fuel consumption for road transport in the usa abstract this study provides both a historical analysis of fuel demand for road transport and an example of using econometric results for projections fuel consumption by all motor vehicles in the usa has been analysed by splitting total demand into passenger car truck and other demands distance travelled and fuel efficiency equations have been estimated for both the passenger car fleet and trucks an essentially five equation model has been constructed and used to simulate likely fuel demand patterns up to 1990

residential energy demand in oecd countries and the role of irreversible efficiency improvements abstract after undergoing substantial changes during a period of high energy prices household energy demand did not rebound in times of declining energy prices as might have been expected hence other factors such as irreversible improvements in technical efficiency must be understood in order to describe both past and future household energy demand in this paper we consider irreversible efficiency improvements as a major reason for the moderate growth in energy demand after the plummeting of the oil price in 1985 we test different econometric models to take into account efficiency indicators the major conclusions of our investigation are i price elasticities are different for rising and falling prices for the latter they are close to zero implying a low rebound effect in the residential sector ii technical efficiency is an important parameter for describing and forecasting energy demand and iii income elasticities turn out to be higher once we incorporate indicators of technological efficiency in the process of estimating energy demand

how reliable are simple single equation specifications of import demand this paper examines nine models of aggregate import demand for each of five countries canada germany japan united kingdom and united states in an attempt to determine which of the frequently used single equation models of import demand are appropriate an appropriate model is defined as one which generates unbiased or at least consistent and efficient elasticity estimates while models without lagged adjustments and almon lag models perform rather poorly according to these criteria models including dynamic behavior through lagged values of the dependent variable are frequently accepted results are reported regarding functional form measures of variables and structural shift economists have devoted considerable attention to the estimation of aggregate import demand elasticities because of their importance in trade theory the simplest procedure for estimating these elasticities which is consistent with economic theory is to assume that the elasticity of supply of imports is infinitely elastic and to estimate

untangling the complexity of the direct and indirect determinants of the residential energy consumption in france quantitative analysis using a structural equation modeling approach abstract about a quarter of french energy demand is for residential use this study mobilises a multidisciplinary approach and a non linear modeling strategy to examine the total direct and indirect effects of households and housing units in designing french energy consumption based on micro level data from the new french 2012 phebus survey this research implements a structural equation model to tease out the effects of both dwelling characteristics household attributes climate and behaviours on the domestic energy use findings confirm that the direct effect of household related attributes on domestic energy demand is notably lower than the corresponding effect from the dwelling attributes nevertheless considering for the indirect effect of household factors on energy use across housing choices the total impact of household related attributes on the french domestic energy consumption is just slightly lower than that of dwelling characteristics therefore to highlight the spectrum of residential energy use this research calls to incorporate both direct and indirect effects of household attributes and choices this study suggests several key insights on how to incorporate housing policy into residential energy policy and reduce energy related greenhouse gas emissions

the reliability of aggregate energy demand functions an application of statistical specification error tests abstract the paper examines the unbiasedness and efficiency of various energy elasticity estimates by means of statistical specification error tests the model selection procedure is applied to energy consumption data of eight industrialized countries it is found that models which describe dynamic behaviour by including the lagged dependent variable among the regressors are most frequently accepted and that long term income effects are important for all countries strong differences among countries prevail concerning the appropriateness of including a time trend elasticities derived from accepted models differ considerably among countries

residential consumption of gas and electricity in the u s the role of prices and income abstract we study the residential demand for electricity and gas working with nationwide household level data that cover recent years namely 1997 2007 our dataset is a mixed panel multi year cross sections of dwellings households in the 50 largest metropolitan areas in the united states as of 2008 we estimate static and dynamic models of electricity and gas demand we find strong household response to energy prices both in the short and long term from the static models we get estimates of the own price elasticity of electricity demand in the 0 860 to 0 667 range while the own price elasticity of gas demand is 0 693 to 0 566 these results are robust to a variety of checks contrary to earlier literature metcalf and hassett 1999 reiss and white 2005 we find no evidence of significantly different elasticities across households with electric and gas heat the price elasticity of electricity demand declines with income but the magnitude of this effect is small these results are in sharp contrast to much of the literature on residential energy consumption in the united states and with the figures used in current government agency practice our results suggest that there might be greater potential for policies which affect energy price than may have been previously appreciated

