enhancing socio ecological value creation through sustainable innovation 2 0 moving away from maximizing financial value capture abstract there is considerable consensus that a key to addressing the serious socio ecological crises facing the world is for organizations to implement innovations that foster sustainable development drawing from the sustainability innovation and resource based view literature this paper aims to examine the organizational capabilities associated with promoting a particular sustainable innovation conservation agriculture among small scale farmers in low income countries findings suggest that a paradigm shift is needed to what we call sustainable innovation 2 0 sustainable innovation 2 0 is associated with a double bottom line approach to sustainability that seeks to enhance positive socio ecological externalities while maintaining financially viable organizations i e financial well being is subservient to socio ecological well being we describe how sustainable innovation 2 0 is associated with i making rare sustainable innovations commonplace ii making inimitable emerging sustainable innovations transferable and iii developing institutional infrastructures and bundles of resources that counteract the non substitutability of sustainable innovations we discuss the implications of these ideas for the associated literature and for future research

trade costs and deviations from the law of one price the link between relative prices across countries and trade costs requires a theoretical foundation that is absent in the literature to date empirical tests on the law of one price are based on an arbitrage equation which is of very limited relevance in understanding this link the application of a new set of arbitrage equations to the tin trade market yields results that are consistent with our theoretical expectations we find evidence in favor of the law of one price between the united states and japan however evidence of price discrimination is also found for the los angeles market

price dynamics in the belarusian black market for foreign exchange using unique data from an internet based foreign exchange trading platform we show that the black market efficiently incorporated public information on the state of the belarusian economy during the balance of payments crisis of 2011 between may and october 2011 the government repeatedly devalued the belarusian ruble and eventually abandoned its fixed exchange rate regime measures derived from black market transaction data have significant predictive power for these devaluations the significance of these black market measures survives even when we include standard macroeconomic indicators in our forecasting model in line with standard economic theory activity in the black market has dried up subsequently

from a systematic literature review to integrated definition for sustainable supply chain innovation ssci publisher elsevier articletitle from a systematic literature review to integrated definition for sustainable supply chain innovation ssci journaltitle journal of cleaner production articlelink http dx doi org 10 1016 j jclepro 2016 11 153 content type article copyright 2016 elsevier ltd all rights reserved

deviations from purchasing power parity in the long run this paper demonstrates that deviations from purchasing power parity reveal a remarkable and possibly startling consistency with martingale behavior during both fixed and flexible rate periods for a wide variety of countries and in both monthly and annual data since this pattern appears to be much more general than one would expect on the basis of models founded on international commodity arbitrage the paper proposes an alternative explanation which instead relies on financial arbitrage in bonds as the underlying mechanism this paper will demonstrate that deviations from purchasing power parity ppp reveal a remarkable and possibly startling consistency with martingale behavior during both fixed and flexible exchange rate periods for a wide variety of countries and in both monthly and annual data this pattern appears to be much more general than one would expect on the basis of models founded on international commodity arbitrage the paper therefore proposes an alternative explanation which does not presuppose free trade in goods but which instead relies on financial arbitrage in bonds as the underlying mechanism the major implication of the theory and the results is that ppp is as likely to be violated in the long as in the short run as an empirical matter deviations from ppp can be observed for most currencies at any instant see kravis et al 21 stockman 37 and genberg 15 among others these deviations are typically both cumulative and persistent the real exchange rate can remain on either side of parity for lengthy but variable time intervals of a year or more as a consequence the current consensus shared

the work money does we present independent estimates of the two sides of fisher s identity mv pt exclusive of the financial circulation these show a fair agreement although or because measurement is rough and approximate total transactions are quite stable at 5 5 times national income and thus shed no new light on the transactions demand for money on the money side the overall velocity of circulation rises from 13 in 1950 to 23 in 1978 this is attributed to a strong increase of bank money velocity which by now far exceeds the cash velocity of 16 it may well rise further

a dynamic general equilibrium analysis of deviations from the laws of one price abstract using disaggregated west german prices this study documents movements in relative export and producer prices and in relative import and producer prices which are variable and highly autocorrelated this suggests the presence of time varying persistent deviations from the laws of one price perfect competition monopoly and monopolistic competition with constant mark up pricing are inconsistent with the variability in relative export and producer prices furthermore cournot oligopoly is inconsistent with the variability in relative import and producer prices a dynamic general equilibrium model with differentiated oligopolistic competition and strategic pricing is shown to generate variable and persistent movements in both measures of relative prices

