scale economies perverse comparative statics results the marshallian stability and the long run equilibrium for a small open economy abstract using a simple general equilibrium model we show that the perverse comparative statics results can occur under scale economies these paradoxes disappear iff the equilibrium is marshallian stable and the latter holds iff it is a stable long run equilibrium under capital adjustment

cost reduction competition and industry performance in many markets firms compete over time by expending resources with the purpose of reducing their costs sometimes the cost reducing investments operate directly on costs in many instances they take the form of developing new products that deliver what customers need more cheaply therefore product development can have the same ultimate effect as direct cost reduction in fact if one thinks of the product as the services it delivers to the customer in the way that lancaster pioneered then product development often is just cost reduction

variable returns to scale and the global correspondence principle in the theory of international trade abstract the global correspondence principle is applied to obtain global theorems on the price output response and the rybczynski and stolper samuelson effects for an economy with variable returns to scale the marshallian output adjustment process is used to obtain these results

on the welfare effects of a duty free zone abstract the analysis extends and corrects the results of an earlier paper by hamada two problems are analyzed 1 how is location of production affected by opening up of a free zone taking into account different kinds of trade barriers and zones implications for production consumption and welfare in a number of different cases are analyzed 2 what are the effects of capital inflow either into the zone or into the host country our results show that both types of capital inflow diminish welfare and welfare diminishes comparatively more when imported into the zone repatriated income as well as its composition is explicitly incorporated

quantitative restrictions and the welfare effects of capital inflows abstract this paper explores the welfare effects of capital inflows when some imports are subject to quantitative restrictions it is shown that in a heckscher ohlin model where all imports are restricted by quotas and some fraction of the initial domestic capital stock is foreign owned a capital inflow is welfare improving regardless of the ranking of sectoral factor intensities with sector specific capital stocks and both tariff ridden and quota restricted imports the consequences of direct foreign investment in any sector are uncertain and depend upon whether the two imports are compensated substitutes or complements as well as the characteristics of production

assessing the combined effect of the diffusion of solar rooftop generation energy conservation and efficient appliances in households abstract there is a growing worldwide concern regarding emissions of energy related greenhouse gases ghgs policy technology and human awareness provide opportunities for offsetting these effects through energy conservation efficient appliances and solar generation in households as these have been the subject of increasing attention across the world in recent years solar rooftop generation in particular could deliver significant efficiency improvements and reductions of co2 emissions through its diffusion which also avoids losses in electricity transmission and distribution systems energy efficiency contributes to the achievement of a sustainable future because it reduces the energy infrastructure needs increases competitiveness and improves consumer welfare conservation would also reduce co2 emissions in households the purpose of this paper is to assess the combined effect of the diffusion of solar rooftop generation energy efficiency and electricity conservation in the residential sector in colombia simulation results for different policy scenarios indicate that rooftop generation energy efficiency and conservation can together lead under certain conditions to important reductions in both electricity prices and emissions

on the concepts of returns to scale abstract we clarify various concepts of returns to scale scattered in the literature by presenting their six different concepts we find the global relationship among them and apply some of the results to determine the shape of the average cost curves

the experience curve option value and the energy paradox abstract this paper develops a model to explain the energy paradox the inclination of households and firms to require very high internal rates of return in order to make energy saving investments the model abstracts from many features of such investments to focus on their irreversibility the uncertainty of their future payoff streams and the investor s anticipation of future technological advance in this setting the decision to invest in energy saving technology can be delayed providing option value in addition delay allows the potential investor to cash in on future experience curve effects with the passage of time firms gain practical knowledge in producing and installing the energy saving technology enabling them to reduce the technology s up front cost per unit of energy saved we incorporate these fundamentals into a stochastic model where the investment s discounted benefits follow geometric brownian motion to demonstrate the model s capabilities we generate simulation results for photovoltaic systems that highlight the experience curve effect as a fundamental reason why households and firms delay making energy saving investments until internal rates of return exceed values of 50 and higher consistent with observations in the economics literature we also explore altruistic motivations for energy conservation and the model s implications for both additionality and the design of energy conservation policy

incorporating technology buying behaviour into uk based long term domestic stock energy models to provide improved policy analysis the uk has a target for an 80 reduction in co2 emissions by 2050 from a 1990 base domestic energy use accounts for around 30 of total emissions this paper presents a comprehensive review of existing models and modelling techniques and indicates how they might be improved by considering individual buying behaviour macro top down and micro bottom up models have been reviewed and analysed it is found that bottom up models can project technology diffusion due to their higher resolution the weakness of existing bottom up models at capturing individual green technology buying behaviour has been identified consequently markov chains neural networks and agent based modelling are proposed as possible methods to incorporate buying behaviour within a domestic energy forecast model among the three methods agent based models are found to be the most promising although a successful agent approach requires large amounts of input data a prototype agent based model has been developed and tested which demonstrates the feasibility of an agent approach this model shows that an agent based approach is promising as a means to predict the effectiveness of various policy measures

