on the robustness of robustness checks of the environmental kuznets curve hypothesis since its first inception in the debate on the relationship between environment and growth in 1992 the environmental kuznets curve hypothesis ekc hereafter has been subject of continuous and intense scrutiny the most recent line of investigation criticizes the ekc hypothesis on more fundamental grounds in that it stresses the lack of sufficient statistical testing of the empirical relationship and questions the very existence of the notion of ekc attention is in particular drawn on the stationarity properties of the series involved per capita emissions or concentrations and per capita gdp and in case of presence of unit roots on the cointegration property that must be present for the ekc to be a well defined concept only at that point can the researcher ask whether the long run relationship exhibits an inverted u pattern on the basis of panel integration and cointegration tests for sulfur stern 2004 and perman and stern 1999 2003 have presented evidence and forcefully stated that the ekc hypothesis does not exist in this paper we ask whether similar strong conclusions can be arrived at when carrying out tests of system fractional integration and cointegration as an example we use the controversial case of carbon dioxide emissions the results show that more ekcs come back into life relative to traditional integration cointegration tests however we confirm that the ekc hypothesis remains a fragile concept

transfers to sustain dynamic core theoretic cooperation in international stock pollutant control international environmental agreements aiming at correcting negative externalities generated by transboundary pollution are difficult to achieve for many reasons important obstacles arise from asymmetry in costs and benefits and instability may occur due to the fact that coalitions of countries may attempt to do better for themselves outside of any proposed agreement in a static context it has already been shown that it is possible to achieve stability in the sense of the core of a co operative game by means of appropriately defined transfers between the countries involved however the transboundary pollution problems that are most important are caused by accumulated pollutants so that a dynamic analysis is required this paper provides a transfer scheme that yields a core property in a dynamic context the possibility of computing such transfers numerically is discussed

unionization and input flexibility in u s manufacturing 1973 1996 input flexibility as measured by the ability of firms to vary input demand in the face of changes in input prices is an important dimension of labor market flexibility using a new dataset the authors analyze the impact of unionization on input flexibility in u s manufacturing from 1973 to 1996 a period in which production was arguably becoming more flexible due to deep changes in the u s industrial relations system and in the broad macroeconomic environment the authors quantify the effects of unionization on input flexibility by estimating elasticities of substitution between a broad range of labor and non labor inputs controlling for unionization the pattern that emerges is more complex than that suggested by other research in particular low unionization apparently is associated with greater flexibility in the use of labor inputs but less flexibility in the use of non labor inputs

co2 emissions and income dynamics what does the global evidence tell us this paper analyzes the co evolution of two major determinants of social welfare namely income and carbon emissions in particular by using a distribution dynamics approach based on markov chains we investigate the shape and behavior of the joint distribution of per capita income and carbon dioxide emissions we arrive at several interesting conclusions especially in the context of international negotiations on climate change first evidence does not support theoretical models predicting the existence of a poverty environment trap specifically in the long run two main groups of countries will emerge poor versus polluting countries second the typical development path leads initially to high emission levels and subsequently to high income third the convergence process towards the stationary distribution is very slow finally for carbon emissions whenever it is observed the environmental kuznets curve seems to be only a transitory phenomenon

investigating environmental kuznets curve from an energy intensity perspective empirical evidence from china abstract this study pioneers investigating the environmental kuznets curve ekc hypothesis and its possible regional differential characteristics in china based on 2003 2017 years of provincial panel data this research employs panel smooth transition auto regression pstr model to analyze the impact of income levels on environmental pollution and identify the ekc threshold of energy intensity then 30 chinese provinces were categorized by energy intensity to examine the inter provincial and interregional differences in the ekc threshold of energy intensity rather than the traditional threshold of income the results indicate that china s pollution emissions and energy intensities show a stepwise decreasing pattern from the western region to the eastern region in addition the impact of income levels on pollution emissions is non linear and the critical value of energy intensity is 0 9168 between the high and low regimes an inverted u shaped environmental kuznets curve is accepted for energy intensity with 0 7670 as its threshold value when the energy intensity is higher lower than the threshold value the income elasticity of pollution emission is positive negative the more developed provinces and municipalities mainly in the eastern region are proved to exceed the threshold than the provinces in the central and western regions within the sample period given these findings this study further divides china s provinces into eco friendly low pollution and high pollution provinces and accordingly the most important policy recommendations were discussed for policy makers and researchers this research can provide a new insight to investigate countries with unbalanced development levels within and a reference for environmental governance policies in sub regions

a note on unionization and the elasticity of substitution if unions force employers off their demand curves the measured elasticity of substitutio n should be lower where unionization is stronger estimates based on pooled data for twenty two digit sic canadian manufacturing industrie s over the period 1971 81 support this proposition point estimates a re that the elasticity is 1 98 in the absence of unions 1 04 if empl oyees are fifty percent unionized and only 0 10 if employees are one hundred percent unionized however the results are not very robust to specification changes

industrial pollution in economic development the environmental kuznets curve revisited abstract using new international data this paper tests the environmental kuznets curve ekc hypothesis for industrial water pollution we measure the effect of income growth on three determinants of pollution the share of industry in national output the share of polluting sectors in industrial output and end of pipe eop pollution intensities per unit of output in the polluting sectors we find that the industry share of national output follows a kuznets type trajectory but the other two determinants do not when combined our results imply rejection of the ekc hypothesis for industrial water pollution it rises rapidly through middle income status and remains roughly constant thereafter

sensitivity analyses of anomalies in developed stock markets abstract the literature on anomalies in developed stock markets produces no consensus on specification this study uses extreme bound analysis eba to evaluate the robustness of 15 stock return anomalies given data covering 16 developed markets from may 1984 to march 1999 two factors are sturdy according to the extreme decision rule in the panel design d p and momentum under a less stringent eba criterion long run lagged returns country risk and the january effect are also robust time series eba for individual markets produces one robust result according to relaxed decision rules across a majority of cases long run government bond yields