the hidden economy as an unobserved variable abstract the technique of unobserved variables is used to estimate the relative size and development time of the hidden economy of oecd countries the burdens of taxation and regulations and the tax morality turn out to be statistically significant determinants at the end of the scandinavian and benc lux countries are expected to have a relatively large and japan and switzerland a relatively small hidden economy canada and the united states are rank in the middle the size of all hidden sectors is estimated to have increased in the period 1960 1973 relative to officially measured gnp

currency substitution financial innovations and money demand a note this note presents some finnish evidence on the importance of currency substitution and financial innovations for money demand it is also shown that conventional demend for money specifications which do not take these factors into account are clearly misspecified and produced unreasonable results the problem is particularly acute for narrow concepts of money

whither loose change the diminishing demand for small denomination currency while payment card usage has increased dramatically the stock of outstanding currency has not declined as rapidly we analyze changes in cash demand for 13 advanced economies from 1988 to 2003 by separating cash into three denomination categories to disentangle its store of wealth and payment functions defining denominations commonly dispensed by automated teller machines atms as the medium category we show that demand for small denomination currency decreases with greater debit card usage and with greater retail market consolidation in contrast the demand for high denomination notes decreases when interest rates rise but is generally unaffected by changes in debit card usage

sustainable supply chain management in emerging economies environmental turbulence institutional voids and sustainability trajectories abstract although research on supply chain management has made many valuable contributions there is a dearth of empirical evidence and theoretical reflection on the characteristics of supply chains that operate mainly in developing and emerging economies the aim of this paper is to help to fill this gap by exploring how supply chain sustainability can be implemented and managed in these settings an in depth case study of the upstream oil and gas industry supply chain in brazil was used to develop propositions about supply chains that operate in developing settings drawing from institutional theory evolutionary theory complexity theory and from the organizational learning innovation and strategy literatures this paper offers four key findings and contributions to the supply chain literature first it shows that becoming a sustainable supply chain is not a destination but a journey where trajectory and time matter given the evolutionary nature of supply chain sustainability trajectories this paper highlights that supply chains learn and evolve just as organizations do second this research indicates that although globalization is a trend natural resource based supply chains are often more geographically bounded and susceptible to local social demands than other supply chains third this paper extends the supply chain literature by arguing that supply chains face additional barriers to sustainability in developing and emerging economies which contribute to a higher degree of complexity and uncertainty due to the existence of highly turbulent business environments and institutional voids these factors in turn hinder supply chain learning and innovation and reduce the slope of supply chains sustainability trajectories finally this research contributes to the literature by claiming that due to the highly complex and uncertain business environments in these settings focal companies play an even more important role in managing the escalating ambiguity stimulating supply chain learning and promoting innovation towards supply chains enhanced sustainability performance

blessing or curse foreign and underground demand for euro notes public finance solutions to the european unemployment problem developing countries may hold as much as 25 30 of the 1 3 trillion oecd currency supply although dollar holdings appear to exceed dm holdings by a factor of four the advent of the euro may change this balance indeed by issuing large denomination notes of 100 200 and 500 the european central bank appears to be well poised to challenge the dominance of the ubiquitous us 100 note however large denomination notes are also extremely popular in the oecd underground economy which appears to hold at least 50 of the currency supply as a result the seigniorage revenues obtained by issuing large denomination notes may be an accounting illusion substantially or fully offset by losses due to increased tax evasion hence the new european central bank may wish to consider policies that discourage underground use of currency even at the expense of losing out on foreign demand kenneth rogoff

some pitfalls in testing the law of one price in commodity markets abstract several articles find no support for the lop in commodity markets a few articles find some support rejecting the lop would strike at the heart of economic theory rejection would suggest that firms do not maximize wealth and households do not maximize utility our objective is to show how four common pitfalls can cause tests of the lop to fail when in fact the lop holds all tests that fail to support the lop fall in to at least two pitfalls all of these pitfalls are the result of ignoring important practical implications of arbitrage

the governance of sustainable socio technical transitions a quasi evolutionary model of socio technical transitions is described in which regimes face selection pressures continuously differentiated transition contexts determine the form and direction of regime change in response to these pressures the articulation of pressures and the degree to which responses are coordinated and based on resources available within the regime define the transition context four alternative contexts are described endogenous renewal re orientation of trajectories emergent transformation and purposive transitions agency and power in the governance of regime transformation are analysed power to affect change depends on regime membership the distribution of resources for change and expectations

network effects on cash card substitution in transactions and low interest rate regimes we develop a nash game on the adoption of a new eftpos electronic fund transfer at point of sale card payment media given cash is dispensed by a competitive atm automated teller machine network equilibrium conditions when cash and card use coexist entail a specific relationship between the card network coverage parameter super k and the proportion of cash financed expenditures we derive a payments innovation technology constrained transactions demand for money which is highly interest rate sensitive in low interest rate regimes data on cash card use in the uk 1990 97 is used to calibrate the model

