co2 emissions energy consumption and economic growth in china a panel data analysis this paper examines the causal relationships between carbon dioxide emissions energy consumption and real economic output using panel cointegration and panel vector error correction modeling techniques based on the panel data for 28 provinces in china over the period 1995 2007 our empirical results show that co2 emissions energy consumption and economic growth have appeared to be cointegrated moreover there exists bidirectional causality between co2 emissions and energy consumption and also between energy consumption and economic growth it has also been found that energy consumption and economic growth are the long run causes for co2 emissions and co2 emissions and economic growth are the long run causes for energy consumption the results indicate that china s co2 emissions will not decrease in a long period of time and reducing co2 emissions may handicap china s economic growth to some degree some policy implications of the empirical results have finally been proposed

economic growth and pollutant emissions in tunisia an empirical analysis of the environmental kuznets curve abstract this paper investigates the relationship between economic growth and pollutant emissions for a small and open developing country tunisia during the period 1961 2004 the investigation is made on the basis of the environmental kuznets curve hypothesis using time series data and cointegration analysis carbon dioxide co 2 and sulfur dioxide so 2 are used as the environmental indicators and gdp as the economic indicator our results show that there is a long run cointegrating relationship between the per capita emissions of two pollutants and the per capita gdp an inverted u relationship between so 2 emissions and gdp has been found with income turning point approximately equals to 1200 constant 2000 prices or to 3700 in ppp constant 2000 prices however a monotonically increasing relationship with gdp is found more appropriate for co 2 emissions furthermore the causality results show that the relationship between income and pollution in tunisia is one of unidirectional causality with income causing environmental changes and not vice versa both in the short run and long run this implies that an emission reduction policies and more investment in pollution abatement expense will not hurt economic growth it could be a feasible policy tool for tunisia to achieve its sustainable growth in the long run

pollution and economic growth evidence from central and eastern european countries abstract we investigate the relationships between pollution and growth in eleven central and eastern european cee countries aggregate results robust to different estimators and control variables reveal an increasing nonlinear link between gdp and co2 for the group of cee countries however at a disaggregated country level the relationship between gdp and co2 is characterized by much diversity among cee countries namely n shaped inverted n u shaped inverted u monotonic or no statistical link thus despite an aggregated upward trend some cee countries managed to secure both higher gdp and lower co2 emissions from a policy perspective eu policymakers could pay more attention to these countries and amend the current unique environmental policy to account for country heterogeneities in order to support economic growth without damaging the environment

energy consumption carbon emissions and economic growth in saudi arabia an aggregate and disaggregate analysis the objective of this study is to examine the relationship among economic growth carbon emissions and energy consumption at the aggregate and disaggregate levels for the aggregate energy consumption model we use total energy consumption per capita and co2 emissions per capita based on the total energy consumption for the disaggregate analysis we used oil gas and electricity consumption models along with their respective co2 emissions the long term income elasticities of carbon emissions in three of the four models are positive and higher than their estimated short term income elasticities these results suggest that carbon emissions increase with the increase in per capita income which supports the belief that there is a monotonically increasing relationship between per capita carbon emissions and per capita income for the aggregate model and for the oil and electricity consumption models the long and short term income elasticities of carbon emissions are negative for the gas consumption model this result indicates that if the saudi arabian economy switched from oil to gas consumption then an increase in per capita income would reduce carbon emissions the results also suggest that electricity is less polluting than other sources of energy

is there a turning point in the relationship between income and energy use and or carbon emissions abstract we analyze the effect of fuel mix model specification and the level of development on the presence and size of a turning point in the relationship between income and energy use and or carbon emissions the results indicate that fuel mix the specification for income and the level of economic development affect conclusions about whether there is a turning point in the relationship between economic activity and energy use and carbon emissions including fuel shares generally reduces the size of a turning point that is estimated from a panel that includes observations from both oecd and non oecd nations but this result varies according to the level of development for oecd nations there is limited support for a turning point in the relationship between income and per capita energy use and or carbon emissions for non oecd nations there is no turning point in the relationship between income and either energy use or carbon emissions instead the relationship is positive together the results indicate that forecasters and policy makers should not depend on a turning point in the relationship between income and energy use or carbon emissions to reduce either

co2 emissions energy consumption and economic growth in bric countries abstract this paper examines dynamic causal relationships between pollutant emissions energy consumption and output for a panel of bric countries over the period 1971 2005 except for russia 1990 2005 in long run equilibrium energy consumption has a positive and statistically significant impact on emissions while real output exhibits the inverted u shape pattern associated with the environmental kuznets curve ekc hypothesis with the threshold income of 5 393 in logarithms in the short term changes in emissions are driven mostly by the error correction term and short term energy consumption shocks as opposed to short term output shocks for each country short term deviations from the long term equilibrium take from 0 770 years russia to 5 848 years brazil to correct the panel causality results indicate there are energy consumption emissions bidirectional strong causality and energy consumption output bidirectional long run causality along with unidirectional both strong and short run causalities from emissions and energy consumption respectively to output overall in order to reduce emissions and not to adversely affect economic growth increasing both energy supply investment and energy efficiency and stepping up energy conservation policies to reduce unnecessary wastage of energy can be initiated for energy dependent bric countries

computing multi period information constrained optima this paper presents a detailed theoretical derivation and justification for methods used to compute solutions to a multi period including infinite period continuum agent unobservedeffort economy actual solutions are displayed illustrating cross sectional variability in consumption and labour effort in the population at a point in time and variability for a typical individual over time the optimal tradeoff between insurance and incentives is explored and the issue of excess variability is addressed by consideration of the analogue full information economy and various restricted contracting regimes

using elasticities to derive optimal income tax rates this paper derives optimal income tax formulas using compensated and uncompensated elasticities of earnings with respect to tax rates a simple formula for the high income optimal tax rate is obtained as a function of these elasticities and the thickness of the top tail of the income distribution in the general non linear income tax problem this method using elasticities shows precisely how the different economic effects come into play and which are the key relevant parameters in the optimal income tax formulas of mirrlees the optimal non linear tax rate formulas are expressed in terms of elasticities and the shape of the income distribution these formulas are implemented numerically using empirical earning distributions and a range of realistic elasticity parameters