factor substitution average firm size and economic growth this paper extends the lucas 1978 the bell journal of economics 9 2 508 523 analysis of firm size by taking into account a normalised aggregate ces production function in a general equilibrium framework it is proved that there is an inverse relation between the elasticity of substitution and average firm size if interpreted together with the fact that richer countries are characterised by a higher elasticity of substitution this result can explain why the recent literature finds a positive association between the importance of smes in an economy and its stage of development but seems to fail in finding causality between the two both have a common origin a high value of the elasticity of substitution this paper also provides a first empirical test of the theory proposed using cross country data from both developed and developing countries

energy subsidies in california s electricity market deregulation deregulation and re regulation of california s electricity market not only failed in terms of anticipated cost reductions improved customer service and higher competition it also led to the introduction of various additional energy subsidies this paper analyzes california s electricity market deregulation process from a subsidy viewpoint under deregulation in california investor owned utilities were not allowed to pass their energy procurement costs fully on to their customers and therefore subsequently and inevitably ran into severe financial problems such retail price regulation is an energy subsidy that is both economically and environmentally unfavorable because it veils true price signals to electricity consumers and in this way discourages energy conservation other policies implemented in california that represent perverse energy subsidies are the purchase of power by the state of california the suspension of retail competition and the potential misuse of money from the recovery of stranded costs many interventions implemented by the state to smooth out the impacts of the energy crisis insulated electricity consumers from market realities supported the existing structure of california s electricity market which is predominantly based on fossil fuels and suppressed market incentives to improve energy conservation

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

carbon dioxide emissions and economic growth panel data evidence from developing countries in this paper we test the environment kuznet s curve ekc hypothesis for 43 developing countries we suggest examining the ekc hypothesis based on the short and long run income elasticities that is if the long run income elasticity is smaller than the short run income elasticity then it is evident that a country has reduced carbon dioxide emissions as its income has increased our empirical analysis based on individual countries suggests that jordan iraq kuwait yemen qatar the uae argentina mexico venezuela algeria kenya nigeria congo ghana and south africa approximately 35 per cent of the sample carbon dioxide emissions have fallen over the long run that is as these economies have grown emissions have fallen since the long run income elasticity is smaller than the short run elasticity we also examine the ekc hypothesis for panels of countries constructed on the basis of regional location using the panel cointegration and the panel long run estimation techniques we find that only for the middle eastern and south asian panels the income elasticity in the long run is smaller than the short run implying that carbon dioxide emission has fallen with a rise in income

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

money demand revisited an operational subjective approach summary this paper proposes a method of data analysis founded on the philosophy and understanding of uncertain knowledge developed by bruno de finetti specifically the paper investigates the informational content of interest rates for the prediction of ml this empirical application replicates that of cooley and leroy 1981 and mcaleer pagan and volker 1985 but the procedures and their interpretation follow the operational subjective approach the issue of an autocorrelated error structure is recast in the operational subjective context methods are developed to assess the interest sensitivity of the demand for money in this context this paper illustrates an operational method of data analysis in the context of linear models the procedures advocated are founded on the subjective theory of probability originated by bruno definetti 1974 1975 and enhanced by l j savage 1954 this foundational position denies the existence of a true model and its concomitant parameters the function of a model is its assistance in generating predictive distributions of observable unknown quantities a model s performance at prediction is empirically observable this proposed method of econometric analysis is illustrated with an applied example taking advantage of a previous well known application confronting the appropriateness of econometric practices the example concerns money demand as measured by ml with particular emphasis on the informational content of interest rates for the forecasting distribution of ml cooley and leroy 1981 examined the estimation of money demand employing the bayesian method of extreme bounds analysis developed in leamer 1978 although bayesian in approach the method focuses on parameter estimation and retains the conviction of standard techniques in the reality of the model and in the reality of the model parameters mcaleer pagan and volker 1985 re examine the same model and data from a frequentist approach yielding an appropriate example with which to contrast the method presented here and its interpretation

models of military expenditure a brief review of the extensive empirical literature devoted to explaining levels of military expenditure indicates a wide variety of unreconciled results however comparing the alternative models is not straightforward this paper uses british post war military expenditures to illustrate some of the methodological issues involved in model comparison evaluation and selection starting from two published models for the uk a systematic specification search leads to a new model which dominates alternative specifications passes a wide range of misspecification tests and also fits well to french data

ces production functions and economic growth we examine inconsistencies and controversies related to the use of ces production functions in growth models first we show that not all variants of ces functions commonly used are consistently specified second using a simple growth model we find that a higher elasticity of substitution leads to a higher steady state and makes the emergence of permanent growth more probable it is also pointed out that the effect of a higher elasticity of substitution on the speed of convergence depends on the relative scarcity of the factors of production finally we discuss possible explanations of variations in the elasticity of substitution jel classification o41 o11

confronting the environmental kuznets curve t he environmental kuznets curve posits an inverted u relationship between pollution and economic development kuznets s name was apparently attached to the curve by grossman and krueger 1993 who noted its resemblance to kuznets s inverted u relationship between income inequality and development in the first stage of industrialization pollution in the environmental kuznets curve world grows rapidly because people are more interested in jobs and income than clean air and water communities are too poor to pay for abatement and environmental regulation is correspondingly weak the balance shifts as income rises leading industrial sectors become cleaner people value the environment more highly and regulatory institutions become more effective along the curve pollution levels off in the middle income range and then falls toward pre industrial levels in wealthy societies the environmental kuznets curve model has elicited conflicting reactions from researchers and policymakers applied econometricians have generally accepted the basic tenets of the model and focused on measuring its parameters their regressions typically fitted to cross sectional observations across countries or regions suggest that air and water pollution increase with development until per capita income reaches a range of 5000 to 8000 when income rises beyond that level pollution starts to decline as shown in the conventional ekc line in figure 1 in developing countries some policymakers have interpreted such results as conveying a message about priorities grow first then clean up numerous critics have challenged the conventional environmental kuznets curve both as a representation of what actually happens in the development process and as a policy prescription some pessimistic critics argue that crosssectional evidence for the environmental kuznets curve is nothing more than a