on the choice between capital import and labor export abstract the paper analyses some questions arising in connection with inflow of foreign capital into a host country and its free zone when capital is mobile between sectors capital import into any part of the economy decreases welfare with sector specific capital import of capital into the protected sector export sector decreases increases welfare if capital import into the export sector of the domestic zone is infeasible there may be a case for establishing a free zone and allowing capital import exclusively there with a suitable tax policy capital import into the free zone will always be beneficial

germany s solar cell promotion dark clouds on the horizon abstract this article demonstrates that the large feed in tariffs currently guaranteed for solar electricity in germany constitute a subsidization regime that threatens to reach a level comparable to that of german hard coal production a notoriously outstanding example of misguided political intervention yet as a consequence of the coexistence of the german renewable energy sources act eeg and the eu emissions trading scheme ets the increased use of renewable energy technologies does not imply any additional emission reductions beyond those already achieved by ets alone similarly disappointing is the net employment balance which is likely to be negative if one takes into account the opportunity cost of this form of solar photovoltaic pv support along the lines of the international energy agency iea 2007 energy policies of iea countries germany 2007 review international energy agency oecd paris p 77 we recommend the immediate and drastic reduction of the magnitude of the feed in tariffs granted for solar based electricity ultimately producing electricity on this basis is among the most expensive greenhouse gas abatement options

protection and the harmful effects of endogenous capital flows abstract assume a country has in place a binding tariff and is a price taker on world markets in which capital is internationally mobile and unimpeded regardless of trade patterns possible specificity of capital or factor intensities an increase in the tariff harms the country if capital is frozen and harms the country even more when capital mobility brings rates of return into line among countries

tariffs capital export and immiserizing growth abstract the purpose of this paper is to show how the brecher diaz 1977 and minabe 1974 propositions on the capital inflow from a tariff apply symmetrically to capital outflow that is when the home country continues to import the labor intensive goods while remaining incompletely specialized the capital outflow must reduce the home country s real income this will be so when the net return to home capital is greater than the home value of its marginal product at internal prices but less than the home value of its marginal product at world prices

gains from trade under variable returns to scale recently several trade theorists have investigated the welfare consequences of international trade under variable returns to scale for example kemp and negishi 11 using the revealed preference arguments obtain the sufficient conditions under which the opening of trade and an improvement in the terms of trade are nonharmful in the presence of variable returns to scale production subsidies and consumption taxes eaton and panagariya 7 reexamine these issues in the context of pareto welfare criterion it is noteworthy that the assumption of constant returns to scale is retained in their discussions on production subsidies and consumption taxes 1 the purpose of this paper is to explore the welfare implications of tariffs and consumption taxes as well as the welfare rankings of these policy instruments under variable returns to scale we obtain several interesting results for example social welfare for a small country can be maximized by introducing in addition to free trade a policy of production tax cum subsidy such that the output of the industry exhibiting greater smaller returns to scale is pushed to the maximum minimum a higher tariff rate needs not result in a lower welfare whereas a higher rate of consumption tax necessarily leads to a lower welfare furthermore a tariff may be superior to an equivalent consumption tax the paper evolves as follows the model and assumptions are presented in section ii section iii is the analysis regarding non optimality of free trade free trade versus no trade

scaling up local energy infrastructure an agent based model of the emergence of district heating networks abstract the potential contribution of local energy infrastructure such as heat networks to the transition to a low carbon economy is increasingly recognised in international national and municipal policy creating the policy environment to foster the scaling up of local energy infrastructure is however still challenging despite national policy action and local authority interest the growth of heat networks in uk cities remains slow techno economic energy system models commonly used to inform policy are not designed to address institutional and governance barriers we present an agent based model of heat network development in uk cities in which policy interventions aimed at the institutional and governance barriers faced by diverse actors can be explored three types of project instigators are included municipal commercial and community which have distinct decision heuristics and capabilities and follow a multi stage development process scenarios of policy interventions developed in a companion modelling approach indicate that the effect of interventions differs between actors depending on their capabilities successful interventions account for the specific motivations and capabilities of different actors provide a portfolio of support along the development process and recognise the important strategic role of local authorities in supporting low carbon energy infrastructure

fiscal and monetary policies in complex evolving economies what is the most appropriate combination of fiscal and monetary policies in economies subject to banking crises and deep recessions we study this issue using an agent based model that is able to reproduce a wide array of macro and micro empirical regularities simulation results suggest that policy mixes associating unconstrained counter cyclical fiscal policy and monetary policy targeting employment is required to stabilise the economy we also show that discipline guided fiscal rules can be self defeating as they depress the economy without improving public finances finally we find that the effects of monetary and fiscal policies become sharper as the level of income inequality increases

