greenhouse warming comparative analysis of nuclear and efficiency abatement strategies abstract we analyse two popular strategies for reducing fossil fuel carbon dioxide co2 emissions revitalizing nuclear power and improving energy efficiency under highly favourable assumptions for nuclear power in scenarios of moderate to high energy growth we find that even if large nuclear plants 1 000 mw could be built every one to three days from now until 2025 which is impossible in the third world global co2 emissions would still continue to grow thus nuclear power cannot contribute significantly to abating greenhouse warming except possibly in scenarios of low energy growth for which the problem is already largely ameliorated by efficiency improvement in the usa the world s largest producer of co2 each dollar invested in electric efficiency displaces nearly seven times as much co2 as a dollar invested in nuclear power even if the most optimistic aspirations for the future economics of nuclear power were realized today efficiency would still displace between 2 5 and 10 times more co2 per unit investment we conclude that revitalizing nuclear power would be a relatively expensive and ineffective response to greenhouse warming and that the key to reducing future co2 emissions is to improve the energy efficiency of the global economy

political cycles in oecd economies this paper studies whether the dynamic behaviour of gnp growth unemployment and inflation is systematically affected by the timing of elections and of changes of governments the sample include the last three decades in 18 oecd economies we explicitly test the implication of several models of political cycles both of the opportunistic and of the partisan type also we confront the implication of recent rational models with more traditional approaches our results can be summarized as follows a the political business cycle hypothesis as formulated in nordhaus 1975 on output and unemployment is generally rejected by the data b inflation tends to increase immediately after elections perhaps as a result of pre electoral expansionary monetary and fiscal policies c we find evidence of temporary partisan differences in output and unemployment and of long run partisan differences in the inflation rate as implied by the rational partisan theory by alesina 1987 d we find virtually no evidence of permanent partisan differences in output growth and unemployment

europe vs america institutional hysteresis in a simple normative model we show how the differences in us and european institutions can arise in a normative model the paper focuses on the labor market and the government s decision to set unemployment benefits in response to an unemployment shock the government balances insurance considerations with the tax burden of benefits and the possibility that they introduce adverse incentive effects whereby benefits increase unemployment it is found that when an adverse shock occurs benefits should be increased most when the adverse incentive effects of benefits are largest adjustment costs of changing benefits introduce hysteresis and can help explain why post oil shock benefits remained high in europe but not in the us desirable features of the model are that we obtain an asymmetry out of a symmetric environment and that the mechanism yielding hysteresis is both simple requires the third derivative of the utility function to be non negative and self correcting empirical evidence concerning the role of corporatism is discussed

in the aftermath of the energy crisis new zealand s energy policy in the 1970s and 1980s abstract the past decade of energy policy in new zealand is analysed with respect to the country s dependence on imported oil energy conservation programmes and the use of renewable energy resources in all cases the country has failed to meet the objectives continually set forth in energy policy documents the recent corporatization strategy of the government with respect to energy planning and management makes the possibility of achieving integrated energy planning quite dubious even recent studies calling for resilient energy plans have only added ambiguity to this situation it is only through a coordinated and centralized strategy that these deficiencies can be overcome which is quite the opposite of the present policy focus

energy efficiency vs economic efficiency new zealand electricity sector reform in the context of the national energy policy objective abstract in this article i review the diverse commentaries on new zealand s ongoing electricity sector reform process within the context of the government s energy policy objective in doing so my purpose is to highlight the interactions between the concepts of energy efficiency and economic efficiency in particular i ask how do the various commentators on reform define these concepts what indicators do they use to measure them and what level of each do they prescribe as appropriate my main objective is not to decide whether any commentator is right or wrong rather i seek to identify the distinct world views or paradigms underlying the commentaries with respect to both energy efficiency and economic efficiency i conclude that economic efficiency is consistent with a supply side paradigm valuing economic growth whereas those who value energy efficiency over economic efficiency subscribe to a demand side paradigm recognising the limits to growth such a paradigm derives from the ethic of sustainability i close by posing the as yet unanswered question are these paradigms mutually exclusive

