forecast 2025 global emissions of so 2 continue to increase forest loss stabilizes before the end of the period but tropical deforestation continues at a constant rate throughout the period

financial development and economic growth convergence or divergence abstract this study tests for convergence in financial development and economic growth by incorporating the interaction between the real and financial sectors into an otherwise traditional test for convergence the results show strong evidence for conditional convergence middle and high income countries conditionally converge to parallel growth paths not only in per capita gdp but also in financial development the mutually reinforcing relationship between financial development and economic growth is stronger in the early stage of economic development and this relationship diminishes as sustained economic growth gets under way as such low income countries with a relatively well developed financial sector are more likely to catch up to their middle and high income counterparts and those with a relatively under developed financial sector are more likely to be trapped in poverty this finding explains the observed great divergence between poor and rich countries another finding is that while human capital is more important to growth in the early stage of economic development economic freedom becomes more important in the later stage

environment development and politics capital accumulation and the livestock sector in eastern amazonia summary deforestation and environmental degradation are increasingly common themes in the literature on humid tropical rural development this paper explores the frameworks used to analyze environmental questions in developing economies and how well these function in the particular case of livestock development in the eastern amazon basin the paper argues that due to the peculiarities of the state subsidies available for ranching activities that spurred a frenzy of land speculation the exchange rather than productive value of land became paramount in such a context cautious land management was irrelevant and serious environmental degradation was the result the paper suggests that models of environmental degradation that focus only on the question of production cannot capture the environmental dynamics of speculative economies

food regimes and their trade links a socio ecological perspective abstract the concept of food regimes has become a prominent theory in political economy we here provide socio ecological underpinning of the food regimes theory and thereby connect it closer to an ecological economics perspective we quantify physical trade with main agricultural commodities between world regions from the mid 19th century to 2016 and ask how trade patterns relate to issues of resource use in particular to land use soil fertility and the energetic basis of agriculture agricultural exports rose from a few million t yr around 1870 to 1 4 billion t yr in 2016 growth in trade and production did not follow a continuous trend periods of accelerated growth alternating with phases of relative stability can be distinguished rather than directed modernization we observe shifts in unequal relations of power physical exchange and environmental pressure between changing centers and peripheries the periods of growth in trade match with the periodization of food regimes we find that regime shifts are closely related to changes in societies energy metabolism in the resource base of agricultural production and also to agro ecological crisis our analysis emphasizes that food regimes not only reflect changes in power relations in the world system but also changes in societies natural relations

real interest rate equalization and the integration of international financial markets abstract this paper argues that conventional regression tests of real interest rate equality may be misleading because they neglect to consider transactions costs a transactions cost band may inhibit the one to one correspondence between changes in real rates in alternative countries that is presumed by conventional tests statistical problems which may lead to incorrect inferences in conventional tests are also discussed alternative tests which overcome these limitations are developed and applied to real interest rates for ten different countries the alternative tests generate much stronger support for interest parity than is found in the existing literature

trade and the environment from a southern perspective the relationship between free trade and the environment is one of the main issues of contention between environmental and ecological economics environmental economics assumes a positive relationship between free trade economic growth and environmental policies environmental externalities may cause important damage however trade is not to be blamed for this instead the fault lies with policy inadequacies at the national level on the other hand some ecological economists criticise the assumptions of environmental economics especially the immobility of production factors and the positive correlation between income and environmental quality they plead for measures to prevent deterioration of northern environmental standards in a race to the bottom due to ecological dumping from the south in this paper we argue that neither environmental economics nor northern ecological economics take into account the structural conditions determining the international trade system based on some new empirical evidence on material flows we stress the notion of environmental cost shifting if physical and political ecology perspectives are adopted a southern approach to the trade and environment issue may arise 2001 elsevier science b v all rights reserved

purchasing power parity and the behavior of prices and nominal exchange rates across exchange rate regimes abstract the evidence presented in this paper shows that purchasing power parity as a long run proposition is indeed a very useful approximation we see this quite clearly in the panel data for three historical periods examined here the classical gold standard era from 1870 to 1914 the interwar period from 1921 to 1939 and the period after world war ii from 1959 to 1998 price level behavior across countries differs in the way that ppp suggests when monetary arrangements differ and is highly similar when monetary arrangements are themselves similar inflation rates adjusted for exchange rate changes in general are highly correlated and bear a one to one relation to one another within and across the three periods and the varied monetary regimes that prevailed