towards sustainable consumption and production competitive pricing of modular products for green consumers abstract concern for unsustainable development has peaked and promoting and devising sustainable production and consumption is vital therefore via an analytical model we examine the impact of modularity and consumer sensitivity to sustainability on the pricing decisions of two competing firms consider an environmentally conscious green consumer who will buy one of two available horizontally differentiated products a modular product m manufactured by firm m or a standard product s manufactured by firm s firm m can take advantage of its modular production technology and product return policy for such a consumer driven demand setting we develop a model and solve to optimality a single stage non cooperative game where both firms simultaneously set their competitive prices in addition to analytical expressions for the optimal prices and the profits for both firms we provide structural results and numerical examples to render practical insights the refund rate has a strong impact on profits sensitivity of product greenness can be increased by conscientious advertising and the reusability of modular parts encourages lower pricing and higher market share we assert that modularity is a strong concept and practice in developing sustainable products and thereby in production which in turn may enhance sustainable consumption this study s findings have direct implications for reverse supply chain management and firms should take these findings into account early in the product design phase

the law of one price in international commodity markets a reformulation and some formal tests abstract we report formal tests of whether the law of one price lop holds in the long and in the short run for commodities traded in orgnized markets we formalize the distinction between short and long run by introducing lagged price adjustments also we introduce expectations explicitly tests support the long run lop but they reject the short rn lop the long run lop holds better for future prices than for spot prices on average 90 per cent of the deviation from lop is eliminated within 10 weeks but this ranges from 1 to 120 weeks

the paradox of sustainable innovation the eroom effect moore s law backwards innovation has been widely acknowledged as a key mechanism for addressing sustainable development concerns however less attention has focused on downstream commercialization challenges such as achieving increasingly complex and stringent regulatory approval such challenges may hinder the development of more sustainable technologies especially those coming from smaller or publically funded institutes as well they may obstruct the development of applications that could provide societal benefits but may only have limited commercial viability due to small market niches or applicability to customers with limited financial means we explore this apparent paradox using the concept of the eroom effect moore s law backwards i e where improved price performance due to technological advances are outweighed by increasing costs of regulatory approval and other commercialization costs we illustrate this phenomenon with two cases of publically funded institutes one developing transgenic cotton and the other lignin transformation technology that can replace petroleum based feedstocks in a number of industrial applications we discuss the unintended consequences of the eroom effect and conclude with implications for industry policy and ngos

toward a theory of international currency we use the framework of random matching games and develop a two country model of the world economy in which two national currencies compete and may be circulated as media of exchange there are multiple equilibria which differ in the areas of circulation of the two currencies in one equilibrium the two national currencies are circulated only locally in another one currency is circulated as an international currency there is also an equilibrium in which both currencies are accepted internationally we also find an equilibrium in which the two currencies are directly exchanged we first characterize the existence conditions of these equilibria in terms of the relative country size and the degree of economic integration and then use an evolutionary approach to equilibrium selection to explain the evolution of the international currency as the two economies become more integrated some welfare implications are also discussed for example a country can improve its national welfare by letting its own currency circulate internationally provided the domestic circulation is controlled for when the total supply is fixed however a resulting currency shortage may reduce the national welfare

spot and futures prices and the law of one price the law of one price lop is tested for narrowly defined commodities traded in futures markets in different countries during the period 1973 80 although the lop holds as an average tendency for most of the commodities there are instances of large riskless arbitrage returns before transactions costs deviations from the lop tend to be commodity specific rather than due to a common external factor and they tend to be smaller the longer the maturity of the futures contract in this paper we examine how well the law of one price lop holds for commodities traded internationally the answer to this question is important for two reasons the first is that in most modern theories of exchange rates price arbitrage for at least some goods is a necessary condition to determine the level of exchange rates but recent empirical research on the behavior of various price indices casts doubt on the empirical validity of the lop across countries for even the most disaggregated indices if it is not possible to identify any commodities for which the lop works satisfactorily then models incorporating the lop will not provide an adequate description of exchange rates the second reason for studying individual commodities is to gain information on the efficiency and the degree of integration of international commodity markets in efficient markets international commodity arbitrage implies that for a standard commodity prices in two markets expressed in a common currency will not differ but for transport costs

