managing without growth abstract there are three main arguments why developed countries should consider managing without growth 1 continued economic growth worldwide is not an option owing to environmental and resource constraints and so developed countries should leave room for growth in developing countries where the benefits of growth are evident 2 in developed countries growth has become uneconomic in the sense that it detracts more from well being than it adds and 3 economic growth in developed countries is neither necessary nor sufficient for meeting specific policy objectives such as full employment no poverty and protection of the environment this paper explores various growth scenarios for canada over the medium range to 2020 using lowgrow a dynamic simulation model after describing lowgrow a scenario is presented that shows conditions under which the rate of unemployment in canada could be reduced to historically low levels poverty eliminated and greenhouse gas emissions reduced to comply with canada s commitment under the kyoto protocol without relying on economic growth this is not to say that zero growth should itself become a policy objective rather that the dependence on and defence of economic growth should not be an obstacle to fulfilling more specific welfare enhancing objectives of full employment eliminating poverty and protecting the environment the paper concludes with some policy implications for managing without growth followed by an annex which provides a technical description of lowgrow

sustainability of external imbalances in the oecd countries the authors wish to thank three anonymous referees for helpful comments to a previous version financial support from the spanish institute for fiscal studies the spanish ministry of economy and competitiveness projects eco2011 29314 c02 02 o bajo rubio and c diaz roldan and eco2011 30260 c03 01 v esteve and the department of education and science of the regional government of castilla la mancha project peii09 0072 7392 is also gratefully acknowledged v esteve also acknowledges support from the generalitat valenciana project gvprometeo2009 098

testing intertemporal budget constraints theory and applications to u s federal budget and current account deficits this paper extends previous tests of intertemporal budget balance and present value relationships by expanding the set of allowable deficit processes and by deriving a testable condition that is sufficient to ensure intertemporal budget balance as long as the expected discount rate is strictly positive using these tests the authors find that both the postwar federal budget deficit process and the process governing accumulation of u s assets by foreigners are consistent with intertemporal budget balance copyright 1991 by ohio state university press

the physical dimension of international trade part 1 direct global flows between 1962 and 2005 abstract the physical dimension of international trade is attaining increased importance this article describes a method to calculate complete physical trade flows for all countries which report their trade to the un the method is based on the un comtrade database and it was used to calculate world wide physical trade flows for all reporting countries in nine selected years between 1962 and 2005 the results show increasing global trade with global direct material trade flows reaching about 10 billion tonnes in 2005 corresponding to a physical trade volume of about 20 billion tonnes adding both total imports and total exports the share from european countries is declining mainly in favour of asian countries the dominant traded commodity in physical units was fossil fuels mainly oil physical trade balances were used to identify the dominant resource suppliers and demanders australia was the principal resource supplier over the period with a diverse material export structure it was followed by mainly oil exporting countries with varying volumes as regards to regions latin america south east asian islands and central asia were big resource exporters mostly with increasing absolute amounts of net exports the largest net importers were japan the united states and single european countries emerging countries like the asian tigers with major industrial productive sectors are growing net importers some of them to an even higher degree than european countries altogether with the major exception of australia and canada industrialized countries are net importers and developing countries and transition countries are net exporters but there are important differences within these groups

sustainability of current account deficits in india an intertemporal perspective this study examines the sustainability of current account deficits cads and the validity of intertemporal budget constraint ibc in india the long run model is estimated on annual data for the period 1950 1951 to 2009 2010 the optimal single equation and maximum likelihood ml system estimates of the model provide a consistent support for the long run relationship between imports and exports the olsgh estimates provide no support and that ml system estimates a consistent support for cointegration in both the models estimated with one and two structural breaks in level the new cointegration breakdown tests generally suggest that the cointegration prevails from 1951 to 2010 the evidence supporting the cointegration between imports and exports overwhelms the evidence providing a mixed or no support for cointegration the estimates of slope parameter above zero and the dominant support for cointegration between imports and exports vindicate the validity of ibc and the sustainability of cads the shor

drivers for the use of materials across countries abstract this paper analyses drivers for resource use and material productivity across countries this is not only relevant in light of soaring raw material prices but also because eu policies such as the thematic strategy on the sustainable use of natural resources com 2005 670 the eu raw materials initiative com 2008 699 and various similar policies internationally seek to better manage materials along their life cycle and across economies in order to better understand the system dynamics of material use our paper applies methodologies of material flow analysis and regression analysis to identify the major drivers for resource use and decoupling from gdp drivers are understood as those factors that exert influence on human activities to use resources a panel data set is taken for the european union for the years 1980 2000 eu 15 and 1992 2000 eu 25 the main drivers of resource use were found to be energy efficiency new dwellings and roads construction activities shortcomings of the methodology are also discussed

environmental policy under oligopoly with endogenous market structure emission taxes under both fixed number oligopoly and endogenous market structure which are the most relevant market structures for policy issues are examined in the latter case and contrary to what is expected under imperfect competition the optimal tax could exceed marginal external damages which implies that externalities generated by oligopolistic firms could be optimally controlled by overinternalizing environmental damages under endogenous market structure a scheme consisting of a license fee and a second best underinternalizing emission tax can increase social welfare as compared to the use of a single emission tax exceeding marginal damages copyright 1995 by the editors of the scandinavian journal of economics

global imbalances and the intertemporal external budget constraint a multicointegration approach abstract this paper analyzes the external solvency of a group of 23 oecd countries for the period 1970 2012 the empirical strategy adopted underlines the increasing importance of the financial channel for the external adjustment as proposed in gourinchas and rey 2007 we unify the traditional approaches to testing for external sustainability considering the stock flow system created by the variables representing the external relationships of an open economy external sustainability is tested using several types of cointegration and multicointegration tests the results obtained point to weak sustainability in the flows analysis whereas some degree of strong sustainability is found for up to six countries in the stock flow approach among these countries we find both non european economies such as japan and new zealand and euro area members especially those with more restricted access to financing in the international markets

common trends the government s budget constraint and revenue smoothing abstract the requirement that the government s budget be balanced in present value terms is shown to be equivalent to the condition that government expenditures inclusive of interest tax receipts and seignorage be cointegrated the condition is in fact stronger requiring that the deficit inclusive of interest be stationary stationarity of the net of interest deficit is neither necessary nor sufficient for intertemporal budget balance however it does have implications for barro s tax smoothing hypothesis data for the period 1890 1986 are consistent with intertemporal budget balance but not with tax smoothing

the sustainability of government deficits implications of the present value borrowing constraint this paper introduces a new methodology for evaluating the sustainability of fiscal policy the new methodology is distinguished from most existing tests in two important respects first it allows for stochastic real interest rates and second it is both necessary and sufficient results from the application of the new test suggest that recent fiscal policy in the united states has not been sustainable the paper contrasts its findings with those of james d hamilton and marjorie a flavin 1986 copyright 1989 by ohio state university press