distribution network prices and solar pv resolving rate instability and wealth transfers through demand tariffs 1 in 4 detached households in southeast queensland have installed rooftop solar pv amongst the highest take up rates in the world electricity distribution network capacity is primarily driven by periodic demand and household load generally peaks in the early evening whereas solar pv production peaks during the middle of the day and thus a mismatch exists compounding matters is the fact that the structure of the regulated two part network tariff is dominated by a flat rate variable charge in this article interval meter data at the customer switchboard circuit level confirms that solar households use only slightly less peak capacity than non solar households and that non trivial cross subsidies are rapidly emerging a tariff model demonstrates that a peak capacity based demand tariff is a more efficient cost reflective and equitable pricing structure that improves the stability of tariffs given a rate of return regulatory constraint

the income environment relationship evidence from a binary response model abstract the empirical environmental kuznets curve ekc literature is vast but far from conclusive many authors have analysed the existence of an ekc for various pollutants others have used the ekc framework to identify country characteristics that help to explain the income environment relationship in this framework environmental degradation is analysed using a second or third order polynomial in income and a limited number of control variables some authors question whether this standard framework is appropriate this paper proposes an alternative to study the specific characteristics of countries that have experienced economic growth and an improving environment at the same time we estimate a binary response model and find an ekc like relation between the probability that a country s environment improves with economic growth and per capita gdp our evidence further suggests that the level of environmental damage is an important explanatory variable we also confirm the importance of an open political system these results indicate that the binary response model could be a valuable alternative to test which country specific characteristics are associated with a negative ier

financial market effects on aggregate money demand a bayesian analysis empirical researchers in aggregate money demand have long been concerned with the degree of substitutability between money and other capital assets and the impact on money holdings of financial markets developments despite the potential importance of financial market linkages to money demand empirical studies display substantial diversity in modeling these influences various econometric studies have found that money holdings may depend on short term debt returns bond yields and even the term structure of interest rates there is also evidence that stock market returns and measures of stock trading affect money holdings existing studies are limited in their evaluation of asset substitution patterns and other financial market effects because they look at a small subset of possible specifications

a multiscale reassessment of the environmental kuznets curve for energy and co2 emissions abstract this paper investigates the environmental kuznets curve hypothesis for total primary energy supply and co2 from fuel combustion over the period 1971 2015 our analysis has two distinguishing features firstly it adopts a robustness approach by a using both parametric and semi parametric methods and b analysing different geographical scales secondly it strictly adheres to the ekc narrative by a not using control variables and b taking energy and co2 in absolute rather than in per capita terms which is consistent with the fact that nature cares about absolute pressures we show how evidence for ekc changes depending on the model specification the sample and the used variables hence this paper contributes to explaining why the literature on the ekc gives mixed results the multiscale perspective and some theoretical considerations however tell how to perform the analysis appropriately thus we can affirm that both for co2 and energy the fragile evidence of ekc that was emerging at the end of the last century has vanished with the new wave of globalization there is only evidence of decreasing elasticities for very high income countries interestingly the great recession might have produced structural reductions in tpes and co2 in the affected countries finally the case of germany which shows ekc patterns indicates that active energy policies can reduce energy and co2 without harming the economy

stoking the fires co2 emissions and economic growth abstract we examine the relationship between economic development and carbon dioxide emissions a greenhouse gas central to global warming predictions estimates derived from global panel data suggest a diminishing marginal propensity to emit mpe carbon dioxide as gdp per capita rises despite this global carbon dioxide emissions growth will continue at 1 8 percent per annum for the foreseeable future a result that is not sensitive to average output growth instead emissions growth continues because output and population will grow most rapidly in lower income nations with high mpes this latter feature emphasizes the distributional consequences of policies to reduce emissions

aggregate inventory behavior in large european economies abstract inventory fluctuations are known to be an important propagation mechanism for u s business cycles this paper compares the significance of inventory fluctuations in the u s with four other major industrial economies in europe a general model of aggregate inventory demand is specified which seeks to encompass the models presented in recent studies of inventory behavior this model is estimated for the large european economies united kingdom west germany france and italy the preferred models that result from this analysis are compared with the empirical evidence for the u s

reexamining the empirical evidence for an environmental kuznets curve this paper uses an updated and revised panel data set on ambient air pollution in cities worldwide to examine the robustness of the evidence for the existence of an inverted u shaped relationship between national income and pollution we test the sensitivity of the pollution income relationship to functional forms to additional covariates and to changes in the nations cities and years sampled we find that the results are highly sensitive to these changes and conclude that there is little empirical support for an inverted u shaped relationship between several important air pollutants and national income in these data

exploring the environmental kuznets hypothesis theoretical and econometric problems focussing on the prime example of co2 emissions we discuss several important theoretical and econometric problems that arise when studying environmental kuznets curves ekcs an ekc refers to an inverse u shaped relationship between a pollutant and economic activity the dominant theoretical approach is given by integrated assessment modelling which consists of economic models that are combined with environmental impact models we critically evaluate the aggregation model dynamics and calibration aspects and their implications for the validity of the results we then turn to a discussion of several important econometric problems that go almost unnoticed in the literature the most fundamental problems relate to nonlinear transformations of nonstationary regressors and in a nonstationary panel context to neglected cross sectional dependence we discuss the implications of these two major and some minor problems that arise in the econometric analysis of kuznets curves our discussion shows that ekc modelling as performed to date is subject to major drawbacks at both the theoretical and the econometric level