environment and development is there a kuznets curve for co2 emissions this article re examines the relationship between growth in per capita income and environmental degradation using econometric techniques appropriate for smooth transition regressions with panel data this is a more intuitive and flexible methodology than the polynomial models widely used in the literature and it can reconcile some of the mixed results found previously the methodology is applied to carbon dioxide emissions from nonoecd countries over the period 1971 to 1997 although there is no evidence of environmental kuznets curve we find two regimes namely a low income regime where emissions accelerate with economic growth and a middle to high income regime associated with a deceleration in environmental degradation

an econometric study of co2 emissions energy consumption income and foreign trade in turkey abstract this study attempts to empirically examine the dynamic causal relationships between carbon emissions energy consumption income and foreign trade in the case of turkey using the time series data for the period 1960 2005 this research tests the interrelationship between the variables using the bounds testing to cointegration procedure the bounds test results indicate that there exist two forms of long run relationships between the variables in the case of first form of long run relationship carbon emissions are determined by energy consumption income and foreign trade in the case of second long run relationship income is determined by carbon emissions energy consumption and foreign trade an augmented form of granger causality analysis is conducted amongst the variables the long run relationship of co2 emissions energy consumption income and foreign trade equation is also checked for the parameter stability the empirical results suggest that income is the most significant variable in explaining the carbon emissions in turkey which is followed by energy consumption and foreign trade moreover there exists a stable carbon emissions function the results also provide important policy recommendations

a recursive formulation for repeated agency with history dependence abstract we present general recursive methods to handle environments where privately observed variables are linked over time we show that incentive compatible contracts are implemented recursively with a threat keeping constraint in addition to the usual temporary incentive compatibility and promise keeping conditions journal of economic literature classification numbers d30 d31 d80 d82

post fordism and flexibility the travel industry polyglot abstract theorists argue that leisure and travel related activities have become increasingly commodified reflecting the broader evolution of a postmodern culture of consumption this paper argues that these developments have produced a travel industry complex characterized by a polyglot of varying production processes each placing a premium on flexible forms of accumulation focusing on certain key sectors of the travel industry the paper examines how partly because of new information technologies each element of the travel industry polyglot appears to have been affected by flexible based production strategies such as the externalization of ancillary services the development of interfirm strategic alliances and sophisticated product differentiation through brand segmentation the paper ends with a call for in depth empirical investigations to help develop a superior understanding of how flexible production techniques affect the various components comprising the travel industry

economic development and co2 emissions a nonparametric panel approach we examine the empirical relation between co2 emissions per capita and gdp per capita during the period 1960 1996 using a panel of 100 countries relying on the nonparametric poolability test of baltagi et al baltagi b h hidalgo j li q 1996 a nonparametric test for poolability using panel data journal of econometrics 75 345 367 we find evidence of structural stability of the relationship we then specify a nonparametric panel data model with country specific effects estimation results show that this relationship is upward sloping nonparametric specification tests do not reject monotonicity but do reject the polynomial functional form which leads to the environmental kuznets curve in several studies

a theory of credibility this paper presents models in which one agent must decide whether to trust another whose motives are uncertain reliability can only be communicated through actions in this context it pays for people to build a reputation based on reliable behaviour someone becomes credible by consistently providing accurate and valuable information or by performing useful services the theory provides a justification for long term arrangements without binding contracts it also describes those situations where it pays an agent to cash in on his reputation many decisions depend on trusting someone consumers must decide whether to believe advertisements banks need to judge the reliability of loan applicants and employers must decide how much responsibility to delegate to their employees this paper attempts to model situations that arise when someone is uncertain about whether to trust the people he deals with in this context reputations for reliability are valuable an agent becomes credible by consistently providing accurate valuable information or by always acting responsibly i analyse a series of simple abstract models of information transmission in the basic model there are two agents the sender s and the receiver r who are to play the game a known finite number of times at each stage both players learn the value of a parameter measuring the importance of that period s play of the game that is the value of making a correct decision and s obtains payoff relevant information s then sends a signal to r who makes a decision that affects the welfare of both players after both players learn the consequences of r s decision the process repeats at each stage r must decide what action to take in order to do that he must assess the credibility of s the difficulty arises because r is uncertain about s s preferences when play begins i model this by assuming that with positive probability s has identical preferences to r s is a friend and with positive probability s has completely opposed preferences to r s is an enemy this uncertainty creates a trade off for enemy senders at each stage providing honest information enhances s s reputation but only at the expense of foregoing an opportunity for immediate gain by duping r the possibility that s is a friend lends credibility to what he says but this credibility may also be exploited by an enemy s the principal equilibrium has the following form in the basic model where s has no control over the importance of a given play s typically conveys accurate information for the first several periods r raises the probability he places on s being friendly after receiving accurate information if he believes that an enemy would have lied to him with positive probability the more important the information the more likely an enemy will attempt to deceive r an enemy will eventually take advantage of r by misleading him when this happens the sender loses all opportunities for deception in the future i

existence and characterization of optimal employment contracts on a continuous state space abstract this paper characterizes the class of incentive compatible contracts and establishes existence and absolute continuity of an optimal wage employment contract in an environment where private information can take on a continuum of values unlike previous work on optimal contracting our results use neither an assumption that utility is additively separable in income and leisure nor prior assumptions of continuity or differentiability of the contract journal of economic literature classification numbers d82 c61 j41

determinants of co2 emissions in a small open economy abstract the aim of the paper is to explore the relationship between economic development and carbon dioxide co2 emissions for a small open and industrialized country austria we test whether an environmental kuznets curve relationship also holds for a single country rather than concentrating on panel or cross section data for a set of countries a cubic i e n shaped relationship between gdp and co2 emissions is found to fit the data most appropriately for the period 1960 1999 and a structural break is identified in the mid seventies due to the oil price shock furthermore two variables are additionally significant import shares reflecting the well known pollution haven hypothesis and the share of the tertiary service sector of total production gdp accounting for structural changes in the economy emission projections derived from this single country specification support the widely held opinion that significant policy changes are asked for when implementing the kyoto protocol in order to bring about a downturn in future carbon emissions

the strategic role of tourism trade fairs in the new age of tourism abstract tourism trade fairs have played an important role in the industry facilitating the sales function of companies in the fordian phase of tourism in the new age of tourism their mission is more complex they contribute systematically to the competitiveness of companies and clusters strengthening their information function this article examines the implications for tourism company policies in this new age as well as the current and potential contribution of tourism trade fairs to improving each one of porter s competitive factors demand input factors supporting industry and company structure finally the article recommends strategic guidelines for the development of tourism trade fairs and for optimizing participation in these events