fossil resource trade balances emerging trends for the uk abstract the aim of this paper is to examine the extent to which the uk can be classified as a net importer of fossil resources and a creator of pollution havens abroad between 1968 and 2000 using input output techniques and a derived resource flow classification system both the physical trade balance ptb and pollution trade balance utb associated with fossil resource use are computed the ptb shows that between 1968 and the early 1980 s the uk is presented as a net importer of direct fossil resource flows between 1984 and 2000 the uk is identified as a net exporter of direct fossil resources these trends are primarily explained by the uk s discovery and commercial production of north sea oil and gas fields in the late 1970s on the other hand the utb shows that over the whole period the indirect used flows attributable to the uk s exports are higher than those attributable to its imports these findings suggest that the uk did not create pollution havens abroad from the use of fossil resources between 1968 and 2000 however it is noticeable in both cases that from 1995 the uk s position as a net exporter has been decreasing considerably maturing north sea oil and gas fields set against increasing demands for fossil fuels and imported goods is signalling a return to the uk s pre 1984 dependence on direct imported fossil resources and the possible creation of pollution havens abroad knowledge of these trends contributes to the evidence base for the uk s changing import and export structure and the potential environmental repercussions at home and abroad

the metabolic transition of a planned economy material flows in the ussr and the russian federation 1900 to 2010 abstract the study of long term historical trends in material flows has gained some prominence in ecological economics since the first studies for austria and the united kingdom were published as part of a special section in 2002 this research expands the existing knowledgebase by presenting material flows for the russian federation and its predecessor states employing a standard accounting framework the study of material flows for the russian federation provides an interesting and unique case of a planned economy and its transition to a market based form of economic organization we show that in spite of considerable differences in the physical economy the ussr developed material use patterns similar to that of western industrialized economies lower levels of consumption were more than outweighed by inefficient production the transition towards a market economy drove rapid improvements in resource productivity but also growth in metabolic rates the results indicate that the transition to an industrial metabolic profile proceeds largely irrespective of economic and political conditions an improved understanding of the evolution of socio economic systems and the material flows that fuel them is increasingly relevant for designing new systems of production and consumption and facilitating a transition towards a more sustainable industrial metabolism

material use and material efficiency in latin america and the caribbean different world regions have followed very different trajectories for natural resources use over the recent decades latin america has pursued a development path based largely on exports of primary resources adopting this path has characteristic environmental and social impacts in this paper we provide the first broad based estimate of material use and material efficiency for the region beginning in 1970 and extending to the onset of the global financial crisis in 2008 the results show a region with rapidly growing primary materials consumption which is simultaneously becoming less efficient at converting those resources into national income using an ipat framework we found that population growth and rising per capita incomes made comparable contributions to growing material use while technological change as reflected in material intensity did not moderate consumption increasing materials intensity observed for the region as a whole is also observed for most individual countries this contrasts with some other world regions and implies that many countries in latin america and the caribbean will confront higher environmental pressures than expected when expanding their extractive industries to take advantage of new demand from other world regions while simultaneously supplying the requirements for their own domestic industrial transformations and urbanization

material flow accounting in an irish city region 1992 2002 abstract this paper aims to measure raw material inputs and waste flows in an irish city region in order to analyse i whether there was absolute dematerialisation in the particular case study over the period 1992 2002 and ii whether material consumption and waste generation were decoupled from economic growth and increases in disposable income over the same period it was found that the selected material flow indicators showed no evidence of absolute dematerialisation over the given study period although more recent evidence at the national level suggests that a decline in construction activity and extraction of non metallic minerals has resulted in an absolute reduction in material consumption and it is likely that this will be mirrored at the system boundary level it was found that domestic material consumption dmc per capita and direct material input dmi per capita increased at a faster rate than domestic processed output dpo per capita and direct material output dmo per capita between 1992 and 2002 which indicates relative decoupling of consumption from waste generation in addition it was found that there was relative decoupling of consumption and waste generation from disposable income growth over the study period finally it was found that average dmc and dmi figures for the selected case study were lower than the national averages but broadly similar to results for other city regions in the european union eu on a methodological note it was concluded that material flow accounting mfa for city regions in ireland is constrained due to a lack of disaggregated data for material flows with the exception of local waste data and it is recommended that bottom up analysis should be used to complement disaggregated top down data

perspectives on the u s current account deficit and sustainability this essay considers the underpinnings of the large u s current account deficit it then tackles the question of whether the u s current account deficit is sustainable a current account deficit is sustainable at a point in time if neither it nor the associated foreign capital inflows nor the negative net international investment position are large enough to induce significant changes in economic variables such as consumption or investment or interest rates or exchange rates even if the current account deficit is sustainable by this definition today its trajectory could still be creating future risks for the u s and global economy

current account sustainability in the us what did we really know about it abstract we analyze the sustainability of the us current account ca deficit by means of unit root tests first we argue that there are several reasons to believe that the ca may follow a non linear mean reversion behavior under the null of stationarity using a non linear estar model we can reject the null of non stationarity favoring the sustainability hypothesis second we ask whether unit root tests are a useful indicator of sustainability by comparing in sample results for the 1960 2004 period to the developments observed up to the end of 2008 we find that the non linear model outperforms the linear and random walk models in terms of forecast performance the large shocks to the ca observed in the last five years induced a faster speed of mean reversion ensuring the necessary adjustment to meet the inter temporal budget constraint

long term changes in social metabolism and land use in czechoslovakia 1830 2000 an energy transition under changing political regimes abstract industrialisation goes along with sweeping changes in society s interrelations with its environment the transition from an agrarian to an industrial society leads to fundamentally new patterns in social metabolism a process which has been described as socio metabolic transition this paper investigates this transition for the case of the current czech and slovak republics and presents a dataset on the development of key variables related to social metabolism during the last 170 years the dataset includes time series data on the extraction of biomass and fossil fuels energy consumption and land use combining data on bohemia and moravia 1830 1915 with data on czechoslovakia 1918 1992 and the czech and slovak republics 1993 2002 the study covers a period of consecutive political and institutional changes it includes the feudal regime of the late period of the habsburg empire and its disintegration with wwi the short period of the czechoslovak republic in the interwar period the era of a planned economy under a communist regime the collapse of this regime and the subsequent turn towards a market economy and european integration in the 1990s the period was characterized by economic and physical growth it saw a doubling of population and a growth in gdp by a factor 20 domestic energy consumption dec increased by a factor 10 and the share of biomass in dec declined from more than 98 to less than 20 all in all the observed changes closely resemble the characteristic path of the socio metabolic transition as observed in other western european economies major political and economic changes did not result in fundamental alterations of the socio metabolic transition until the mid 20th century the communist era 1945 1989 was characterized by rapid physical growth and changes in the energy and land use system very similar to those of other western european economies in the same period however leading to dec values substantially higher than those of other european countries at around 300 gj cap in the mid 1980s the disturbances caused by the velvet revolution resulted in short term turbulences in social metabolism and structural adaptations and around the year 2000 the czech and slovak republics show biophysical features very similar to those of other western european countries

pigouvian taxation of energy for flow and stock externalities and strategic noncompetitive energy pricing abstract the literature on energy and carbon taxes is by and large concerned about the derivation of globally efficient strategies in contrast this paper considers the dynamic interactions between cartelized energy suppliers and a consumers government that collectively taxes energy carriers for pigouvian motives two different kinds of external costs are associated with energy consumption flow e g acid rain and stock externalities e g global warming the dynamic interactions between a consumers government and a producers cartel are modeled as a differential game with a subgame perfect nash equilibrium in linear and nonlinear markov strategies the major implications are that the nonlinear solutions are pareto inferior to the linear strategies and energy suppliers may preempt energy taxation and thereby may raise the price at front however this effect diminishes over time because the producers price declines while taxes increase