the credibility revolution in empirical economics how better research design is taking the con out of econometrics since edward leamer s memorable 1983 paper let s take the con out of econometrics empirical microeconomics has experienced a credibility revolution while leamer s suggested remedy sensitivity analysis has played a role in this we argue that the primary engine driving improvement has been a focus on the quality of empirical research designs the advantages of a good research design are perhaps most easily apparent in research using random assignment we begin with an overview of leamer s 1983 critique and his proposed remedies we then turn to the key factors we see contributing to improved empirical work including the availability of more and better data along with advances in theoretical econometric understanding but especially the fact that research design has moved front and center in much of empirical micro we offer a brief digression into macroeconomics and industrial organization where progress by our lights is less dramatic although there is work in both fields that we find encouraging finally we discuss the view that the design pendulum has swung too far critics of design driven studies argue that in pursuit of clean and credible research designs researchers seek good answers instead of good questions we briefly respond to this concern which worries us little

monetary economic myth and econometric reality few of the main macro economic forecasting systems can produce sensible forecasts without the tender loving care of their proprietors many econometric equations in com mon use show significant deterioration in the accuracy with which they characterise data as time passes and many economists are sceptical about empirical evidence feeling it lacks credibility monetary relationships have the dubious distinction of being among the leaders in this field as witnessed by the very large mispredictions of m1 models in the usa over what is now known as the missing money period 1973 76 as well as during the recent great velocity decline 1979 82 in the uk models of m1 and m3 demand experienced large structural breaks following the competition and credit control regu lation changes and the move to floating exchange rates perhaps it is no surprise that goodhart s law should have been formulated with respect to money demand equations

the search for a stable money demand function a survey of the post 1973 literature phe question of whether the demnand function for money is stable is one of the most important recurring issues in the theory and application of macroeconomic policy what is being sought in a stable demand function is a set of necessary conditions for money to exert a predictable influence on the economy so that the central bank s control of the money supply can be a useful instrument of economic policy as such the notion of a stable demand function appears to involve three key elements e g john t boorman 1976 p 317 and david e w laidler 1977 pp 34 35 first the demand for money relation should be highly predictable in a statistical sense as measured by the usual goodness of fit statistics precision of estimated coefficients and presumably its ability to forecast accurately out of sample second a stable demand function for money has relatively few arguments a relationship that requires knowledge about a large number of variables in order to pin it down is in effect not predictable finally the variables that appear as arguments in the function should represent significant links to spending and economic activity in the real sector in sum a stable demand function for money means that the quantity of money is predictably related to a small set of key variables linking money to the real sector of the economy the importance of a stable money demand function for monetary policy can be illustrated with the standard is lm model in which interest rates and gnp are the endogenous variables in this context a stable demand function for money translates into a well defined relationship between money interest rates and gnp

environmental kuznets curve for co2 in canada abstract according to the environmental kuznets curve hypothesis the relationship between per capita gdp and per capita pollutant emissions has an inverted u shape this implies that past a certain point economic growth may actually be profitable for environmental quality most studies on this subject are based on estimating fully parametric quadratic or cubic regression models while this is not technically wrong such an approach somewhat lacks flexibility since it may fail to detect the true shape of the relationship if it happens not to be of the specified form we use semiparametric and flexible nonlinear parametric modeling methods in an attempt to provide more robust inferences we find little evidence in favour of the environmental kuznets curve hypothesis our main results could be interpreted as indicating that the oil shock of the 1970s has had an important impact on progress towards less polluting technology and production

the effects of unions on employment and productivity an unresolved contradiction the evidence that unions substantially increase productivity is contradicted by the evidence that the effect of unions on employment is small it is shown in this paper that if the union is constrained by the firm s demand function and it is the efficiency units of labor that are in the demand function then essentially the only way to resolve this contradiction is for unions to raise the productivity of capital and not of labor under conditions where the substitutability between labor and capital is very limited but estimates of the substitutability parameter are near unity so that one of these effects must be wrong either unions do not substantially increase productivity or they substantially reduce employment

how to design and use the clean development mechanism under the kyoto protocol a developing country perspective under the kyoto protocol industrialized countries committed to emission reductions may fullfil part of their obligations by implementing emission reduction projects in developing countries in doing so they make use of the so called clean development mechanism cdm two important issues surround the implementation of the cdm first if the cheapest abatement measures are implemented for cdm projects developing countries may be left with only more expensive measures when they have to meet their own commitments in the future the so called low hanging fruits lhf issue second a choice must be made on the type of baseline against which emission reductions are measured an absolute baseline or a relative to output one the baseline issue the purpose of this paper is to study the interactions between these two issues from the point of view of the developing country two major results are obtained first when possible future commitments for developing countries and irreversibility of abatement measures are taken into account we show that the industry where cdm projects are implemented enjoys larger profits under an absolute baseline than under a relative one second concerning the lhf problem the financial compensation required by the developing country for implementing too many cdm projects is larger under the relative baseline

using model selection algorithms to obtain reliable coefficient estimates this review surveys a number of common model selection algorithms msas discusses how they relate to each other and identifies factors that explain their relative performances at the heart of msa performance is the trade off between type i and type ii errors some relevant variables will be mistakenly excluded and some irrelevant variables will be retained by chance a successful msa will find the optimal trade off between the two types of errors for a given data environment whether a given msa will be successful in a given environment depends on the relative costs of these two types of errors we use monte carlo experimentation to illustrate these issues we confirm that no msa does best in all circumstances even the worst msa in terms of overall performance the strategy of including all candidate variables sometimes performs best viz when all candidate variables are relevant we also show how 1 the ratio of relevant to total candidate variables and 2 data generating process noise affect relative msa performance finally we discuss a number of issues complicating the task of msas in producing reliable coefficient estimates

the causal direction between money and prices abstract causality is viewed as a matter of control controllability is captured in simon s analysis of causality as an asymmetrical relation of recursion between variables in the unobservable data generating process tests of the stability of marginal and conditional distributions for these variables can provide evidence of causal ordering the causal direction between prices and money in the united states 1950 1985 is assessed the balance of evidence supports the view that money does not cause prices and that prices do cause money

