are shocks to real effective exchange rates permanent or transitory evidence from pacific island countries in this article we consider the stability of the real effective exchange rates for four pacific island countries using the lee and strazicich 2003a b unit root test which allows one to incorporate at most two structural breaks in the data series our main finding is that for papua new guinea and samoa exchange rates are stable implying that shocks will have a transitory effect on real effective exchange rates while for fiji and the solomon islands we find exchange rates to be unstable implying that shocks will have a permanent effect on real effective exchange rates

towards a science of sustainability improving the way ecological economics understands human well being abstract ecological economics seeks to recognize what traditional economics often ignores that the economy is embedded in wider social and biophysical systems to date ecological economics has focused on the biophysical dimensions of these interactions yet achieving sustainable development will require difficult decisions regarding which environmental and other assets should be preserved and in what form this emphasizes the importance of understanding why particular environmental resources and services are important to human well being and how social and economic institutions may be structured to make the best use of these and other forms of capital the paper thus examines a variety of approaches to well being characterizing these as interpreting well being as a state of mind as a state of the world as human capability or as the satisfaction of underlying needs the literature surveyed is drawn largely from political philosophy and psychology and includes classical utilitarianism and self evaluative approaches descriptive utilitarianism and preference based approaches the basic needs approach functional approaches and underlying needs based and virtue based approaches particular authors include michalos scitovsky easterlin hirsch galbraith rawls sen maslow boyden and max neef the ideas examined are found to have significant implications for economic theory and policy especially regarding the social construction of preferences the treatment of distributional issues the identification of universal underlying needs and the relationship between the satisfaction of these needs and perceived well being these insights suggest that rising real incomes are unlikely to result in improved community well being calling into question the traditional economic view of progress they also offer a new path to sustainable development in which the primary focus is on the cultivation of appropriate institutions and attitudes rather than on the better management of resources the paper concludes that important aspects of social economic and environmental systems are codetermined and thus that achieving sustainable development will require an expansion of the scope of analysis to encompass a wider system dynamic the most promising approaches to well being in this context are those that identify universal underlying human needs thus avoiding the commodity fetishism of mainstream economics

purchasing power parity in the long run a cointegration approach this paper utilizes cointegration analysis to examine purchasing power parity relationships over a long time horizon the results indicate that the exchange rate is cointegrated strongly with the wholesale price index ratio and somewhat weakly with the consumer price index ratio the cointegrating coefficient between the exchange rate and the price ratio is close to one when cointegration is confirmed the hypothesis that the real exchange rate follows a random walk is rejected in most cases finally a new test for common trends finds no such common trends in exchange rates or price ratios copyright 1990 by ohio state university press

national price levels purchasing power parity and cointegration a test of four high inflation economies abstract the time series properties of exchange rates and wholesale prices from four high inflation countries show some evidence in support of purchasing power parity tests for stationarity of real exchange rates and cointegration among price and exchange rate variables are presented for argentina brazil chile and israel during the 1970s and 1980s error correction models describe the mechanism of adjustment to long run equilibrium

corporate environmental and resource management in search of a new managerial paradigm abstract sustainable development is close to becoming the catchword of the 1990s but it is still far from being an operational concept for individual companies this paper attempts to transform the brundtlandian contradictory of sustainable development into a corporate and more operational concept as it is argued economists interest in the environment is not new whether to implement sustainable corporate environmental and resource management practices or not is no longer a real choice for industrialists today given the ultimate limitations of nature limitations that are close to being reached the implications of such a new corporate development philosophy will be far reaching however the new managerial paradigm which is outlined here challenges not only the way in which industry is run today but attacks the very bedrock on which mainstream economics is based

economics of sustainability or the sustainability of economics different paradigms this article reviews different views of neo classical and ecological economics on the sustainability of economic growth and welfare neo classical economics concludes that due to substitution and technical progress consumption can be sustained even if production depends on a natural resource that is being depleted if production depends on an essential renewable resource there is a level of consumption that can be sustained forever pollution lowers the level of consumption that can be sustained if production depends on an exhaustible resource recycling of waste is insufficient for sustaining consumption unless 100 recycling is possible sustainable economic development is possible if the resource growth potential exceeds the sum of the discount rate minus the rate of exogenous technical progress and if resource productivity is sufficiently high in addition intial levels of environmental quality a composite of pollution and natural resources and man made capital influence the possibilities for sustainable economic development if the resource stock itself affects utility or if irreversibilities occur optimal consumption and extraction are lowered ecological economics states that substitution possibilities are restricted full recycling of waste is impossible and the limited influx of solar energy poses an additional constraint on the level of production that can be sustained since the functions of the environment production factor consumer good and waste sink are intertwined this life support function poses a restriction on economic growth as well in ecological economics development is viewed as an evolutionary process with continuous feedbacks between a changing economy and environment welfare is not merely the sum of discounted individual preferences but requires environmental compatibility and the explicit collective formulation of policies regarding the conservation of species ecosystems and natural resources

real and nominal effective exchange rates for 22 ldcs 1971 1 1990 4 the international monetary fund constructs and publishes the real and nominal effective exchange rates mostly for developed but not less developed countries this paper employs a method of constructing real and nominal effective exchange rate from the literature to produce quarterly data over the 1971 1990 period for 22 developing nations as an application the stationarity of real effective exchange rates are determined to establish the empirical validity of the purchasing power parity theory ppp the results reveal that ppp fails to hold for most countries

the black market exchange rate vs the official rate in testing ppp which rate fosters the adjustment process abstract in testing the purchasing power parity theory ppp researchers hardly pay attention to the speed with which the exchange rate adjusts to a change in relative prices in this paper we show that the speed of adjustment is faster when the black market exchange rate is used in testing the ppp as compared to the official exchange rate this could be another reason as to why central banks should unify the two rates