the italian recession of 1993 aggregate implications of microeconomic evidence we use household level data covering a ten year period 1984 to 1993 to investigate the likely determinants of the italian recession of 1993 the first year after wwii when private consumption fell consumption fell most for working age households and for the self employed our evidence is consistent with the response to permanent negative shocks due to the major pension reform of 1992 and the introduction of stricter tax compliance measures for the self employed this is still true when we control for the role played by job losses and the collapse of the retail sector that characterized the early 1990s

the rise and fall of german hard coal subsidies abstract beginning with the coal crisis of 1958 the survival of the german hard coal mining sector has been heavily dependent on subsidies for several decades these subsidies are a complex system of almost 60 different measures often with conflicting objectives annual financial support for this subsidy system grew from 0 6 billion in 1958 to 7 5 billion in 1989 with the majority of the funding financed outside the public budget by a special fund based on the coal penny kohlepfennig in 1995 the abolishment of the coal penny in connection with budget constraints led to a significant subsidy decrease to 3 5 billion a recent agreement between the federal government and the mining state of north rhine westphalia in 2003 however seems to have fixed german hard coal subsidies at the 2 billion level for the time after 2012

coal restructuring in spain continuity and uncertainty abstract the policies of coal energy are currently undergoing a significant change at the european community level energy concerns are dominated by environmental commitments that seem to demand coal s disappearance the countries that for years have supplied the european energy market with this resource have confronted their future challenges in differing ways the history of the energy sector in spain has been marked by important changes and coal has been a key factor in this process membership in the european union has constituted a clear transition for a historically subsidized and protected sector that now faces an uncertain role in the national energy market the aim of this paper is to offer an overview and analysis of the mechanisms that have been implemented in the energy sector the first part analyzes the rationalization policies that preceded spanish entry into the eu giving a detailed description of the complex programs designed by the government to help mining companies the second part analyzes later systems aimed at helping the coal industry that were implemented after the eu imposed new criteria and objectives these systems led to the so called mixed model of rationalization this model which is completely different from that implemented in other member states is based on maintaining a system of subsidies that discriminate between public and private companies the third part examines the objectives of the current system and the plans projected for the future in the context of the eu s adoption of an energy strategy that seeks to reconcile a self sufficient energy supply with adherence to environmental commitments

removing coal subsidies implications for european electricity markets denmark britain germany and spain have high coal shares in electricity generation denmark with no indigenous coal has the cheapest coal and electricity germany has the largest coal industry one of the most protected pays the highest price for coal and has high electricity prices the paper examines the possible impacts on electricity prices of dismantling coal subsidies and argues that much depends on the form of the subsidies and their method of finance removing subsidies in germany and spain might lower prices by 10 but in the uk where remaining subsidies are small by a negligible amount

beyond 1992 the single market and ec energy issues abstract the european community is contemplating under the de lors plan moving to monetary and political union but the 1987 single europe act which aims to remove by 1992 all remaining barriers to competition has still to be implemented nowhere are the difficulties greater than in the energy sector which has remained outside the operation of the 1957 treaty of rome this article sets the single energy market sem objective in the context of other energy policy issues principally energy supply security and global warming it warns that excessive concentration on the market doctrine underlying the european commission s sem proposals would conflict with the policies necessary to safeguard supply security and the environment

resistance to reform status quo bias in the presence of individual specific uncertainty comment why do governments so often fail to adopt policies which economists consider to be efficiency enhancing our answer to this question relies on uncertainty regarding the distribution of gains and losses from reform we show that there is a bias towards the status quo and hence against efficiency enhancing reforms whenever some of the individual gainers and losers from reform cannot be identified beforehand there are reforms which once adopted will receive adequate political support but would have failed to carry the day ex ante the argument does not rely on risk aversion irrationality or hysteresis due to sunk costs jel d72 f13 why do governments so often fail to adopt policies that economists consider to be efficiency enhancing this is one of the fundamental questions of political economy the answer usually relies on what may be