oil exploitation and the environmental kuznets curve abstract this study refers to a panel estimation of an environmental kuznets curve ekc for oil to determine the factors most affecting oil exploitation in 38 oil producing countries during 1990 2000 control variables such as oil reserves oil price population political rights and the gini index were used to determine its contribution to the main ekc model the empirical results fully support the existence of an ekc for oil exploitation furthermore the result indicates that the proved oil reserves has a significant and positive role in oil production but oil price and population do not significantly affect crude oil production also increased freedoms and a better income distribution will reduce the rate of oil exploitation thus policies aiming at enhancing democratic society and better income distribution would be more compatible with sustainability

redistributive taxation in a simple perfect foresight model abstract we investigate the redistributive potential of capital taxation in an intertemporal maximizing model of capital formation first even unanticipated redistributive capital taxation is severely limited in its effectiveness since it depresses wages second under any convergent redistributive tax policy which maximizes a paretian social objective the capital income tax will converge to zero independent of the factor supply elasticities these results are independent of workers holdings of capital

economic growth energy conservation and emissions reduction a comparative analysis based on panel data for 8 asian pacific countries this study was conducted to evaluate the causality between energy consumption gdp growth and carbon emissions for eight asia pacific countries from 1971 to 2005 using the panel data the results indicate that there are long run equilibrium relationships between these variables additionally causality from energy consumption to co2 emissions was observed generally but there were some opposite relationships also parameter estimations of the panel data model indicate that there are great differences in the carbon emissions the efficiencies of energy use carbon emissions of unit gdp and unit energy consumption between developed and developing countries the base carbon emissions per capita energy consumption and efficiency of energy use in developing countries are far lower than in developed countries however the co2 emissions per unit of energy use is higher although developing countries may reduce their co2 emission per unit energy use total energy consumption will rise rapidly with economic development thus developing countries must determine how to undergo economic growth while conserving energy and reducing emissions to respond to global climate change it is necessary to develop innovative technology for energy use transform the energy structure and conduct the clean development mechanism

the environmental kuznets curve ekc theory part a concept causes and the co2 emissions case abstract the main purpose of this study is to capture the main features of the environmental kuznets curve ekc concept according to the ekc theory the process of economic growth is expected eventually to limit the environmental degradation created in the early stages of development the ekc concept leads many researchers from the early 1990s to assume that each economy should focus on its growth and any environmental problems will be eventually eliminated by the process of economic growth several studies attempt to test empirically the ekc hypothesis using data on many countries and examining various types of environmental degradation while other studies examine the underlying factors that may drive such a relationship this article reviews the evolution of the ekc concept and the possible causes of an ekc pattern like the distribution of income the international trade pollution haven hypothesis structural changes technical progress and improvements in energy efficiency institutions and governance and consumer preferences as co2 emissions are a pollutant with global effects several studies deal with the possible ekc pattern for co2 emissions and these studies are discussed separately the various critiques on the ekc concept are reviewed in the second article of this work

global observation of ekc hypothesis for co2 sox and nox emission a policy understanding for climate change mitigation in bangladesh abstract environmental kuznets curve ekc hypothesis is critical to understanding the developmental path of a nation in relation to its environment how the effects of economic development processes dictate environmental changes can be found through the study of ekc to understand the ekc phenomena for climate change this study was undertaken by reviewing the available literature as co2 sox and nox are the significant greenhouse gases ghg responsible for global warming thus leading to climate change the study focused on those ghgs for ekc consideration with an understanding of the different ekc trajectories an attempt was made to determine the implications for the economic development of bangladesh in regards to the ekc it was shown that ekc for co2 was following a monotonous straight line in most cases sox were shown to follow the full trajectory of the ekc in most situations and nox was shown the hope only for the developed countries getting the low income turning point the type of economic policy that bangladesh should follow in regards to the discussed pollutants and sources is also revealed from these discussions contributions to policy stimulation in bangladesh are likely to be made

co2 emissions energy consumption trade and income a comparative analysis of china and india in order to prevent the destabilisation of the earth s biosphere co2 emissions must be reduced quickly and significantly the causes of co2 emissions by individual countries need to be apprehended in order to understand the processes required for reducing emissions around the globe china and india are the two largest transitional countries and growing economies but are in two entirely different categories in terms of structural changes in growth trade and energy use co2 emissions from the burning of fossil fuels have significantly increased in the recent past this paper compares china and india using the bounds testing approach to cointegration and the ardl methodology to test the long and short run relationships between growth trade energy use and endogenously determined structural breaks the co2 emissions in china were influenced by per capita income structural changes and energy consumption a similar causal connection cannot be established for india with regard to structural changes and co2 emissions because india s informal economy is much larger than china s india possesses an extraordinarily large number of micro enterprises that are low energy consumers and not competitive enough to reach international markets understanding these contrasting scenarios is prerequisite to reaching an international agreement on climate change affecting these two countries

investigation of the environmental kuznets curve for carbon emissions in malaysia do foreign direct investment and trade matter abstract environmental degradation has become a central issue of discussion among the economists and environmentalists in view of malaysia s position as one of the main contributors to co2 emissions in asia and its status as a fast growing economy it is vital therefore to conduct a study to identify the relationship between economic growth and co2 emissions for malaysia this study attempts to examine empirically the environmental kuznets curve hypothesis for malaysia in the presence of foreign direct investment and trade openness both in the short and long run for the period 1970 to 2008 the bounds testing approach and granger causality methodology are applied to test the interrelationships of the variables the results of our study indicate that the inverted u shaped relationship does exist between economic growth and co2 emission in both the short and long run for malaysia after controlling for two additional explanatory variables namely fdi and trade importantly the results of the study also provide some crucial policy recommendations to the policy makers

tourism policy a midsummer night s dream abstract the changing nature of the tourism industry with its move away from mass tourism towards greater market segmentation use of new technologies differentiation of the product and adoption of new management styles demands a change in the substance of governments tourism policies this article reviews the development of tourism policy from pure promotion to product development to the current goal of maintaining competitiveness it argues for a more balanced partnership between private public and voluntary sectors and discusses various national plans that may serve as a model for future policy making the trend in some quarters towards privatization of policy programmes is considered unsustainable