some stabilizing and destabilizing effects of foreign debt accumulation in developing countries abstract recent research indicates that current account imbalances in the three largest industrial countries germany japan and the united states are self correcting a long run equilibrium relationship exists between the cumulated current account which is the net stock of these countries foreign assets or liabilities and other economic factors the situation appears to be different in a sample of 26 developing countries examined here this paper attempts to explain why it examines the effects on the current account of government and government guaranteed foreign debt on the one hand and net foreign liabilities or the cumulated current account deficit on the other while the cumulated current account deficit does generate stabilizing forces possibly through wealth effects large amounts of government and government guaranteed debt create destabilizing effects by stimulating capital flight

do remittances facilitate a sustainable current account we examine how workers remittances impact on the current account in doing so we focus on how remittances affect the sustainability rather than the size of current account balances we find that the presence of remittances makes it more likely that exports and imports are cointegrated thereby lending support to current account sustainability furthermore quantile regression analysis suggests that increased remittances are associated with a faster speed of current account adjustment towards long run equilibrium particularly for those countries characterised by already highly persistent current account balances in contrast to a literature that emphasises an adverse dutch disease impact of workers remittances on the real exchange rate in terms of reduced external competitiveness our findings suggest that remittances are actually beneficial to the current account balance

mean reversion of the current account evidence from the panel data unit root test abstract theoretically the modern intertemporal model of current account determination implies the stationarity of the current account however the empirical finding in the literature indicates nonstationary current account balances based on conventional unit root tests applying the panel data unit root test of im pesaran and shin we find support for the mean reverting property of the current account this in turn lends support to the intertemporal approach to the current account the policy implication of our findings is that current account deficits in major industrial countries are sustainable

is the budget deficit too large yes specifically we find that recent spending and taxing policies of the government if continued violate the government s intertemporal budget constraint as a result government spending must be reduced and or tax revenues must be increased these conclusions are based on tests of whether government spending and revenue are cointegrated in addition to examining real spending and revenue we also normalize these variables by real gnp and population for a growing economy these normalized measures are perhaps more pertinent we also test and find support for the hypothesis that deficits have become a problem only in recent years

energy prices and carbon taxes under uncertainty about global warming this paper extends the strategic interactions between producers of fossil fuels concerned about their profits and a taxing government concerned about the consumers welfare for uncertainty global warming follows an ito process stochasticity requires to differentiate between reversible and irreversible emissions in contrast to the deterministic version the unconstrained reversible case allows for a closed form solution but not the more realistic and constrained case nevertheless interesting analytical properties e g about when to stop emissions implicit conservation due to monopolistic supply are derived and complemented by a numerical example

assessing ricardian equivalence this paper reviews the literature on ricardian equivalence this hypothesis may be interpreted as a generalisation to the short and the long run of the theories which put no weight on the real effects of public policies on aggregate demand we argue that ricardian equivalence relies on both permanent income hypothesis and the fulfilment of the intertemporal government budget constraint the theoretical literature emphasises several reasons for departures from this hypothesis however the empirical literature is inconclusive when ricardian equivalence is tested in a life cycle framework the hypothesis is usually rejected while when the empirical analysis is based on optimising models it is usually accepted

international intertemporal solvency in industrialized countries evidence and implications recent large current account deficits among industrialized countries have caused concern for policy makers some believe for example that the current buildup of claims on the u s by foreigners violates her solvency condition with respect to the rest of the world recent research 22 suggests that for a country s intertemporal solvency condition to hold the change in the country s obligations to the rest of the world i e her current account deficit must be stationary stationarity tests on current accounts were performed for the u s by trehan and walsh 22 and wickens and uctum 23 for the u s and canada by otto 15 and for twenty three countries by gundlach and sinn 10 these papers present evidence that current accounts are non stationary for several major industrialized countries including the u s the u k canada germany and japan these findings do not favor international intertemporal solvency for this reason the issue merits further investigation in this paper we test for the stationarity of current account deficits of the group of seven industrialized countries preliminary results confirm many of gundlach and sinn s 10 findings however several events during the 1980s might have caused discrete breaks in current account balances events potentially linked with current account breaks include the reduction in world inflation tax reduction and reform in the u s and other industrialized countries attempts at international macroeconomic coordination i e the plaza accord and shifts in the after tax rate of return on capital in many countries as shown in recent research on gross national product 16 2 if such breaks are not accounted for stationarity tests will be biased in favor of accepting the null hypothesis of non stationarity our results suggest strong evidence of discrete breaks in the u s and japan and some evidence favoring breaks in the u k germany and canada the break in the u s current account appears to occur in 1983 while breaks in the other countries appear to occur somewhat later between late 1984 and 1987 more importantly once these breaks are incorporated the evidence is more favorable toward the stationarity of current accounts in these countries these findings thus support intertemporal solvency for these countries

fiscal policy and the current account deficits and trade jose vinals does the balance of payments act as an external constraint on the design of domestic economic policy in practice most governments believe it does yet popular discussion is sometimes confused this paper begins by evaluating the nature of the external constraint and the extent to which it can adequately be measured by the current account of the balance of payments it is often argued that a fiscal expansion will increase employment it is also widely held that a fiscal expansion necessarily leads to a deterioration of the current account while these propositions may hold in specific circumstances neither is generally true the theoretical basis of the two propositions is examined and compared with recent international experience when important changes in fiscal stance occurred the popular presumptions are confirmed by recent experience in the us the uk and germany but france is a counterexample to the first and spain to the second the important policy implication is that one can identify both in theory and in practice clear circumstances in which expansionary fiscal policy is appropriate and will not be thwarted by external considerations

are bond financed deficits inflationary a ricardian analysis this paper considers the possible theoretical validity of the following monetarist hypothesis that a constant positive government budget deficit can be maintained permanently and without inflation if it is financed by the issue of bonds rather than money the question is studied in a discrete time perfect foresight version of the competitive equilibrium model of sidrauski modified by the inclusion of government bonds as a third asset it is shown that the monetarist hypothesis is invalid if the deficit is defined exclusive of interest payments but that it is valid under the conventional definition it is also shown that the stock of bonds can grow indefinitely at a rate in excess of the rate of output growth provided that the difference is less than the rate of time preference these formal conclusions do not take account of possible limitations on taxing capacity arising from default incentives that tend to grow with the stock of bonds

on the limitations of government borrowing a framework for empiricaltesting this paper seeks to distinguish empirically between two views on the limitations of government borrowing according to one view nothing precludes the government from running a permanent budget deficit paying interest due on the growing debt load simply by issuing new debt an alternative perspective holds that creditors would be unwilling to purchase government debt unless the government made a credible commitment to balance its budget in present value terms we show that distinguishing between these possibilities is mathematically equivalent to testing whether a continuing currency inflation might be fueled by speculation alone or is instead driven solely by economic fundamentals empirical tests which have been developed for this economic question lead us to conclude that postwar u s deficits are largely consistent with the proposition that the government budget must be balanced in present value terms this abstract was borrowed from another version of this item