a fuzzy linear programming enterprise input output model for optimal crisis operations in industrial complexes abstract industrial complexes may be subject to significant risk of cascading failure caused by various disruptions and emerging economies are potentially more susceptible to the impacts as less established policies are in place to deal with these issues in particular there is a need to develop adaptation strategies to ensure the resilience of industrial activities to various perturbations that may result from climate change the inherent complexity of such systems makes decision making for risk management a non trivial task that is best facilitated with the aid of mathematical models enterprise input output models have been used extensively to model production systems at different scales in this work a fuzzy linear programming enterprise input output model is developed to determine optimal adjustments in production levels of multi product systems when a crisis is induced by a loss of resource inputs the model allows for adjustments that are equitable for different decision makers that may comprise an industrial complex or a supply chain capabilities of the model are illustrated with a case study on the effect of water shortage on an aluminum production system

corruption and the shadow economy an empirical analysis this paper analyzes the influence of the shadow economy on corruption and vice versa we hypothesize that corruption and the shadow economy are substitutes in high income countries while they are complements in low income countries the hypotheses are tested for a cross section of 98 countries our results show that there is no robust relationship between corruption and the size of the shadow economy when perceptions based indices of corruption are used employing an index of corruption based on a structural model however corruption and the shadow economy are complements in countries with low income but not in high income countries

how big is the shadow economy a re analysis of the unobserved variable approach of b s frey and h weck hannemann abstract in a widely quoted study b s frey and h weck hannemann estimated the size and the development of the shadow economy in 17 countries by means of the latent variable approach a re analysis of the data shows that the results of frey and weck hannemann s model are extremely unstable and cannot be regarded as reliable statements about the shadow economy of these 17 countries even minor variations in the number of countries included in the analyses in the period under investigation or in the index which is defined lead to a pronounced instability a critical look at the observational variables used in the model lead to the conclusion that the authors cannot even be sure that what they have investigated is indeed the shadow economy the latent variable could equally well be interpreted in other ways it could be for instance that they have measured the development of the welfare state

privatization of electricity distribution in the northeast of brazil the good the bad the ugly or the naive this paper analyzes the evolution of five electricity distribution companies in the northeast of brazil using technical and financial indicators three privatized and two public firms were analyzed between 1997 and 2008 the financial indicators are used as proxies for the capacity of the business to generate value for shareholders while the technical indicators are used as proxies for service quality provided to consumers we observed that the privatized firms had their financial indicators improved after privatization increasing the value of the firm for the shareholders however there is no evidence that privatization affected the quality of service provided to consumers

the demand for large bank notes in many countries the high share of the largest bank note denomination in the total currency circulation contrasts sharply with its limited use in payment transfers this somewhat puzzling phenomenon has been discussed more than once for the u s 100 bill which has a value share of nearly 50 percent see anderson 1977 kimball 1981 porter and bayer 1984 however the phenomenon is the more remarkable for countries like switzerland germany and the netherlands that issue a denomination at the upper end of the bank note range whose face value is five to fifteen times as high as the 100 note in the netherlands this is the fl 1 000 note with a face value at end 1990 of more than u s 500 1 the circulation of this fl 1 000 note has grown dramatically see table 1 at year end 1987 fl 1 000 notes accounted for almost 45 percent of the value of bank notes in circulation and this was thus the most important denomination in terms of value at that time there were approximately fifteen million fl 1 000 notes in circulation this works out at an average of one of these notes per head of the population and over 2 5 notes per household compared with less than one note per household just ten years earlier nevertheless fl 1 000 notes are seldom encountered in the course of everyday payment transactions analysis of the development of macroeconomic variables reveals that the remarkable increase in the importance of the fl 1 000 note since 1980 cannot be solely

estimating the size of the danish shadow economy using the currency demand approach an attempt the currency demand approach provides some insight into the size and development of the shadow economy in denmark currency demand is statistically affected by tax rates the difference in currency demand is calculated by comparing the actual tax burden over time to the lowest tax burden in the period 1952 82 the shadow economy grew steadily to 10 per cent of gnp in 1977 and then fluctuated between 7 10 per cent of gnp for the period 1978 82 the calculated size fits nicely with the results obtained using the same

some further evidence on the law of one price the law of one price still holds international trade models often postulate the existence of a representative price i e the price which prevails at all markets this is known as the law of one price in this paper the law of one price is tested for seven commodities among four countries by explicitly considering transaction costs the empirical evidence suggests that in most cases the law of one price cannot be rejected asa maintained hypothesis furthermore for the remaining cases transaction costs seem to cause the failure

shadow economies size causes and consequences using various methods the size of the shadow economy in 76 developing transition and oecd countries is estimated average size varies from 12 percent of gdp for oecd countries to 23 percent for transition countries and 39 percent for developing countries increasing taxation and social security contributions combined with rising state regulations are driving forces for the increase of the shadow economy especially in oecd countries according to some findings corruption has a positive impact on the size of the shadow economy and a growing shadow economy has a negative effect on official gdp growth

