inflation and reputation in many macroeconomic models with rational expectations optimal policy is time inconsistent and therefore announced policy may not be credible this paper models the government s credibility explicitly using kreps and wilson s analysis time consistent optimal government policy emerges as a sequential equilibrium in a repeated game this policy is at least as good as the inconsistent optimal policy and dominates the consistent policy when reputational effects are ignored thus the analysis resolves the problem of specifying a credible optimal policy in such models the results show why attempts to disinflate may lead to recession even with perfectly flexible prices this abstract was borrowed from another version of this item

postwar developments in business cycle theory a moderately classical perspective for issues regarding business cycles the phillips curve or aggregate supply portion of a macroeconomic model s specification is crucial unfortunately the relevant dynamic behavior is poorly understood flexible price models appear inconsistent with the data while existing sticky price models are unlikely to be policy invariant nevertheless current knowledge is adequate to design a rule for monetary policy that would if maintained result in near zero inflation and output fluctuations that are small by historical standards an operational rule of this type is described and some indication of its effectiveness is reported copyright 1988 by ohio state university press

is the energy led growth hypothesis valid new evidence from a sample of 85 countries abstract the energy growth literature contains a large number of discussions on the causal relationship between energy consumption and economic growth the central debate focuses on whether energy consumption contributes or not to economic growth since it has direct implications for the formulation of strategic policies nevertheless current studies cannot provide a conclusive suggestion due to mixed causality results this inconclusive evidence is potentially attributed to model specifications and the stage of economic development of the countries under investigation hence this study attempts to empirically re investigate the validity of the energy led growth hypothesis using a different model specification and different stages of economic development for 85 selected countries around the globe overall although the causality results are mixed among countries we do find a systematic pattern in particular granger causality models with three and four variables are more likely to support the hypothesis compared to their counterparts that contain only two variables in addition both developed and developing countries are more likely to support the energy led growth hypothesis compared to the less developed or low income countries therefore causality results are very sensitive to the choice of the model specification along with the stages of economic development finally energy conservation policies should only focus on low income countries as these policies may not retard the process of economic growth

a new test of money income causality this paper investigates the prima facie causal relationship between money and income employing a methodology the multiple rank f test the results of which are invariant to monotonic transformations of all variables and robust over alternative distributions of the errors in contrast to prior functional form dependent parametric analyses evidence of prima facie causality between money and income is found for the 1970 88 time period this evidence is consistent with an elementary theoretical framework in which the direction and strength of causality is dependent upon the definition of money copyright 1992 by ohio state university press

on the casual relationship between government expenditures and national income a research strategy is suggested that separates the issue of inference from the problems of prediction or of quantitative policy analysis of an empirical parametric model and illustrates a new methodology that enables this in a test for prima facie causality unlike the conventional parametric test the more powerful multiple rank f test is invariant to monotonic transformations of the variables and independent of the error distribution employing this test the wagnerian hypothesis supported by conventional parametric analysis is rejected and the conventional keynesian theory is accepted copyright 1990 by mit press

the politics of speculative attacks in industrial democracies recent models of speculative currency crises contend that market expectations of policy behavior can trigger a speculative attack we argue that political processes and partisan objectives inform expectations about the government s commitment to the exchange rate first market actors anticipate periods when the partisan identity of a government may change through an election or a cabinet collapse second party labels provide information to currency traders about the policy objectives of a potential government consequently we contend that the probability of a speculative attack will be higher when markets expect the cabinet to end and when the cabinet dissolution is likely to produce a leftward shift in policy a discrete timesurvival model is used to estimate the probability that a cabinet will dissolve in any given month for sixteen parliamentary democracies from 1970 to 1995 the predicted values are then used as a proxy for market expectations in a model of speculative currency crises

expenditures and receipts in state and local government finances comment the aim of this note has been to show that marlow and manage s 1987 paper suffers from serious methodological problems due to the non stationary data series used and the arbitrary lag lengths employed use of appropriate stationarity tests and optimal lag lengths of the variables change some of the basic conclusions of their paper contrary to their suggestion the presence of a feedback between local tax receipts and expenditures imply that local governments should be concerned with the implication of their spending and revenue enhancing decisions on their budget decisions to increase current expenditures may lead to higher future taxes similarly efforts to impose higher taxes to reduce budget deficits at the local government level may be futile due to a subsequent increase in spending