capital inflows and economic welfare for a small open economy with variable returns to scale abstract in the presence of a production subsidy a tariff and or variable returns to scale this paper shows that a capital inflow improves welfare under certain conditions and that only temporary production subsidy tariff may be needed to generate capital inflows even if the domestic rental rate is initially lower than the world rental rate

trade in producer services a heckscher ohlin approach trade in services has become topical but little theory has been developed this paper assumes that one commodity and the services of capital are tradable and examines the traditional trade results service trade can produce the same equilibrium as commodity trade but substantial differences exist depending on whether the tradable commodity is capital or labor intensive tariffs on either commodity have the same commodity price effects and will always increase the welfare of the immobile factor labor factor income taxes can also affect trade patterns when both goods and capital services are tradable there is an indeterminacy in trade patterns and tariffs while reducing commodity trade may not reduce welfare

an economic perspective on experience curves and dynamic economies in renewable energy technologies this paper analyzes dynamic economies in renewable energy technologies the paper has two contributions the first is to test the robustness of experience in solar photovoltaic solar thermal and wind energy to the addition of an explicit time trend which has been done in experience studies for other industries but not for renewable energy technologies estimation is carried out on the assumption that cumulative capacity industry production average firm production and electricity generation affect experience and thus the fall in price the second contribution is to test the impact of r d on price reduction in general cumulative experience is found to be highly statistically significant when estimated alone and highly statistically insignificant when time is added to the model the effect of r d is small and statistically significant in solar photovoltaic technology and statistically insignificant in solar thermal and wind technologies

capital and technology movements and economic welfare economists have long valued capital mobility as an aid to international efficiency robert mundell has shown that under certain conditions the capital movement induced by tariffs on goods will substitute for trade and enable the tariff impeded international economy to reach essentially the same equilibrium as would a completely free international economy it will also except possibly for the case when the optimal tariff is non zero benefit both countries but if perfect unlimited capital mobility is a good thing for the borrowing country it does not follow as this paper demonstrates that any limited amount of capital mobility however small is a good thing if the capital movement is due to discrepancies in returns due solely to a tariff then a small amount of capital inflow will actually diminish welfare in the recipient country thus countries which take a few cautious steps toward liberalization of capital flow may find their welfare diminished this conclusion is related to the intuitive notion that perhaps it might not be a good idea to allow only a few foreign investors to reap high rates of return in capital short countries if foreign investment is allowed enough should be allowed to depress the rate of return so that excessive profits are not taken otut of the country by a few privileged investors on the other hand however this paper shows that if differences in returns are due to a technological advantage in the capital importing country so that the country with initially high return to capital nonetheless exports the capital intensive good and if these differences in returns are accompanied but not caused by tariffs then even short hesitant steps toward liberalization of capital inflow will improve the borrowing country s welfare this paper also shows that the home country s welfare may be improved or diminished by importing the advanced country s technology when the home country levies a tariff and pays royalties for the technology the critical point is that a movement of technology may either increase or diminish economic welfare depending on whether the technological progress is of the capital saving type or of the labor saving type in the fixed production coefficients case in the same case when the technological progress is hicksian neutral technology inflow will reduce or have no effect on the home country s economic welfare depending on whether the foreign country s technological progress occurs in the home country s inmport competing or export industries similarly capital or technology inflow will never increase the borrowing country s welfare when the country specializes completely in a single industry some of these results should be modified when we treat the possibility that changes in factor prices alter factor proportions

welfare gains from capital inflows under import quotas abstract the presence of tariffs was assumed in the literature which examined the effect of additional foreign investment on the welfare of the host country in the small country setting however this paper analyzes the case of import quotas and shows that additional inflows of foreign capital improve the host country s welfare when import quotas are kept constant

tariff induced capital inflow and welfare under variable returns to scale abstract this paper extends recent studies on tariff immiserization in the presence of internationally mobile sector specific capital to include the possibility of non constant returns to scale it is shown that brecher and diaz alejandro s 1977 proposition does not necessarily hold that is under certain conditions tariff induced capital inflow improves the host country s welfare even if the foreign capital receives the full untaxed value of its marginal product

competition with hidden knowledge in markets where product quality is diffuse and verification by buyers is sufficiently costly high quality sellers have an incentive to signal to buyers by investing in some activity that is more costly for low quality sellers unfortunately with competition among buyers over the price paid for each level of the signal there is in general no nash equilibrium however it is sufficient for equilibrium that i low quality sellers would under symmetric information choose not to enter the market and ii the rate at which the marginal cost of signaling declines across types is sufficiently large