the ricardian equivalence hypothesis evidence from bangladesh this article examines the ricardian equivalence hypothesis reh and its sources of failure in the case of bangladesh using various theoretical specifications annual data from 1974 2001 and linear and nonlinear time series techniques the general findings tend to invalidate the reh a finite time horizon and the presence of liquidity constrained individuals are the sources of deviation from the reh empirical results reveal that real per capita private consumption c under various specifications is cointegrated generally at the 5 level with real per capita income y government expenditure before and after interest rate repayments g and g2 taxes t and the interest rate r results reveal that an increase in g g2 t and r reduces c and that an increase in budget deficits raises trade deficits these results highlight the importance of fiscal policies in boosting private consumption and controlling trade deficits which are the prime goals of stabilization policies being followed by bangladesh

the importance of engaging residential energy customers hearts and minds abstract in an attempt to reduce the contribution of residential greenhouse gas emissions the eu has implemented a variety of policy measures the focus has been to promote domestic energy efficiency and ultimately a reduction in residential energy demand in this study we estimate residential energy demand using underlying energy demand trend uedt and asymmetric price responses for 14 european oecd countries between 1978 and 2008 our results support the conclusion that policies to reduce residential energy consumption and the consequent emissions need to account for behavioural lifestyle and cultural factors in order to be effective

the imperfect price reversibility of non transport oil demand in the oecd abstract this paper examines the price reversibility of oecd non transport oil demand and its components residual heavy fuel oil non transport distillates and other non transport oil products our purpose is to determine the extent to which the reductions in demand following the oil price increases of the 1970s have been and will be reversed by the price cuts of the 1980s the analysis is based on an econometric model which utilizes price decomposition methods to measure separately the effects of price increases and price decreases these methods allow empirical testing of irreversibility and hysteresis and should be applicable in other areas of economics where asymmetry of response or persistence of effect are evident based on the statistical evidence we reject the conventional specification of demand being perfectly price reversible we conclude that the response to the price cuts of the 1980s has been significantly smaller than to the price increases of the 1970s demand has followed a ratchet process price increases reduced demand substantially when demanders conserved and switched away from oil but price cuts did not reverse this process completely if at all this has important implications for projections of oil demand especially under low price assumptions the oecd s dependency on oil will not increase as much as some analysts may have feared there is however another aspect of imperfect price reversibility the possibilities of adjusting to future price rises may not be as great as they have been in the past the easiest and least costly demand savings have already been made and oil has been replaced by other energy sources in many uses what s done is done

the structure of residential energy demand in greece abstract this paper attempts to shed light on the determinants of residential energy demand in greece and to compare it with some other oecd countries from the estimates of the short run and long run elasticities of energy demand for the period 1965 1999 we find that residential energy demand appears to be price inelastic also we do not find evidence of a structural change probably because of the low efficiency of the energy sector we find however that the magnitude of the income elasticity varies substantially between greece and other oecd countries

the twin deficits phenomenon evidence from greece this paper explores the relationship between budget and trade deficits in a small open economy using annual data the purpose of the paper is to test empirically the validity and rationale of the keynesian proposition conventional view and the ricardian equivalence hypothesis the econometric methodology is based on cointegration analysis error correction modelling and granger trivariate causality the ecm empirical findings suggest that budget deficit has short and long run positive and significant causal effects on trade deficit

have large budget deficits caused rising trade deficits for the united states the 1980s have been years of both large and unprecedented trade deficits as well as massive federal budget deficits the trade deficit rose from 25 billion in 1980 to 124 billion in 1985 during this same period federal budget deficits soared from 74 billion in 1980 to more than 212 billion in 1985 it is widely believed that the u s trade deficit rose mainly because of the skyrocketing federal budget deficit presenting such a view are for example hutchison and pigott 25 hutchison and pyle 26 clark 11 modigliani 30 and aschauer 2 besides economists many labor unions i e afl cio and official government documents see the economic report of the president particularly of 1984 have all shared similar views the issues involved have important policy implications suppose that the basic reason for rising trade deficits is indeed the escalating federal budget deficit in this case policy makers may focus on curtailing the budget deficit in order to resolve the trade deficit problem that has adversely affected several sectors such as manufacturing industries and agriculture however if such a view concerning the causal role of the budget deficit is incorrect then reductions in the federal budget deficit may not resolve the trade deficit dilemma and moreover attention will be diverted from more relevant and urgently needed policy options 6 the purpose of this paper is to empirically investigate the conventional argument that high federal budget deficit has been the prime cause of the escalating u s trade deficit finding only partial empirical evidence to support it in section ii i argue that most of previous studies in this area appear flawed by a methodological error rendering their tests unreliable for discriminating between a number of equally plausible hypotheses section iii describes the data and methodology used in the paper section iv presents the empirical results section v summarizes and concludes the paper