dealing with monetary paralysis at the zero bound recently the key constraint for central banks is the zero lower bound on nominal interest rates central banks fear that if they push short term policy interest rates too deeply negative there will be a massive flight into paper currency this paper asks whether in a world where paper currency is becoming increasingly vestigial outside small transactions at least in the legal tax compliant economy there might be relatively simple ways to finesse the zero bound without affecting how most ordinary people live surprisingly this question gets little attention compared to the massive number of articles that take the zero bound as given and look for out of the box solutions for dealing with it in an inversion of the old joke it is a bit as if the economics literature has insisted on positing assume we don t have a can opener without considering the possibility that we might be able to devise one it makes sense not to wait until the next financial crisis to develop plans fundamentally there is no practical obstacle to paying negative or positive interest rates on electronic currency and as we shall see effective negative rate policy does not require eliminating paper currency

extreme dependence in price transmission analysis abstractwe propose a generalized procedure that combines conventional price transmission analysis with copula based dynamic tail dependence to examine price relationships under extreme conditions this approach is used to examine ukrainian wheat markets where export restrictions combined with price surges 2006 2008 and 2010 2012 have contributed to a turbulent market the results indicate that domestic prices were effectively insulated from world price shocks but that a rocket and feathers price relation held between domestic flour and wheat prices these asymmetric price co movements changed with the degree of restrictiveness of the export prohibitions

labor market institutions taxation and the underground economy abstract the paper aims at qualifying the links between labor market institutions taxation tax monitoring and underground economic activity the proposed model is a continuous time matching model with one commodity roduced either overground or underground underground economic activity arises because of partial compliance with regulations and tax contributions imposed by the government vacancies and workers search are directed at a specific labor market workers are heterogenous in the subjective cost they face when operating in the irregular sector analytical and numerical investigations suggest that interactions between regular and irregular activities can affect standard results of policy interventions in that respect the paper supports the view that policies aiming at increasing individuals benefits of participating in the regular sector are more desirable than a deterrence policy

a hard nut to crack implementing supply chain sustainability in an emerging economy abstract in the last decade sustainable supply chain management has become a key topic in the sustainability literature as well as a buzzword in industry and policy circles although research has made substantial contributions there is a lack of understanding on how focal companies operating in emerging economies can lead the implementation of sustainability into their supply chains this research connects and advances the constructs of cleaner production sustainability and supply chains by exploring a classic case of a focal company operating in an emerging economy that even facing considerable challenges has been able to succeed in transforming its entire supply chain drawing from stakeholder theory and contingency theory this research offers four key contributions to the sustainability and supply chain discourses as follows 1 it proposes an innovation centered approach to sustainable supply chain management by adapting and extending the tcos uncertainty framework 2 it suggests that the way a focal company manages and is influenced by its established network of relationships shape the evolution of the supply chain sustainability trajectories 3 it argues that supply chains are dynamic entities and should then be considered and understood through the lenses of evolutionary approaches and 4 it suggests that the implementation and management of sustainable supply chains are context specific challenges and therefore theoretical managerial and policy generalizations are difficult to be achieved

on money as a medium of exchange we analyze economies in which individuals specialize in consumption and production and meet randomly over time in a way that implies that trade must be bilateral and quid pro quo nash equilibria in trading strategies are characterized certain goods emerge endogenously as media of exchange or commodity money depending both on their intrinsic properties and on extrinsic beliefs there are also equilibria with genuine fiat currency circulating as the general medium of exchange we find that equilibria are not generally pareto optimal and that introducing fiat currency into a commodity money economy may unambiguously improve welfare velocity acceptability and liquidity are discussed

estimating the second economy in tanzania abstract the official national accounts of tanzania suffer from two serious weaknesses incomplete coverage as well as inaccurate estimates of the activities covered this arises because many of the activities especially those in the informal sector are either misreported or underrecorded often however the required information is deliberately concealed from public authorities either because the agents are involved in illegal black market activities or where such parallel market activities are legal there is a deliberate intention to evade government controls the misstatement and omission of these second economy activities from official statistics imply that macroeconomic measures are not robust enough for meaningful analysis development planning policy and program formulation this paper attempts to estimate the magnitude of and changes in the second economy in tanzania to establish the extent to which official statistics misstate actual production of goods and services

currency demand and the growth of the underground economy in canada 1991 1995 the extent to which the recent introduction of a value added tax in canada contributed to the growth of the underground economy remains controversial if underground economy growth led to increased currency holdings and shifted the currency demand function forecasts for the period after the introduction of the tax should tend to underestimate currency holdings using a cointegration based error correction mechanism in vector autoregression models currency demand is estimated using quarterly data for 1968 1990 and dynamic forecasts are made for 1991 1995 on average currency demand is underpredicted but by a small amount the results are consistent with an increase in the underground economy of between 0 01 and 0 3 of gdp as a result of the new tax if changes in marginal direct tax rates are considered the underground economy may have grown between 0 1 and 0 7 of gdp in 1991 1995