new evidence on purchasing power parity from 17 oecd countries there is a large literature that investigates whether or not real exchange rates are stationary in an attempt to unravel support for purchasing power parity ppp at best the empirical results are mixed this paper applies a unit root test that allows for a simultaneous structural break in the intercept and slope shown by sen 2003 to minimize power distortions to examine ppp for 17 oecd countries our results on ppp are mixed when the real exchange rate is based on the us dollar evidence is found of ppp for only france portugal and denmark when the real exchange rate is based on the deutschmark we find evidence of ppp for austria belgium norway spain netherlands switzerland and denmark

economics and sustainability balancing trade offs and imperatives the concept of sustainability has been increasingly invoked in scholarly and public policy debates discussion has been hampered however by uncertainty and lack of uniformity in the meaning of sustainability this paper seeks to identify some common ground among economists ecologists and environmen tal ethicists two issues seem salient require ments for intergenerational and the defi nition of social capital to be provided to future generations a concept of safe minimum standard which has received at least some recognition in the ecology philosophy and eco nomics literatures may provide the beginnings of a common ground for debate about sus tainability jel q2

niche diversification in environmental ecological economics abstract this paper is devoted to the identification and comparison of the niches of neoclassical environmental economics nee and ecological economics eco it is presented in four sections section 1 argues that the existing literature does not make the differences and relations between the sister disciplines neatly transparent section 2 critically examines the antecedents of the subjects with reference to three structural dimensions such as scarcity perception problem solving orientation and range of integration section 3 collates the elements and reformulates the definitions section 4 is coda on the essay the divide between the paradigms which came to the surface during the 1960s became prominent through the growth controversy of the subsequent decade the controversy over the need for change of economic theory to cope with the growing intensity of environmental uncertainty makes the disciplines sore about each other the neoclassical paradigm comprising of elements like relative scarcity allocative approach market correction and technological optimism characterises nee the distinguishing characteristics of eco include thermodynamic irreversibility absolute scarcity economy ecosystem symbiosis biophysical approach ecological stewardship and prudent pessimism the niches are competitive and complementary in some respects and thus provide a unique example of fruitful niche diversification within environmental ecological economics we have a feeling that the economics profession can trace out the interface of the disciplines in some policy areas and raise the effectiveness of prescriptions so that this academic species diversity can serve humankind to its full potential

marx s reproduction schemes and the environment abstract ecological economists have argued that marx s reproduction schemes are self contained circular flows that downgrade the importance of natural conditions the present paper evaluates this criticism in light of both marx s methodology and his response to quesnay s tableau economique it is shown that marx follows quesnay in clearly distinguishing monetary circular flows from material throughput and that his schemes encapsulate the dependence of capitalist production on natural conditions as developed elsewhere in capital at the same time the purpose of marx s schemes is not to theorize environmental crises but to set out the basic exchanges necessary for capitalist reproduction as a material and social class process marx s analyses of capitalist environmental crises are developed at other points in capital

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

economic indicators of resource scarcity a critical essay abstract the theoretical arguments of the conceptual and empirical literature on economic indicators of long run resource scarcity are logically flawed if resource allocators were informed of the nature of resource scarcity their behavior and the economic indicators it generates would reflect the scarcity but if they were so informed we could simply ask them if resources were scarce if they are not informed their behavior and economic indicators are as likely to indicate their ignorance as the reality unfortunately there is no way of knowing whether they are informed or not unless we already know whether resources are scarce

bioeconomics and post keynesian economics a search for common ground abstract this paper is concerned with the links between two schools of economic thought which challenge the neoclassical synthesis bioeconomics refers to that school of economics stressing the fact that the human species is a part of the larger biosystem of the planet and ultimately subject to the same laws and limitations as other life forms post keynesian economics is a specific school of macroeconomics stressing the fundamental ideas of keynes marx and kalecki concerning uncertainty the nature of production and the role of government in economic affairs bioeconomics and post keynesian economics have much in common in terms of their methodological framework their emphasis on production rather than exchange and their interpretation of the social rate of discount a potential area of conflict between the two schools is their attitude toward economic growth the areas of commonality between the two schools are discussed and a research and policy program which combines the insights of both approaches is suggested

the concept of joint production and ecological economics joint production is suggested as one of the conceptual foundations of ecological economics the notion of joint production springs immediately from the application of thermodynamics and has a long history in economic analysis considerations of joint production give rise to philosophical concerns relating to responsibility and knowledge the concept of joint production is easily comprehensible and is also constitutive and supportive of a range of concepts current in ecological economic thought 2001 elsevier science b v all rights reserved

purchasing power parity in less developed and transition economies a review paper abstract the concept of purchasing power parity ppp has been the subject of numerous studies many of which have been unable to prove conclusively this core principle of international finance although industrialized countries have received most of the attention studies that focus on less developed and transition economies have also attained mixed results this study surveys trends in this branch of the literature highlighting the econometric advances that have sought to solve this puzzle while pointing out that more needs to be done to address the reasons that might cause ppp not to hold

do nominal devaluations lead to real devaluations in ldcs abstract devaluation or depreciation of nominal exchange rate is a policy to boost exports however since any favorable effects of devaluation could be offset by its inflationary effects one must consider real devaluation this note investigates whether nominal devaluation leads to real devaluation by employing a relatively new method of cointegration and error correction modeling

why are stabilizations delayed when a stabilization has significant distributional implications e g tax increases to eliminate a large budget deficit socioeconomic groups may attempt to shift the burden of stabilization onto other groups the process leading to stabilization becomes a war of attrition each group attempting to wait the others out and stabilization occurring only when one group concedes and bears a disproportionate share of the burden the authors solve for the expected time of stabilization in a model of rational delay and relate it to several political and economic variables they motivate this approach and its results by comparison to historical and current episodes copyright 1991 by american economic association