exploring domestic micro cogeneration in the netherlands an agent based demand model for technology diffusion abstract micro cogeneration micro chp is a new technology at the household level producing electricity in cogeneration with domestic heating thereby increasing the overall efficiency of domestic energy production we have developed a prototypical agent based simulation model for energy technologies competing for demand at the consumer level the model is specifically geared towards the competition between micro chp and incumbent condensing boilers in the model both technologies compete on purchase price and costs of usage to which various types of consumers decide on the installation of either technology simulations with various gas and electricity prices show that micro chp diffusion could be seriously inhibited if demand for natural gas decreases e g due to insulation measures further simulations explore various subsidy schemes a subsidy for purchase is only found to be effective within a limited range of 1400 3250 a subsidy based on decreasing price difference between the competing technologies is much more cost effective than fixed purchase subsidies simulations of a subsidy scheme for usage show that a fast market penetration can be reached but this does not yet take full advantage of technological progress in terms of decreasing co2 emissions selection of the most effective scheme thus depends on the policy criteria assumed

theory of screening and the behavior of the firm comment possibilities the concept of equilibrium differs depending upon the assumptions concerning the behavior of the firm as michael rothschild and stiglitz and others point out in this comment i reconsider the stiglitz screening model assuming that the behavior of the firm is more responsive to profitable possibilities than that considered by stiglitz i show that the screening process in the stiglitz model has similarities with that in the spence model in some aspects i also point out other characteristics of the stiglitz model considering the existence of equilibria in the cases of no social return from screening and of positive social return from screening and show that the existence of equilibria depends upon the supposed behavior of the firm and the concept of equilibrium in the stiglitz model

revisiting the stolper samuelson and rybczynski theorems with production externalities by using duality theory this paper reexamines the validity of the stolper samuelson and rybczynski theorems with intra and or interindustrial externalities in particular the author states conditions for the validity of both theorems in terms of the patterns of production externalities and price output responses this paper also examines the second and third assumptions of r w jones 1968 to show that they are equivalent without interindustrial externalities with the assumption the normal price output response is a necessary and sufficient condition for the validity of the theorems while without it the normal price output response is a necessary condition

emerging innovation niches an agent based model the creation of an innovation niche depends on the interaction of three mechanisms involving converging expectations networking among the innovation actors and learning about the novelty through efficient knowledge creation and diffusion such mechanisms define the key characteristics of a network of firms i e the innovation niche and the interaction among them guides the development and diffusion of a new technology in this paper we propose an agent based model to investigate the dynamics characterising such interactions and the role that policy intervention can have in governing the niche development process specifically we consider and assess the impact of two policy actions 1 increasing actors expectations towards the new technology by means of information spreading and 2 providing subsidies aimed at stimulating technological switch our results confirm the importance of policy intervention and show the dominance of information spreading activities over subsidies the former policy action in fact preserves a broad consensus around the new technology a fact which turned out to be fundamental in order to promote efficient knowledge diffusion and the effective use of individual and network resources

technological change in energy systems learning curves logistic curves and input output coefficients abstract learning curves have recently been widely adopted in climate economy models to incorporate endogenous change of energy technologies replacing the conventional assumption of an autonomous energy efficiency improvement however there has been little consideration of the credibility of the learning curve the current trend that many important energy and climate change policy analyses rely on the learning curve means that it is of great importance to critically examine the basis for learning curves here we analyse the use of learning curves in energy technology usually implemented as a simple power function we find that the learning curve cannot separate the effects of price and technological change cannot reflect continuous and qualitative change of both conventional and emerging energy technologies cannot help to determine the time paths of technological investment and misses the central role of r d activity in driving technological change we argue that a logistic curve of improving performance modified to include r d activity as a driving variable can better describe the cost reductions in energy technologies furthermore we demonstrate that the top down leontief technology can incorporate the bottom up technologies that improve along either the learning curve or the logistic curve through changing input output coefficients an application to uk wind power illustrates that the logistic curve fits the observed data better and implies greater potential for cost reduction than the learning curve does

an analysis of uk policies for domestic energy reduction using an agent based tool this paper introduces a new agent based model which incorporates the actions of individual homeowners in a long term domestic stock model and details how it was applied in energy policy analysis the results indicate that current policies are likely to fall significantly short of the 80 target and suggest that current subsidy levels need re examining in the model current subsidy levels appear to offer too much support to some technologies which in turn leads to the suppression of other technologies that have a greater energy saving potential the model can be used by policy makers to develop further scenarios to find alternative more effective sets of policy measures the model is currently limited to the owner occupied stock in england although it can be expanded subject to the availability of data

trade and investment with constant and increasing returns to scale it has been well known since the seminal paper by mundel that in a heckscher ohlin model with constant returns to scale factor flows can be perfect substitutes for com modity trade this paper extends the analysis to differentiate between factor movements and investment and considers the possibility of trade and investment occurring simultaneously the analysis is carried out in models with constant and increasing returns to scale in the crs model it is shown that it is important whether the returns to capital are repatriated in terms of commodity x or commodity y the country well endowed with capital could export the labour intensive good and generally the pattern of trade cannot be predicted by endowment differences between countries with both investment and trade tariffs need not produce a welfare loss with irs it is shown that there can be no presumption as to the direction of investment in the no trade world trade patterns however are predictable as investment will be after trade has taken place thus the direction of investment may depend on whether trade or investment occurs first