swedish co2 emissions 1900 2010 an exploratory note abstract this paper projects swedish co 2 emissions during the period 2000 2010 based on data covering 1900 1999 swedish climate policy is currently based on the assumption that carbon emissions will increase ceteris paribus by 5 15 relative to the 1990 level this forecast has motivated a number of policy measures including carbon taxes subsidies and an information package we find however that co 2 emissions may well be lower in the future this outcome is broadly consistent with the literature on the environmental kuznets curve which portrays the relationship between emissions and gdp the key contribution of this paper is that our analysis is based on a long time series current literature is invariably based on short panel data sets while we study a single country through several phases of development our analysis also sheds some light on the key importance played by nuclear power for carbon emission projections

the environmental kuznets curve for pm2 5 pollution in beijing tianjin hebei region of china a spatial panel data approach abstract the purpose of this study is to exam the existence of environmental kuznets curve ekc of pm2 5 pollution in the beijing tianjin hebei bth region of china as one of the most important economic growth poles in china bth region has long been suffering from air pollution especially pm2 5 pollution thus in this study we utilized satellite observations of pm2 5 pollution and panel data of 13 cities in bth region from 1998 to 2016 to investigate the relationship between economic growth and pm2 5 pollution after verifying the spatial effect of pm2 5 pollution by spatial statistical analysis the spatial econometric model spatial durbin model sdm was chosen over the non spatial model in the examination of ekc the results showed that 1 the relationship between economic growth and pm2 5 pollution presented a significant inverted u shaped pattern though bth region is still in the upward section there is a hope that it will cross the point and enter the downward section in the future 2 the turning points of ekc would happen later with spatial effect considered compared to the result of non spatial model 3 the turning point of ekc would not happen until the region enter the post industrial economy stage moreover though some of the cities in bth region have entered post industrial stage none of them has cross the turning point of ekc results of this study indicate a promising future in the control of pm2 5 pollution as well as provide suggestions to put more emphasis on regional cooperative governance in air pollution control for the policy makers

the environmental kuznets curve and sustainability a panel data analysis abstract in recent years sustainability has represented one of the most important policy goals explored in the environmental kuznets curve ekc literature but related hypotheses performance measures and results continue to present a challenge the present paper contributes to this ongoing literature by studying two different ekc specifications for 10 middle east and north african mena countries over the period 1990 2010 using panel data methods for the first specification namely ekc we show that there is an inverted u shape relationship between environmental degradation and income while for the second specification namely modified ekc mekc we show that there is an inverted u shape relationship between sustainability and human development hd the relationships are shaped by other factors such as energy trade manufacture added value and the role of law more interestingly findings from the estimation show that ekc hypothesis hd and sustainability are crucial to build effective environmental policies

existence of optimal mechanisms in principal agent problems we provide general conditions under which principal agent problems with either one or multiple agents admit mechanisms that are optimal for the principal our results cover as special cases pure moral hazard and pure adverse selection we allow multidimensional types actions and signals as well as both financial and non financial rewards our results extend to situations in which there are ex ante or interim restrictions on the mechanism and allow the principal to have decisions in addition to choosing the agent s contract beyond measurability we require no a priori restrictions on the space of mechanisms it is not unusual for randomization to be necessary for optimality and so it should be and is permitted randomization also plays an essential role in our proof we also provide conditions under which some forms of randomization are unnecessary

environmental kuznets curve for carbon emissions in pakistan an empirical investigation this study investigates the relationship between carbon emissions income energy consumption and foreign trade in pakistan for the period 1972 2008 by employing the johansen method of cointegration the study finds that there is a quadratic long run relationship between carbon emissions and income confirming the existence of environmental kuznets curve for pakistan moreover both energy consumption and foreign trade are found to have positive effects on emissions the short run results have however denied the existence of the environmental kuznets curve the short run results are unique to the existing literature in the sense that none of the long run determinants of emissions is significant the contradictory results of short and long run give policy makers the opportunity to formulate different types of growth policies for the two terms taking environmental issues into consideration in addition the uni directional causality from growth to energy consumption suggests that the policy makers should not only focus on forecasting future demand for energy with different growth scenarios but also on obtaining the least cost energy furthermore the absence of causality from emissions to growth suggests that pakistan can curb its carbon emissions without disturbing its economic growth

consumption insurance an evaluation of risk bearing systems in low income economies the hypothesis of full risk sharing can be taken to data from low income countries and evaluate formal and informal financial systems in many contexts idiosyncratic risks are high so credit insurance arrangements could be beneficial statistical tests reveal that households in southern india take advantage of these possibilities villages in cote d ivoire and countries in thailand do not do as well the paper includes an empirical description of the devices used to smooth consumption and a theoretical discussion of private information and incentives on ideal operating systems the full information and mechanism design frameworks provide benchmarks for policy analysis

dynamic linkages among transport energy consumption income and co2 emission in malaysia this paper examines the dynamic relationship between income energy use and carbon dioxide co2 emissions in malaysia using time series data during 1975 to 2011 this study also attempts to validate the environmental kuznet curve ekc hypothesis applying a multivariate model of income energy consumption in the transportation sector carbon emissions structural change in the economy and renewable energy use the empirical evidence confirmed that there is a long run relationship between the variables as shown by the result of co integration analysis the results indicate that the inverted u shape ekc hypothesis does not fully agree with the theory the coefficient of squared gdp is not statistically different from zero the time duration and the annual data used for the present study do not seem to strongly validate the existence of ekc hypothesis in the case of malaysia causality test shows that the relationship between gdp and co2 is unidirectional the granger causality test results reveal that emissions granger cause income energy consumption and renewable energy use moreover we find that income granger causes energy consumption and renewable energy use and both structural change and renewable energy use granger cause energy consumption in road transportation