response of residential electricity demand to price the effect of measurement error abstract in this paper we present an empirical analysis of the residential demand for electricity using annual aggregate data at the state level for 48 us states from 1995 to 2007 earlier literature has examined residential energy consumption at the state level using annual or monthly data focusing on the variation in price elasticities of demand across states or regions but has failed to recognize or address two major issues the first is that when fitting dynamic panel models the lagged consumption term in the right hand side of the demand equation is endogenous this has resulted in potentially inconsistent estimates of the long run price elasticity of demand the second is that energy price is likely mismeasured to address these issues we estimate a dynamic partial adjustment model using the kiviet corrected least square dummy variables lsdv 1995 and the blundell bond 1998 estimators we find that the long term elasticities produced by the blundell bond system gmm methods are largest and that from the bias corrected lsdv are greater than that from the conventional lsdv from an energy policy point of view the results obtained using the blundell bond estimator where we instrument for price imply that a carbon tax or other price based policy may be effective in discouraging residential electricity consumption and hence curbing greenhouse gas emissions in an electricity system mainly based on coal and gas power plants

estimating energy and oil demand functions a study of thirteen developing countries abstract in this paper we attempt to identify some of the factors that have determined the level and pattern of energy demand in developing countries during the 1970s and early 1980s aggregate oil and energy demanding functions are constructed for a selection of oil importing countries and oil exporting countries the results show a strong link between income and aggregate energy demand conversely the price elasticity of energy demand is low both in the short run and the long run oil demand behaviour is more complex oil products can be rationed or domestic energy production can affect oil demand nonetheless the income elasticity remains close to one in most countries and is well above one for some

oligopoly price discrimination with many prices abstract the model of price discrimination in cournot nash oligopoly is extended to the case of many prices analogous to 1st degree monopoly price discrimination in the limit all viable customers are served but the price charged the keenest customers is well below the highest price charged by a monopoly

modelling residential electricity demand in the gcc countries abstract this paper aims at understanding the drivers of residential electricity demand in the gulf cooperation council countries by applying the structural time series model in addition to the economic variables of gdp and real electricity prices the model accounts for population weather and a stochastic underlying energy demand trend as a proxy for efficiency and human behaviour the resulting income and price elasticities are informative for policy makers given the paucity of previous estimates for a region with particular political structures and economies subject to large shocks in particular the estimates allow for a sound assessment of the impact of energy related policies suggesting that if policy makers in the region wish to curtail future residential electricity consumption they would need to improve the efficiency of appliances and increase energy using awareness of consumers possibly by education and marketing campaigns moreover even if prices were raised the impact on curbing residential electricity growth in the region is likely to be very small given the low estimated price elasticities unless that is prices were raised so high that expenditure on electricity becomes such a large proportion of income that the price elasticities increase in absolute terms

asymmetric price responses and the underlying energy demand trend are they substitutes or complements evidence from modelling oecd aggregate energy demand abstract a number of energy demand studies have considered the importance of modelling asymmetric price responses apr for example the often cited work of gately and huntington 2002 griffin and schulman 2005 questioned the asymmetric approach arguing that this is only capturing energy saving technical progress huntington 2006 however showed that for whole economy aggregate energy and oil demand there is a role statistically for both apr and exogenous energy saving technical change in a separate strand of the literature the idea of the underlying energy demand trend uedt has been developed see for example hunt et al 2003a and 2003b and dimitropoulos et al 2005 they argue that it is important in time series energy demand models to allow for stochastic trends or uedts based upon the structural time series dynamic regression methodology recommended by harvey 1989 1997 this paper attempts to bring these strands of the literature together by proposing a testing procedure for the uedt and apr in energy demand models within both a panel context consistent with the huntington 2006 approach and the structural time series modelling framework a set of tests across a range of specifications using time series and panel data are therefore suggested in order to try and ascertain whether energy saving technical change or the more general uedt and apr are substitutes for each other when modelling energy demand or whether they are actually picking up different influences and are therefore complements using annual whole economy data for 17 oecd countries over the period 1960 2006 the results suggest that for most of the countries the uedt is preferred to apr whereas for another group the uedt and apr are complements and for another group they are substitutes it is argued therefore that energy demand modellers should not assume at the outset that one method is superior to the other moreover wherever possible a general model be it in a time series or panel context that includes a non linear uedt and apr should be initially estimated and only if accepted by the data should symmetry and or a more restrictive uedt be imposed