international comparison of resource use and its relation to economic growth the development of total material requirement direct material inputs and hidden flows and the structure of tmr abstract resource flows constitute the materials basis of the economy at the same time they carry and induce an environmental burden associated with resource extraction and the subsequent material flows and stocks which finally end up as waste and emissions a reduction of this material throughput and the related impacts would require a reduction of resource inputs and breaking the link between resource consumption and economic growth would require an increase in resource productivity material flow analysis mfa can be used to quantify resource flows and indicate resource productivity in this article we study the available empirical evidence on the actual de linkage of material resource use and economic growth we compare resource use with respect to total material requirement tmr and direct material input dmi for 11 and 26 countries respectively and the european union eu 15 the dynamics of tmr as well as of the main components are analysed in relation to economic growth in order to show whether there is a decoupling relative or absolute from gdp and a change of the metabolic structure in the course of economic development dmi cap so far only decoupled from gdp cap in relative terms that is in most countries it reached a rather constant level but with the exception of czech republic showed no absolute decline yet tmr cap was reduced in two high income countries and one low income country due to political influence changes in tmr were more influenced by hidden flows hf than by dmi we analyse the dynamics of the structure and composition of tmr in the course of economic development in general the economic development of industrial countries was accompanied by a shift from domestic to foreign resource extraction different relations can be discovered for the share of biomass fossil fuel resources construction resources and metals and industrial minerals

increased ecoefficiency and gross rebound effect evidence from usa and six european countries 1960 2002 despite increased efficiency in the use of natural resources the use of these resources continues to increase in most societies this paper examines the discrepancy between the potential decrease of use of natural resources as an effect of increased efficiency and actual use during the period 1960 2002 this difference was found to grow faster in the usa than the mean for six west european countries possible reasons for this difference between the two regions are analysed to reduce the anthropogenic flows of energy and material and the consequent deleterious effects on the biosphere it will become necessary to adapt consumption to degree of efficiency in the use of natural resources based on the comparison between the two regions some economic aspects of this issue are discussed

resource consumption drivers and pathways to reduction economy policy and lifestyle impact on material flows at the national and urban scale an analysis of material flows that also considers economic and social indicators has been performed at the national sweden and urban scale stockholm and gothenburg to study the dynamics of resource use during the last two decades a summary of policies related to resource consumption implemented at the eu national and local scale is presented and their probable effects discussed based on empirical evidence the resource consumption trends indicate that the implemented policies have failed to bring significant reductions in resource and energy throughput resource consumption has increased both in sweden as a whole and in the studied cities moreover the consumption of construction materials and electronics has grown exponentially even when normalized by population the few success stories are the absolute reduction in fossil fuel consumption achieved in stockholm building energy reduction by halve and complete abolishment of oil as the heating fuel in sweden the lifestyle characteristics that have an impact on resource consumption include high income car ownership large residential floor space social movements and trends related to dietary choices the consumption of electronics textiles and cosmetic products was shown to have increased considerably the same quantities of food are consumed but the diet has changed waste generation by far outpaces improvements in recycling in recycling waste to energy is growing faster than material recycling which impedes the development of a circular economy the main limitation of the policies implemented to date is that they only address efficiency of use but do nothing to reduce the demand for resources in addition efforts have so far been restricted to energy consumption the reality is that we must urgently reduce the consumption of all resources not just fossil fuels we call for greater concern and more action towards reducing nonfuel resource consumption

a century of current account dynamics abstract recent globalization trends have refocused attention on the historical evolution of international capital mobility over the long run the issue is examined here using time series analysis of current account dynamics for fifteen countries since circa 1850 the inter war period emerges as an era of low capital mobility and only recently can we observe a tentative return to the degree of capital mobility witnessed during the late nineteenth century the analysis of saving and investment dynamics also helps make sense of the frequently observed high correlation of saving and investment rates in historical data

the sustainability of current account deficits abstract this paper proposes a new method of determining whether a country is likely to be able to sustain its current account deficits without defaulting on its debt it is based on the notion of the national intertemporal budget constraint ibc which is derived from a forward solution of the balance payments identity although the problem is formally similar to that considered in the literature on the government ibc a more general solution is obtained by allowing the primary deficit to be endogenous instead of exogenous it is shown that the existence of negative feedback from net indebtedness to the primary deficit a wealth effect is sufficient this method supplants the ad hoc approach previously adopted in the current account literature whilst many of the same variables appear a formal structure for analysing them is provided

business cycles in international historical perspective business cycle models seek to answer the question of why economies go through cycles of recession and recovery or boom and bust any theory of the business cycle makes two sorts of claims what shocks are most important in disturbing the economy and what economic structure is necessary for propagating these shocks for example one common explanation of business cycles begins with monetary shocks and then seeks to explain why monetary shocks are not purely neutral as neoclassical theory would have it and instead have real effects at least in the short term early models in this vein were often implicitly or explicitly based on the proposition that markets do not clear continuously early equilibrium real business cycle theories instead emphasized the importance of real shocks especially to technology which may cause socially efficient fluctuations even when markets are always in equilibrium more recent models have attempted to marry the equilibrium approach to macroeconomics with the substantive keynesian ideas that money is not neutral and that economic fluctuations are costly new keynesian theories of the business cycle admit the possibility of a number of economic shocks including monetary and technology shocks but then focus on explaining how nominal price rigidities within the economy can turn these shocks into recessions or booms other models show that business cycles driven by keynesian animal spirits are consistent with rigorous microfoundations and rational expectations seeking empirical evidence for and against these various approaches we turn business cycle theories loose on perhaps the greatest macroeconomic laboratory

physical and monetary input output analysis what makes the difference abstract a recent paper in which embodied land appropriation of exports was calculated using a physical input output model ecological economics 44 2003 137 151 initiated a discussion in this journal concerning the conceptual differences between input output models using a coefficient matrix based on physical input output tables piots in a single unit of mass and input output models using a coefficient matrix based on monetary input output tables miots extended by a coefficient vector of physical factor inputs per unit of output in this contribution we argue that the conceptual core of the discrepancies found when comparing outcomes obtained using physical vs monetary input output models lies in the assumptions regarding unit prices and not in the treatment of waste as has been claimed ecological economics 48 2004 9 17 we first show that a basic static input output model with the coefficient matrix derived from a monetary input output table is equivalent to one where the coefficient matrix is derived from an input output table in physical units provided that the assumption of unique sectoral prices is satisfied we then illustrate that the input output tables that were used in the original publication do not satisfy the assumption of homogenous sectoral prices even after the inconsistent treatment of waste in the piot is corrected we show that substantially different results from the physical and the monetary models in fact remain finally we identify and discuss possible reasons for the observed differences in sectoral prices faced by different purchasing sectors and draw conclusions for the future development of applied physical input output analysis

how to evaluate the solvency of an indebted nation reassessing third world debt daniel cohen the conventional measures of the solvency of developing countries usually rely on such indices as debt export or debt gnp ratios the underlying rationale is that to be solvent a country must eventually pay back all its debt this paper starts from two simple but important remarks first solvency need not require the full eventual repayment of all debt continued borrowing may be possible rather what is required is that a country s debt accumulation does not outstrip its capacity to make future repayments and the capacity of lenders to make future loans second solvency therefore cannot be defined independently of the growth rates of lender and borrower countries nor of the interest rate at which past debts accumulate putting these ideas together a new solvency index is proposed and this is computed for all the less developed countries this new index suggests a less gloomy view of the international debt crisis the largest debtors may have already accomplished an adjustment which is more than sufficient to restore their solvency when this is properly computed to investigate this claim there is a detailed analysis of the policies recently adopted in argentina and brazil

allocation distribution and scale towards an economics that is efficient just and sustainable abstract the practical policy of issuing tradeable permits for depletion and pollution requires for its implementation the clear separation of the three basic economic goals of efficient allocation equitable distribution and sustainable scale economic theory needs to catch up with policy in recognizing that scale issues cannot be reduced to either allocation or distribution