trade factor prices and the gains from trade with increasing returns to scale existing analyses seem to suggest that national increasing returns to scale are not a very useful tool for analysing trade owing to problems such as multiple equilibria and the tendency towards complete specialization the purpose of this paper is to construct a model in which there are in fact determinant relationships among country size the direction of trade the gains from trade and international factor price differences in the model differences in country size determine the direction of trade which in turn determines factor price differences and limits the possible distribution of the gains from trade commerce international prix des facteurs de production et les gains de l change dans un contexte de rendements croissants a l echelle les analyses conventionnelles semblent suggerer que les rendements croissants h l 6chelle au niveau national ne constituent pas une avenue prometteuse dans l analyse du commerce international parce que de tels rendements creent une presomption en faveur de la specialisation complete et conduisent a des situations d 6quilibres multiples le but de ce m6moire est de construire un mod le dans lequel il existe des rapports determinants entre la dimension du pays la direction des 6changes les gains de l echange et les differentiels internationaux entre les prix des facteurs de production dans ce mod le les differences entre les pays en termes de dimension d6terminent la direction du commerce international laquelle d6termine le differentiel entre les prix des facteurs de production et limite l eventail des r6partitions possibles des gains de l echange

innovation and market structure in the dynamics of the pharmaceutical industry and biotechnology towards a history friendly model this paper is a first attempt at modelling the long term dynamics of market structure and innovation in the pharmaceutical industry in a history friendly way the model examines the relationships between the nature of the search space demand the patterns of competition and industry evolution in the age of random screening and in the age of molecular biology and shows that concentration in the pharmaceutical industry is shaped by lack of cumulativeness in innovative activities and market fragmentation the model conforms to our appreciative understanding and responds to changes in parameters concerning demand costs economies of scale opportunity conditions and the relative advantages of new biotechnology firms nbfs vis a vis incumbents with the exception of cost increases the model is quite robust to these changes in its essential features it is quite difficult to raise substantially concentration and to have nbfs displacing incumbents

zero energy homes are they economically viable whilst net zero energy homes are espoused in many policy circles and many bespoke examples have been constructed to demonstrate their technical feasibility there is a scarcity of evidence demonstrating such a standard would be economically rational particularly for large scale housing development where orientation and aspect may not always be optimal drawing on energy monitoring evidence and construction economics associated with a nearly zero energy housing estate in adelaide australia this paper explores the economic feasibility of the net zero energy home policy in warm temperate climates the results demonstrate that using economic tools and assumptions typically applied for building energy regulatory policy changes net societal economic benefits significantly outweigh costs the clear economic outcomes combined with expected health and productivity benefits from improved levels of thermal comfort should provide security to policy makers to progress home energy standards towards net zero energy performance

entry and learning this paper shows the difficulties associated with discerning the impact of learning and pressures of competitive entry on the price and cost of production in commodity markets it shows that the patterns of price and cost movements over time will be dramatically affected by the entry of new competitors if firms possess u shaped average cost curves entry alone can generate price and cost declines which look like learning induced reductions alternatively cost increases may occur even when learning is quite strong this research has dramatic managerial and empirical implications managers operating in highly competitive environments subject to rapid entry must put more emphasis on the role of their own day to day decisions in affecting cost the fact that costs have declined may have nothing to do with learning but may be driven by their reactions to competitive pressures investigators empirically estimating learning curves must also be cognizant of the role entry plays in affecting cost simple compa

tariffs capital export and immiserizing growth a reply it would be wrong to infer from yeong her yeh 1983 that one can exclude the possibility of immiserization from capital export if exporters of capital earn abroad an amount equal to the value of marginal product of capital at world prices immiserization may occur both in the capital exporting and importing countries when the amount of capital transfer is limited

breeding competitive strategies we show how genetic algorithms can be used to evolve strategies in oligopolistic markets characterized by asymmetric competition the approach is illustrated using scanner tracking data of brand actions in a real market an asymmetric market share model and a category volume model are combined to represent market response to the actions of brand managers the actions available to each artificial brand manager are constrained to four typical marketing actions of each from the historical data each brand s strategies evolve through simulations of repeated interactions in a virtual market using the estimated weekly profits of each brand as measures of its fitness for the genetic algorithm the artificial agents bred in this environment outperform the historical actions of brand managers in the real market the implications of these findings for the study of marketing strategy are discussed