population pressures and agricultural development in developing countries a conceptual framework and recent evidence abstract the purpose of this paper are a to develop a more comprehensive conceptual approach for investigating the responses to increases in rural population density in developing countries and b to present recent empirical evidence illustrating these responses the variety of responses is empirically illustrated for broad regions in developing countries including increases in arable land land intensification out migration and fertility decline though the focus is on the economic changes viewing the economic changes both across countries and over time suggests wide scope for further increases in agricultural output even with existing technology nevertheless prospects for raising living standards in the developing countries are better with slower rates of population growth

real interest parity rip over the 20th century new evidence based on confidence intervals for the largest root and the half life abstract in this paper we employ local to unity asymptotics to investigate the validity of real interest parity rip for three countries relative to the us using long span data we find that deviations from parity are corrected quickly and this is what could in principle be expected to happen in an integrated world where economic forces act rapidly so that discrepancies do not grow systematically over time moreover the observed speed of reversion raises important issues for policy in that the tendency for rates to converge implies that the impact of the domestic authorities stabilization polices might be limited finally there is no clear cut difference in the adjustment to shocks across fixed and floating regimes

environmental regulation cost and industry structure changes nonstationary markov analyses are used to investigate impacts of environmental regulatory costs associated with compliance on changes in market structure in pulp and paper industries results show environmental regulation expenditures have statistically significant effects on the probabilities of capacity moving to a larger company size category so industry structure is affected by environmental regulation however counter to expectations results further show consolidation occurs with higher probability when environmental costs are falling rather than when they are rising policy analyses that presume immediate policy responses to cost changes or that industry structure is unchanged may yield time inconsistent policy conclusions

coalition formation in standard setting alliances we present a theory for predicting how business firms form alliances to develop and sponsor technical standards our basic assumptions are that the utility of a firm for joining a particular standard setting alliance increases with the size of the alliance and decreases with the presence of rivals in the alliance especially close rivals the predicted alliance configurations are simply the nash equilibria i e those sets of alliances for which no single firm has an incentive to switch to another alliance we illustrate our theory by estimating the choices of nine computer companies to join one of two alliances sponsoring competing unix operating system standards in 1988

a bibliometric account of the evolution of ee in the last two decades is ecological economics becoming a post normal science abstract in ecological economics the debate on formalism and formalization has been addressed in the context of a lively discussion on ecological economics as a post normal versus normal science using ecological economics ee as a seed journal and applying bibliometric techniques to all 2533 the articles published in ee from january 1989 to december 2009 we analyze the evolution of the field of ecological economics aiming to shed light on this debate we observe the predominance and increased relevance of certain research topics methodological issues policies governance and institutions and valuation moreover collective action technical change and the environment and values stand as emergent themes of research finally we note that ecological economics experienced an empirical turn reflected in a shift away from exclusively formalized papers towards exclusively empirical and to a larger extent formal and empirical ones the combination of the prominent and emergent topics and the empirical turn mirrors the increasing awareness among researchers in the field of the need to address a key specificity of ecological economics the interdependence of the economic biophysical and social spheres on this basis we argue that at least through the lens of ee ecological economics has evolved towards a post normal science

performance versus design standards in the regulation of pollution abstract this paper presents a model of pollution regulation in an oligopolistic market two forms of regulation are considered performance standards which regulate pollution directly by an upper limit on emissions and design standards which regulate pollution indirectly by a minimum usage requirement of an enissions control input equilibria under each regulatory regime are characterized a welfare analysis reveals that performance standards are preferred to design standards if the objective is minimization of emissions plus pollution damage costs however the comparison is indeterminate if the regulator s objective is total surplus less pollution damage an equivalence between emissions taxes and performance standards is established so the above welfare comparisons also apply to emissions taxes versus design standards

the internationalization of money and finance and the globalization of financial markets abstract in this paper i combine long multi country time series data for interest rates and stock returns with the institutional evidence for much earlier centuries amassed by economic historians to study the question of financial globalization and how it has altered since the late classical era at their longest for dutch and english short term interest rates the quantitative data that i use extend back slightly more than three centuries the institutional history provides information on an additional millennium s worth of experience the conclusion that i reach is that the internationalization of money and finance and the globalization of financial markets are not new phenomena they are part of an evolutionary process that began much earlier and that has continued albeit with periodic interruptions and reversals for many centuries what we see today is simply the latest and most advanced manifestation of this process