assessing the fiscal stance in the european union and the united states 1970 2011 the huge increases in debt gdp ratios following the 2007 2009 global financial crisis which are unprecedented except in times of war has focused attention on the viability of the fiscal positions of eu countries and the us how to assess this and the likely future evolution of these positions this paper proposes an indicator of the fiscal stance which computes the fiscal adjustment required to reach a specific debt gdp targeted given the forecasts of future deficit and interest rates obtained from an unrestricted recursively estimated var model the index is easy to compute and can be decomposed to disclose the different contribution of revenue expenditure nominal yields inflation and growth to the fiscal stance for this reason it provides a transparent and detailed measure of the fiscal stance particularly suitable for multi country surveillance as a result the index improves on the tax gap indicators widely used by governments and international agencies and is far more informative than formal econometric tests of fiscal sustainability the time series of the indicator for individual eu countries and the us show that their fiscal position has fluctuated considerably over the last 40 years and has particularly deteriorated since 2007 the index predicts that the adjustment required to restore pre crisis debt gdp levels are higher for high debt countries like greece italy and portugal they become more severe the shorter is the time horizon for the adjustment as a large degree of uncertainty surrounds the assessment of the fiscal stance in the medium and long run we argue that policy makers should inform their policy based on the worst case scenario predicted by the indicator

optimal fossil fuel taxation with backstop technologies and tenure risk abstract the paper derives the global welfare optimizing time path for a tax on fossil fuels causing a negative stock externality climate change under increasing marginal extraction cost and in the presence of an unlimited backstop resource causing no externality in a basic competitive case the optimal tax equals the pigou rate equivalent to the present discounted value of marginal damage costs we consider two separate types of tenure insecurity for resource owners and their impact on the tax implementing the optimal policy when insecure control is with respect to future ownership to the resource competitive extraction is higher than otherwise and the efficiency implementing tax exceeds the pigou rate when tenure insecurity instead implies possible expropriation holdup of investment in extraction capacity it deters extraction and the optimal tax is lower than the pigou rate

on the solvency of nations cross country evidence on the dynamics of external adjustment we test the hypothesis that net foreign asset positions are consistent with external solvency and examine the dynamics of external adjustment using data for 50 countries over the 1970 2006 period our analysis adapts bohn s 2007 error correction reaction function approach which tests for a negative long run relationship between net exports nx and net foreign assets nfa as a sufficiency condition for the intertemporal budget constraint to hold to a dynamic panel framework pooled mean group pmg and mean group error correction estimation yield evidence of a statistically significant negative response of nx to nfa moreover we cannot reject the hypothesis that the response is largely homogeneous across countries our sensitivity analysis shows that the countries with relatively weaker fundamentals need to respond more strongly to the changes in nfa to keep their nfas on a sustainable path

in search of rational government what political preference function studies measure and assume political preference function ppf studies assume that policy making can be described by a mathematical problem in which a rational government maximizes a function of interest groups welfares the purpose of my paper is to explain in depth ramifications of ppf study assumptions and methodology ppf studies that attempt to measure interest group political power do so by measuring marginal rates of transformation along a pareto frontier one can estimate political power with a ppf only if observed policies are pareto efficient which may depend on the assumed number of interest groups and policy instruments marginal rates of transformation need not reveal anything meaningful about interest group political power and may incorrectly measure the direction of transfers

current account deficit sustainability the case of barbados this article investigates the sustainability of the current account deficit in barbados over the period 1960 to 2006 various unit root and cointegration techniques are employed to determine whether the country is satisfying its intertemporal budget constraint ibc the cointegration regressions suggest that the current account of barbados is sustainable and that deviations from long run equilibrium between real exports and imports are corrected in the short run with imports making the adjustment

the material basis of the global economy worldwide patterns of natural resource extraction and their implications for sustainable resource use policies abstract material flow accounting and analysis mfa has been established as an influential framework for quantifying the use of natural resources by modern societies so far however no reference data for overall scale and trends of global extraction of natural resources and their distribution between different world regions has been available this paper presents the first comprehensive quantification of the material basis of the global economy i e used domestic extraction in a time series from 1980 to 2002 we analyse time trends for major material groups fossil fuels metals industrial and construction minerals and biomass disaggregated into seven world regions this allows for a an illustration of the global economy s physical growth driven by worldwide processes of economic integration over the past decades and b an indication of the worldwide distribution of environmental pressures associated with material extraction the results show that annual resource consumption of the world economy increased by about one third between 1980 and 2002 this indicates that scale effects due to economic growth more than compensated for other effects such as the relative increase of the service sectors contribution to gdp structural effect and the use of new production technologies with higher material and energy efficiency technology effect the observed growth of natural resource extraction is unevenly distributed over the main material categories with metals showing the highest growth rate the regional analysis shows the increasing importance of asia and latin america in global resource extraction on the global level material intensity i e resource extraction per unit of gdp decreased by about 25 indicating relative decoupling of resource extraction from economic growth the paper concludes with policy recommendations for a more sustainable use of natural resources

unequal raw material exchange between and within countries galicia nw spain as a core periphery economy abstract a global multi regional input output model with sub national resolution for galicia north west spain was used to study physical and value added trade balances between galicia the rest of spain and the world within the framework of ecologically unequal exchange theory we argue that a region such as galicia can play a twofold role as core and periphery in the global division of extractive activities we show that galicia is a sink i e net importer of natural resources from middle and low income economies and that the lower the income of the trade partner the more raw material intensive the imports measured as upstream kg per usd imported value added however this physical deficit is less accentuated than for the rest of spain and galicia s material footprint is significantly lower 14 2 compared with 24 5 t capita moreover galicia is a source i e net exporter of raw materials compared with more thriving european union economies and even for some key trade partners such as germany uk and the rest of spain it is a net importer of value added

are stationarity and cointegration restrictions really necessary for the intertemporal budget constraint abstract time series related to fiscal and external deficits are commonly subjected to stationarity and cointegration tests to assess if the deficits are sustainable such tests are incapable of rejecting sustainability the intertemporal budget constraint proves to be satisfied if either the debt series or the revenue and with interest spending series are integrated of arbitrarily high order i e stationary after differencing arbitrarily often revenues and spending do not have to be cointegrated rejections of low order difference stationarity and of cointegration are thus consistent with the intertemporal budget constraint error correction type policy reaction functions are suggested as more promising for understanding deficit problems

fiscal reaction under endogenous structural changes in brazil abstract regarding the importance of fiscal policy in smoothing the impact of shocks such as the international financial and economic crises the paper analyzes the sustainability of the brazilian fiscal policy by taking into consideration the possibility of multiple endogenous structural breaks on the coefficients of government reaction function from monthly data in the period 1991 2008 tests on the reliable estimates dictate the occurrence of structural change in may 1994 and another in february 2003 there has been a situation of fiscal solvency in brazil but only from may 1994 the hitherto innocuous actions of government to formulate policies on public debt turn out to be significant as it rose twofold after february 2003 this reinforces the existence of a more flexible alternative to implement strategic policy in brazil if an eventual alternative for increasing public spending is a way of hindering the effects of international financial crises without compromising the fiscal targets