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

on the existence of optimal contract mechanisms for incomplete information principal agent models two abstract results are given for the existence of optimal contract selection mechanisms in principal agent models by a suitable reformulation of the almost incentive compatibility constraint they deal with both single and multi agent models in particular it is shown that the existence results in a series of papers by f h page follow from these two results kwdjournal of economic literatureclassification numbers c72 d82

are people sometimes too honest increasing decreasing and negative returns to honesty we show that sender honesty can hurt receivers in simple signaling games the receiver faces a trade off between its ability to work with senders and the quality of information it can get and use from them our example also contradicts recent work suggesting that returns to honesty should be increasing positive increasing returns are restored in our model if the receiver can precommit

incentives and aggregate shocks this paper presents an incentive based theory of the dynamics of the distribution of consumption in the presence of aggregate shocks the paper builds on the models concerning the distribution of income or consumption and incentive problems of green 1987 thomas and worrall 1991 phelan and townsend 1991 and atkeson and lucas 1992 by incorporating aggregate production shocks the model allows an examination of the interactions between individual and aggregate consumption series given incomplete insurance further the methodology outlined allows the incorporation of incentive considerations to macroeconomic environments similar to rogerson 1988 and hansen 1985

environmental kuznets curve in an open economy a bounds testing and causality analysis for tunisia the environmental kuznets curve hypothesis posits that in the early stages of economic growth environmental degradation and pollution increase however as a nation reaches a certain level of incom

trade the pollution haven hypothesis and the environmental kuznets curve examining the linkages abstract this paper examines the extent to which the ekc inverted u relationship can be explained by trade and specifically the migration or displacement of dirty industries from the developed regions to the developing regions the pollution haven hypothesis phh using detailed data on north south trade flows for pollution intensive products the evidence for the phh is assessed emissions of 10 air and water pollutants are then estimated controlling for trade openness structural change and dirty north south trade flows evidence of pollution haven effects is found although such effects do not appear to be widespread and appear to be relatively small compared to the roles played other explanatory variables

efficiency and equality in a simple model of efficient unemployment insurance abstract this paper describes the efficient allocation of consumption and work effort in an economy in which workers face idiosyncratic employment risk and considerations of moral hazard prevent full insurance we impose a lower bound on the expected discounted utility that can be assigned to any agent from any date onward and show with this feature added that the efficient unemployment insurance scheme induces an invariant cross sectional distribution of individual entitlements to utility the paper thus provides a simple prototype model suited to the study of the normative question what is the trade off between equality and efficiency in resource allocation journal of economic literature classification numbers d31 d63 d82 j65

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

empirical study on the environmental kuznets curve for co2 in france the role of nuclear energy this paper attempts to estimate the environmental kuznets curve ekc in the case of france by taking the role of nuclear energy in electricity production into account we adopt the autoregressive distributed lag ardl approach to cointegration as the estimation method additionally we examine the stability of the estimated models and investigate the granger causality relationships between the variables in the system the results from our estimation provide evidence supporting the ekc hypothesis and the estimated models are shown to be stable over the sample period the uni direction running from other variables to co2 emissions are confirmed from the casualty tests specifically the uni directional causality relationship running from nuclear energy to co2 emissions statistically provides evidence on the important role of nuclear energy in reducing co2 emissions

modeling the evolutionary nexus between carbon dioxide emissions and economic growth abstract given the fast paced world economy increasing carbon dioxide co2 emissions have caused serious concern regarding global warming many studies have examined the nexus between co2 emissions and economic growth and inconsistent results are provided limited evidence suggests that different time periods under investigation could be a source of inconsistency but there lacks of a thorough analysis this paper systematically focuses on the evolutionary characteristics of the nexus to explore the influence of time periods the panel data are reorganized by considering different time periods in various countries and an intelligent data driven approach symbolic regression is applied to discover models for each period without predefined structure and parameters three issues does the time period matter what are the trends in different time periods what are the applicable scopes of the models have been addressed in this paper the results reveal the evolutionary nature of the nexus and it is verified that an intrinsic time period distinction does generate extrinsic inconsistency the detailed dynamics of models indicate that the optimal models tend to be more complex as the time periods are extended for countries with different locations and income levels the applicable scopes of the four superior models monotonically increasing inverted u shaped inverted n shaped and m shaped vary in different time periods the findings highlight that the effect of time periods cannot be ignored and the models should not be applied unconditionally when conducting empirical research finally several policy implications are provided which are critical for the balance of economic growth and co2 emissions particularly in some developing countries

the co2 emissions income nexus evidence from rich countries the paper attempts to test the environment kuznets curve ekc hypothesis for 36 high income countries for the period 1980 2005 the test is based on the suggestion of narayan and narayan 2010 various panel data unit root and co integration tests are applied carbon dioxide co2 emissions and gdp series are integrated of order one and co integrated especially after controlling for cross sectional dependence additionally the blundell bond system generalised methods of moments gmm is employed to conduct a panel causality test in a vector error correction mechanism vecm setting unidirectional causality running from real per capita gdp to per capita co2 emissions is uncovered in both the short run and the long run the empirical analysis based on individual countries provides evidence of an ekc for greece malta oman portugal and the united kingdom however it can be observed that for the whole panel a 1 increase in gdp generates an increase of 0 68 in co2 emissions in the short run and 0 22 in the long run the lower long run income elasticity does not provide evidence of an ekc but does indicate that over time co2 emissions are stabilising in the rich countries

the impact of international trade on china s industrial carbon emissions since its entry into wto this paper employs the input output io approach to analyze the scale and structure of embodied carbon emissions of china s 19 industry sectors during 2001 2011 and constructs a regression model to establish the relationship between energy intensity per capita output trade openness foreign direct investment fdi trade comparative advantage environmental regulation technology and co2 emission intensity our results suggest that china s international embodied carbon emission balance has been in a state of continuous growth for the period 2001 2011 and china has become a pollution haven the relationship between per capita output and co2 emission is inverse n typed and china s industries are in the rising stage of the curve fdi and trade comparative advantage are two main elements boosting china s carbon emissions trade openness environmental regulation and technology will lower the growth rate of china s industrial carbon emissions ices consequently china s policies should center on adjusting the industry structure and scale of fdi inflows transforming industries with trade comparative advantages into a clean type facilitating environmental regulation level and bringing in and developing low carbon technology to avert china from being a pollution haven

influential factors of carbon emissions intensity in oecd countries evidence from symbolic regression abstract carbon emissions intensity is used as a yardstick to evaluate the relative extent of carbon emissions of a country to reduce carbon emissions intensity it is crucial to find out the dominant factors that enhance it and take actions to manage them this study is an attempt to employ symbolic regression method to explore the most influential factors of carbon emissions intensity in 34 oecd member countries using data from 1995 to 2014 rooted in genetic programming symbolic regression method can explore the inherent functional structures amidst the variables and could discover the influential factors robotically the results confirm that the influential factors of carbon emissions intensity vary from country to country gdp is found as the most frequent and important factor of carbon emissions intensity in 17 countries each of industrialization and technological innovation is the prominent factor in every 4 countries and each of urbanization total population and foreign direct investment plays a pro active role in 3 individual nations based on the empirical results some policy implications are also conferred