re exploring the trade and environment nexus through the diffusion of pollution some scholars argue that trade liberalization results in the outsourcing of pollution to pollution havens and this may explain the existence of the environmental kuznets curve ekc in industrialized countries others claim that trade liberalization effectively lessens pollution by allowing a more efficient use of resources and the diffusion of clean technologies in part because these theories generate similar predictions for industrialized countries empirical studies have not provided conclusive evidence for either argument to identify the role of trade i draw on the insights of the diffusion literature and estimate a spatial regression model where trade operates as the mechanism through which pollution shifts from country to country using the case of per capita carbon dioxide hbox co 2 emissions i find that once spatial correlation is accounted for the ekc disappears the effect is even stronger when looking at trade from developing countries only providing support for the pollution haven hypothesis i also show that the hbox co 2 trajectory of developing countries goes above the one previously followed by industrialized countries this suggests that developing countries carry on an additional carbon burden above the one that would be obtained in the absence of trade these findings contribute to the literature on the non economic effects of trade and the constraints of domestic policies when the costs of trade are low

monopoly power and uneven development baran revisited baran examined the implications of the rise in monopoly power in advanced economies for the underdevelopment in poor countries and the process of uneven development on a world scale this article examines his work critically and then presents a north south model which defines uneven development in a precise manner and analyses the mechanism by which the rise in monopoly power leads to such uneven development it is shown that the process can work even without reference to imperialism which is a central but controversial element in baran s analysis

deforestation and the environmental kuznets curve an institutional perspective institutions for secure property rights and better environmental policies for moving the system towards a sustainable growth path can reduce the height of an environmental kuznets curve ekc relationship between income and deforestation this study examines the impact of these specific institutional factors on the ekc relationship for deforestation across latin american african and asian countries the factors related to agricultural production population economy and governmental policies of each country are hypothesised to affect deforestation results of the latin american countries show significant evidence of an ekc relationship for deforestation and also relevance of the institutional factors to reduce the rate of deforestation improvements in institutions for secure property rights and better environmental policies can thus significantly reduce the rate of deforestation without hindering the level of economic growth evidence also suggests that the effect of agricultural production on deforestation could be halted by strengthening institutional factors there was found to be complementarity between the institutional factors and forest sector polices and an additive effect between the institutional factors and forest products export promotion policies which could also eventually reduce the rate of deforestation

macroeconomic change competitiveness and timber production a five country comparison summary this study analyzes how long run macroeconomic fluctuations have affected timber production levels in five tropical oil producing countries gabon cameroon papua new guinea png venezuela and ecuador the core hypothesis is that oil booms foreign borrowing and other major foreign exchange inflows slow down timber harvesting these inflows cause dutch disease depressing the price competitiveness of timber exports and other trade exposed sectors a qualitative examination of long run trends in the five countries is combined with simple econometrics the findings confirm a strong impact of competitiveness on logging substantial real currency devaluation can greatly accelerate timber exports yet in middle income countries with strongly expanding domestic timber markets ecuador cameroon venezuela home market demand also rises much with urban incomes and population when full or partial import protection occurs this translates into rising domestic production the relative weight of these two potentially significant factors varies widely so policies to influence extraction levels need to be tailored accordingly

redd and forest transition tunneling through the environmental kuznets curve abstract international attention is focused on finding ways to reduce emissions from deforestation because of the emerging concerns over climate change however the causes of deforestation are rooted in current economic and development paradigms the causes of deforestation also vary across different geographical regions and have implications for the forest transition attempts to reach an international agreement on curbing deforestation have achieved little success despite over 30 years of un negotiations new initiatives from redd reducing emissions from deforestation and forest degradation could provide financial incentives to curb deforestation hence alternative development paths for forest cover changes and forest transition are analyzed for the redd policy within the framework of an environmental kuznets curve ekc for deforestation the ekc models are estimated for geographical regions of latin america africa and asia the results based on the panel data analysis of 43 countries covering the period 1970 1994 provides evidence that an inverted u shaped ekc fits for latin america and africa while a u shaped ekc applies to asia the results also indicate that strengthening agricultural and forestry sector policies are important for curbing deforestation the ekc models estimates could provide guidance for decisions on financing the redd policy as specific to each region