global patterns of materials use a socioeconomic and geophysical analysis abstract human use of materials is a major driver of global environmental change the links between materials use and economic development are central to the challenge of decoupling of materials use and economic growth dematerialization this article presents a new global material flow dataset compiled for the year 2000 covering 175 countries including both extraction and trade flows and comprising four major material categories biomass construction minerals fossil energy carriers and ores industrial minerals first we quantify the variability and distributional inequality gini coefficients in international material consumption we then measure the influence of the drivers population gdp land area and climate this analysis yields international income elasticities of material use finally we examine the coupling between material flows and between income and material productivity measured in economic production per tonne material consumed material productivity is strongly coupled to income and may thus not be suitable as an international indicator of environmental progress a finding which we relate to the economic inelasticity of material consumption the results demonstrate striking differences between the material groups biomass is the most equitably distributed resource economically the most inelastic and is not correlated to any of the mineral materials the three mineral material groups are closely coupled to each other and economic activity indicating that the challenge of dematerializing industrial economies may require fundamental structural transformation our analysis provides a first systematic investigation of international differences in material use and their drivers and thus serves as the basis for more detailed future work

do economic instruments matter wind turbine investments in the eu 15 abstract this paper analyses how governments in the eu 15 countries have succeeded in stimulating investments in wind turbines between 1985 and 2005 i use four different evaluation criteria tobin s q euler equation estimation investment accelerator model and the effective marginal tax rate to describe the observed investment patterns after a period of rapid growth in capital stock 1985 2000 a period of modest growth 2001 2005 can be observed even though the economic attractiveness of investing increases modestly this pattern cannot be explained by the evaluation criteria unless we accept economic attractiveness is a necessary condition and not a necessary and sufficient condition when analysing which policy has worked best the policies of germany denmark and spain stand out their early and consistent support has been based on feed in tariffs combined with subsidies

the sustainability of india s current account this study conducts an investigation into the sustainability of the indian current account using data for 1950 onwards a necessary condition for current account sustainability is that exports and imports are cointegrated after testing for unit roots that allow for a structural break we employ parametric tests for cointegration based on johansen 1995 and saikkonen and lutkepohl 2000a b c as well as the nonparametric procedure proposed by breitung 2002 and breitung and taylor 2003 that does not assume linearity by employing these procedures recursively two distinct regimes are identified characterized by whether or not imports and exports are cointegrated the regime of noncointegration runs until the late 1990s and the second regime of cointegration is present after that this latter regime coincides with the liberalization of the indian economy

hidden linkages between resources and economy a beyond gdp approach using alternative welfare indicators taking gdp as the standard economic indicator for economic welfare recent resources economy studies indicate the dematerialization of the economy the so called decoupling effect this conclusion seems to alleviate concerns over resource scarcity and limits to growth and feeds optimism for green growth and sustainability prospects however the validity of gdp as the sole and unambiguous measure of the ultimate outcome of the economy has been severely disputed there is nowadays increasing interest in broader welfare measurements that capture more aspects of economic output and hence constitute better approximations of well being the present paper provides an overview of the above discussion and sets out to explore the relevance of three alternative welfare indicators the human development index hdi the index of sustainable economic welfare isew and the genuine progress indicator gpi as a basis for evaluating the dependency of welfare and its major engine the economy on natural resources increasing welfare appears to require a disproportionate use of resources strong and increasing dependency on resources at the global level and in giant countries such as china and india may have serious implications for current sustainability policies and the united nations sustainable development goals

the physical economy of the european union cross country comparison and determinants of material consumption abstract in this paper we investigate what determines observed differences in economy wide material use among the eu 15 member states the empirical basis for our analysis is an extended and revised material flow data set for each of the eu 15 countries in time series from 1970 to 2001 this data set comprises consistent data for domestic extraction imports and exports as well as for derived material flow indicators broken down by 12 types of materials we compare the level and composition of domestic material consumption dmc in the eu 15 member states and identify determinants of the observed differences across the european union member states overall dmc per capita varies by a factor of three ranging between 12 tonnes per capita in italy and the united kingdom and 37 tonnes per capita in finland this variability of dmc in the eu 15 is in a similar order of magnitude as the variability of gdp per capita or total primary energy supply per capita linear correlation analysis reveals that national income and final energy consumption relate to material use but cannot fully account for the observed differences in material consumption by breaking down overall material flow indicators into 12 categories of materials and analysing their use patterns in detail we identified a number of factors socio economic and natural that influence the level and composition of economy wide material use many of these factors are specific for certain types of materials others are more general and quite some driving factors counteract each other regarding the direction of their influence concluding we summarize the most important driving factors for domestic material consumption stressing population density as largely neglected but important explanatory variable for material use patterns discuss issues of environmental significance aggregation and the use of different denominators in material flow accounting and suggest a re interpretation of dmc

bigger cakes with fewer ingredients a comparison of material use of the world economy the amount of materials used worldwide in production and consumption increased by 56 from 1995 to 2008 using an index decomposition analysis based on the logarithmic mean divisia index we investigate the drivers of material use both on a global and a country scale we exploit a panel dataset of 40 countries accounting for 75 of worldwide material extraction and 88 of gdp from 1995 to 2008 the results show that economic growth and structural change towards material intensive countries explain most of the growth in global material use slight gains in material efficiency and falling importance of material intensive sectors have decelerating effects the country level analysis reveals substantial heterogeneity some nations exhibit stable or falling material use while it increases notably in most countries improving material efficiency is able to dampen growth of material use in important industrializing nations like china or india

fiscal policy rules and the sustainability of public debt in europe the sustainability of public debt is interpreted as the result of the interaction of fiscal policy with the economic environment and not as a statistical concept as in most of the recent literature if debt is not to explode over time policymakers have to respond to the changing conditions in the macroeconomic environment this article defines the conditions that will ensure compliance of fiscal policy with the intertemporal budget constraint in the context of europe s fiscal policy rules the empirical part of the article reveals that european public debt is sustainable in this respect but questions regarding long run liquidity requirements remain unresolved

evaluating the efficiency of industrial environmental regulation in china a three stage data envelopment analysis approach abstract environmental regulation is of great concern to international academics and policy makers previous studies often regarded environmental regulation as an influencing factor when calculating eco efficiency or energy efficiency more attention should be given to the efficiency of environmental regulation especially in industrial field according to exiting studies industrial environmental regulation efficiency iere may be influenced by external environmental factors to explore the influence and obtain an actual efficiency this paper calculated iere in china by using the panel data of 30 regions from 2011 to 2015 the 12th five year plan period through the three stage data envelopment analysis approach firstly the undesirable slacks based model method was used to calculate the original iere secondly the economic base industrial structure urbanization level and education level were taken as external environmental variables and the effect of external environmental factors and stochastic disturbance were excluded thirdly the actual iere can be calculated after adjusting input values the results showed that china s iere was underestimated due to the impact from external environmental factors moreover the iere was more influenced by pure technical efficiency than scale efficiency the iere of each region varied thus targeted policies should be formulated according to local conditions this research provided a new analytical method for calculating environmental regulation efficiency the method can be applied either in other countries or in other sectors

disadvantageous oil tariffs and dynamic consistency a large importer who places relatively greater weight on future than current oil consumption will import less oil in the future than if it were able to commit itself in advance to future tariffs and may find itself worse off than if it were unable to impose tariffs at all futures markets and storage modify these adverse effects and may avoid the problem of dynamic inconsistency copyright 1990 by american economic association