power privatization and the uk coal industry abstract this article considers the impact of power privatization on the uk coal industry it notes the key importance of fuel costs in determining the profit levels of private generators and concludes that privatization will result in a premature closure of uk coal capacity which would otherwise be competitive with imported coal after 1990 it suggests that the basis of power privatization is essentially irrational and ideological

the privatization programme and the consumer interest abstract the uk government s privatization programme has sought to free the managers of the industries from interference in the day to day running of their businesses three related assumptions seem to underly the extension of this approach to the utility industries first that the products of utility industries should as far as possible be treated as a commodity like any other second that the overriding purpose of public policy towards the utilities is to promote efficiency not equity for example third that managerially independent shareholder owned industries will be more efficient than regulated centrally planned industries consumer organizations are sceptical about these assumptions

a sectoral accounting approach to national savings applied to korea abstract this paper presents a sectoral accounting approach to the determination of the national savings ratio starting with the process of sectoral savings determination and showing the sectoral interactions this approach offers an acceptable empirical framework for aggregate savings studies the model estimated with the korean data is used to run simulations to evaluate its predictive capacity to decompose past savings performance by major factors and to assess the savings effect of policy changes and other exogenous shocks the results indicate that income variables have been the most important determinants although interest rate and tax policies have also played some role

a positive theory of the earnings relationship of unemployment benefits in a wage bargaining model a stronger earnings relationship of unemployment benefits may reduce wages therefore the benefit structure significantly influences profits and trade union utility raising the question as to how the benefit structure is determined in the political process we consider a government that chooses the earnings relationship in order to maximize its political support our model predicts a strong earnings relationship under right wing governments and a weak relationship when unions are influential using panel data for 19 oecd countries we find support for these theoretical predictions moreover we show that the earnings relationship varies negatively with openness

income distribution and growth in east asia it is widely believed that the east asian economies performed exceptionally well not only in generating growth but also in keeping inequality low this study tries to answer the questions raised by the claims of exceptionality of income distribution in east asia central findings are that only japan korea and taiwan have legitimate claims to low inequality that the east asian economies distinguished themselves by their ability to translate high profit shares into high savings and investment rates and that low inequality and high profit shares coexisted primarily due to the unusually even distribution of wealth

a portfolio model of korean household saving behavior 1962 1976 in his recent paper on korea s saving and capital accumulation experience over the 1962 76 period williamson challenges development economists to improve on the simplistic models of saving behavior that have come to characterize studies of surplus mobilization in less developed countries he warns that we can no longer be satisfied with single equation ordinary least squares estimated models that ignore the simultaneous nature of the saving investment decision he further suggests that saving studies have been overly concerned with modeling total domestic saving flows and have consequently bypassed important issues relating to changes in sectoral saving patterns and within sectors changes in the composition of saving others have had similar criticisms mikesell and zinser and leff and sato complain that the specifications of total and sectoral saving functions in ldc macro studies have been unimaginative and not well grounded in theory 2 they acknowledge those household saving studies that have utilized theoretically appealing specifications based on wealth stock adjustment and life cycle saving models but they suggest that many studies have been ad hoc in nature and have tended to place excessive emphasis on current disposable income nia definition as the leading and in some cases the only explanatory variable preoccupation with simplistic keynesian saving models that emphasize current nia income is unfortunate since from a purely theoretical standpoint permanent and or capital gains adjusted income measures would be more appropriate explanatory variables to use along with expected real rate of return variables in household wealth accumulation studies indeed studies that have used permanent income and life cycle variables have yielded interesting results 3 mikesell and zinser and williamson point out that measuring the effect on saving of changes in interest rates has been handled in a