modelling oecd industrial energy demand asymmetric price responses and energy saving technical change abstract the industrial sector embodies a multifaceted production process consequently modelling the derived demand for energy is a complex issue made all the more difficult by the need to capture the effect of technical progress of the capital stock this paper is an exercise in econometric modelling of industrial energy demand using panel data for 15 oecd countries over the period 1962 2003 exploring the issue of energy saving technical change and asymmetric price responses although difficult to determine precisely it is tentatively concluded that the preferred specification for oecd industrial energy demand incorporates asymmetric price responses but not exogenous energy saving technical change

impact of exchange rate uncertainty on commodity trade between us and sweden previous studies that investigated the effects of exchange rate uncertainty on the trade flows of sweden employed aggregate trade data either between sweden and the rest of the world or at bilateral level between sweden and her major trading partners in this article we disaggregate the trade data and employ the import and export data from 87 industries that trade between sweden and the us we find that exchange rate volatility has significant short run effects on the trade flows between the two countries in almost two third of the industries however the short run effects are translated into the long run effects in one third of the cases furthermore the real depreciation of krona against the dollar was found to have favourable effects on the overall trade balance between the two countries

competition and price dispersion in the airline markets we use two ticket level data sets on one way domestic flights for the us airlines to examine the potentially nonlinear relationship between price dispersion and three forms of competition inter firm inter flight and frequency competitions the linear relationship is rejected at any conventional significance levels in particular there is an s shaped relationship between market concentration and price dispersion this can be a reason for the mixed results in the literature roughly speaking the inter flight and frequency competitions have opposite effects on price dispersion finally in general the size of aircraft has a positive effect on price however for very large aircraft the relationship becomes negative

econometric modelling of international carbon tax regimes an econometric model of fossil fuel demand has been estimated for eight oecd countries relating coal oil and gas demands to gdp and prices in addition a model of endogenous technical progress has been estimated aiming to include both price induced innovation in energy and structural change in the economy as long term determinants of energy consumption a number of possible international carbon energy tax agreements are simulated showing the impacts on carbon dioxide emissions and comparing the two models in the long run the magnitude of taxes required to stabilize or reduce emissions would be large and there are important differences between countries in price responses which must be taken into account in international modelling and policy formulation

energy consumption and economic activity in industrialized economies a note abstract in industrialized countries the income elasticity of primary energy demand is not far off unity furthermore it can be argued that there is little use in distinguishing between short and long term income elasticities a long term income elasticity does not have a direct impact on energy demand and hence it is of doubtful use in energy demand projections via an aggregate oecd model it was estimated that the short term impact of prices on primary energy demand is about 0 15 while the long term impact is 0 43 but increasing over time

the j curve and nafta evidence from commodity trade between the us and mexico the north american free trade agreement nafta was predicted to have a substantial impact on the us mexico trade especially on specific importing and exporting industries in this article we use annual industry level export and import data from 1962 to 2004 to discern both the short and long run effects of real exchange rate depreciation on the mexico us trade balance as well as the effects of nafta on this trade we find that peso depreciation has a positive long run effect on 24 of 102 mexican industries and a negative short run effect on 19 of 102 industries only a small fraction 7 of 102 industries show any support for the j curve hypothesis nafta has had a significant effect on a significant number of the industries however

understanding the spectrum of residential energy saving behaviours french evidence using disaggregated data analysing household energy saving behaviours is crucial to improve energy consumption predictions and energy policy making how should we quantitatively measure them what are their determinants this study explores the main factors influencing residential energy saving behaviours based on a bottom up multivariate statistical approach using data from the recent french phebus survey firstly we assess energy saving behaviours on a one dimension scale using irt secondly we use linear regression with an innovative variable selection method via adaptive lasso to tease out the effects of both macro and micro factors on the behavioural score the results highlight the impact of five main attributes incentivizing energy saving behaviours based on cross variable analyses energy price household income education level age of head of household and dwelling energy performance in addition our results suggest that the analysis of the inverted u shape impact of age enables the expansion of the energy consumption life cycle theory to energy saving behaviours abstract analysing household energy saving behaviours is crucial to improve energy consumption predictions and energy policy making how should we quantitatively measure them what are their determi nants this study explores the main factors influencing residential energy saving behaviours based on a bottom up multivariate statistical approach using data from the recent french phebus survey firstly we assess energy saving behaviours on a one dimension scale using irt secondly we use linear regression with an innovative variable selection method via adaptive lasso to tease out the effects of both macro and micro factors on the behavioural score the results highlight the impact of five main attributes incentivizing energy saving behaviours based on cross variable analyses energy price household income education level age of head of household and dwelling energy performance in addition our results suggest that the analysis of the inverted u shape impact of age enables the expansion of the energy consumption life cycle theory to energy saving behaviours