real and nominal effective exchange rates for developing countries 1973 1 1997 3 the international monetary fund construct and publish real and nominal effective exchange rate data mostly for developed countries in this paper real and nominal effective rate data for developing countries are constructed application of the kpss test to real effective rate data reveals that ppp holds in most countries

humans environment and economies from vicious relationships to virtuous responsibility abstract the debates questioning the meaning of growth point to a need for a more holistic understanding of human beings and of the economic actor fundamental to economic theory and practice this contribution turns to virtue ethics in order to reframe the self in more reflexive relational and environmental terms we explore the significance of understanding humans sense of responsibility that is quintessentially relational and of their capacity and need to relate to nature as well as community and society we begin by reviewing the main arguments in the thriving debate in ecological economics around what the characteristics of the human being can contribute to implement an ecologically sustainable development our aim is then to draw a link between this debate and that of virtue ethics that leads to a different understanding of the human being of what can contribute to individual wellbeing and a good life responsibility we argue is not only a value but a virtue that enables individuals to find meaning in acting responsibly towards the environment emphasising the multiple benefits that arise from framing good lives in active terms we conclude reflecting on the challenges to and implications of our proposition for government institutions particularly education

the role of thermodynamics in the study of economic and ecological systems abstract economic theory has always maintained that economic value is generated solely within the economy where it is fully distributed among the factors of production before being consumed according to this theory the economy is an isolated system that does not need flows to pass across its boundaries in support of its steady state general equilibrium from a thermodynamic point of view this idea is unacceptable according to thermodynamic theory any open system which allows flows of matter and energy to cross its boundaries is capable of maintaining itself in steady state only because it transport value from its environment to restore the value that has been consumed within the system and dissipated drawing on the analogy with thermodynamics this paper replaces the traditional systemic analog of the economy which is the closed circular flow process with the steady flow process according to this analog any efficient economy is an open system both physically and economically requiring a flow of economic value to maintain its steady state in other words an economically isolated system has to be inefficient and is bound to misallocate and overuse environmental resources whether the economy behaves as an economically isolated inefficient or open efficient system is an empirical question however if real economies are economically open and efficient and environmental resources are abused due to the economy s unrestrained material growth parts of traditional economic theory espicially those related to benefit evaluation will have to be modified policy recommendations will be affected in any case because internalization the panacea of resource misallocations cannot be more than a temporary solution instead of opening the economy internalization encloses the harmed resource and saves it by abusing excessively other environmental resources

limits to substitution between ecosystem services and manufactured goods and implications for social discounting this paper examines implications of limits to substitution for estimating substitutability between ecosystem services and manufactured goods and for social discounting based on a model that accounts for a subsistence requirement in the consumption of ecosystem services we provide empirical evidence on substitution elasticities we find an initial mean elasticity of substitution of two which declines over time towards complementarity we subsequently extend the theory of dual discounting by introducing a subsistence requirement the relative price of ecosystem services is non constant and grows without bound as the consumption of ecosystem services declines towards the subsistence level an application suggests that the initial discount rate for ecosystem services is more than a percentage point lower as compared to manufactured goods this difference increases by a further half percentage point over a 300 year time horizon the results underscore the importance of considering limited substitutability in long term public project appraisal

promise and shortcomings of a green turn in recent policy responses to the double crisis abstract the paper analyses six international scale responses to the financial and climate change double crisis in order to review how they define problems and solutions analyse what underpins the policy choices revealed in these responses the green turn reflect on the implications of the proposed solutions in terms of sustainability and global environmental justice and to suggest three elements for a paradigm shift towards an alternative turn embedded in ecological economics theory the analysis reveals that responses by leading international organisations continue to appeal to the precepts of neoclassical economy we argue that from an ecological economics perspective policy responses under the various labels of green economy green growth sustainable growth green new deal fall well short of what is needed to fight the environmental crisis and rising inequality across and within countries the idea of justice and equity that underpins the mainstream approach seems inadequate in terms of sustaining our environmental base and global environmental justice based on this critical review we propose an alternative turn centred on three elements of a paradigm shift leading to a new economy where the environmental base and global environmental justice are at the centre of the discourse

toward consilience between biology and economics the contribution of ecological economics abstract during its ten year history ecological economics has made a real difference in the way economists look at the natural world and in the way biologists look at the economy in this survey article we examine the contributions to the journal in terms of e o wilson s concept of consilience that is his argument that the methods and assumptions of any field of study should be consistent with the known and accepted facts in other disciplines in particular we examine the contributions of ecological economics to reconciling the economic theory of the consumer and producer with biophysical reality

are asian real exchange rates mean reverting evidence from univariate and panel lm unit root tests with one and two structural breaks there are a number of studies that examine the purchasing power parity ppp hypothesis the empirical findings from the extant literature for the ppp hypothesis are mixed this article applies univariate and panel lagrange multiplier lm unit root tests with one and two structural breaks to real exchange rates for 15 asian countries the univariate lm unit root tests find evidence of ppp for two thirds of the sample the results from the panel lm unit root test support long run ppp for the asian countries in the sample the results from the lm panel unit root tests differ from those of existing panel unit root tests of ppp for asian countries that have not allowed for the existence of structural breaks