consumption and real exchange rates in dynamic economies with non traded goods abstract we examine the possibility that non traded goods may account for several striking features of international macroeconomic data large persistent deviations from purchasing power parity small correlations of aggregate consumption fluctuations across countries and substantial international real interest rate differentials a dynamic exchange economy is used to show that non traded goods in principle can account for each of these phenomena in the theory there is a close relation between fluctuations in consumption ratios and those in bilateral real exchange rates but we find little evidence for this relation in time series data for eight oecd countries

unemployment and the shadow economy abstractcurrent research links the shadow economy se and the unemployment rate either indirectly or by means of a preliminary estimate this article establishes and empirically implements a methodology for estimating the size of the se as a direct function of the tax and unemployment rates this link is found to be extremely relevant in countries with high unemployment rates such as greece and spain and less relevant in countries with moderate unemployment rates such as germany and italy unemployment s contribution to the se is shown to be significant especially in the years following the economic downturn of 2008 the calculation of the variance and distribution of these estimates is another significant contribution the common criticism that se estimates are unreliable is addressed by calculating the variance and the distribution of the estimates and the large size of the se in greece and spain is once again confirmed

what determines the value and volume of noncash transactions evidence from a panel of european and north american countries using data from a panel of 15 countries over the period 1990 1998 the determinants of the use of non cash payment instruments are analysed the estimation results highlight the importance of distinguishing between the determinants of the value and volume of noncash transactions it is found in fact that the volume of these transactions is generally affected by changes in the determinants more strongly than their value and that variables such as the interest rate have a different impact on the volume and the value of the transactions the findings also suggest that past habits play a dominant role in the intensity of use of noncash payment instruments

flexible exchange rates prices and the role of news lessons from the 1970s recent experience with flexible exchange rate systems has led to renewed interest in the operation of foreign exchange markets as reflected in many recent studies of the principal determinants of exchange rates the 1970s witnessed the dramatic alteration of the international monetary system from a regime of pegged exchange rates which prevailed for about a quarter of a century since the bretton woods conference into a regime of flexible though managed rates as a consequence of the emergence of the new legal and economic system traders national governments and international organisations were confronted with new economic problems choices and instruments during the 1970s ex change rates fluctuated widely and inflation rates accelerated the international monetary system had to accommodate extraordinarily large oil related shocks which affected trade flows in goods and assets huge oil payments had to be recycled uncertainties concerning future developments in international politics reached new heights and the prospects for the world economy got gloomier these developments placed unprecedented pressures on the markets for foreign exchange as well as on other asset markets they were associated with a large slide in the value of the us dollar and resulted in speeding up the creation of new institutions like the european monetary system which provided the formal framework for the management of exchange rates among members

foreign demand for domestic currency and the optimal rate of inflation we characterize the ramsey optimal rate of inflation in a model with a foreign demand for domestic currency in the absence of such demand the model implies that the friedman rule deflation at the real rate of interest is optimal we show analytically that in the presence of a foreign demand for domestic currency this result breaks down calibrated versions of the model deliver optimal annual rates of inflation between 2 and 10 the domestically benevolent government imposes an inflation tax to extract resources from the rest of the world in the form of seignorage revenue

commodity prices exchange rates and their relative volatility abstract exchange rates are move volatile than rates implied by ppp using conventional price indexes this fact has led many to believe that exchange rates fluctuate more than is warranted by the variability in commodity prices and supports those who believe that fluctuations in exchange rates are excessive we show that exchange rates are less volatile than commodity prices in auction markets and less volatile than rates implied by the law of one price using such prices we also show that the behavior of exchange rates and the rates implied by these commodity prices is not consistent with the dornbusch overshooting model

swedish tax rates labor supply and tax revenues effective marginal tax rates on labor income for the representative swede have increased from roughly 50 percent in 1959 to 80 percent today the effects of this increase in the level of taxation are examined using a two sector model parameterized to correspond to the swedish economy the model contains a single household which allocates labor to either taxed essentially market or untaxed largely household uses the estimated long run effects are sufficient to explain up to 75 percent of the recent decline in the measured growth rate of the swedish gnp calculations of total tax revenues are also derived from the model these peak when the tax rate is approximately 70 percent indicating that sweden is presently on the downward sloping portion of its laffer curve