resource duration as a managerial indicator for circular economy performance abstract this paper provides a new indicator for environmental assessment performance linked to circular economy almost all existing techniques evaluate resource use based on their burden relative to value while the central point of circular economy is to create value through material retention the existing burden orientated techniques are therefore unsuitable for guiding managers in relation to circular economy objectives this paper presents a new performance metric the longevity indicator which measures contribution to material retention based on the amount of time a resource is kept in use the measure is composed of three generic components initial lifetime earned refurbished lifetime and earned recycled lifetime management of these components can be used for decision making and performance assessment in the circular economy the example of precious metals in mobile phone handsets is used to illustrate the general application and suitability of this indicator findings show that for materials to be retained managers should encourage longer lifetime use increase product return levels for initial use and refurbished phones and select the most effective recycling processes available this paper advances performance indicators for circular economy and provides a tool which can be applied at managerial and organizational levels to measure the impact of business decisions on the longevity of precious materials

optimal taxation of exhaustible resource under monopoly abstract this paper deals with the problem of using taxes or subsidies to correct the inefficient resource allocation under monopoly in this paper the question raised is what would be the optimal tax on resource extraction under monopoly ultimately it is shown that taxes may be devised to generate price and extraction paths under monopoly that are identical to those under the competitive equilibrium tax policy can thus be used as an instrument for changing the distortionary resource allocation generated by the monopolist

u s federal indebtedness and the conduct of fiscal policy abstract this paper examines whether the conduct of u s fiscal policy since the 1920s has been influenced by constraints on the accumulated stock of outstanding federal debt the evidence is affirmative during most of the inter and post war period policy in effect stabilized the federal debt relative to gnp but after 1981 large debt and debt service costs failed to produce deficit reductions consistent with the pattern of previous decades

the biophysical perspective of a middle income economy material flows in mexico abstract we analyse natural resource use dynamics in the mexican economy during the last three decades despite low and uneven economic growth the extraction and use of materials in the mexican economy has continuously increased during the last 30 years in this period population growth rather than economic growth was the main driving force for biophysical growth in addition fundamental changes have taken place in the primary sectors in manufacturing and in household consumption and these are reflected in an increasing emphasis on the use of fossil fuels and construction materials mexico s economy has been strongly influenced by international trade since the country commenced competing in international markets in the 1970s mexico mainly exported primary resources this pattern has changed and manufactured goods now have a much greater importance due to a boom in assembling industries in contrast with other latin american countries mexico has achieved a diversification of production moving towards technology intensive products and a better mix in its export portfolio however crude oil exports still represent the single most important export good mexico s material consumption is still well below the oecd average but is growing fast and the current resource use patterns may well present serious social and environmental problems to the medium and long term sustainability of mexico s economy and community information on natural resource use and resource productivity could provide valuable guidance for economic policy planning in mexico

material flow accounts balances and derived indicators for the czech republic during the 1990s results and recommendations for methodological improvements abstract the economy and the environment are connected through material and energy flows these flows are the key cause of environmental problems together with land use and other biological and social factors and can serve as an indirect indicator of pressure on the environment the leading method for assessing material flows and dematerialisation at a macroeconomic level was developed during the 1990s by a number of research institutes and organisations the result of this effort was the guide eurostat 2001 92 this is a guide for the analysis of the total mass of annual material inputs and outputs for the whole economic system using accounts balances and derived indicators of material flows the manual touches only briefly on the flows between various sectors of the economy this article describes the application of material flow analysis mfa to the economy of the czech republic relevant indicators were derived on the basis of accounts and balances of material flows compiled for the czech republic for 1990 2000 the indicators and analysis of material flows presented here are the first results covering a long time period and a comprehensive set of material flow accounts in a transition economy the results show that indicators of material flows decreased during the 10 year period analysed by approximately 30 40 material intensity also dropped by 30 i e material efficiency increased by 30 while the material intensity of other countries such as germany dropped by 30 in the 15 year period finally it has been possible to demonstrate that economic growth as expressed by gdp has been decoupled from environmental pressure as expressed by material flow indicators the article proposes further work that should be undertaken in mfa at macroeconomic level in the czech republic in conclusion recommendations are made on how to improve the methodology used

regulating vertically integrated utilities when transfers are costly but revenues are beneficial this paper considers regulating a vertically integratedutility under asymmetric information about efficiency gainsdue to integration the benchmark case benevolentregulation implies a divestiture of a technically efficientintegration unless the cost savings due to integrating aresubstantial this highlights how private information causes adeviation from the standard perfect information framework this result is at odds with the worldwide experience withpublic utilities that remained integrated almost throughoutthe 20th century despite that integration offered meager or nosavings as now becomes evident of course this divergencebetween normative analysis and facts is no surprise for publicchoice indeed a rather mild kind of a leviathan motive regulators dislike transfers to the utility and by symmetry like revenues coupled with the secrecy only integrationoffers due to private information explains why a regulator hasan interest to keep even economically inefficiently integratedfirms integrated this is in line with crew and rowley 1988 that public regulation serves to milk rather than to imposeefficiency

taxing incumbent monopoly to foster entry abstract this paper investigates whether it is welfare enhancing to tax the output of a monopoly in order to foster cost inefficient entry this question is of particular concern in the energy markets dominated by cartel like affiliations opec and oil russia s gas exports to europe and the interest and practice to stimulate the development of alternative fuels making the realistic assumption that none of the players can commit to future policies subsidies are not a viable strategy for the government a tax cannot be first best but can be second best if the government cannot force the incumbent monopoly to sell its output at no profit and if the incumbent s profit is discounted however stimulating supply by improving the conditions for entry is not the prime concern of taxation after all it lowers aggregate supplies and may even lower the entrant s supply but to accrue parts of the monopoly rent

are southern poor countries governments more profligate than their northern rich counterparts fiscal criteria and impulse responses this study examines the health of public finances in different geographical regions by emphasising the discrepancies in north versus south and rich versus poor countries the last decade s debt and deficit figures depicting a general fiscal consolidation across regions and income levels show signs of worsening when the fiscal criteria are adjusted for cyclical factors fiscal pressure appears in most countries since the end of the 1990s but has been more persistent in poor countries and in asia the dynamics of governments reaction to debt accumulation reveals however that most regions exhibit consistent anti debt policies to various degrees the exception is the latin american and caribbean region where results suggest a lack of debt fighting policies among income categories rich countries generate the highest primary surpluses when confronted with debt accumulation

red signals current account deficits and sustainability abstract this paper proposes a method to asses the potential problems of sustainability of a country s sovereign debt we claim that the relevant variables used for this analysis are typically subject to changes that are associated with changes in macroeconomics policies we propose a procedure for identifying periods under which the current account accumulates at a non stationary rate our approach is based on imposing identifying restrictions on markov switching type models empirical applications of the procedure to argentina brazil japan uk and usa are examined and discussed

foreign debt accumulation financial and fiscal effects and monetary policy reactions in developing countries abstract this paper analyzes the effects of the current account of government and government guaranteed foreign debt on the one hand and net foreign liabilities or the cumulated current account deficit on the other hand in a sample of 26 developing countries while the cumulated current account deficit generates stabilizing forces pissibly through financial and wealth effects large amounts of government and government guaranteed debt produce destabilizing effects by stimulating capital flight i also find that monetary policy reactions are stabilizing in the case of the cumulated current account deficit but desstabilizing in the case of a build up of government and government guaranteed foreign debt jel f32 f34