operationalizing sustainable development dynamic ecological economic models abstract since the mid eighties a vast literature has evolved around the concept of sustainable development it shows a wide support for changes in policy making and decision making for instance to integrate environmental interests in national and international political processes remarkably recommendations of contours and new elements of research methods and policy analysis for sustainable development are rare although this is just as essential as the renewed attention for the political dimension a clear view on how to use and change adequately existing techniques and models for sustainable development will contribute to a more satisfactory operationalization of it this paper examines the implications of ecologically sustainable economic development for integrated dynamic modelling after a concise discussion of sustainable development it is suggested that five concepts are central to it intergenerational equity the regional scale multiple use long term uncertainty and economic ecological integration the discussion of each of these issues is focused on the implications for model elements and uses thereby old ideas are reviewed and new ones are proposed the aim is not to come up with a rigid framework for dealing with sustainable development but rather to suggest which alternatives are available to deal with the central concepts although in a section on economic ecological integration general requirements for dynamic economic ecological models are mentioned explicitly in order to offer a general frame of reference these requirements are fairly general and may be taken up in ensuing discussions of the methodological aspects related to sustainable development the main conclusions are the following we view economic ecological integration in the sense of combining processes instead of one process and a variable to deal with intergenerational equity one may choose objectives various constraints or a combination of both for regional models one may consider various types of conditions on cross boundary flows and external factors of regional processes multiple use can be modelled as an intermediate stage between single resource models with a partial view and complex models with a general view sensitivity probability and scenario analyses can be used to deal partially with the various types of long term uncertainty although this remains difficult for the very important class of unexpected events or catastrophes such surprises can at best be turned into risk by scenario analyses and examination of dynamic behaviour of the system as a whole

do gasoline prices asymmetrically affect us consumers economic outlook changes in gasoline prices can affect consumer sentiment which may then influence consumption we utilize the michigan surveys of consumers data on the index of current economic conditions icc and the index of consumer expectations ice in order to explore the dynamic relationship between us consumers economic outlook ice and real gasoline prices pg for 1993 2015 we find that ice and icc as well as ice and pg are cointegrated ice is positively related to icc and negatively related to pg in the long run in the short run ice responds symmetrically to icc movements but asymmetrically to pg movements that is ice remains unchanged when pg declines but deteriorates when pg rises

malthus vs wordsworth perspectives on humankind nature and economy a contribution to the history and the foundations of ecological economics abstract in this paper the view of humankind and nature upon which the thinking of malthus is founded will be reflected on and contrasted with the opposed understanding of his contemporary wordsworth we show that the economic considerations of both are based decidedly on the premise of these views and that their alternative interpretations of the contemporary economy and the relationship between economy and nature may thus be explained from the comparison of malthus and wordsworth we draw conclusions for modern ecological economics identifying its malthusian understanding of nature and reflecting on the capacities and limits implied for further research we ascribe a central role in the conceptual history of ecological economics to wordsworth and present his philosophical presumptions as a fruitful alternative for ecological economics finally attention will be drawn to the principle importance of the philosophical foundations underpinning this field of research

towards an ecological economics of sustainability abstract persistent disagreement both as to the interpretation to be given to sustainability and as to the relation between ecological and economic sustainability has hindered the development of an ecological economics of sustainable resource use this paper identifies the main concepts of sustainability deriving from the two disciplines in order to explore the difference implied by an ecological approach to the problem it is argued that present economic and ecological approaches are largely disjoint and that they address basically different phenomena by combining the efficiency requirements of what is usually thought of as economic sustainability with the stability requirements of an ecological approach it is shown that an intertemporally efficient allocation of resources that satisfies the conditions for constant levels of consumption is not necessary to assure ecological sustainability ecological sustainability requires that the allocation of economic resources should not result in the instability of the economy environment system as a whole

the approach of ecological economics this paper discusses the major tenets of ecological economics including value pluralism methodological pluralism and multi criteria policy assessment ecological economics offers viable alternatives to the theoretical foundations and policy recommendations of neoclassical welfare economics a revolution in neoclassical economics is currently taking place and the core assumptions of welfare economics are being replaced with more realistic models of consumer and firm behaviour this paper argues that these new theoretical and empirical findings are largely ignored in applied work and policy applications in environmental economics as the only heterodox school of economics focusing on the human economy both as a social system and as one imbedded in the biophysical universe and thus both holistic and scientifically based ecological economics is poised to play a leading role in recasting the scope and method of economic science

ecological economics as a policy science rhetoric or commitment towards an improved decision making process on sustainability abstract with sustainability issues currently attracting increasing political and policy attention this paper examines the impact of the rise of ecological economics in the policy world and its potential influence on the decision making process this study emphasises that ecological economics development is coevolved with and modified to fit specific social economic political and cultural contexts as a policy science ecological economics is context sensitive and action oriented explaining why it is so and what to do about it has become imperative for ecological economists this paper attempts to address the questions such as what are the macroeconomic conditions and political processes that make the formulation and implementation of ecological economic policy possible how should this alternative social reality engage with the dominant decision making process does ecological economics provide the necessary means for prescribing policy measures to achieve sustainable development endeavouring to understand these dimensions of ecological economics has been a dynamic social process and understanding this complex process might provide an opportunity to bridge the divide between policy rhetoric and reality in practice rather than maintain the status quo in order to achieve an improved decision making process on sustainability it highlights the imperative to explicitly study the institutional setting through which sustainable development policy discourse is mediated

solutions to the crisis the green new deal degrowth and the solidarity economy alternatives to the capitalist growth economy from an ecofeminist economics perspective this article deals with three approaches conceived as alternative approaches to the capitalist growth economy the green new deal degrowth and the solidarity economy ecofeminist economics has much to offer to each of these approaches but these contributions remain as of yet unrealized the green new deal largely represents the green economy which holds economic success as contingent upon the ecological restructuring of industrial production the degrowth approach more fundamentally raises questions concerning the relationship between material prosperity and individual and social well being the principles of the solidarity economy involve the immediate implementation of the principles of self determination and cooperation none of these approaches takes into account the claims of ecofeminist economics and none of them clearly view gender equity as essential to economic change the three approaches are however deeply gendered in the sense that they are implicitly based on assumptions concerning women s labor in the sphere of social reproduction this article demonstrates how each approach can be improved upon by the integration of ecofeminist economic principles in order to achieve economic change that also meets claims for gender equity