the environmental kuznets curve semi parametrically revisited this paper re examines the existence of an environmental kuznets curve ekc across countries using a semi parametric regression estimator which places no restrictions on the functional form our results using cross country panel data on sulfur and carbon dioxide strongly suggest that the relationship between wealth and environmental degradation is not bell shaped as suggested by an ekc rather that there is a positive link for the very poorest countries and no clear relationship for richer countries

decoupling analysis and environmental kuznets curve modelling of provincial level co2 emissions and economic growth in china a case study abstract guangdong is one of the most representative provinces of china in terms of reflecting how the provincial level co2 emissions dynamically evolve with economic development during the process of industrialisation and urbanisation the present study combines decoupling analysis with environmental kuznets curve ekc modelling to systematically explore the interactions between co2 emissions and economic growth in guangdong from the short to long terms aiming to provide the referential significance of low carbon development to other chinese provinces empirical results indicate that co2 economy interactions in guangdong dynamically changed with time performing an effect of expansive weak decoupling during 1995 2014 and having a potential to achieve a strong decoupling in the long run the decoupling states of various sectors and their contributions to the provincial overall decoupling differed greatly and varied by time and household and service sectors played increasingly important roles overall the decoupling effect of provincial co2 emissions is distinctly affected by the stage of industrialisation and urbanisation renewable energy utilisation as well as low carbon technical progress therefore promoting co2 economy decoupling at the provincial level should be specific to the feature and development reality of various provinces

the effects of openness trade orientation and human capital on total factor productivity abstract we study the effects of openness trade orientation and human capital on total factor productivity for a pooled sample of developed and developing countries total factor productivity emerges from a parsimonious specification of the aggregate production function potential determinants of total factor productivity include measures of openness trade orientation and human capital higher openness benefits total factor productivity outward oriented countries experience higher total factor productivity over and above the positive effect of openness human capital generally contributes positively to total factor productivity in poor countries however human capital interacts with openness to achieve a positive effect

econometric modelling of non ferrous metal prices abstract this article evaluates the significance of the empirical models and the distributional properties of prices in non ferrous metal spots and futures markets published in leading refereed economics and finance journals between 1980 and 2002 the survey focuses on econometric analyses of pricing and return models applied to exchange based spot and futures markets for the main industrially used non ferrous metals namely aluminium copper lead nickel tin and zinc published empirical research is evaluated in the light of the type of contract examined frequency of data used choice of both dependent and explanatory variables use of proxy variables type of model chosen economic hypotheses tested methods of estimation and calculation of ses for inference reported descriptive statistics use of diagnostic tests of auxiliary assumptions use of nested and non nested tests use of information criteria and empirical implications for non ferrous metals

electric utility stranded costs valuation and disclosure issues we analyze the stock market s valuation of electric utility stranded costs i e costs that might become unrecoverable under deregulation and investigate whether stranded costs that have arisen as a result of voluntary firm business decisions are valued differently from those that are more directly linked to regulatory mandates further we study whether investor valuations differ across jurisdictions finally we examine the relation between investor valuation of stranded costs and the decision by utilities to make stranded cost related disclosures in their financial statements voluntarily we find that investors anticipate that on average approximately 10 of total stranded costs will be borne by utility shareholders stranded costs arising from voluntary operating or investing decisions made by utilities are valued more negatively than those associated with mandatory power purchase contracts consistent with investors assigning a higher recovery probability to the latter investor valuations of stranded costs associated with utility generating investments do not differ systematically across jurisdictions we find that stranded costs are valued less negatively for voluntary disclosers not just in the year of disclosure but also in the preceding two years implying that it is not disclosure per se that favorably influences valuation voluntary disclosers operate in jurisdictions that have more clearly established stranded cost recovery mechanisms suggesting that both stranded cost disclosure and valuation are prompted by reduction in uncertainty about recoverability

recent progress in applied bayesian econometrics abstract bayesian methods are widely used by theoretical econometricians and statisticians but have not won widespread acceptance from applied researchers after briefly describing the basic of the bayesian approach we discuss several issues relating to the empirical application of bayesian methods the existing bayesian empirical literature is also partially summarized the remainder of the paper offers a non technical survey of some recent computational advances in bayesian econometrics the overall goal is to persuade economists that bayesian methods are both computationally feasible and easy to implement in empirical research

what will take the con out of econometrics the paper begins with the question of whether leamer s extreme bounds analysis eba really does take the con out of econometrics by analytically demonstrating that the extreme bounds are simply functions of the f statistic for the deletion of variables from a regression we conclude that the information provided by eba represents no advance over that available from traditional methods furthermore there is a degree of arbitrariness in eba which exactly parallels the selective reporting of regressions it was designed to supplant the last part of the paper attempts a positive response to its title by following a well defined series of modelling steps we maintain that cooley and le roy s eba derived conclusions concerning the interest elasticity of money demand owe more to a faulty methodology than to the data this abstract was borrowed from another version of this item

the environmental kuznets curve cointegration and nonlinearity this paper clarifies some conceptual shortcomings of the empirical environmental kuznets curve ekc literature that arise because of the hitherto inadequate application of unit root and cointegration techniques the literature to date has ignored the fact and a fortiori the consequences that powers of integrated processes are themselves not integrated processes the paper explains why standard methods should not be applied and discusses some recently proposed viable estimation and testing approaches for cointegrating polynomial regressions the application to co2 and so2 emissions data shows that using appropriate methods leads to strongly reduced evidence for a cointegrating ekc compared to typical but conceptually not sound findings

why environmental management may yield no regret pollution abatement options empirical evidence supports the existence of pollution abatement possibilities at negative costs the so called no regret options we provide a microeconomic rationale for the existence of such potential at the firm level an econometric application confirms that pollution abatement cost curves with no regret options are compatible with a standard production function as stated in our theoretical model c 2008 elsevier b v all rights reserved