integrating cleaner production into sustainability strategies an introduction to this special volume abstract this special volume of the journal of cleaner production is built primarily upon articles submitted for the 4th international workshop advances in cleaner production held in sao paulo brazil in 2013 the 54 articles underscore the urgent need for changing from unsustainable production and societal patterns to sustainable ones they provide many new approaches to help industries governments and society to speed up the transition to sustainable patterns the authors focus on defining and solving problems with special emphasis upon sustainability strategies raw material replacement renewable energy technological developments product and policy changes the central roles of improved corporate management for sustainable societal transitions are explored with an emphasis upon stakeholder empowerment in promoting implementation of new cleaner technologies within companies industrial sectors supply chains and countries some authors improved assessment tools for environmental accounting at the biospheric scale some authors underscored the need for cooperation among governments industrial sectors and companies to accelerate the integration of cleaner production into policies and practice multiple examples of successful integration of cp in national and local policy structures exemplified how focused work in key industrial sectors is delivering multiplier benefits within and among companies and in the community at large the authors documented numerous benefits of holistic integration of local regional national and global efforts to accelerate the transition to sustainable development and societal well being

empirically testing the law of one price in an international commodity market a rational expectations application to the natural rubber market abstract the law of one price lop is an important ingredient in theories of international trade and exchange rate determination an important shortcoming of the existing empirical literature is that parity is typically assumed to hold contemporaneously this overlooks the fact that international commodity arbitrage takes place over time as well as across spatially separated markets recognizing this fact we expect to see parity holding for expected prices a model which incorporates the expectations of commodity arbitragers is constructed and used to test the lop in the natural rubber market results indicate that the inclusion of expectations may be of value when considering the lop

the monetary method to measure the shadow economy the forgotten problem of the initial conditions abstract we show that when the money demand function used to estimate the size of the shadow economy includes the lagged dependent variable the need to assume a known initial condition reappears as it was the case in the early monetary methods

the speed of euro adoption this paper estimates the speed and determinants of euro adoption across italian provinces by exploiting the natural experiment in early 2002 when euro and lira dually circulated as legal tender a unique data set with daily observations on the net flows of euro banknotes from the branches of the bank of italy province by province is used the speed of euro adoption differs according to the availability of transaction technology and demographic characteristics lessons for countries adopting a new currency are obtained

sustainable innovations in the corporate sector the empirical evidence from ibex 35 firms abstract sustainable innovation practices those which simultaneously contribute to environmental social and economic value creation have drawn increased attention from academics industry leaders and policy makers around the globe there is a general agreement that innovation is a very important part of the puzzle in achieving long term sustainability thus a critical question to be answered is what factors actually differentiate and appear to contribute to sustainable innovations si at the firm level this paper addresses the question by examining empirical evidence from the ibex 35 companies from the years 2010 2015 our results obtained from multivariate regression model indicate that the intensity of a firm s si activity is strongly and statistically significantly associated with the sector in which a given firm operates with a rising level of environmental footprint acting as a stimulant for innovation additionally firms characterized by higher net profit margins and returns on equity were also much more likely to introduce sis the findings also suggest that factors like size and age of a given company as well as level of competition in a sector in which it operates are not significant predictors for the implementation of sustainable innovations overall this study contributes to our understanding of the main characteristics of companies active in the area of si

identifying price linkages a review of the literature and an application to the world market of cotton this paper reviews the literature of price linkages and examines the degree to which cotton prices are linked it also tests whether such linkages have improved over the last decade it concludes that the degree of linkage has improved over the last decade while the main source of this improvement appears to be a result of short run price transmission and to a lesser extent long run co movement

monetary policy and the zero bound to interest rates a review1 this paper reviews the literature on what the zero bound to nominal interest rates implies for the conduct of monetary policy the aim is to evaluate the risks of hitting the zero bound and to evaluate policies that are said to be able to reduce that risk or policies that are proposed as means of helping the economy escape if it is in a zero bound trap i conclude that policies aimed at cure are arguably more uncertain tools than those aimed at prevention so prevention is a less risky strategy for policymakers but since the risks of hitting the zero bound seem quite small anyway and the risks of encountering a deflationary spiral smaller still it is conceivable that inflation objectives that typify modern monetary regimes already have more than enough insurance built into them to deal with the zero bound problem