the theorems of international trade with factor mobility abstract this paper addresses the relation between goods trade and international factor mobility in general terms the basic theorems of international trade suitably interpreted are shown to hold in their strong versions if the number of international markets for goods and factors is at least as large as the number of factors the crucial dimensionality issue is hence not the relative number of goods and factors per se but the number of international markets relative to the number of factors only the price version of the heckscher ohlin theorem fails to be essentially preserved by this condition

marshallian stability long run equilibrium and the pattern of specialization under factor market distortions in the pure theory of international trade abstract using a simple general equilibrium small open economy model we show that the principal comparative statics paradoxes under factor market distortions disappear if the equilibrium is marshallian stable and that the latter holds if it is a stable long run equilibrium under capital adjustment

factor movements and commodity trade as complements abstract several models are presented in which factor mobility leads to an increase in the volume of world trade the models share the common characteristic that the basis for trade is something other than differences in relative factor endowments these alternative bases for trade include returns to scale imperfect competition production and factor taxes and differences in production technology taken together the models suggest a more general idea the widely held notion that trade in goods and factors are substitutes is in fact a rather special result which is a general characteristic only of factor proportions models

should export share requirements be implemented under quota protection in this paper the authors develop a model to analyze the effects of export share requirements when a quota is in place they show that when foreign capital is located in specific economic activity zones identified with the importable sector an increase in export share requirements reduces welfare owing to the price induced higher payments to foreign capital

a reconsideration of the welfare economics of a free trade zone abstract this paper presents a model of a free trade zone which incorporates the fact that such zones are often established by government subsidies designed to promote non traditional exports in our model the condition is derived under which the establishment of a free trade zone can increase welfare regardless of the relative factor intensity of a zone based industry however the relative factor intensity of a free trade zone plays a crucial role in determining the change in welfare following economic growth and foreign investment

modelling the diffusion and operation of anaerobic digestions in great britain under future scenarios within the scope of water energy food nexus abstract the paper aims to understand the impacts of the spatial and temporal diffusion of anaerobic digestion ad on the water energy food wef nexus and to quantify the associated environmental social and economic benefits contemporary tight carbon reduction targets urge the need to deploy renewable energy technologies however due to interdependencies across the wef nexus various technologies are beneficial for some but not all sectors this paper quantifies the impacts of future possible ad technology diffusion choices on the environment society and economy this can aid decision makers to identify the potential consequences of various ad alternatives within the next three decades the study considers an integrated wef nexus approach and accounts for the interdependencies within the nexus this was done by developing an agent based model abm and simulating the relations between the main players within the nexus thus examining the upscaling of ad diffusion and its consequences for water consumption energy production transportation landfill use food waste processing and digestate generation three future wef nexus scenarios that reflect potential alternatives of society and technology in great britain up to 2050 were utilised by the abm implementation to test the sensitivity of ad diffusion choices these scenarios describe possible changes to lifestyle governance technologies climate and social structures accounting for the uncertainty associated with such future simulations the monte carlo method was employed to estimate the potential variations in scenario outputs results suggest that decentralisation results in the largest carbon reduction but can incur more costs centralisation consumes 35 more water but produces 37 more energy biogas the paper has visualised the scenario outputs graphically to highlight the consequences of neglecting the inter relationships between environmental social and economic aspects of ad

basel iii capital surcharges for g sibs are far less effective in managing systemic risk in comparison to network based systemic risk dependent financial transaction taxes in addition to constraining bilateral exposures of financial institutions there exist essentially two options for future financial regulation of systemic risk first regulation could attempt to reduce the financial fragility of global or domestic systemically important financial institutions g sibs or d sibs as for instance proposed by basel iii second it could focus on strengthening the financial system as a whole by reducing the probability of large scale cascading events this can be achieved by re shaping the topology of financial networks we use an agent based model of a financial system and the real economy to study and compare the consequences of these two options by conducting three computer experiments with the agent based model we find that re shaping financial networks is more effective and efficient than reducing financial fragility capital surcharges for g sibs could reduce systemic risk but they would have to be substantially larger than those specified in the current basel iii proposal in order to have a measurable impact this would cause a loss of efficiency

tariffs foreign capital and national welfare with sector specific factors abstract this paper examines the effect on national welfare of an endogenously determined inflow of foreign capital in the context of a well known model with sector specific inputs both for the case of unrestricted international trade and investment and in the presence of a tariff the second best problem of the optimal tax on foreign investment for a given tariff level is also investigated by application of the concept of shadow prices for primary factors in distorted open economies the results obtained are then related to analogous propositions derived previously for the standard heckscher ohlin model