pro poor growth and sustainable development framework evidence from two step gmm estimator abstract the environmental sustainability agenda is not easy to be achieved without implementing pro growth and pro poor growth policies across the globe pakistan s economy is no exception that strive hard to managed environmental resource capital and pro poor growth expenditures in order to reduce poverty incidence and carbon mitigation policies while many efforts need more sustainable instruments to be achieved united nation s assigned sustainable development target till 2030 the study selected an annual time series data from 1975 to 2016 and employed two step generalized method of moments gmm estimator for robust inferences the results show that higher economic growth decreases poverty incidence through social reforms while deforestation under 5 mortality rate trade openness carbon emissions and fdi inflows largely increases poverty incidence in a country the study confirmed environmental kuznets curve ekc hypothesis of carbon emissions in relation of per capita income and public spending on education while pollution haven hypothesis is confirmed due to high involvement of dirty polluting industries in country s economic transformation process the fossil fuel combustion and high population density increases carbon emissions that sabotage the process of sustainable development in a country thus it is imperative to device sustainable policies for mitigating carbon fossil emissions with cleaner production techniques and improves the quality of life of poor people through increase social expenditures that trickle down to the poor as compared to the non poor

factor mobility trade and welfare abstract the paper develops a north south model which is driven by scale economies in the modern sector the model predicts that skilled and unskilled labor migrate from south to north and capital migrates from north to south migration of skilled labor and capital exhibits complementarity with trade while migration of labor may exhibit complementarity or substitutability if the terms of trade effects are ignored small movements of all factors affect the welfare of the population in south negatively and of that in north positively the effects of migration on the terms of trade are ambiguous in general

choice modelling and its potential application to tropical rainforest preservation abstract loss of rainforest occurs in part because of a global market failure problem markets routinely transmit signals about international demands for forest products such as timber but fail to transmit signals about demands for preservation to make efficient resource allocation choices decision makers need some framework to estimate the non use values that might be held by an international community for rainforest preservation non market valuation techniques can be used for this purpose but framing and other problems limit the application of the contingent valuation method cvm an alternative technique choice modelling cm appears to hold some promise because it can be used to model complex situations and to frame choices consistent with real life choices in this paper a cm experiment to assess the values that australians hold for rainforest conservation in vanuatu is reported the experiment disguises effectively the issue of interest rainforest conservation in vanuatu within a pool of other conservation locations also the experiment demonstrates that choice tradeoffs may involve a variety of environmental and socio economic factors rather than be concentrated on some monetary tradeoff the results demonstrate that a variety of predictive and valuation tools can be gained from a cm experiment and suggest that further development is warranted

financial market globalization symmetry breaking and endogenous inequality of nations this paper investigates the effects of financial market globalization on the inequality of nations the world economy consists of inherently identical countries which differ only in their levels of capital stock each country is represented by the standard overlapping generations model modified only to incorporate credit market imperfection an integration of financial markets affects the set of stable steady states as it changes the balance between the equalizing force of the diminishing returns technology and the unequalizing force of the wealth dependent borrowing constraint the model is tractable enough to allow for a complete characterization of the stable steady states in the absence of the international financial market the world economy has a unique steady state which is symmetric and stable in the presence of the international financial market symmetry breaking occurs under some conditions that is the symmetric steady state loses its stability and stable asymmetric steady states come to exist in the stable asymmetric steady states the world economy is endogenously divided into the rich and poor countries the borrowing constraints are binding in the poor but not in the rich the world output is smaller the rich are richer and the poor are poorer in any of the stable asymmetric steady states than in the unstable symmetric steady state

population tenure and natural resource management the case of customary land area in malawi abstract this paper analyzes the factors determining conversion of woodlands to agricultural land changes in tree cover and maize yield for the last two and a half decades by using aerial photos and field survey data in 57 communities in malawi the econometric analysis revealed that population pressure led to greater land conversion but had no effect on yield or tree cover changes areas where greater changes in traditional tenure systems have occurred are associated with reduction in tree cover and expansion of agricultural land these results suggest the importance of strengthening institutions to manage natural resources

is free trade passe abstract if there were an economist s creed it would surely contain the affirmations i understand the principle of comparative advantage and i advocate free trade yet the case for free trade is currently more in doubt than at any time since the 1817 publication of ricardo s principles of political economy and this is due to changes that have recently taken place in the theory of international trade while new developments in international trade theory may not yet be familiar to the profession at large they have been substantial and radical in the last ten years the traditional constant returns perfect competition models of international trade have been supplemented and to some extent supplanted by a new breed of models that emphasizes increasing returns and imperfect competition these new models call into doubt the extent to which actual trade can be explained by comparative advantage they also open the possibility that government intervention in trade via import restrictions export subsidies