do malaysian house prices follow a random walk evidence from univariate and panel lm unit root tests with one and two structural breaks in this article we apply univariate and panel lagrange multiplier lm unit root tests with one and twostructural breaks proposed by lee and strazicich 2003 2004 and im et al 2005 to examine housing prices for five different housing price indices all housing detached housing semi detached housing terrace housing and high rise housing in 14 states of malaysia to test whether housing prices exhibit a random walk our main finding from the univariate lm unit root tests is that for the vast majority of states housing prices follow a stationary process about a segmented trend the results of the panel lm unit root tests provide overwhelming evidence that house prices are segmented trend reverting

production and environmental resources a prelude to an evolutionary framework the paper advances a framework to study the evolution of technology and institutions it is based on two simple tenets first the quality and quantity of environmental resources are defined and constrained by the regime of technology and institutions second the character and extent of innovations are informed and limited by the regime as well the framework is contrasted with neoclassical and ecological economics while the framework assimilates ideas from both paradigms it departs from them by stressing the importance of the technological institutional regime tir the two views ignore in different ways the significance of tir 46 the neoclassical program conceives the flow of innovations as tir independent while the ecological agenda regards the fund of resources as tir independent 1 consequently both camps fail to provide an endogenous account of the observed punctuated character of the evolution of tir neoclassical economists maintain that as a resource depletes its price rises which induces switching to a cheaper one encourages exploration or spurs invention harold barnett and chandler morse 7 11 state that nature imposes particular scarcities not an inescapable general scarcity the responses to environmental resource limitation are supposedly singular activities stripped from any underpinning regime the neoclassical disregard of tir heuristically resembles the fable of marie antoinette s folly in response to the scarcity of bread at the eve of the french revolution she advised according to legend buying cake instead ecological economists offer a different view of resource limits 48 for herman daly 21 8 nature really does impose an inescapable general scarcity while neoclassical economists emphasize relative limitation scarcity pricing ecological economists stress malthusian general limitation for ecological economists substitution can solve relative allocation but cannot solve general limitation general limitation can be avoided only if economic activity proceeded within certain boundaries or as put by martin o connor 69 within appropriate cyclical structure of resource transformations under the motto sustainable development a low pace production activity supposedly enables a population to replicate indefinitely ecological economists conceive

intertemporal valuation in an unpredictable environment abstract the inherent unpredictability of ecological systems is a vital feature for the development of theories at the interface between economics and ecology such unpredictability is caused by instabilities that are intrinsic parts of ecosystem function succession and evolution the complexity of ecological dynamics undermines the simple probabilistic treatment of uncertainty based on the equilibrium paradigm common in traditional environmental economics we investigate an important alternative by representing the dynamics of the biogeophysical system as an infinite sequence of instabilities this leads to a stochastic process exhibiting an exponentially growing variance our analysis is carried out in a macroeconomic setting in a situation where the value system here formalized in terms of risk averse social welfare functions contains at least two distinct aspects consumption rate and the state of the environment the central variables for intertemporal valuation i e the time dependent expected values of the two welfare function components are calculated using the probability distribution describing the environmental dynamics one result is that if the unpredictability of the environmental dynamics is taken into account then the social discount rate for environmental existence values may well be negative

some issues in agrarian and ecological economics in memory of georgescu roegen abstract ecological critics of economics have argued for over one hundred years that economists should study the flow of energy and materials in the economy the services nature offers to the human economy cannot be adequately valued in the accounting system of neoclassical environmental and resource economics today s ecological economics does not only critizice it also tries to provide physical indicators in order to judge whether the economy is ecologically sustainable beyond its decisive role in strengthening such ecological economics georgescu roegen s work currently still holds sway in two additional fields consumption theory as analysed by gowdy 1993 and agrarian economics are there relations between such fields of study and ecological economics in this article i shall first focus on the agrarian question and then on intra and inter generational ecological distribution

feminism ecology and the philosophy of economics abstract the contemporary discipline of economics pays little heed to either the natural environment or to the work of women a review of the literature on the historical development of western concepts of self and science shows that this is not coincidental rather than suggesting that ecological economics reinforce the identification of women with nature however feminist thought suggests that dualistic thinking about men and women humans and nature can be should be replaced with a fuller picture of human identity and knowledge

new evolutionary foundations theoretical requirements for a science of sustainability abstract ecological economics stands in theoretical and ethical opposition to many aspects of neoclassical economic theory despite their sound critiques of that theory ecological economists have not settled on an alternative theory of human behavior as a potential alternative norgaard s socioecological coevolutionary framework remains underspecified in terms of variation heredity and selection i review concepts and insights on human behavior from evolutionary biology and evolutionary social science in order to supply new theoretical tools for ecological economic problems and help refine the coevolutionary framework i argue that a synthetic evolutionary theory of human behavior provides a sufficient alternative to the neoclassical perspective and that cultural evolutionary theory is a necessary prerequisite of a mature economic science ecological coevolutionary or otherwise finally i suggest some potential topics that such a mature theory might begin to tackle

understanding economic policy reform one of the eventual consequences of the global debt crisis was a wave of market oriented economic reforms this paper discusses the state of our knowledge on the political economy of this process why were inefficient and often unsustainable policies maintained for so long why are so many governments reforming now after decades of adherence to policies of an opposite kind have the reformers internalized the correct lessons from the east asian experience finally are there any helpful rules for reformers to follow in guiding their policies through complicated political terrain