increasing returns and the specific factors model in recent years trade theorists have been increasingly interested in the role of economies of scale in international trade models yet the literature to date seems to lack a simple treatment of income distribution and related issues in the presence of economies of scale the present paper attempts to fill this gap by incorporating increasing returns to scale irs into the standard specific factors model trade theorists have begun to view the specific factors model as the favored vehicle for analyzing the economy wide effects of changes in commodity prices factor endowments and other exogenous variables the strongest case in favor of this model has been presented by neary 16 who argues that the model provides a rigorous general equilibrium foundation for partial equilibrium analysis as far as the supply side of the economy is concerned whereas with icm partial equilibrium reasoning will frequently be misleading 2 he further conjectures that icm is the source of all the paradoxes which are peculiar to international trade theory with the exception of those which arise from the failure to adopt first best policies in light of these views in the literature it is of interest to investigate how robust the predictions of the specific factors model are in the presence of economies of scale the analysis in this paper has important implications for the literature on irs as well as that on the specific factors model the more important of these implications may be summarized as follows first in a small open economy characterized by national intraindustry irs the condition for local dynamic stability is equivalent to the condition for a normal output price response 3 moreover in contrast with the findings of the irs models based on free intersectoral mobility of all factors as exemplified in herberg and kemp 6 this condition may be satisfied everywhere along the production possibilities frontier second stability of an equilibrium in the presence of irs is not sufficient to guarantee the validity of many results of the standard specific factors model responses of a small

increasing returns dynamic stability and international trade abstract a simple two country two good model in which economies of scale form the basis of international trade is presented it is shown that the larger country exports the good characterized by increasing returns and imports the good subject to constant returns a key feature of the paper is a comprehensive stability analysis it turns out that a normal output price response is necessary for d stability furthermore the marshall lerner condition must be satisfied in terms of the short run import demand elasticities for local dynamic stability finally if international factor mobility is permitted cross hauling of specific factors may be observed

the learning curve and pricing in the chemical processing industries data on 37 chemical products are used to test a number of hypotheses about the learning curve and industrial price behavior the results document a strong and consistent learning effect learning is found to be a function of cumulated industry output and cumulated investment rather than calendar time standard economies of scale appear significant but small in magnitude relative to the learning effect variations in the slope of the learning curve are linked to differences in r d expenditures and capital intensity market concentration is found to be a strong influence on price flexibility and the timing of learningrelated price changes

marshallian stability and long run equilibrium in the theory of international trade with factor market distortions and variable returns to scale abstract we show that perverse comparative statistics paradoxes associated with factor market distortions and variable returns to scale vanish if the equilibrium is marshallian stable and that the equilibrium is marshallian stable iff it is a stable long run equilibrium

varieties of agents in agent based computational economics a historical and an interdisciplinary perspective in this paper we trace four origins of agent based computational economics ace namely the markets origin the cellular automata origin the tournaments origin and the experiments origin along with this trace we examine how these origins have motivated different concepts and designs of agents in ace which starts from the early work on simple programmed agents randomly behaving agents zero intelligence agents human written programmed agents autonomous agents and empirically calibrated agents and extends to the newly developing cognitive agents psychological agents and culturally sensitive agents the review also shows that the intellectual ideas underlying these varieties of agents cross several disciplines which may be considered as a part of a general attempt to study humans and their behavior with an integrated interdisciplinary foundation

a three dimensional model of residential energy consumer archetypes for local energy policy design in the uk this paper reviews major studies in three traditional lines of research in residential energy consumption in the uk i e economic infrastructure behaviour and load profiling based on the review the paper proposes a three dimensional model for archetyping residential energy consumers in the uk by considering property energy efficiency levels the greenness of household behaviour of using energy and the duration of property daytime occupancy with the proposed model eight archetypes of residential energy consumers in the uk have been identified they are pioneer greens follower greens concerned greens home stayers unconscientious wasters regular wasters daytime wasters and disengaged wasters using a case study these archetypes of residential energy consumers demonstrate the robustness of the 3 d model in aiding local energy policy intervention design in the uk

international capital mobility and commercial policy in an economic region abstract if two small countries are linked by capital movements then at low tariff levels any increase in capital flows induced by the commercial policy of either country will harm that country and benefit the other country while at low levels of international investment a tariff increase always harms the country levying the tariff nevertheless an increase in one country s tariff could benefit both countries by alleviating regional distortions in factor allocation if the countries liberalize factor movements within a customs union then conflicts must arise in choosing the level of the common external tariff

a note on tariff induced capital inflow and immiserization in the presence of taxation of foreign profits abstract this paper develops further the formal model of tariff induced capital inflow and immiserization presented by bhagwati 1973 we set down the necessary and sufficient condition under which immiserization will follow in addition it will be shown that the possibility of immiserization depends crucially on the initial amount of foreign capital as well as the rate of corporation tax on foreign capital