success factors for agricultural biogas production in sweden a case study of business model innovation as government officials policymakers and the general public increasingly express their concern about global warming caused by greenhouse gas emissions scientists search for alternative sources o

aggregation and the role of energy in the economy methods for investigating the role of energy in the economy involve aggregating different energy flows a variety of methods have been proposed but none has received universal acceptance this paper shows that the method of aggregation has crucial effects on the results of the analysis we review the principal assumptions and methods for aggregating energy flows the basic heat equivalents approach economic approaches using prices or marginal product for aggregation emergy analysis and thermodynamic approaches such as exergy we argue that economic approaches such as the index or marginal product method are superior because they account for differences in quality among fuels we apply various economic approaches in three case studies in the us economy in the first we account for energy quality to assess changes in the energy surplus delivered by the extraction of fossil fuels from 1954 to 1992 the second and third case studies examine the importance of energy quality in evaluating the relation between energy use and gdp first a quality adjusted index of energy consumption is used in an econometric analysis of the causal relation between energy use and gdp from 1947 to 1996 second we account for energy quality in an econometric analysis of the factors that determine changes in the energy gdp ratio from 1947 to 1996 without adjusting for energy quality the results imply that the energy surplus from petroleum extraction is increasing that changes in gdp drive changes in energy use and that gdp has been decoupled from between aggregate energy use all of these conclusions are reversed when we account for changes in energy quality 2000 elsevier science b v all rights reserved

political business cycles and macroeconomic credibility a survey there is clear evidence that government popularity and election performance is affected in part by economic performance suggesting that governments may manipulate the economy to political advantage simple models incorporating adaptive expectations which allowed the government to exploit this relationship were developed in the 1970s but fell out of fashion with the advent of new classical economics however modern theories of the political business cycle which are closely related to the macroeconomic policy game literature assume rational expectations and lead to forms of political business cycle driven by the existence of uncertainty of one type or another the international evidence suggests that some aspects of the theories apply although definitive conclusions are as we might expect hard to come by

emergence of green business models the case of algae biofuel for aviation emergent business models seek to take advantage of new market mechanisms driven by technological changes particularly those related to the production and delivery of clean or sustainable energy such business models often function at the intersection of various industries with global views and the resulting systems have distinct social political environmental economic technological and business dimensions such holistic systems are not only difficult to develop but also require support from a broad range of actors with effective regulations and policies in place such that the firm functions within a framework that integrates various factors this study substantiates such a framework by detailing the nascent algae based bio fuel industry that caters to the aviation sector while arguing that businesses in the energy industry can emerge as a next practice platform that drive a sixth wave of innovation the framework begins with three basic enablers innovation flexibility and sustainability and explains how value from renewable energy technologies can be created and captured sustainably and innovatively with new market mechanisms implemented by firms with green business models

the impact of environmental policy instruments on innovation a review of energy and automotive industry studies various types of policy instruments have been implemented to reduce local and global emissions but the impact on innovation of different instruments has received less attention this paper reviews empirical studies of the innovation impact of four main types of policy instruments in two high emitting sectors the conclusions are threefold 1 policy plays a key role for the development and diffusion of environmental innovation in the studied sectors 2 different types of instruments promote different types of innovations general economic instruments has primarily encouraged incremental innovation general regulatory instruments has enforced improvements based on modular innovation and technology specific instruments appears to have been needed to support the development and deployment of radically new technologies 3 all types of policy instruments face challenges in design and implementation understanding the selection impact of the chosen instruments implementing increasing stringency levels committing to an appropriate scale and safeguarding policy stability

energy and economic growth in the usa a multivariate approach abstract this paper examines the causal relationship between gdp and energy use for the period 1947 90 in the usa the relationship between energy use and economic growth has been examined by both biophysical and neoclassical economists in particular several studies have tested for the presence of a causal relationship in the granger sense between energy use and economic growth however these tests do not allow a direct test of the relative explanatory powers of the neoclassical and biophysical models a multivariate adaptation of the test vector autoregression var does allow such a test a var of gdp energy use capital stock and employment is estimated and granger tests for causal relationships between the variables are carried out although there is no evidence that gross energy use granger causes gdp a measure of final energy use adjusted for changing fuel composition does granger cause gdp