can foreign aid accelerate stabilization this paper studies the effect of foreign aid on economic stabilization following alesina and drazen 1991 we model the delay in stabilizing as the result of a distributional struggle reforms are postponed because they are costly and each distributional faction hopes to reduce its share of the cost by outlasting its opponents in obstructing the required policies since the delay is used to signal each faction s strength the effect of the transfer depends on the role it plays in the release of information we show that this role depends on the timing of the transfer foreign aid decided and transferred sufficiently early into the game leads to earlier stabilization but aid decided or transferred too late is destabilizing and encourages further postponement of reforms

do exchange rates follow a random walk process in middle eastern countries abstract in this note we employ the kpss test in addition to the adf test to determine whether the real effective exchange rates in middle eastern countries follow a random walk process or they are stationary while in most cases the kpss test supported the stationary of the real effective rates thus the ppp the adf test did not the failure to support the ppp by the adf test is said to be due to its low power

ecological economics and sustainable governance of the oceans abstract this paper is an introduction and synthesis of the papers that appear in this special issue devoted to the sustainable governance of the oceans the special issue contains papers on various aspects of the problem including the ecological and economic importance of the oceans the problems facing the oceans from an ecological economics perspective the links between science and policy the rationale for sustainable ocean governance and examples of sustainable institutions and governance structures we developed the lisbon principles of sustainable governance responsibility scale matching precaution adaptive management full cost allocation and participation as a core set of guidelines for sustainable ocean governance we then describe the major problems facing the oceans in terms of how the principles are violated and evaluate some suggested institutions in terms of how the principles are incorporated

finding common ground between ecological economics and post keynesian economics abstract post keynesian economics and ecological economics have in common that they are considered to be heterodox schools of thought aside from that there has not been a strong connection between them previous books on post keynesian economics contain no chapter on environmental or ecological issues this neglect has led leading ecological economists to criticize post keynesians for succumbing to the same growth paradigm as the neoclassical school this paper argues that the two approaches are complementary in the sense that they each have different strong points ecological economics has correctly pointed out that the growth of the global economy may not be welfare improving anymore whereas post keynesians have gained valuable insights into the functioning of the capitalist growth process to determine the feasibility of a synthesis between the two schools the paper compares their approaches to the problems of production consumption and economic dynamics as well as the associated policy recommendations it shows that on a theoretical level the two schools have much in common but their policy conclusions differ with regard to the desirability of further growth the paper concludes that a synthesis of both approaches may lead to a better understanding of how a capitalist economy operates in a natural environment with limits to growth and to better informed policy advice

german monetary unification and the stability of the german m3 money demand function abstract this paper employs quarterly data from the whole of germany to test the stability of m3 demand for money the methodology is based on an application of the cusum and cusumsq in the context of error correction modeling and cointegration the results reveal some instability in m3 money demand function

cointegration analysis with structural breaks and deterministic trends an application to the canadian dollar this article applies recent developments in cointegration analysis with structural breaks and deterministic trends to analyse the relationship between the real canada us exchange rate and commodity prices previous empirical studies disagree on whether these variables are cointegrated the root of disagreement could be in the handling of deterministic trends and potential structural breaks i find that even after controlling for these matters the question of whether the real exchange rate and commodity prices are cointegrated for canada remains unresolved

is there a long run relation between the trade balance and the real effective exchange rate of ldcs abstract using quarterly data over 1973 1988 period the cointegration analysis is used and it is shown that the trade balance and the real effective exchange rate of some ldcs are cointegrated in the long run this approach is argued to be a close substitute for testing the marshall lerner condition

exchange rate overshooting in turkey abstract exchange rate overshooting is said to be a short run phenomenon however when a currency like turkish lira depreciates from 13 to almost 400 000 lira per dollar over three decades one wonders whether it has overshot its long run value as well in this paper we employ a relatively new method of error correction modeling to show how one could test for overshooting in the short run as well as in the long run

between a rock and a soft place ecological and feminist economics in policy debates abstract the field of ecological economics includes both economic analysis on the one hand and discussions of normative values and visions for society on the other using feminist insights into cultural beliefs about the relative hardness and softness of these two sides this essay discusses how ecological economists can use this unique between space in order to better inform policy the current crisis of global climate change it is argued requires that economists move beyond modeling and measurement while ecological thinkers need to re examine beliefs about markets and profit

values ideology and politics in ecological economics abstract ecological economics is built on a value commitment to study environmental issues and to contribute constructively to a more sustainable development path however many ecological economists still hesitate it appears to depart too much from other scholars by openly addressing issues of values and ideology in this essay the role of the scholar s orientation with respect to values and ideology is addressed it is observed that not only scholars but also actors in society are guided by their ideological orientation this leads to the idea that some of the weaknesses of economic man and profit maximising firm assumptions can be mitigated by introducing a political economic person and a political economic organisation

real and nominal effective exchange rates in mena countries 1970 2004 the main purposes of this article are 3 fold first we construct measures of real and nominal effective exchange rates for 14 middle east and north african countries over the 1970 2004 period second we test the validity of the purchasing power parity ppp by applying the adf and kpss tests to the real effective exchange rates finally we employ the bounds testing approach to cointegration and error correction modelling to show that nominal devaluation leads to real devaluation in the short run as well as in the long run in many of the countries

on the dynamics of u s consumer sentiment and economic policy assessment abstractwe utilize the michigan surveys of consumers data to first investigate the dynamic relationship between consumers assessment of current and future economic conditions index of current economic conditions icc and index of consumer expectations ice and then examine how these assessments are influenced by deterioration improvement in consumers appraisal of economic policies of the government gp we further assess how deterioration improvement in icc and ice influences gp for 1978 2015 our findings first indicate that icc and ice are cointegrated and both respond to disequilibrium to restore the long run equilibrium relationship second deterioration in gp results in deterioration in both icc and ice improvement in gp however results in improvement in ice with no impact on icc third deterioration in both icc and ice results in deterioration in gp improvement in ice results in improvement in gp but improvement in icc has no impact on gp the observed asymmetries are in line with n