direct comparison of agent based models of herding in financial markets abstract the present paper tests a new model comparison methodology by comparing multiple calibrations of three agent based models of financial markets on the daily returns of 24 stock market indices and exchange rate series the models chosen for this empirical application are the herding model of gilli and winker 2003 its asymmetric version by alfarano et al 2005 and the more recent model by franke and westerhoff 2011 which all share a common lineage to the herding model introduced by kirman 1993 in addition standard arch processes are included for each financial series to provide a benchmark for the explanatory power of the models the methodology provides a consistent and statistically significant ranking of the three models more importantly it also reveals that the best performing model franke and westerhoff is generally not distinguishable from an arch type process suggesting their explanatory power on the data is similar

diffusion paths for micro cogeneration using hydrogen in the netherlands we estimate the diffusion of micro cogeneration systems micogen using hydrogen produced from natural gas in the netherlands for the 2000 2050 period on the basis of economical factors the diffusion is important for the transition to a hydrogen economy based on renewables with natural gas paving the way for hydrogen from renewables for three scenarios full diffusion takes place in the period 2020 2050 the most important factors behind the diffusion are 1 growing energy demand resulting in lower hydrogen costs and higher energy costs in the reference case and 2 lower costs of micogen stemming from learning economies the model is advanced by considering all costs components for heterogeneous users which have been calculated for the entire diffusion period it is the first threshold diffusion model that is being applied to the diffusion of technological clusters involving new or adapted infrastructures 2007 elsevier ltd all rights reserved

accumulation of human capital in ldcs in the presence of unemployment this paper takes up an aggregative growth framework to study how human and physical capital evolve over time as households allocate their investment between the two assets in the context of unemployment of educated labor it develops a general equilibrium model of an economy with two sectors a composite good sector and a schooling sector where output is subject to increasing returns to scale a temporary equilibrium for this economy depends on the endowments of physical and human capital as well as on the output elasticity of returns to scale and the price elasticity of education the dynamic evolution of this economy is explored in terms of the accumulation of the two types of capital a rise in education subsidy increases the demand for education at the cost of investment in physical capital and could lead to inefficient substitution between skilled and unskilled workers in the long run copyright 1994 by the london school of economics and political science

policy design and technological substitution investigating the reach regulation in an agent based model this article proposes an agent based model to study the impact of the european regulation reach on industrial dynamics this new regulation was adopted in 2006 and establishes a new philosophy of how to design environmental protection and health especially through the authorization process and the extended producer responsibility the main contribution of this article is to investigate how different combinations of flexible and stringent mechanisms create the incentives and constraints to shape market selection and innovation the model outcomes stress that 1 stringency is the most determining feature of policy design timing is also decisive but it appears to be of secondary importance 2 technology substitution that brings radical technological change and significant pollution reduction is possible only if regulation is stringent enough but after many sacrifices especially in terms of market concentration and number of failures and 3 soft regulation does not lead to technology transition because of weak incentive and selection effects

alternative approaches to analyzing markets with asymmetric information reply shiro yabushita s comment on the theory of screening stiglitz 1975 raises some interesting questions which have arisen in a number of different contexts how should one model markets with imperfect information what are appropriate behavioral postulates and equilibrium concepts to restructure the question in terms of game theoretic language who are the active players what are their strategy spaces do the players move simultaneously or does one move before the other these questions do not have simple answers different equilibrium notions are appropriate for different economic contexts yabushita s comment illustrates how one can obtain markedly different results using alternative assumptions although we believe that for the particular context examined in stiglitz 1975 the equilibrium concept employed there is better than the alternative implicitly proposed by yabushita his formulation merits attention and there are other contexts in which his would be the appropriate formulation in order to illuminate how the yabushita model differs from the stiglitz model it is useful to reformulate their analyses in game theoretic terms the strategies of individuals entail decisions as to whether or not to screen themselves go to school while the strategies of firms are wage offers conditioned on whether or not the individual has screened himself and the result of that screening an individual goes to work for the firm which offers him the highest wage thus the payoff to the firm is zero if it doesn t obtain the worker and the difference between the worker s productivity and his wage if it obtains the worker the payoff to the individual is his maximum wage offer minus his screening costs there are two alternative ways of viewing the difference between the yabushita and stiglitz formulations of the education market one way is to view yabushita and stiglitz as differing in their assumptions about whether firms or individuals move first the choice of a schooling program is typically made by individuals before a wage offer is received the stiglitz model attempts to capture this natural temporal sequence of decision making by formulating a two period model in the first period individuals decide whether or not to screen themselves while in the second profit maximizing firms offer wages to both screened and unscreened individuals who in turn go to work for the firm offering them the highest wage the wage offer of each firm is assumed to be the profit maximizing response to the screening decision of workers given the wage offers of other firms hence if any high ability worker screens himself he will receive a wage equal to his expected productivity 9k if no workers screen themselves the unscreened workers receive a wage equal to their expected productivity of 0 and if the type 1 workers screen themselves the unscreened workers receive a wage of 02 their expected productivity in each case higher wages would incur losses and a lower wage could not be an equilibrium since there would be an opportunity for some other firm to increase its profits by offering a higher wage 2