the mining industry under the thumb of politicians the environmental consequences of the spanish coal decree abstract the so called coal decree royal decree 143 2010 and subsequent royal decree 1221 2010 have modified the historical use of coal trends in the spanish economy since 2010 the use of domestic coal in spain s electricity sector will be promoted by the royal decree until 2014 this energy strategy on the one hand and political decision on the other were advanced under the flag of energy security and the fulfillment of the 9th principle of the international council of mining and metals icmm which specified that sustainable development in mining areas should maintain among other things employment the mutual understanding between the government and the local mining industry is confronted with vast criticism at the institutional firm and social levels regarding a the disparities generated between electricity generation technologies b the increase of electricity market prices the national competition commission reported the royal decree and c subsequent environmental harm the coal decree has changed the gradual decrease of coal in the spanish energy mix since the end of the 1990s the environmental efficiency gains accumulated over the past several years would be lost as a result of this change of direction in policy in the last fifteen years the coal industry in spain has been under pressure from political decisions that have forced the dismantling of the industry a labor reconversion of mining areas and the conversion of coal fired power plants into combined cycle gas power plants this situation considerably reduced co2 emissions from coal combustion in spain improving the environmental efficiency of the entire economy for many years nevertheless the implementation of the royal decree has changed these trends this paper will examine the environmental consequences of the coal decree from 2010 to 2014 based on actual economic and energy demand requirements and actual electricity mix composition a post keynesian energy age model to forecast energy demand and the derived co2 emissions will be applied to evaluate the change in the reduction of emissions observed in the electricity sector since 2005 and in the spanish economy since 2010 the results will be compared to other alternative scenarios of co2 emissions evolution

from labor to finance understanding the failure of socialist economic policies in spain this article seeks to explain the spanish socialist party s psoe s failure to reverse spain s dismal employment record during the course of its long government tenure from 1982 until 1996 most efforts to explain spain s position at the extreme of the unemployment spectrum in europe follow the prevalent tendency in the comparative political economy literature by giving causal primacy to labor market institutions this article challenges this labor market centered view by arguing that the failure of the socialist government s economic policy strategy is to be found in the interaction of two other factors the biased course of financial liberalization and the perverse effects of the psoe s macroeconomic policy strategy on inflation and on the process of social concertation national wage bargaining the article also seeks to explain the psoe s choices in these policy areas

small system modelling of real wages inflation unemployment and output per capita in italy 1970 1994 the relationships between real wages output per capita inflation and unemployment in italy between 1970 and 1994 are modelled using a cointegrated vector autoregression there is evidence of a change in the underlying equilibria and in the dynamic evolution of the variables probably associated with the substantial changes in many sectors of the italian economy after 1979 alternative ways to model structural change in the italian labour market are considered in adopting a split sample approach the results favour an hysteresis interpretation of unemployment

coal policies and trade barriers abstract the purpose of this paper is to treat in some depth recent work performed by the iea secretariat in analysing barriers to coal trade in member countries the concept of the producer subsidy equivalent pse as a measure of financial transfers to the coal industry is described along with its advantages and limitations as illustration summary results for the years 1982 1988 are given the paper concludes with a discussion of the arguments for and against maintaining support for domestic coal production

educational policies in a long run perspective in this paper we study the effects of educational reforms on school attainment we construct a dataset of relevant reforms that occurred at the national level over the last century and match individual information from 24 european countries to the most likely set up faced when individual educational choices were undertaken our identification strategy relies on temporal and geographical variations in the institutional arrangements controlling for time country fixed effects as well as for country specific time trend by characterizing each group of reforms for their impact on mean years of education educational inequality and intergenerational persistence we show an ideal policy menu which has been available to policymakers we distinguish between groups of policies that are either inclusive or selective depending on their diminishing or augmenting impact on inequality and persistence finally we correlate these reform measures to political coalitions prevailing in parliament finding support for the idea that left wing parties support reforms that are inclusive while right wing parties prefer selective ones michela braga daniele checchi and elena meschi

unemployment and the labour management conspiracy we study a model in which management and a union bargain sequentially first choosing a rule that will later determine the level of employment and then choosing a wage the government then chooses an output or an employment subsidy an exogenous natural turnover rate in the unionized sector creates unemployment whenever the union wage exceeds the competitive wage government intervention can increase both the equilibrium amount of unemployment and worsen the intersectoral allocation of labour because of the induced change in the endogenous wage unemployment weakens but does not eliminate the possibility of a labour management conspiracy