are devaluations contractionary in mena countries currency depreciation reduces aggregate supply by raising cost of imported inputs and increases aggregate demand by increasing its net export component depending on the relative strength of the two effects depreciation could be expansionary or contractionary we employ the bounds testing approach to cointegration and error correction modelling to evaluate the effects of exchange rate depreciation on output growth both in the short and in the long run across a sample of mena countries exchange rate fluctuations are found to be important to fluctuations in real output growth in the short run anticipated exchange rate depreciation may induce long run expansionary or contractionary effects on output supply consistent with theory s predictions the expansionary effect of unanticipated depreciation is only transitory on output growth nonetheless unanticipated depreciation is found to have a contractionary effect on output growth in the long run via an increase in the cost of imported inputs

real exchange rate behavior in the middle east a re examination abstract this letter extends recent work by bahmani oskooee bahmani oskooee m do exchange rates follow a random walk process in middle eastern countries economics letters 1998 58 339 344 on testing long run purchasing power parity for middle eastern countries during the post bretton woods period using multivariate nonlinear models strong support is provided for highly nonlinear reversion of real exchange rates toward a stable equilibrium for each country examined

low climate stabilisation under diverse growth and convergence scenarios abstract in the last decade a number of papers have analysed the consequences of achieving the greenhouse gas concentration levels necessary to maintain global temperature increases below 2 c above preindustrial levels most models and scenarios assume that future trends in global gdp will be similar to the growth experienced in the past century which would imply multiplying current output by about 19 times in the 21st century however natural resource and environmental constraints suggest that future global economic growth may not be so high furthermore the environmental implications of such growth depend on how it is distributed across countries this paper studies the implications on ghg abatement policies of low global gdp growth and high convergence levels in gdp per capita across countries a partial equilibrium model poles of the world s energy system is used to provide detailed projections up to 2050 for the different regions of the world the results suggest that while low stabilisation could be technically feasible and economically viable for the world in all the scenarios considered it is more likely to occur with more modest global growth however that will imply higher global abatement costs relative to gdp convergence in living standards on the other hand places greater pressures in terms of the required reduction in emissions in general we find that there are major differences between regions in terms of the size and the timing of abatement costs and economic impact

changing concepts of land in economic theory from single to multi disciplinary approaches abstract the role of land in economic theory is surveyed both from a conceptual and historical perspective land has been incorporated in economic theories in various ways originally land used by agriculture was the main motivation for an economic treatment of land this was gradually extended with various other land use categories neoclassical economic theory gave less attention to land use generally regarding land as a production factor of relatively little importance nevertheless specialized sub fields within economics such as regional and urban economics met the demand for explicit spatial analysis including land use considerations attention for environmental and resource problems has stimulated new perspectives on and conceptualizations of land in economic analysis this involves the interaction with other disciplines as well as the use of spatially disaggregated methods of analysis awareness of the richness of ideas on land in economic theory can contribute to enhanced environmental research

debt stabilization with a deadline abstract this paper presents an extension of the alesina and drazen 1991 american economic review 81 1170 1188 war of attrition model extended by including an exogenous deadline beyond which a punishment namely a penalty is exacted from all players in case of no agreement i solve for this game and establish that the higher the penalty is the higher the probability of stabilizing the debt on time will be i also show that there is a period of complete inertia right before the deadline no group of agents wants to concede just before this date the length of this period of total inertia is increasing in the penalty

quantile unit root test and ppp evidence from 23 oecd countries abstractapplication of six different univariate unit root tests to real effective exchange rates of 23 oecd countries supports their stationarity or purchasing power parity theory ppp only in five countries a result consistent with previous research that is known as ppp puzzle however descriptive statistics of each effective rate reveals a clear sign of non normal distribution to account for this we use quantile unit root test which allows impact of different shocks to be realized at different quantiles when we applied this new test to the same rates number of countries in which ppp is supported increased to 16 apparently incorporating effects of shocks improves testing efficiency and provides more support for the ppp and reduces the severity of the puzzle

cointegration and tests of purchasing power parity nonstationarity in the levels of spot exchange rates and domestic and foreign price indices makes the use of conventional tests of the absolute version of purchasing power parity ppp inappropriate if ppp is true inter country commodity arbitrage ensures that deviations from a linear combination of spot exchange rates and domestic and foreign price levels should be stationary under these conditions exchange rates and price levels should form a cointegrated system we find the null hypothesis of no cointegration cannot be rejected for all five countries thus violating the long run absolute version of ppp

on the ideological foundations of environmental policy abstract this paper is an investigation into the philosophies of science inherent in the development of two schools of thought in environmental economics neoclassical and steady state analysis it attempts to gain clearer insight into the direction of inquiry and the policy options of each by contrasting their perspective metaeconomic structures the sets of first principles shaping theoretical development the ontology of steady state analysis while accepting the general principle of rationality differs from neoclassicism by including the ecological interaction of people with nature as an element of spicies being the cosmology of the two schools differs in the steady statists take the laws of thermodynamics and the principle of biospheric assimilation of first principles questions of absolute scarcity take primacy over the neoclassical focus on problems of relative scarcity in policy analysis consequently steady state theorists view the environment problem in its global dimensions over a longer time continuum the result is that steady state policy prescriptions are not necessarily market bound and may transcend the intstitutional arrangements common in western capitalist societies

pursuing self interest or self actualization from capitalism to a steady state wisdom economy the co evolution of capitalism democracy and science since 1800 has led to enormous progress but also major existential problems this article asserts that these problems are rooted in neo classical economics narrow focus within human nature on self interest which causes intense conflicts for scarce resources among people societies species and generations it describes how an emphasis on the totality of human nature in life with a focus on self actualization instead of self interest as the main driving force and wisdom rather than wealth as the ultimate aim can lead to a steady state wisdom economy that can simultaneously ensure high personal welfare and collective sustainability