optimal indirect and capital taxation we consider an environment in which agents skills are private information and follow arbitrary stochastic processes we prove that it is typically pareto optimal for an individual s marginal benefit of investing in capital to exceed his marginal cost of doing so this wedge is consistent with a positive tax on capital income we also prove that it is pareto optimal for the marginal rate of substitution between any two consumption goods to equal the marginal rate of transformation this lack of a wedge is consistent with uniform taxation of consumption goods within a period

decomposition of co2 emissions over 1980 2003 in turkey abstract there is a multi dimensional need for studying the energy situation in turkey and to obtain insight into the development of co2 emissions on the one hand recent projections of the oecd show that turkey has a yearly gdp growth potential of over 7 on the other hand recent projections of undp and world bank indicate that the level of co2 emission is going to rise six fold by 2025 with respect to the level of emissions in 1990 it is a great challenge to both meet the growth target and keep the co2 under control thereupon this paper tries to unfold factors that explain co2 emissions by undertaking a complete decomposition analysis for turkey over the period 1980 2003 the analysis shows as is common to relatively fast growing economies that the biggest contributor to the rise in co2 emissions is the expansion of the economy scale effect the carbon intensity and the change in composition of the economy which nearly move in tandem also contribute to the rise in co2 emissions albeit at a slower rate the energy intensity of the economy which is decreasing is responsible for a modest reduction in co2 emissions hence in congruence with the scale effect a decoupling of carbon emissions and economic growth is not found in turkey over the period 1980 2003

dynamic optimal taxation with private information we study dynamic optimal taxation in a class of economies with private information optimal allocations in these environments are complicated and history dependent yet we show that they can be implemented as competitive equilibria in market economies supplemented with simple tax systems the market structure in these economies is similar to that in bewley 1986 agents supply labour and trade risk free claims to future consumption subject to a budget constraint and a debt limit optimal taxes are conditioned only on two observable characteristics an agent s accumulated stock of claims or wealth and her current labour income we show that optimal taxes are generally non linear and non separable in these variables and relate the structure of marginal wealth and income taxation to the properties of agent preferences this paper studies optimal taxation in a class of dynamic economies with private information we consider an environment in which agents preferences are defined over consumption and labour and each agent receives a privately observed sequence of i i d preference shocks incentivecompatibility constraints stemming from private information imply that socially optimal or constrained efficient allocations in this environment are complicated and history dependent yet we show that they can be implemented as competitive equilibria in market economies supplemented with simple tax systems the market structure in these economies is identical to that in bewley 1986 huggett 1993 or aiyagari 1994 agents can trade current consumption for claims to future consumption subject to a budget constraint and a borrowing limit these claims have a non contingent pre tax return crucially taxes are conditioned upon only two observable characteristics of an agent current wealth given by the agent s accumulated stock of claims and current labour income they do not depend on any other aspect of an agent s past history most models of dynamic optimal taxation follow the ramsey approach in which the set of fiscal instruments available to the government is exogenously specified 1 linear labour and capital income taxes are typically included in this set while lump sum taxes are ruled out the exclusion of the latter is justified by appealing to incentive or administrative constraints but these are not explicitly modelled these exogenous restrictions on fiscal instruments represent frictions that the government seeks to ameliorate through its optimal choice of tax rates the approach we adopt in this paper builds on the optimal taxation literature initiated by mirrlees 1971 mirrlees assumes that agents receive privately observed shocks to their

potential for reducing carbon emissions from non annex b countries through changes in technology abstract continued questions surrounding the efficacy and enforceability of the kyoto protocol make it worthwhile to examine alternative cost effective approaches to climate policy this paper examines the feasibility of an approach that does avoid the problem of targets and timetables and concentrates on solving the most obvious gap in the kyoto protocol how to change the future trajectory of emissions from the non annex b eastern european and former soviet union countries the paper begins by estimating how large a near term reduction in emissions could be achieved if these countries were moved to levels of carbon intensity of annex b countries this static calculation shows that such an improvement in china india eastern europe and russia would provide annual emission reductions two to three times as large as those to which the annex b countries would be committed under the kyoto protocol in 2010 the paper also extends a dynamic model of economic growth with embodied technology improvement based on swan swan t w 1956 economic growth and capital accumulation economic record 32 2 334 361 and solow solow r m 1960 investment and technology progress stanford symposium of mathematical methods in the social sciences eds kenneth j arrow samuel karlin and patrick suppes stanford university press the key feature of this model is the new investment increases total factor productivity by embodying new technology and it can be adapted to include the assumption that new investment also embodies technology with lower carbon emissions the model reveals that even though new investment in non annex b countries has far lower emissions per unit of output than the existing capital stock new investment still does not embody the level of technology observed in annex b countries the model estimates that the potential for reducing emissions through changing technology in developing countries over the next 15 years is similar in magnitude to the reductions in emissions that would be achieved if all annex b countries were to achieve their kyoto protocol emission caps

cluster analysis of the relationship between carbon dioxide emissions and economic growth abstract as global warming continues to worsen the balance between carbon dioxide emissions and economic growth has received increasing attention and carbon reduction comes to be an urgent task in many countries in literature various regression models have been developed to investigate the relationship between carbon dioxide emissions and economic growth such as the inverted u shaped ekc model inverted n shaped model etc which play critical roles in analyzing the relationships existing studies suggest that some countries follow similar models to describe the relationships while others employ different ones regarding the interplay between carbon dioxide emissions and economic growth there lacks a cluster analysis to systematically uncover the similarity of countries that employ models more similar to each other than to the countries in other clusters in this paper a novel clustering approach is proposed to identify clusters of 67 countries from the spatial temporal and descriptive dimensions unlike the traditional clustering technique in which clusters are determined by geometric distances the clusters in this research are obtained based on the differences between the fitting models of the countries in each cluster the first step of the approach is to find clusters of countries sharing similar models in a given year based on the symbolic regression method and the second step is to determine the countries that frequently cooccur in the same cluster by the apriori algorithm the results present two high order clusters with different dynamic features during the period between 1971 and 2010 one high order cluster mainly consists of countries in higher level of income while the other contains lower income level countries and the carbon intensities of the two high order clusters have distinct differences the findings suggest that the countries within the same cluster could learn more lessons from each other while countries belonging to different clusters should not be examined together indiscriminately several policy implications are provided which may inform decision making for policymakers when choosing proper learning objects and help researchers with designing optimal models for specific countries