biophysical structure of the ecuadorian economy foreign trade and policy implications abstract at the core of this paper lays the notion that a systematic analysis of material flow accounts enables us to discuss the sustainability of an economic model ecuador is going through a socio ecological transition from an agrarian towards an industrial regime based on the use of nonrenewable sources of materials and energy direct material flow indicators are used in this article to analyze the ecological dimension of the economy of ecuador during 1970 2007 this approach enables the concept of societal metabolism to become operative the paper compares societal metabolic profiles showing that per capita use of materials is still at about one fifth of the average in the high income countries of the world physical flows of trade indicate that there is an ecologically unequal exchange whereas a positive trade balance is desirable from an economic policy its counterpart in physical units has been a persistent net outflow of material resources the extraction of which causes environmental impacts and social conflicts

trade with polluting nonrenewable resources abstract the paper considers nonrenewable resource extraction in a situation where the resource buyers have formed a government which applies emission taxation for slowing pollution accumulation and the sellers are competitive or a resource cartel the noncompetitive situation is studied as a stackelberg differential game which the cartel leads it is first assumed that extraction costs do not depend on the resource stock level and that the pollution stock does not decay in the time consistent and markov perfect equilibrium the sellers monopoly power vanishes asymptotically the sellers market power reduces the buyers emission tax at each point in time in the stackelberg equilibrium the emission tax is below the marginal present value of pollution damage if pollution decays and extraction costs depend on the resource stock level buyers have monopsony power and the ability of sellers to receive emission tax revenues is weakened when the rate of pollution decay is high the producer price falls below the pareto optimal level

the effect of emission taxes and abatement subsidies on market structure abstract emission taxes and abatement subsidies are considered to be efficient measures for environment protection the purpose of this paper is to quantify their effects on industry output firm output and on the number of firms in the industry three types of market structure are under discussion perfect competition oligopoly and a dominant firm with a competitive fringe it turns out that emission taxes and abatement subsidies affect the structure of the polluting industry in opposite ways while the effects on industry s emissions are similar in direction but different

changes in the united kingdom s natural relations in terms of society s metabolism and land use from 1850 to the present day abstract in this paper we present our understanding of how society and nature have interacted in the course of history in terms of society s metabolic interchange with the biophysical environment presenting a theoretical model we begin by focusing on the interface between society and nature society s natural relations as conceptualized by the idea of metabolism which draws upon marxist theory complemented by a systems approach the concept of metabolism portrays society as a system which has to establish and maintain a permanent throughput of energy and matter to produce and maintain society s material components the amount of resource flow is operationalized by using material and energy flow accounting methods empirically these methods are applied to the uk s economy in a time series approach from 1850 to the present day we discuss different aggregates of inputs such as domestic material extraction foreign trade of materials energy input and additionally give an account of land use change obviously these changing natural relations are linked to socio economic activities hence we make a first attempt to discuss different periods of socio economic development by drawing from a regulation approach and try to link them to physical indicators such as direct material and energy input and domestic material consumption dmc thereby we hope to contribute to a historical understanding of socio economically driven environmental change within the framework of ecological economics

testing a present value model of the current account evidence from us and canadian time series abstract this paper presents a simple model of current account determination based upon the permanent income hypothesis of private consumption behavior under rational expectations the model employs a representative national agent who is forward looking and can borrow and lend at a constant world interest rate a present value relationship for the current account is derived and its implications are tested on post war data for the united states and canada testing is done using the framework developed by campbell and shiller 1987 which allows the forcing variables in the model to be difference rather than trend stationary our empirical results indicate the most stringent restrictions of the present value model are strongly rejected by the us and canadian data however less formal procedures suggest the consumption smoothing model has some ability to track the dynamic behavior of the us current account jel f32

socio ecological regime transitions in austria and the united kingdom we employ the concepts of socio ecological regime and regime transition to better understand the biophysical causes and consequences of industrialization for two case studies the united kingdom and austria we describe two steps in a major transition from an agrarian to an industrial socio ecological regime and the resulting consequences for energy use land use and labour organization in a first step the coal based industrial regime co existed with an agricultural sector remaining within the bounds of the old regime in a second step the oil electricity based industrial regime agriculture was integrated into the new pattern and the socio ecological transition had been completed industrialization offers an answer to the input and growth related sustainability problems of the agrarian regime but creates new sustainability problems of a larger scale while today s industrial societies are stabilizing their resource use albeit at an unsustainable level large parts of the global society are in midst of the old industrial transition this poses severe problems for global sustainability

dynamic multidimensional assessment of sustainability at the macro level the case of austria abstract this paper explores the issue of sustainability at the macro scale employing multi criteria decision aid mcda methods the incommensurability of values and the essentially multi dimensional and dynamic nature of sustainability challenge the use of composite measurement indices this determined the choice of mcda methods austria was chosen as a case study due to the wide availability of data especially on indicators of strong sustainability the structure of the multi criteria problem comprised the evolution of different sustainability dimensions over time the process for selecting criteria included a critical assessment of institutional sustainability agendas un eu and austrian government and theoretical recommendations after an assessment of mcda methods the naiade method demonstrated the most suitable properties for sustainability assessment the application of this outranking approach was undertaken in three separate settings long term from 1960 to 2003 medium term 1970 1995 and short term 1995 2003 with varying numbers of criteria the response of results to the addition of evaluating criteria and periods was tested the degree of credibility for accepting preference relations was also employed for sensitivity analysis according to the results of long term and medium term assessments especially in the weak sustainability setting sustainable progress is taking place in austria in the short term in the stronger sustainability setting and especially as the number of criteria increases more incomparable periods appear and trends are less determined moreover it is shown how results crucially depend on the methodological choices this is one of the first applications of the multi criteria tools to the dynamic analysis of sustainability at the macro scale

the identity of ecological economics retrospects and prospects the paper first reveals the relevance of ecological economics in the time of a triple crisis ecological social and economic and promotes it as a distinct paradigm comprised of two interconnected and interdependent aspects the qualitative framework within which it operates and the quantitative models and techniques it uses to observe ecosystem resilience measure progress towards sustainability and evaluate policies while acknowledging the progress that has so far been made the paper argues that divergences in understanding the meaning and content of ecological economics hinder its effectiveness and influence on real world policy making and calls for a unified framework as a common ground that would strengthen the field and direct research the implication of this position then follows pointing out what has so far been missing from the ecological economics analysis and what should be done for it to become a more problem oriented and policy relevant alternative copyright oxford university press

coase and hotelling a meeting of the minds in this paper we tie together the two literatures of durable goods monopoly and exhaustible resource pricing we show that the intertemporal no arbitrage condition that arises if the durable good monopolist seller can commit to a price path mirrors the intertemporal no arbitrage condition if the monopsonist buyer of an exhaustible resource can commit to a price path the intuition is that the durable good monopolist initially announces high future prices to get high valuation buyers to buy early and subsequently lowers the price to attract additional buyers on the other hand the monopsonist buyer of the exhaustible resource initially announces low future prices to encourage sellers to supply their units early and subsequently as the stock of the resource declines raises the price to call forth additional supply as the period of commitment shrinks to zero the durable good s price drops to its marginal cost and the exhaustible resource s price jumps to its choke level all in a twinkling of the eye a

public debt the unit root hypothesis and structural breaks a multi country analysis we assess fiscal performances in g7 and selected latin american and asian countries we consider two questions i have public finances been sustainable ii do countries follow more restrictive fiscal policies when debt starts to rise we find that i the traditional unit root tests often overlook the corrective actions taken by many governments controlling for structural breaks changes the non stationarity results dramatically among the three groups ii estimation of a reaction function for governments expanded by incorporating structural breaks provides further evidence for significant active anti debt policies among g7 countries and to a lesser extent in the other regions