the role of the business model in capturing value from innovation evidence from xerox corporation s technology spin off companies this paper explores the role of the business model in capturing value from early stage technology a successful business model creates a heuristic logic that connects technical potential with the realization of economic value the business model unlocks latent value from a technology but its logic constrains the subsequent search for new alternative models for other technologies later on an implicit cognitive dimension overlooked in most discourse on the topic we explore the intellectual roots of the concept offer a working definition and show how the xerox corporation arose by employing an effective business model to commercialize a technology rejected by other leading companies of the day we then show the long shadow that this model cast upon xerox s later management of selected spin off companies from xerox parc xerox evaluated the technical potential of these spin offs through its own business model while those spin offs that became successful did so through evolving business models that came to differ substantially from that of xerox the search and learning for an effective business model in failed ventures by contrast were quite limited

autoregressive modelling and money income causality detection abstract a step wise procedure based on granger s concept of causality and abaike s final prediction error criterion is suggested as a practical means to identify the order of lags of each variable in a multivariate autoregressive process the model seems useful because it can serve as a reduced form formulation to avoid imposing often spurious or false restrictions of the model it also provides a reasonably powerful test of causality the idea is applied to u s postwar money and income data it is found that between m1 and gnp a bivariate feedback model fits the data best between m2 and gnp a one way causal model from money to income performs better diagnostic checks applied to our model seem to indicate the adequacy of our approach

the demand for petrol with explicit new car fuel efficiency effects a uk study 1977 86 abstract a full quarterly model for the demand for petrol motor gasoline is presented which deals with problems of seasonality in price and volume it is shown that the annual new car fuel consumption rate can be incorporated in modelling demand for petrol and this allows a better representation of the structure and mean speed of response of demand to price effects by separately specifying a new car fuel parameter the estimated short run price elasticity is 0 18 after three months rising to 0 2 after a year without such specification the elasticity reduces to 0 14 after three months 0 12 after a year the difference is discussed and interpreted as compensation due to the new car effect the new model year car fuel elasticity is defined and found to be about 0 1 in the sense that a 10 decrease in l 100 km 10 increase in efficiency over the previous model year decreases total petrol demand by 1 by endogenizing both petrol price and volume in a simultaneous system it is possible to identify a supply model for petrol volume in terms of the now endogenous petrol price to give a long run supply elasticity of about 0 4

central bank independence and macroeconomic performance some comparative evidence this note uses information on a sample of sixteen oecd countries to assess the relationship between central bank independence and macroeconomic performance as previous work suggests politically controlled central banks are more likely to pursue policies that lead to high and variable inflation however the authors find little evidence that political control of central bank policy has any impact on measures of the level or variability of growth unemployment or the ex ante real interest rate copyright 1993 by ohio state university press

central bank independence a paneldata approach the present paper uses a paneldata estimation technique to combine the time series for individual countries australia canada france germany italy japan the netherlands switzerland the united kingdom and the united states we postulated the response of central banks in these countries to inflation economic growth and current account surplus given the constraints to be the same among the sample countries differences between central bank independence come forward in a different structural pressure to lower or raise money market rates in these countries the empirical results in this study coincide remarkably well with the legal indices of central bank independence

the impact of environmental management on firm performance environmental management has the potential to play a pivotal role in the financial performance of the firm many individuals suggest that profitability is hurt by the higher production costs of environmental management initiatives while others cite anecdotal evidence of increased profitability a theoretical model is proposed that links strong environmental management to improved perceived future financial performance as measured by stock market performance the linkage to firm performance is tested empirically using financial event methodology and archival data of firm level environmental and financial performance significant positive returns were measured for strong environmental management as indicated by environmental performance awards and significant negative returns were measured for weak environmental management as indicated by environmental crises the implicit financial market valuation of these events also was estimated cross sectional analysis of the environmental award events revealed differences for first time awards and between industries first time award announcements were associated with greater increases in market valuation although smaller increases were observed for firms in environmentally dirty industries possibly indicative of market skepticism this linkage between environmental management and financial performance can be used by both researchers and practitioners as one measure of the benefits experienced by industry leaders and as one criterion against which to measure investment alternatives