modeling the nexus between carbon dioxide emissions and economic growth the effects of economic growth on the environment have received increased attention as global warming and other environmental problems become more serious many empirical studies explain the nexus between carbon dioxide emissions and economic growth with such models as the environmental kuznets curve ekc theory however the assumptions of these models have never received strict verification with a large available data set and therefore may not be appropriate to describe the relationship in this study the nexus is modeled for 67 countries from 1971 to 2010 using a novel symbolic regression method from the experimental results several conclusions as follows could be reached firstly there is no universal model fitting every country and symbolic regression could discover a set of reasonable models for a specific country or region secondly four models including the inverted n shaped m shaped inverted u shaped and monotonically increasing are frequently found without domain experts intervention in these countries whereas the m shaped model has received little attention in previous studies but exhibits promising performance thirdly the relationship is diversified due to the difference of regions and economic development where developed countries generally follow the inverted n shaped and m shaped models to explain the relationship whereas developing countries are more likely to refer to the inverted n shaped inverted u shaped and monotonically increasing models finally several policy suggestions are presented

robust collusion with private information the game theoretic literature on collusion has been hard pressed to explain why a cartel should engage in price wars without resorting to either impatience symmetry restrictions inability to communicate or failure to optimize this paper introduces a new explanation that relies on none of these assumptions if the cartel s member firms have private information about their costs price wars can be optimal in the face of complexity specifically equilibria that are robust to pay off irrelevant disruptions of the information environment generically cannot attain or approximate efficiency an optimal robust equilibrium must allocate market shares inefficiently and may call for price wars under certain conditions for a two firm cartel cost interdependence is a sufficient condition for price wars to arise in an optimal robust equilibrium that optimal equilibria are inefficient generically applies not only to collusion games but also to the entire separable pay off environment a class that includes most typical economic models copyright 2012 oxford university press

on efficient distribution with private information this paper is a study of the dynamics of the efficient distribution of consumption in an exchange economy with many consumers each of whom is subject to private idiosyncratic taste shocks we propose a recursive method for finding feasible allocations that are incentivecompatible and that are pareto optimal within this set the method is applied to several parametric examples we find that in an efficient allocation the degree of inequality continually increases with a diminishing fraction of the population receiving an increasing fraction of the resources we discuss the extent to which these allocations can be decentralized via market arrangements this paper is a study of the dynamics of the efficient distribution of consumption in an exchange economy with private information the economy we study has a constant endowment flow of a single non storable consumption good which is to be allocated each period among a large number of consumers each period these consumers experience unpredictable idiosyncratic privately observed taste shocks affecting their marginal utility of current consumption efficiency dictates that more resources be allocated to those consumers who in any given period have a high marginal utility of current consumption

does higher economic and financial development lead to environmental degradation evidence from bric countries abstract a vast number of studies addressed the environmental degradation and economic development but not financial development moreover as argued by stern 2004 the rise and fall of the environmental kuznets curve world development 32 1419 1439 they present important econometric weaknesses using standard reduced form modeling approach and controlling for country specific unobserved heterogeneity we investigate the linkage between not only economic development and environmental quality but also the financial development panel data over period 1992 2004 is used we find that both economic and financial development are determinants of the environmental quality in bric economies we show that higher degree of economic and financial development decreases the environmental degradation our analysis suggests that financial liberalization and openness are essential factors for the co 2 reduction the adoption of policies directed to financial openness and liberalization to attract higher levels of r d related foreign direct investment might reduce the environmental degradation in countries under consideration in addition the robustness check trough the inclusion of us and japan does not alter our main findings

if homo economicus could choose his own utility function would he want one with a conscience reply in my model of the evolution of honesty 1 i assumed the existence of a signal a blush perhaps extreme values of which served to identify some individuals as being honest with certainty joseph harrington notes that without this assumption honest individuals have difficulty invading a population initially dominated by defectors for readers who do not wish to work through the algebra in his comment the argument is easily summarized in nontechnical terms suppose two honest mutants a and b arrive in an uncountably large population consisting entirely of dishonest persons and suppose that the probability that an honest person exhibits an intense blush is say 0 999 while the corresponding probability for everyone else is only 0 001 when a sees an intense blush on the face of b what will then be his estimate of the probability that b is honest assuming that a knows the laws of elementary probability and corrects for the base rate of honest persons in the population it will be zero when virtually everyone in the population is dishonest even a person with an intense blush will be pegged as dishonest provided that even the smallest fraction of dishonest persons also shows an intense blush with

forcing firms to talk financial disclosure regulation and externalities we analyze a model of voluntary disclosure by firms and the desirability of disclosure regulation in our model disclosure is costly it has private and social value and its precision is endogenous we show that i a convexity in the value of disclosure can lead to a discontinuity in the disclosure policy ii the nash equilibrium of a voluntary disclosure game is often socially inefficient iii regulation that requires a minimal precision level sometimes but not always improves welfare iii the same is true for subsidies that change the perceived cost of disclosures and iv neither regulation method dominates the other article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

reassessing the environmental kuznets curve for co2 emissions a robustness exercise the number of studies seeking to empirically characterize the reduced form relationship between a country economic growth and the quantity of pollutants produced in the process has recently increased significantly in several cases researchers have found evidence pointing to an inverted u benvironmental kuznetsq curve in the case of co2 however the evidence is at best mixed in this paper we reconsider that evidence by assessing how robust it is when the analysis is conducted in a different parametric setup and when using alternative emissions data from the international energy agency relative to the literature our contribution can be viewed as a robustness exercise in these two respects the econometric results lead to two conclusions firstly published evidence on the ekc does not appear to depend upon the source of the data at least as far as carbon dioxide is concerned secondly when an alternative functional form is employed there is evidence of an inverted u pattern for the group of oecd countries with reasonable turning point regardless of the data set employed not so for non oecd countries as the ekc is basically increasing slowly concave according to the iea data and more bellshaped in the case of cdiac data d 2005 elsevier b v all rights reserved

financial distress and underemployment a reasonable model of the labour market over the business cycle should predict among other things that a in very low states of product demand there may be too little employment from an efficiency perspective but as the state improves employment will increase until ultimately it is efficiently deployed and b in low states of demand a worker s welfare level will be low and as the state of the world improves so will the worker s welfare except possibly at high levels of demand where the worker s utility may start to fall surprisingly there does not exist a labour contract based model that is consistent with predictions a and b in fact the standard results in the literature are if leisure is a normal good then there will be too much employment in essentially all states of the world and the welfare of the worker declines as the state of the world improves in this paper a labour contracting model is constructed that is consistent with the above mentioned predictions two necessary ingredients in the model are the possibility of financial distress in low demand states and partial provability in contracting financial distress can be viewed as frustrating renegotiation and thus inefficient outcomes are possible in equilibrium partial provability the ability of an informed player to make verifiable claims or statements to an uninformed player eliminates certain kinds of inefficient outcomes in particular it eliminates the possibility that in equilibrium there is too much employment this last result is interesting in itself because it is commonly believed that normality of leisure necessarily implies that labour contracting models will generate employment levels that are too high from an efficiency perspective