are cleaner production innovations the solution for small mining operations in poor regions the case of padua in brazil abstract mining in santo antonio de padua a city located in the underdeveloped northeast area of the rio de janeiro state in brazil is currently the most important economic activity in the region unfortunately companies lag behind technologically and use rudimentary production methods which cause serious environmental problems social implications and poor competitiveness in order to seek sustainable solutions for the padua mining region local support organizations have created initiatives to develop endogenous cleaner production innovations to enhance the industry s sustainability performance during this process some barriers for mining companies to adopt these developed technologies have emerged this research draws on the cleaner production sustainability and innovation literature and uses a qualitative research with multiple sources of evidence to understand the dynamics behind the padua mining region more specifically this research explores how initiatives to improve the sustainability performance led by local support organizations took place analyzes their outcomes i e cleaner production innovations and identifies some of the barriers to technology adoption this paper offers three key research contributions first we claim that cleaner production approaches alone cannot create sustainable mining regions in emerging and developing countries but they are definitively a step in the right direction since they provide the base for expanding the scope towards sustainability second we argue that technology cannot be understood as the panacea for sustainability because it will never represent the complete solution for companies sustainability problems third we claim that companies can face a managerial trap if they pursue enhanced sustainability performance solely through the adoption of cleaner production innovations

paradoxes and dilemmas for stakeholder responsive firms in the extractive sector lessons from the case of shell and the ogoni this paper examines some of the paradoxes and dilemmas facing firms in the extractive sector when they attempt to take on a more stakeholder responsive orientation towards issues of environmental and social responsibility we describe the case of shell and the ogoni and attempt to draw out some of the lessons of that case for more sustainable operations in the developing world we argue that firms such as shell rio tinto and others may well exhibit increasingly stakeholder responsive behaviours at the corporate strategic level however for reasons of strategy lack of competency or institutional will this increasing level of corporate responsiveness may not be mirrored effectively in dealings between subsidiary business units and their most important direct stakeholders for example local communities and in the developing world we contrast the struggles of shell to replicate its corporate stakeholder responsiveness at the local level in nigeria with the experiences of other firms that seem to have developed managerial capabilities at a somewhat deeper level throughout the firm with consequent benefits both for stakeholders and the business

cleaner production towards a sustainable transition abstract this special volume of the journal of cleaner production was built principally upon articles submitted for the 5th international workshop advances in cleaner production held in sao paulo brazil in 2015 the 43 articles emphasize the imperative need for shifting from unsustainable production and societal patterns to sustainable ones they provide many new technological and or management related approaches to help industries governments and society to speed up the transition to sustainable patterns efforts on defining and solving problems with the special accent upon a sustainable solution for the use of raw materials and energy technological advances product and policy changes are presented and deeply discussed improved corporate management for sustainable societal transitions is discussed highlighting consumer empowerment in sponsoring implementation of innovative cleaner technologies within companies industrial sectors supply chains and countries multiple examples are provided relating the successful combination of cleaner production in policy structures illustrating on how the focused work in production sectors is delivering multiplier benefits and creating conditions to facilitate a leapfrogged path toward sd

what does purchasing power parity mean this paper examines the theoretical and empirical content of purchasing power parity ppp in efficient markets it analyzes the sources of deviations from the strictest version of ppp that exchange adjusted price levels are everywhere identical focusing on the role played by uncertainty relative price changes inappropriate price data transaction costs and government intervention in creating these deviations it then identifies and addresses the key issue involving purchasing power parity are the deviations from ppp that occur sufficiently large persistent and predictable as to enable individuals or governments to successfully exploit them an answer of no is shown to be consistent with both economic theory and the empirical evidence

more about the law of one price this article explores the general difficulty of testing the law of one price based on evidence about commodity prices and exchange rates but without regard to transfer costs it then reports on tests based on this sort of limited evidence using price data at the finest possible level of disaggregation in any official statistics a part of the results are favorable to the law but the clearest conclusion is that we shall probably never be able to come to any general verdict about the law in the absence of evidence about transfer costs

the size and development of the shadow economy an empirical investigation from states of india abstract using the state level data from india this paper investigates the size of the hidden economy in indian states over the period 1974 75 to 1995 96 our analysis has shown that after liberalization of the indian economy in 1991 92 the growth in the size of the hidden economy has decreased on an average our results show that the growth in the size of the hidden economy is approximately 4 less in scheduled election years than in all other years we also demonstrate that the growth is significantly lower in those states where the coalition government is in power an increased growth of newspapers and the literacy rates translate to cleaner governance e g to fewer amounts of shadow economy activities in the economy

tax evasion and the demand for currency in norway and sweden is there a hidden relationship variables associated with the level of hidden economic activity are examined in terms of their effects on the demand for currency in norway and sweden aggregate time series of marginal tax rates are compiled for this purpose no such effects are evident for norway while in the case of sweden the demand for currency was found to be significantly related to marginal tax rates these estimates are then used as a basis for deriving an estimate of the size of the hidden economy in sweden an analysis of the assumptions underlying this procedure shows that the uncertainty involved in applying the currency approach to measuring the size of the hidden economy is so great as to make it hazardous to rely on such estimates