underlying energy demand trends in south korean and indonesian aggregate whole economy and residential sectors abstract this paper used annual time series data over the period 1973 2008 to estimate energy demand functions for south korea and indonesian aggregated whole economy and residential sectors furthermore the underlying energy demand trend uedt which may be non linear and reflects not only technical progress which usually produces greater energy efficiency but also other factors such as changes in consumer tastes and the economic structure that may be working in the opposite direction is also examined in the paper in estimating the price and income elasticities the study applies harvey s structural time series approach where a stochastic trend is used as a proxy for uedt empirical evidence from this study reveals that the estimated long run income and price elasticities range from 0 58 to 1 15 and from 0 09 to 066 respectively furthermore the stochastic form for the uedt is preferred for both countries and sectors suggesting a wide variation in the exogenous effects of energy saving technical progress in addition to other pertinent exogenous factors such as economic structure consumer preferences and socio economic influences

quantifying the impact of exogenous non economic factors on uk transport oil demand abstract this paper attempts to quantify the impact of exogenous non economic factors on uk transport oil demand in addition to income price and fuel efficiency by estimating the demand relationship for oil transport for 1960 2007 using the structural time series model from this the relative impact on uk transport oil demand from income price and efficiency are quantified moreover the relative impact of the non economic factors is also quantified based on the premise that the estimated stochastic trend represents behavioural responses to changes in socio economic factors and changes in lifestyles and attitudes the estimated elasticities for income price and efficiency are 0 6 0 1 and 0 3 respectively and it is shown that for efficiency and price the overall contribution is relatively small whereas the contribution from income and non economic factors is relatively large this has important implications for policy makers keen to reduce transport oil consumption and associated emissions but not willing to reduce the trend rate of economic growth taxes and improved efficiency only have a limited impact hence a major thrust of policy should perhaps be on educating and informing consumers to persuade them to change their lifestyle and attitudes and thus reduce their consumption through the non economic instruments route

current account and budget deficits twins or distant cousins the paper develops a two country micro theoretic model consistent with the ricardian equivalence hypothesis reh specifically tax increases used to retire government debt will not affect private spending or the current account balance however increases in government spending regard less of the means of finance can be expected to induce a current account deficit an unconstrained vector autoregres sion shows some patterns in the recent u s data which appear to be inconsistent with the reh rigorous testing of the model however does not allow us to reject the indepen dence of the record federal government budget and current account deficits

how sensitive is commodity trade flows between us and india to currency depreciation previous studies that investigated the impact of real depreciation of the rupee on indian trade balance used aggregate trade data and provided no support for real depreciation to be effective in improving india s trade balance in this article we disaggregate the indian trade data by commodity and consider the sensitivity of each industry s inpayments export value and outpayments import value to real rupee dollar exchange rate annual data over the period of 1962 to 2004 from 40 industries that trade between the two countries as well as bounds testing approach are used to show that while in half of the industries real depreciation of rupee has short run effects on inpayments and outpayments the short run effects do not last into the long run in majority of the cases

accounting for technical progress in aggregate energy demand abstract researchers have not reached a consensus on how to account for technical progress when modeling aggregate energy demand some include a time trend in a dynamic model while others omit the trend in a model that disallows for long run income effects we show that the latter approach can be directly tested as a nested case of the former so that model selection need not be made a priori solely on theoretical grounds using annual data over 1960 1990 we find that long run income effects are not significant however including a time trend improves the model s fit while rendering much more credible long run price elasticities

underlying trends and seasonality in uk energy demand a sectoral analysis this paper demonstrates the importance for energy demand modelling of allowing for trends and seasonal effects that are stochastic in form inherent underlying trends may be non linear and reflect not only technical progress which usually produces greater energy efficiency but also other factors such as changes in consumer tastes and the economic structure that may be working in the opposite direction using quarterly unadjusted data for various sectors in the uk it is shown that unless energy demand models are formulated so as to allow for stochastic trends and seasonals estimates of price and income elasticities could be seriously biased