relative and absolute scarcity of nature assessing the roles of economics and ecology for biodiversity conservation abstract our aim in this essay is to identify and analyze some of the difficulties with interdisciplinary integration of economic and ecological contributions to the study of biodiversity loss we develop our analysis from a widely accepted definition of economics which is based on the concept of scarcity taking a closer look at this notion we find that economics actually limits itself to a very particular aspect of scarcity which we denote as relative scarcity we describe in what respect the economic approach towards biodiversity is based on this notion and also reflect on the specific understanding of the relation of humans and nature behind the economic approach we then turn to absolute scarcity as another notion of scarcity and show that this is not within the scope of economics but has been a theme of ecology and ecological economics we describe in which way ecological and ecological economic approaches towards biodiversity are based on the idea of absolute scarcity and also reflect on the specific understanding of the human nature relationship behind this notion of scarcity against this background we discuss the roles of economics and ecology for nature conservation we conclude that the interdisciplinary integration of ecology and economics requires a philosophical underpinning and suggest a framework for further research

historical roots for ecological economics biophysical versus allocative approaches abstract a number of economists today are aware that the results of their science are more or less at variance with concrete fact and are alive to the necessity of perfecting it they go wrong rather in their choice of means to that end they try obstinately to get from their science alone the materials they know are needed for a closer approximation to fact whereas they should resort to other sciences and go into them thoroughly not just incidentally for their bearing on the given economic problem until economic science is much farther advanced economic principles are less important to the economists than the reciprocal bearings of the results of economics and the results of the other social sciences many economists are paying no attention to such interrelations for mastery of them is a long and fatiguing task requiring an extensive knowledge of facts whereas anyone with a little imagination a pen and a few reams of paper can relieve himself of a chat on principles pareto 1935 para 2022

incorporating daily market uncertainty data into a conventional short run dynamic model the case of the black market exchange rate in iran the effect of market uncertainty on a country s currency while widely recognized is either omitted from mainstream models or addressed using low frequency series which are typically subject to a

environmental sustainability as the first principle of distributive justice towards an ecological communitarian normative foundation for ecological economics abstract the ecological economic concern with environmental sustainability embodies the normative orientations of the field this concern is foremost a matter of distributive justice the definition of which determines the relevance of the appropriate scale and efficient allocation criteria yet it would appear that the discipline lacks a shared internally consistent set of ethical premises by which this concern might be legitimized various authors have embraced a rawlsian conception of liberal justice as the appropriate banner for ecological economics in place of the consequentialist libertarian foundations of neoclassical economics including environmental economics it is argued here that this is insufficient in so far as it is premised on a vision of a discrete self sufficient economic actor instead it is posited that an ecological economic ethic must proceed from an understanding of the economic actor as community member a recognition implicit in recent ecological economic contributions focused on discourse ethics and deliberative democracy an ecological communitarian conception of distributive justice which views the well being of the individual as inseparable from the integrity of its implicate mutually constituting human and non human natural communities is advanced as the appropriate basis for the ecological economic world view in this light the thermodynamic foundations of ecological economics are seen to provide the necessary departure point for normative decision making oriented towards ensuring sustainability in economic organization

reflections of an applied welfare economist presidential address presented at the annual meeting of the association of environmental and resource economists september 6 1980 denver colorado

an empirical examination of long run purchasing power parity using cointegration techniques this paper presents an empirical analysis of long run purchasing power parity ppp for five major exchange rates using recently developed econometric techniques on the cointegration of economic time series our empirical results are extremely unfavourable to the ppp hypothesis as a long run equilibrium condition even with an allowance made for measurement error and or tranportation costs in particular we are unable to reject the hypothesis of non cointegration of the exchange rate and relative prices for any of the countries concerned far from finding a stable long run proportionality between exchange rates and relative prices our results therefore suggest that they tend to drift apart without bound

limits to substitution and irreversibility in production and consumption a neoclassical interpretation of ecological economics abstract there are many methodological approaches within ecological economics one of the principal modes of analysis is a modified version of the standard neoclassical model this paper examines the parallels which emerge between the ideas of some ecological economists concerning production and the ideas of others concerning consumption when these ideas are interpreted in the neoclassical paradigm it is well known that ecological economics is characterized by arguments concerning limits to substitution between inputs energy natural capital etc vs manufactured capital labor etc in production and the implications these have for sustainability however various authors have also expressed concerns regarding limits to substitution in consumption either between environmental assets and other goods or between basic needs commodities and other goods though the specific reasons for non substitution are different in the production and consumption cases the underlying theme is that individual commodities and other inputs have unique physical or other properties which make them poor substitutes ideas about irreversibility in production and economic development are also prominent in ecological economics likewise many authors have argued for similar irreversibilities in consumption behavior in analogy to the term technological change i coin the term preferential change to describe these phenomena the linking themes in this case are that the economy environment system is evolutionary in character and that external effects intended and unintended consequences of actions or processes imposed on other parties or resources are all pervasive

towards solving the ppp puzzle evidence from 113 countries several different approaches have been followed by researchers to test the validity of purchasing power parity ppp since the introduction of the unit root tests researchers have applied a battery of these tests to determine whether the real exchange rates are stationary if the answer is in the affirmative ppp is validated while application of the standard augmented dickey fuller test has not provided much support for ppp a test that incorporates nonlinearity in the rates has under both tests however the null of nonstationary is tested against the alternative of stationarity in this article when we switch the null with the alternative and apply kwiatkowski et al 1992 test we provide relatively more support for the theory getting closer and closer towards solving the ppp puzzle