repeated moral hazard and one sided commitment abstract this paper considers a repeated unobserved endowment economy with a restriction that agents can walk away from insurance contracts at the beginning of any period and contract with another insurer one sided commitment an equilibrium is derived characterized by a unique market determined insurance contract with the property that agents never want to walk away from it the paper shows that trade or insurance still occurs and that a non degenerate long run distribution of consumption exists a numerical example shows that this distribution is nearly log normal journal of economic literature classification numbers d30 d31 d80 d82

an ekc pattern in historical perspective carbon dioxide emissions technology fuel prices and growth in sweden 1870 1997 the environmental kuznets curve ekc has been subject to research and debate since the early 1990s this articleexamines the inverted u trajectory of swedish co2 emissions during an extended time

pooled mean group estimation of an environmental kuznets curve for co2 abstract we apply the pooled mean group estimator to test for the existence of an environmental kuznets curve for co2 in 22 oecd countries this approach allows for more flexible assumptions in a panel data framework the period goes from 1975 to 1998

intertemporal distortions in the second best we consider a very general class of public nance problems that encompasses ramsey models of optimal taxation as well as economies with limited commitment private information and political economy frictions we identify a su cient condition to rule out permanent intertemporal distortions at the optimum if there exists an admissible allocation that converges to the rst best steady state then all intertemporal distortions are temporary in the second best we analyze a series of applications to illustrate the signi cance of this result

the risk free rate in heterogeneous agent incomplete insurance economies abstract why has the average real risk free interest rate been less than one percent the question is motivated by the failure of a class of calibrated representative agent economies to explain the average return to equity and risk free debt i construct an economy where agents experience uninsurable idiosyncratic endowment shocks and smooth consumption by holding a risk free asset i calibrate the economy and characterize equilibria computationally with a borrowing constraint of one year s income the resulting risk free rate is more than one percent below the rate in the comparable representative agent economy

optimal taxation of capital income in general equilibrium with infinite lives this paper analyzes the optimal tax on capital income in general equilibrium models of the second best agents have infinite lives and utility functions which are extensions from the koopmans form the population is heterogeneous the important property of the models is the equality between the social and the private discount rates in the long run i find that the optimal tax rate is zero in the long run for a special case of additively separable utility functions i then determine the tax rates along the dynamic path and conditions that are sufficient for the local stability of the steady state

co2 emissions energy consumption income and foreign trade a south african perspective abstract the effect of trade liberalisation on environmental conditions has yielded significant debate in the energy economics literature although research on the relationship between energy consumption emissions and economic growth is not new in south africa no study specifically addresses the role that south africa s foreign trade plays in this context a surprising fact given trade is one of the most important factors that can explain the environmental kuznets curve this study employs recent south african trade and energy data and modern econometric techniques to investigate this the main finding of interest in this paper is the existence of a long run relationship between environmental quality levels of per capita energy use and foreign trade in south africa as anticipated per capita energy use has a significant long run effect in raising the country s co 2 emission levels yet surprisingly higher levels of trade for the country act to reduce these emissions granger causality tests confirm the existence of a positive bidirectional relationship between per capita energy use and co 2 emissions whilst the study also finds positive bidirectional causality between trade and income per capita and between trade and per capita energy use it appears however that trade liberalisation in south africa has not contributed to a long run growth in pollution intensive activities nor higher emission levels

income fluctuation and asymmetric information an example of a repeated principal agent problem we examine a simple repeated principal agent model with discounting there are a risk averse borrower with an unobservable random income and a risk neutral lender the efficient contract is characterized it tends to the first best constant consumption contract as the discount factor tends to one and the time horizon extends to infinity if the time horizon is infinite and the contract is legally enforceable the borrower s utility becomes arbitrarily negative with probability one if the borrower has constant absolute risk aversion consumption is transferred between any two states at a constant interest rate which is less than the rate of time preference

risk sharing and information in village economies arrangements for achieving efficient risk sharing vary depending on the information available to agents in the economy the usual euler equation restricts efficient allocations in an economy which obeys the permanent income hypothesis while efficient allocations in an economy with private information and long term contracts satisfy a symmetric restriction but not the euler equation full insurance arrangements are unique in that they satisfy both restrictions we look at an environment in which it seems likely that long term contracts play a role in mitigating the effects of private information three village economies in south india the evidence that consumption allocations satisfy the private information restriction is quite strong for households in two of the three villages the evidence for the third village suggests that while consumption for some households satisfies the private information restrictions other households consumption obey the permanent income hypothesis

political economy of mechanisms we study the optimal mirrlees taxation problem in a dynamic economy in contrast to the standard approach where the taxation mechanism is operated by a benevolent planner with full commitment power we focus on economies in which policy decisions are made by self interested politicians who cannot commit to policies the society controls politicians using elections we show that the provision of incentives to politicians can be partly separated from redistribution across agents and that political economy constraints can be modeled as introducing additional aggregate distortions in the dynamic mirrlees problem we provide conditions under which the political economy distortions persist or disappear in the long run if the politicians are as patient as the agents the best sustainable mechanism leads to an asymptotic allocation where the aggregate distortions arising from political economy disappear in contrast when politicians are less patient than the citizens positive aggregate labor and capital taxes remain even asymptotically we conclude by providing a brief comparison of centralized

robustly collusion proof implementation a contract with multiple agents may be susceptible to collusion we show that agents collusion imposes no cost in a large class of circumstances with risk neutral agents including both uncorrelated and correlated types in those circumstances any payoff the principal can attain in the absence of collusion including the second best level can be attained in the presence of collusion in a way robust to many aspects of collusion behavior the collusion proof implementation generalizes to a setting in which only a subset of agents may collude provided that noncollusive agents incentives can be protected via an ex post incentive compatible and ex post individually rational mechanism our collusion proof implementation also sheds light on the extent to which hierarchical delegation of contracts can optimally respond to collusion