the rate of return to public sector agricultural r d in the uk 1965 80 1989 the rate of return to public sector agricultural r d in the uk 1965 80 applied economics vol 21 no 8 pp 1063 1086

central bank independence and growth a sensitivity analysis in this paper the levine renelt robustness test is employed to examine the robustness of the empirical relationship between growth and various proxies for central bank independence experiments are made with a wide variety of the most comprehensive systematic measures of central bank independence currently available the levine renelt test implies that growth is not robustly correlated with central bank independence

the pareto principle of optimal inequality the pareto principle is often viewed as a mild requirement compatible with a variety of value judgements in particular it is generally thought that it can accommodate different views on the desirable degree of equality we show that this is generally not true in intertemporal models where some uncertainty prevails to do so we formalize the concept of inequality aversion we show that different degrees of inequality aversion are not possible in typical models of time consistent dynamic decision under uncertainty

sensitivity analyses of the deterrence hypothesis let s keep the econ in econometrics abstract leamer and mcmanus applied extreme bound analysis eba in an empirical study of the deterrent effects of capital punishment and other penalties their analysis has questioned the validity of the deterrence hypothesis the thrust of our paper is twofold first by applying eba to well known econometric models of demand production and human capital investment our analysis exposes and illustrates the inherent flaws of eba as a method of deriving valid inferences about model specification second since the analysis shows leamer and mcmanus s inferences about deterrence to be based on a flawed methodology we offer an alternative theory based sensitivity analysis of estimated deterrent effects using similar data our analysis supports the deterrence hypothesis more generally it emphasizes the indispensable role of theory in guiding sensitivity analyses of model specification

rejecting capital skill complementarity at all costs any serious empirical study of factor substitutability has to allow the data to display complementarity as well as substitutability the standard approach reflecting this idea is a translog specification this is also the approach used by numerous studies analyzing the relative capital skill complementarity hypothesis formulated by griliches 1969 according to this hypothesis the degree of substitutability between skilled labor and capital is lower than that for unskilled labor and capital yet the results of empirical studies investigating this hypothesis are controversial this paper offers a straightforward explanation using a translog approach reduces the issue of actor substitutability or complementarity to a question of cost shares our review of translog studies mentioned in hamermesh s 1993 summary on the demand for heterogeneous labor demonstrates that this argument is empirically relevant all these studies can be reconciled with each other on the basis of the cost share argument

a note on clean technology adoption and its influence on tradeable emission permits prices in this paper we give an example in which the price of tradable emission permits increases despite firms adoption of less polluting technology a result that is in contrast with montero j environ econ 44 23 44 2002 and parry j regul econ 14 229 254 1998 among others if two cournot players switch to a cleaner technology the price for permits may increase due to an increase in the net demand for permits and a decrease in the net supply of permits after the clean technology is adopted this is only the case when output demand is quite elastic

a new look at the effects of export instability on investment and growth abstract this paper is concerned with the effects of export instability on investment and growth it is shown that past cross sectional empirical studies on the effects of export instability either in prices or in value terms used an incorrect measure of instability that does not properly take account of the share of exports in gdp using a new instability index and a broad set of conditioning variables it is shown that export instability was positively associated with investment but negatively associated with growth in a large sample of countries during the period from the early 1970s to the mid 1980s

monopoly regulation discontinuity stranded assets abstract for regulated electricity utilities if trend load growth enters a state of terminal decline through disruptive competition and costs are unable to contract at a similar rate the regulatory outcomes that follow produce strikingly different results to an equivalent episode in a competitive market where profits fall and assets are written off under economic regulation prices rise to offset volumetric losses and in the presence of disruptive competition a destructive price spiral can ensue in these circumstances some component of the regulated utility s assets meet the definition of stranded failure to deal with stranded assets will eventually and needlessly damage shareholders consumers and welfare however the regulatory compact makes this an especially complex area of economics zero recovery of stranded monopoly assets is not credible policy a normative analysis of economics and law suggests full recovery is not credible either in this article asset stranding experience from the us is reviewed and a series of policy principles are established viz asset stranding is a case by case proposition involving recovery via non bypassable pricing mechanisms quantified and packaged as a partial return of capital possibly financed by transition bonds on a time limited basis financial risk tolerances of the utility and the stability of post stranding consumer tariffs are important parameters that should guide the policy approach to asset stranding but ultimately asset stranding is a policy choice not an analytical determination

constraining equitable allocations of tradable co2 emission quotas by acceptability since the signing of the kyoto protocol future commitments are likely to be framed in terms of tradable quotas the discussions on the allocation of the quotas among countries will be based at least partly on rules corresponding to a certain conception of equity for instance allocating quotas in direct proportion to population in relation to gdp or according to past emissions has been advocated taking a long term perspective we compute such allocations of tradable quotas with a dynamic closed loop model the total amount of quotas to be distributed at each period corresponds to the world optimal amount of emissions to be realized at each period we observe that most equitable allocation rules do not make the agreement individually rational for every country along the entire time path we then propose a mechanism which determines allocations of quotas that are as close as possible to any equitable allocation while satisfying individual rationality

the regulation of privatized monopolies in the united kingdom this article examines the experience in the united kingdom with the regulation of privatized monopolies its conclusions are 1 that there are significant differences between rpi x or price cap and u s rate of return regulation which provides greater scope for bargaining in the former system 2 that u k regulators have taken seriously their duty to promote competition but that the existing economic literature is of limited help in this task 3 that price regulation is likely to be more effective where technology is changing slowly and or where technology is changing rapidly and 4 that the case for rpi x price cap rather than rate of return regulation is strongest in telecommunications gas supply and electricity supply and least strong in gas and electricity transmission grids

sustainable economic development and the environment theory and evidence the relationship between growth and pollution is studied through a vintage capital model where new technologies are more environmentally friendly we find that once the optimal scrapping age of technologies is reached an economy may achieve two possible cases of sustainable development one in which pollution falls and another in which it stabilizes or a catastrophic outcome where environmental quality reaches its lower bound the outcome will depend on countries investment path and their propensity to innovate in environmentally clean technologies both of which are likely to differ across economies empirical results using long time series for a number of developed and developing countries indeed confirm heterogenous experiences in the pollution output relationship