price discrimination in stackelberg competition we examine the effects of price discrimination in the stackelberg competition model for the linear demand case we show that the leader does not use any price discrimination at all rather the follower does all price discrimination the leader directs all of its first mover preemptive advantage to attract the highest value consumers who pay a uniformly high price we observe that profits and total welfare are larger and consumer surplus is smaller than those of the standard stackelberg competition model

why is the u s current account deficit so large evidence from vector autoregressions most observers consider large u s current account deficits to have been the main contributor to world macroeconomic imbalance in the 1980s the implications of continuing u s current account deficits of 100 to 200 billion dollars per year are troubling other countries must adjust to the scarcity of capital as the united states acquires a significant portion of the world s savings at the same time u s companies seek protection from unfair foreign competition as foreign companies increase market share in the united states determining the source of the problem and designing the correct solution are therefore major objectives of economic research policymakers and economists have suggested a number of reasons for the sudden jump in the current account deficit different schools of thought have therefore proposed different policy responses ranging from doing nothing to radically altering the country s commercial policy debate has centered on the proposed policies with little attention paid to comparing the explanatory power of the underlying hypotheses

metaanalisis de las elasticidades ingreso y precio de la demanda de energia algunas implicaciones de politica publica para america latina the aim of this paper is to analyze the variation in empirical estimates of the income and price elasticities of energy demand the evidence presented through a meta analysis allows identification of the weighted average of the income and price elasticities shows that the estimates are very heterogeneous that there is publication bias and that factors such as region energy sector among others affect its volatility the evidence also indicates that income elasticity in latin america is greater than in the oecd countries and that the price elasticity of energy demand is lower in latin america than in the oecd countries therefore continued economic growth in latin america will be accompanied by a growth in energy demand moreover the establishment of a tax in latin america under the current elasticities is less effective and will be insufficient to control the increase in energy consumption

demand side management in china the context of china s power industry reform abstract the reform of china s power industry has lasted for decades while the implementation of demand side management dsm in china is still in its infancy in this paper we present a comprehensive study of the dsm and demand response dr programs in china under the context of china s power industry reform we first present a brief introduction of the background including the socio economic status and geographical location of china the energy policy of china china s power industry the smart grids and microgrid in china and the reform of china s power industry then based on the introduction of dsm and the analysis of dsm practices in some countries we discuss the development status of dsm and the reform of electricity pricing in china finally the main challenges in five aspects for the future development of dsm programs in china are proposed and discussed these challenges include customer understanding and participation advanced metering infrastructure ami and information and communication technology ict pricing mechanisms and optimal scheduling big data analytics based decision support as well as government regulations and market policies

price discrimination in cournot nash oligopoly abstract the standard cournot nash oligopoly model is extended to encompass price discrimination where firms charge more than one price for the same product based on willingness to pay in the linear symmetric case the average price is not dependent on the extent of price discrimination

the j curve evidence from commodity trade between uk and china in testing the short run j curve effect and the long run effects of currency depreciation on the trade balance many researchers have used either trade data between one country and the rest of the world or between one country and another trading partner both groups are said to suffer from aggregation bias to reduce the bias in this article we consider trade data between one country the us and her trading partner china disaggregated by commodity we use imports and exports of 88 industries 2 digit and 3 digit classifications and cointegration analysis to show that the trade balance of at least 34 of the industries react favourably to real depreciation of the dollar the j curve effect is detected in 22 industries furthermore most of these industries that are sensitive to currency depreciation are durable commodity groupings

demand elasticities in oecd dynamical aspects abstract four models with different lag structures are used to express final energy demand in oecd from 1960 1982 as a function of real gdp and average energy price the income and long run price elasticities are not significantly dependent on the model specification but the koyck lag scheme estimated in its distributed lag form is found to give the most satisfactory results the statistical properties of the data together with evidence of trends in the elasticities both suggest that the period of falling real prices prior to 1971 is not comparable to the present period for the period after 1971 an income elsticity of 1 02 and a long run price elasticity of 0 37 are obtained