on the north south trade in the americas and its ecological asymmetries there has been a long and intensive debate within the scientific community about the role of international trade in the development of countries during the last decades the focus of attention has moved from the pure economic level to the environmental aspects of international trade establishing a simplified system of north south trade for one reference period 2003 this paper attempts to test empirically the extent of potential asymmetries with regard to extracted material flows and contrasts the results with the economic benefits from trade in terms of value added the south is thereby represented by a selection of latin american countries brazil chile colombia ecuador and mexico the north comprises one of their main commercial partners the united states at the methodological level a multi regional input output analysis is used as the tool of investigation results generally support the hypothesis that the south was feeding the north s societal metabolism south north material exports were 1 6 times larger than north south material exports resulting in a net deficit for the south of 324 million tons moreover material intensity of exported commodities from the south was twice as high as that from the north it is worth highlighting however that part of the north south hypothesis fails for the sample of countries since the larger part of the economic surplus has remained in the south contrarily to what would have been expected

coffee in mexico international market agricultural landscape and ecology abstract the amount of energy and land devoted to the production of export crops in developing countries is associated with the economic behavior of the commodity in the international market stable increments in the international price of cash crops are expected to drive farmers and agricultural institutions in producing countries to increase production and yields of export crops the increase in crop production which can take place by incorporating new land into agricultural production and or by introducing technological innovations to increase yield may in turn affect the regional landscape and ecology the present study examines the effects of the international coffee price during the 1970s and 1980s upon the regional landscape and coffee farm ecology of mexico s coffee regions the effects upon the landscape and ecology of coffee production in mexico are discussed within the framework of the debate on trade and environment

the interface between environmental and trade policies last march i gave the frank paish lecture to the society under the title economic life in a greenhouse in my lecture i tried both to survey professional opinion as to some of the possible climatic implications of the greenhouse effect and also to draw out the economic consequences which might follow towards the end of my talk i made reference to some preliminary joint work with randy wigle 2 a colleague at wilfrid laurier university in canada on the global consequences of carbon tax schemes designed to limit and or reduce the build up of co2 emissions a key element underlying the greenhouse effect the written version of the lecture consciously does not reproduce the survey material which made up the first part of the lecture instead it elaborates on the issues raised towards the end it incorporates the work by randy wigle and myself and offers some thoughts on what seems to be a growing issue for the iggos namely the consequences for the international trading system of interactions between trade issues and both future global and current national environmental policies what follows emphasises that if they occur in the next few decades global policy responses3 carbon taxes tradeable permit schemes to environmental concerns will almost certainly have large economic effects among these are likely to be significant effects on trade patterns and trade volumes large interregional effects will also accompany such policies depending upon how such policies are implemented also the i99os may see a growing use of trade measures to achieve objectives set for environmental policies environmental policies towards such countries as brazil the philippines and others where deforestation is a concern may increasingly take the form of threatened trade sanctions unless compliance with global environmental policy objectives occurs 4

terms of trade shocks and economic performance 1870 1940 prebisch and singer revisited debate over trends in the terms of trade between primary commodities and manufactures their causes and their impact has dominated the literature for more than a century classical economists claimed that the terms of trade of primary commodities should improve since land and natural resources are always in inelastic supply following the great depression a new view emerged what came to be known as the prebisch singer thesis was instead that the terms of trade for primary products had deteriorated up to the 1950s the subsequent literature has almost exclusively and obsessively asked whether a deterioration has actually taken place over the 130 years following 1870 nowhere in this literature has the impact of these terms of trade shocks on long run growth been assessed although it is certainly full of lively speculation and debate this paper fills part of this empirical gap by constructing a country specific panel data base 1870 1940 by documenting terms of trade trends by country and region and finally by estimating the impact of the price shocks on long run economic performance we find the impact to have been asymmetric between center and periphery this abstract was borrowed from another version of this item

economics of development and the development of economics the purpose of this paper is to restore some historical perspective by highlighting the many contributions of development economics to the rest of economics we will point out to the younger generations how some of the glittering ideas they currently play with originally came from that now neglected field and how in some cases they have rediscovered with great fanfare insights that were well known in the development literature familiarity with which would have enriched their own work