globalization pressures and the state the worldwide spread of central bank independence the authors examine the impact of globalization on state structures in the specific instance of the central bank following the world system world society and neoinstitutional perspectives in sociology they assume that states are in cultural political and economic competition with each other thereby seeking to maintain their position and status frequently by adopting organizational forms or practices that make them isomorphic with their environment the authors predict that countries boost the independence of their central bank from the political power as their exposure to foreign trade investment and multilateral lending increases they also model the cross national dynamic process of diffusion of central bank independence by examining the impact of cohesive and role equivalent trade relationships between countries they find support for their hypotheses with information on 71 countries between 1990 and 2000

estimating the impact of incidents on urban controlled access highways an empirical analysis abstractan empirical analysis is developed that quantifies the impact of different types of traffic incidents on the speed and maximum flow averages of vehicles on a controlled access highway the incident types considered include damage to highway infrastructure vehicle rollover crashes into stationary objects collisions with moving vehicles rain fog vehicle breakdowns pedestrians on roadway etc using real world data from chile s most heavily used urban motorway freeway estimates of incident impacts on speed are generated using a multiple linear regression model incorporating instrumental variables to correct for endogeneity flow results are then generated using the fundamental traffic equation relating speed flow and density a ranking of the impacts on highway traffic of the different incident types based on incident frequency as well as impact size demonstrates that for the real case studied the incidents with the greatest cumulative effect are in order of magnitude vehicle breakdow

politics and business cycles in industrial democracies politics alberto alesina influences from political competition on macroeconomic policy are often thought to be a source of economic fluctuations politicians are described as being driven by two not mutually exclusive main motivations they want to be reelected and they harbour political or ideological biases when such theories are confronted with actual cycles in a number of industrial countries the pattern of inflation unemployment output and budget deficits indicates that partisan policy making is a fairly widespread phenomenon with more limited evidence that electoral preoccupations result in major fluctuations the combination of partisanship and electoral cycles may easily result in socially undesirable outcomes in particular the degree of politico institutional stability and the independence of the central bank have a bearing on macroeconomic outcomes these observations raise a number of important questions about the design of political institutions

political and monetary institutions and public financial policies in the industrial countries institutions and policies vittorio grilli donato masciandaro and guido tabellini why do countries as similar as the industrialized oecd countries go through such different experience in terms of public deficits and debts or in terms of inflation the answer cannot come from macroeconomic policy responses to different disturbances nor from the principles of optimal taxation but rather from politics this article focuses on the role that particular institutions exert in providing constraints and incentives which shape the actions of policymakers the electoral process and political traditions affect the ability of governments to deal with deficits and mounting debts what seems to matter most it is found is the effect of the durability of governments governments with short horizons act myopically and never quite tackle the hard choices such governments typically exist in countries with an electoral system favouring many small political parties central bank independence promotes low inflation with no apparent costs in terms of real economic performance irrespective of the political institutions in fact there is no link between monetary and fiscal discipline these findings carry powerful implications for countries facing high indebtedness or stubborn inflation but also for the construction of the european economic and monetary union

a casual varma model analysis with an application to canadian money and income data 1988 a casual varma model analysis with an application to canadian money and income data applied economics vol 20 no 9 pp 1167 1183

does conservatism matter a time series approach to central bank behaviour empirical studies crediting independent and conservative central banks with lowering inflation and inflation volatility have been criticised for their focus on policy outcomes instead of policies and for their unsystematic conflation of independence and conservatism we present results from time series models for the german bundesbank that avoid these shortfalls conservatism matters in the following sense i more conservative bundesbank councils tend to react stronger to changes in inflation and output and ii an increase in conservatism leads to a more activist stabilisation policy this is in line with simple policy models incorporating economic persistence with implementation lags for monetary policy

are causal relationships sensitive to causality tests 1987 are causal relationships sensitive to causality tests applied economics vol 19 no 4 pp 459 465