energy consumption and economic activity in industrialized countries the dynamic aggregate time series relationship abstract most econometric studies suggest that the income elasticity of demand for energy is approximately unity for the developed market economies it is shown that over the period 1950 1978 the long run income elasticity is substantially higher than unity in terms of a ces energy demand function this result reflects the application of a generalized dynamic estimation methodology where serial correlation is regarded as a diagnostic guide to distributed lag fitting price elasticities are also estimated but these are in line with conventional estimates

fiscal policy and trade adjustment are the deficits really twins i introduction the unprecedented increase of both the fiscal and trade deficits in the united states during the 1980s led many observers to posit a causal linkage a sizable contingent of economists believe that the twin deficits concept aptly characterizes the recent relationship between federal budgetary policy and the u s trade balance in this view increased federal fiscal deficits during the 1980s were a primary cause of the massive u s trade deficits experienced as the decade unfolded however this posited causal relationship does not command universal acceptance in this paper we examine data on u s trade and federal fiscal measures along with exchange and interest rates to uncover the empirical relationship between them and to discover whether fiscal policy plays an essential role in the adjustment of the massive u s trade imbalance the twin deficits concept asserts that the deficits are twins because they are related in the following manner increased government deficits are thought to put incipient upward pressure on real interest rates this induces incipient capital in flows that lift or appreciate the real exchange value of the currency which erodes competitiveness and after a time lag results in increased trade deficits a number of recent papers examine the relationship between budget and trade deficits each contributes important insights but nothing approaching a consensus has yet emerged miller and russek 1989 find evidence of a secular relationship between the deficits under two of the three statistical techniques they employ bernheim 1988 concludes that the government deficit is a prime determinant of u s trade deficits whereas evans 1989 enders and lee 1990 and dewald and ulan 1990 find no such causal impact of fiscal deficits darrat 1988 and abell 1990 report somewhat mixed results the conflicting results in the existing literature stem from wide differences in the empirical techniques data measures and samples employed further we have found in the literature and in our work reported below that the use of differenced data versus data in level form has a major impact on the results produced and inferences drawn recent empirical literature suggests that stationarity of data is a crucial element in model specification thus the question of whether or not to difference the data should be addressed before estimation and inference classical inference about stationarity of data suffers from what sims 1988 refers to as a discontinuity in the asymptotic theory hence the classical tests used in much of the previous literature have low power to reject the null hypothesis of nonstationarity in levels bayesian inference does not suffer from this problem therefore we generate posterior probabilities using monte carlo integration that estimate probabilities that suggest whether the data are better analyzed in level or difference form despite somewhat contrasting results the classical augmented dickey fuller tests and the bayesian probability estimates both suggest that a difference specification is inappropriate we analyze empirically a five variable nonstructural vector autoregressive var model the model includes both a federal government balance and a government purchases measure to summarize fiscal policy along with these two variables and a trade balance measure we constructed real interest rate and real exchange rate variables spanning a quarterly data sample from 1961 to 1989 we estimate the model in both levels and difference form using the level specification we find strong support for the twin deficit notion that government deficits are a cause of trade deficits whereas in differences we find no such relationship furthermore the results from our monte carlo work imply that the model specified in levels is likely most appropriate for estimation and inference ii contrasting theoretical frameworks the presence of both deficits in a variant of the basic savings investment identity may provide a useful reference as in bernheim 1988 and branson 1985 for discussing the hypothesized causal relationship embodied in popular twin deficits stories 1 tdef gdef i s

the u s budget and trade deficits a simultaneous equation model the large and apparently persistent u s trade deficit has sparked a considerable amount of research into its determinants and the proper policy responses at least two key questions can be identified in this context a general one and a more specific one first to what extent can the trade deficit be explained by changes in macroeconomic fundamentals as opposed to microeconomic explanations such as quality deterioration of u s goods and the like second to what extent and through which channels does the federal budget deficit affect the trade deficit if at all most recent macroeconomic studies on the u s trade deficit have focused on mono causal

the j curve malaysia versus her major trading partners currency depreciation is said to worsen the trade balance before improving it hence the j curve phenomenon since introduction of cointegration and error correction modelling researchers have tried to distinguish the short run effects of currency depreciation from its long run effects a few studies that have investigated the experience of malaysia have relied upon aggregate trade data and have found no strong support for a significant relation between the real value of the ringgit and the malaysian trade balance in this article we disaggregate the data by country and consider malaysia s bilateral trade balance with her 14 largest trading partners using bound testing approach to cointegration and error correction modelling we provide some support for the j curve hypothesis