substitution between production labor and other inputs in unionized and non unionized manufacturing the ease of substitution between labor and other factors of production is an important determinant of the elasticity of demand for labor and thus of the economic effects of unionism all else the same the greater the elasticity of substitution the greater is the elasticity of derived demand and the greater the displacement of labor for a given union induced wage increase in sectors where this elasticity is large unions are likely to be relatively weak and able to win only slight wage gains freeman and medoff 1981 and forthcoming or if they win large gains will have to pay a high price in terms of lost jobs in the sectors where the elasticity is small unions may be able to extract a substantial wage premium at little cost in terms of employment moreover as a simple general equilibrium model indicates the elasticity of substitution between labor and other factors in the unionized sector is a key parameter in determining the impact of the iiunion wage effect on the earnings of nonunion workers and on the efficiency of the economy johnson and mieskowski 1970 despite the importance of the elasticity of labor demand for an analysis of unionism little attention has been given to the absolute and relative magnitude of this elasticity under collective bargaining while there is some discussion of technological change and the substitution of capital and nonproduction workers for organized production workers in the institutional literature e g slichter 1941 slichter healy and livernash 1960 bok and dunlop 1970 modern econometric work provides no estimates of the relevant parameters as a result johnson and mieskowski 1970 rees 1963 lewis 1964 and others have been forced to evaluate union effects with guesstimates of the elasticities of concern in union settings this paper attempts to fill some of the gap in our knowledge by providing estimates for u s manufacturing of the constant output elasticity of demand for unionized and nonunionized production workers and of the elasticity of substitution between these workers and other inputs the analysis concentrates on what we call the relative inelasticity hypothesis which states that the demand for production workers will be more inelastic in the presence of a union for two reasons the likelihood that unions have organized and survived in sectors with low elasticities and the effects of various contract provisions on the ability of management to substitute other factors for production labor the study is divided into four sections section i develops the rationale for the relative inelasticity hypothesis and describes the nature of the empirical analysis conducted to test its validity the second section uses a 1972 state by 2 digit standard industrial classification sic industry data file for manufacturing to estimate the elasticity of substitution between production labor and both nonproduction labor and capital in the union and nonunion sectors of u s manufacturing industries section iii provides estimates based on a 1968 72 sample of manufacturing establishments of the elasticity of substitution between production and nonproduction labor the only two inputs for which information is available the final section briefly summarizes the findings and discusses their implications for understanding the impact of trade unionism on the u s economy to preview the ensuing discussion our main conclusion is substitution between production labor and other inputs is generally lower in union received for publication march 6 1978 revision accepted for publication august 17 1981 both authors are with harvard university and the national bureau of economic research supported by u s department of labor grant no j 9 m 6 0094 national science foundation grant no apt77 16279 and the national bureau of economic research under its program of research on labor economics we are especially grateful to jane mather for her invaluable assistance on this project and to greg bialecki charles brown gary chamberlain kathy coons jon fay martin van denburgh and lori wilson for their significant contributions the study has not been reviewed by the board of directors of the national bureau

justifying social discounting the rank discounted utilitarian approach the popular discounted utilitarian criterion for infinite horizon social choice has been criticized on the ground that it treats successive generations unfairly i propose to evaluate intergenerational welfare with a rank discounted utilitarian rdu criterion instead the criterion amounts to discounted utilitarianism on non decreasing paths but it treats all generations impartially discounting becomes the mere expression of intergenerational inequality aversion i show that more inequality averse rdu societies have higher social discount rates when future generations are better off i apply the rdu approach in two benchmark economic growth models and i prove that it promotes sustainable policies maximizing discounted utility

can energy price regulations smooth price fluctuations evidence from china s coal sector abstract due to the dominance of coal in china s energy mix coal prices have always been a challenging part of pricing reform the recent frequent government interventions raise the key research questions what is the actual impact of price policies on coal price fluctuations and how can forward looking pricing policies be made by proposing a novel classification of coal pricing policies and introducing an expectation and forward looking coefficient the paper examines the relationship between coal price fluctuations and pricing policies using the generalized method of moments gmm method it shows that the lagging coal price and coal demand play a positive role in regulating coal prices while coal supply and marketization have significantly negative effects on coal price fluctuations the heterogeneous impacts of price policies are due to differences in market players expectations policy instruments and the methods of policy release in addition china s coal pricing policy portfolio from 2013 to 2016 exerted synergy effects on the restraint of coal price fluctuations as the forward looking coefficient was considerably low the government s intervention behaviors were obviously biased towards ex post facto responses the paper suggests short run and long run policies to advance marketization of coal prices amid the energy transition

what determines the elasticity of substitution between capital and labor a literature review this paper provides the first comprehensive review of the empirical and theoretical literature on the determinants of the elasticity of substitution between capital and labor our focus is on the two input constant elasticity of substitution ces production function we start by presenting four concise observations that summarize the empirical literature on the estimation of motivated by these observations the main part of this survey then focuses on potential determinants of capital labor substitution we first review several approaches to the microfoundation of production functions where the elasticity of substitution eos is treated as a purely technological parameter second we outline the construction of an aggregate elasticity of substitution aes in a multi sectoral framework and investigate its dependence on underlying intra and inter sectoral substitution third we discuss the influence of the institutional framework on the extent of factor substitution overall this survey highlights that the effective elasticity of substitution ees which is typically estimated in empirical studies is generally not an immutable deep parameter but depends on a multitude of technological non technological and institutional determinants based on these insights the final section identifies a number of potential empirical and theoretical avenues for future research