anatomy of a future energy crisis restructuring and the energy sector in new zealand abstract up until the mid 1980s new zealand had been characterized by an economy that was heavily protected extensively regulated and in which production was subsidized to a considerable extent in 1984 the government embarked upon a programme of extensive public sector and economic restructuring described by some as being among the most wide reaching and radical in new zealand s history for the energy sector the restructuring has meant a move away from an administrative infrastructure of the 1970s and 1980s that was strongly centralized and government led to one that is based much more on market forces energy development production and delivery have been corporatized and privatized the energy sector has been largely deregulated and government has disavowed itself of responsibility for energy resource management and policy the primary motivation that underlies all of the reform is economic efficiency concerns are widely held however for the implications that follow from this restructuring of the energy sector for the efficient management of energy resources security of supply long term management of the sector and for the maintenance of environmental quality it is possible that greater economic efficiencies might be achieved although this is by no means certain but it would seem that specific characteristics of the restructuring will militate strongly against the achievement of other objectives in the sector recommendations for amendment refer to the need to strike a sensible balance between market forces and government involvement

exploring the political economy of labour market institutions labour markets how reforms took place many economists argue that the european unemployment problem relates to large labour market rigidities this paper argues that many of those inflexibilities and the underlying institutional regulations can be understood as the outcome of political influence by incumbent employees this is because many policies that increase unemployment actually benefit these insiders an empirical investigation of the determinants of labour market institutions demonstrates that the observations are consistent with this view the findings imply 1 higher exposure of the employed to unemployment facilitates a reduction in the level of employment protection 2 unemployment benefits are lower the more employment reacts to wages 3 a higher level of unemployment and the existence of a right wing government slow down the growth rate of the minimum wage giles saint paul

market failure and energy policy a rationale for selective conservation abstract appropriate activities for the government in the energy sector of the us economy are suggested on the basis of market failures in this sector alleged market failures are explored and specifically targeted remedies proposed where indicated the resulting government policies can be characterized as selectively conservationist designed to induce lower levels of use of particular fuels sometimes in particular industries

the role of labor markets for euro area monetary policy in this paper we explore the role of labor markets for monetary policy in the euro area in a new keynesian model in which labor markets are characterized by search and matching frictions we first investigate to which extent a more flexible labor market would alter the business cycle behavior and the transmission of monetary policy we find that while a lower degree of wage rigidity makes monetary policy more effective i e a monetary policy shock transmits faster onto inflation the importance of other labor market rigidities for the transmission of shocks is rather limited second having estimated the model by bayesian techniques we analyze to which extent labor market shocks such as disturbances in the vacancy posting process shocks to the separation rate and variations in bargaining power are important determinants of business cycle fluctuations our results point primarily towards disturbances in the bargaining process as a significant contributor to inflation and output fluctuations in sum the paper supports current central bank practice which appears to put considerable effort into monitoring euro area wage dynamics and which appears to treat some of the other labor market information as less important for monetary policy

enhancing energy price stability through consistent and balanced energy technology r d abstract despite the significant decline in energy prices and the large budget deficit the us government must maintain a well balanced energy technology development programme ranging from basic science through to the demonstration of technical feasibility and technology transfer having technology in technical readiness before an energy price shock will moderate economic problems due to the price shock and thereby promote economic stability based on evolving knowledge about the relationships among energy prices technology commercialization and recessions and depressions development of efficient energy technologies must be far better managed by government and the private sector during both normal economic growth and energy crisis

the rise in unemployment a multi country study one of the most remarkable features of recent economic history has been the remorseless rise in unemployment throughout the industrialized countries however while the trend to higher unemployment is universal the experience of individual countries also differs widely the increase is especially marked within the european community where unemployment rates rival those reached in the interwar years by contrast in the scandinavian countries and japan unemployment is lower and has risen very much less experience in the united states lies somewhere between these extremes and in the last few years unemployment there has fallen sharply

before it gets better the short term employment costs of regulatory reforms the article exploits long time series of industry level data in a group of oecd countries to analyze the short term labor market effects of reforms that lower barriers to entry and dismissal costs estimates show that both policies induce non negligible transitory employment losses the strength of these effects varies depending on the underlying industry and labor market structure and on cyclical conditions the employment cost of deregulation is higher in economic downturns and negligible in good times these findings prove robust to a set of specification and sensitivity checks and are confirmed after standard reverse causality and falsification tests

the redistributive roles of unemployment insurance and the dynamics of voting abstract public unemployment insurance is analyzed as the majority voting equilibrium policy of a dynamic stochastic economy abstracting from incentive effects we focus on redistribution some results are because of the distribution of heterogeneous employment opportunities public insurance may be democratically chosen even if complete private markets exist and because of the dynamics even when agents are intrinsically homogeneous the equilibrium benefit level or duration benefit schedule deviates from what has been described as optimal in the literature the effects of differences in the average frequency or duration of unemployment on equilibrium taxes and benefits are investigated with some unanticipated results

wage size relation and the structure of work force composition in italian manufacturing firms in this paper we study the impact of firms productivity and scale of activity on the cost of labour for italian manufacturing firms investigating how the work force composition affects the total expenditures for wages our analysis reveals that once productivity differences among firms are accounted for size still retains a positive effect on cost of labour we show that the source of this phenomenon is the relatively higher proportion of non production workers in bigger firms which results in a cost of labour for white collar workers that increases with increasing firm size copyright the author 2009 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

crossing the river a comparative perspective on italian employment dynamics crossing the river a comparative perspective on italian employment dynamics this paper studies the unprecedented job destruction which occurred throughout europe during the recession of the early 1990s it raises the question whether changes in the institutional structure of various countries labour markets may have deepened the normal effects of the recession institutional legal and sociopolitical safety nets were used to protect many european employees from technological and demand shocks throughout the 1970s and early 1980s important steps have since been taken to deregulate industrial relations european labour markets may currently be in the middle of the river they already experience the negative employment aspects of an american labour market without yet enjoying its benefits based on a study of several countries the article concludes that the social costs of deregulation will be smallest if the intended destination of the transition is reached credibly and without hesitation policy makers must point decisively towards a well defined riverbank rather than leaving the labour market in the middle of the stream giuseppe bertola and andrea ichino

privatization of the esi broadening the debate abstract the debate over the privatization of electricity in the uk has been conducted across too narrow a terrain being primarily concerned with regulation for optimality in the context of static if uncertain conditions of supply and demand insufficient account has been taken of dynamic agencies in formulating and bringing about progressive industrial change something of great importance in the light of their weakness in the uk context consequently a number of deficiencies in the uk esi have been neglected in the debate over privatization and are not liable to be rectified by it in practice

stagflationary effects of monetary stabilization policies a quantitative analysis of south korea this paper presents a macro model of the korean economy that focuses on short run macro economic adjustment and more in particular on the transmission channels of monetary policy between the financial and the real sector of the economy in addition to the usual link between monetary policy and aggregate demand via investment the link between monetary policy and the supply side of the economy via the financing of working capital with borrowed funds is incorporated this link can potentially reverse the short run impact of tight money on inflation and aggregate the impact on output both export prices and domestic prices show a significant sensitivity to cost of financing working capital this credit supply side link gives a stagflationary bias to restrictive credit policies the empirical relevance of this phenomenon is strongly supported by the simulation results derived with the model structurally section 2 of the paper focuses on the real sector part of the model section 3 discusses the financial sector in section 4 different monetary stabilization packages are simulated using the model presented in sections 2 and 3 and alternative policy measures are discussed the simulation runs show strong short run stagflationary effects of tight money policies

the political economy of coal subsidies in europe abstract both the mining and the burning of coal is polluting so we might expect to observe taxes on coal production and consumption yet several countries of western europe subsidize coal production and most east european countries subsidize coal consumption the first part of this paper shows that those subsidies which are emulated by other rich and poor countries respectively have become enormous neoclassical political economy is used to examine why governments adopt such inappropriate policies when they are so wasteful of resources and damaging to the environment several new and offsetting political forces have been at work in western europe in recent years though causing some countries to dismantle their coal producer subsidies the paper concludes that these pressures for reform will continue to operate in the few remaining protectionist countries if coupled with more commercial diplomatic pressure from coal exporting countries they could be sufficient to see the end of such protection by early next century