crime punishment and the market for offenses crime is a subject of intense emotions conflicting ideologies however economists have generally explained it as a reflection of individual choice and equilibrating market forces two major themes of the literature are outlined the evolution of a market model to explain the diversity of crime across time and space and the debate about the usefulness of positive versus negative incentives systematic analyses generally indicate that crime is affected on the margin by both positive and negative incentives there are serious limitations to the effectiveness of incapacitation and rehabilitation and optimal enforcement strategies involve trade offs between narrow efficiency and equity considerations

a comparison among partial adjustment rational expectations and error correction estimates of the canadian demand for money starting from a dynamic optimization principle the currently most popular approaches to modelling money demand functions are derived the partial adjustment adaptive expectations rational expectations and error correction mechanism formulations are then estimated using a common data set the error correction mechanism equation is found to dominate the others either because their implicit restrictions are rejected rational expectations or by employing the encompassing principle partial adjustment adaptive expectations surprisingly all three forms have similar long run solutions since the short run dynamics differ substantially the results have important implications for the conduct of monetary policy

a consumption based approach to environmental kuznets curves using the ecological footprint indicator recent research suggests that consumption based measures offer an insightful perspective on the debate on the relationship between economic growth and the environment in this article we deepen the

union effects on productivity profits and growth has the long run arrived this article interprets literature examining union effects on economic performance production function studies indicate small overall union impacts on productivity positive effects where they exist appear to result from management response to decreased profit expectations and from a natural selection process lower profitability among unionized firms is well established more interesting is the possibility that unions appropriate quasi rents deriving from long lived tangible and intangible capital the connection between unions investment behavior and productivity growth emerges as a particularly fruitful line of empirical inquiry although it does not encourage a sanguine view of unionism s long run impact

energy consumption and income a semiparametric panel data analysis this paper proposes a semiparametric analysis for the study of the relationship between energy consumption per capita and income per capita for an international panel dataset it shows little evidence for the existence of an environmental kuznets curve for energy consumption energy consumption increases with income for a majority of countries and then stabilizes for very high income countries neither changes in energy structure nor macroeconomic cycle technological change have significant effect on energy consumption

is there an environmental kuznets curve for sulfur abstract most existing estimates of the environmental kuznets curve ekc for sulfur which use samples of mainly high income countries indicate a maximum emissions turning point at middle to lower high income levels of gdp per capita we use a larger and more globally representative sample than previous sulfur ekc studies we find that sulfur emissions per capita are a monotonic function of income per capita when we use a global sample and an inverted u shape function of income when we use a sample of high income countries a model estimated in first differences results in a monotonic ekc when estimated with both high income and global samples reductions in emissions are time related rather than income related

the impact of unionization on motor carrier costs i introduction the increasingly competitive markets fostered by the motor carrier act of 1980 have forced motor carriers to focus on cost saving strategies intended to reduce operating miles fuel consumption and capital and labor expenses there are two reasons unions firms may be at a competitive disadvantage in these efforts first although the union nonunion wage differential has decreased following regulatory reform rose 1987 and hirsch 1988 find that union firms still pay higher wages second managers of unionized firms may have less flexibility in the use of inputs since union work rules restrict the activities and substitutability of drivers terminal workers and terminal facilities indeed harrington 1987 reports that post 1980 trucking expenses are still 40 higher for unionized motor carriers than for nonunion firms unionization may affect carrier cost both by increasing the price of labor and by potentially affecting cost function parameters if union rules make labor less productive the entire cost function will shift upwards for a given set of factor input prices further freeman and medoff 1982 argue that work rules may be expected to result in reduced elasticities of substitution between labor and other inputs in the unionized setting indeed they find that substitution between production labor and other labor in manufacturing is generally lower in unionized settings the impact of unionization on production has been investigated in industries such as construction coal mining hospitals and the cement industry by allen 1984 1986a 1986b byrnes et al 1988 and clark 1980a 1980b the results have been inconclusive with unionized firms being more productive than nonunion firms in some instances and less productive in others studies such as allen 1986c and addison and hirsch 1989 have utilized production function methodologies that use restrictive functional forms which impose homogeneity and identical elasticities of substitution between pairs of inputs allen 1986c examines the relative efficiency of union and nonunion firms with a translog cost function allowing for union effects using intercept and slope parameters that vary by union status in his study of different types of construction projects he finds significant differences between the cost functions for union and nonunion firms but no evidence of the inelasticity of factor substitutions as hypothesized by medoff and freeman in fact his estimates of factor demand elasticities show no discernible pattern for union versus nonunion firms leading him to conclude that work rules do not have the anticipated impact on elasticity the purpose of this study is to test whether unionization impacts motor carrier costs and if so to determine the direction of the impact of particular interest is whether the work rules imposed by the teamster s union have had a significant impact on factor substitutability in unionized firms as argued by freeman and medoff 1982 friedlaender and spady 1981 daughety et al 1985 mcmullen and stanley 1988 grimm et al 1989 and ying s 1990 studies of motor carrier industry costs have used translog cost functions which implicitly assume that union and nonunion cost functions arise from the same production technology this is equivalent to accepting the hypothesis that unionization does not affect the production structure of motor carrier firms if unionization does affect a firm s production process the results from these studies could be biased accordingly this study uses a translog cost function to test for differences in the cost structure of union and nonunion carriers not only is the translog cost function standard in the motor carrier literature permitting comparison of these results with those of previous work it also allows the flexibility necessary to examine the differential impact of unions on cost function parameters and elasticities of substitution between factors

from the econometrics of capital punishment to the capital punishment of econometrics on the use and abuse of sensitivity analysis the academic debate over the deterrent effect of capital punishment has intensified again with a major policy outcome at stake about two dozen empirical studies have recently emerged that explore the issue donohue and wolfers 2005 claim to have examined the recent studies and shown the evidence not to be robust to specification changes we argue that the narrow scope of their study does not warrant this claim moreover focusing on our two studies that they have examined we show the deterrence findings to be robust while their work has serious flaws and their reporting appears to be selective the selectivity is biased towards showing no deterrence