r d for green technologies in a dynamic oligopoly schumpeter arrow and inverted u s abstract we extend a well known differential oligopoly game to encompass the possibility for production to generate a negative environmental externality regulated through pigouvian taxation and price caps we show that if the price cap is set so as to fix the tolerable maximum amount of emissions the resulting equilibrium investment in green r d is indeed concave in the structure of the industry our analysis appears to indicate that inverted u shaped investment curves are generated by regulatory measures instead of being a natural feature of firms decisions

identifying roles of international institutions in clean energy technology innovation and diffusion in the developing countries matching barriers with roles of the institutions abstract the development of clean energy technologies is a central issue in climate change negotiation the signatory countries to the united nations convention on climate change agreed to organize the technology executive committee and the climate technology centre and network the objectives of this paper are twofold the first objective is to show a broad landscape of barriers in technology development the paper summarizes the results of key case studies that were conducted to uncover technology specific barriers in technology development these case studies include both technologies for industrial use such as wind bio energy and building energy efficiency and technologies for individual use such as light emitting diodes and photovoltaic panels the case studies also contain technologies at the innovation stage such as integrated gasification combined cycle and carbon capture and storage the second objective of this paper is to highlight and define roles of international institutions in overcoming identified barriers in clean energy technology development in this paper four areas of focus for international institutions are discussed including 1 increasing r d cooperation at the innovation stage 2 facilitation of intellectual property rights 3 supporting finance and 4 enhancing the enabling environment at the diffusion stage

a microfoundation for stochastic frontier analysis abstract this paper provides a microfoundation for distributions of technical inefficiency in parametric stochastic production frontier analysis it shows that dial setting technology a la jovanovic and nyarko 1996 implies a gamma distribution with a specific set of parameters that depends on a manager s experience or his her prediction ability

erratum to why has u s inflation become harder to forecast the article journal of money credit and banking supplement to vol 39 no 1 february 2007 contains errors in figures 2 4 and tables 4 5 associated with a coding error in our program for estimating the uc sv model we thank ling hu of platinum grove asset management for finding this error and bringing it to our attention the corrected uc sv rows for tables 4 and 5 are given below corrected versions of figures 2 4 and corrected replication files can be found at http www princeton edu mwatson

real time density forecasts from bayesian vector autoregressions with stochastic volatility central banks and other forecasters are increasingly interested in various aspects of density forecasts however recent sharp changes in macroeconomic volatility including the great moderation and the more recent sharp rise in volatility associated with increased variation in energy prices and the deep global recession pose significant challenges to density forecasting accordingly this paper examines with real time data density forecasts of u s gdp growth unemployment inflation and the federal funds rate from bayesian vector autoregression bvar models with stochastic volatility the results indicate that adding stochastic volatility to bvars materially improves the real time accuracy of density forecasts this article has supplementary material online

evaluating interval forecasts a complete theory for evaluating interval forecasts has not been worked out to date most of the literature implicitly assumes homoskedastic errors even when this is clearly violated and proceed by merely testing for correct unconditional coverage consequently i set out to build a consistent framework for conditional interval forecast evaluation which is crucial when higher order moment dynamics are present the new methodology is demonstrated in an application to the exchange rate forecasting procedures advocated in risk management

herbicide use in asian rice production abstract economic growth and rising labor costs in many regions of asia have led to the widespread adoption of herbicides in rice production this trend has been reinforced by the spread of direct seeded rice technologies that require chemical weed control in the early stages of crop growth to prevent substantial yield losses herbicide use has been shown to be privately profitable for asian rice farmers but the question remains as to whether it is socially profitable when environmental costs health costs and the societal costs of labor displacement in some economically stagnant regions are accounted for this paper analyzes the causes and potential environmental health and equity consequences of extensive herbicide use in asian rice systems and discusses the importance of an integrated weed management strategy for future rice production

factors impacting investments in energy efficiency and clean technologies empirical evidence from slovenian manufacturing firms abstract promoting energy efficiency is one of the top priorities of the eu energy strategy manufacturing is identified there as one of the sectors holding the potential for substantial energy efficiency improvements this paper therefore examines factors impacting firms decisions to invest in energy efficiency and clean technologies drawing on the energy efficiency gap literature the impact of three groups of factors is analysed namely economic firm specific characteristics and market drivers organisational and regulatory employing probit and bivariate probit models on a panel data set for 848 slovenian manufacturing firms over 7 years 2005 2011 the paper finds that decisions to invest in energy efficiency and in clean technologies are impacted by similar yet not identical factors the following factors significantly increase the likelihood of both energy efficiency and clean technology investments share of energy costs market share and export orientation importantly other types of investments except for investments in the expansion of existing capacities do not crowd out energy efficiency or clean technology investments on the other hand foreign ownership and managers expectations of future demand only impact energy efficiency investments while clean technology investments are influenced by managers expectations of the future business condition of the firm further the economic and financial crisis reduces the likelihood of clean technology investments but not energy efficiency investments this is explained by the fact that investments in energy efficiency represent a cost effective solution for the firm the same argumentation can be used to explain why high energy costs also play an important role for investments in clean technology in addition the likelihood to invest is found to be importantly influenced by industry specific characteristics which captures the effect of industry differences in environmental regulation and other conditions the paper adds to the existing literature in three important ways it employs data on actual rather than intended investments it examines investment decisions over a number of years thereby allowing for an analysis of the impact of the recession on firms decisions and it examines relationships among different types of investments accounting for a potential crowding out effect based on the paper s findings it can be concluded that the energy efficiency gap is less likely to exist in large and well performing firms implying that policy measures should primarily target less energy intensive small and medium sized enterprises

does joint modelling of the world economy pay off evaluating global forecasts from a bayesian gvar we analyze how modeling international dependencies improves forecasts for the global economy based on a bayesian gvar with ssvs prior and stochastic volatility to analyze the source of performance gains we decompose the predictive joint density into its marginals and a copula term capturing the dependence structure across countries the gvar outperforms forecasts based on country specific models this performance is solely driven by superior predictions for the dependence structure across countries whereas the gvar does not yield better predictive marginal densities the relative performance gains of the gvar model are particularly pronounced during volatile periods and for emerging economies

energy efficiency and congestion assessment with energy mix effect the case of apec countries abstract to save energy and improve the environment has become a general consensus in the whole asia pacific economic cooperation region this study focuses on the issue of energy congestion which has been considered as one of the key factors influencing energy efficiency we employ a two stage data envelopment analysis model to assess the energy efficiency and congestion of asia pacific economic cooperation countries from 1995 to 2013 it is worth pointing out that the model takes undesirable outputs into account and is able to recognize energy mix effect on energy congestion there are some discussions which based on the empirical results it indicates that energy congestion has led to almost 20 percent of energy waste in asia pacific economic cooperation countries the conclusions are as follows in general energy efficiency of developing countries is lower than that of developed countries besides energy congestion mainly comes from fossil energy use however the congestion of non fossil energy shows a rising trend in recent years in addition a multiple liner regression analysis indicates that energy consumption and industry value added per gdp have positive effects on energy congestion and gdp per capita has negative effect on energy congestion at last we promote several policy recommendations to improve energy efficiency

evaluating the bank of england density forecasts of inflation we consider evaluating the uk monetary policy committee s inflation density forecasts using probability integral transform goodness of fit tests these tests evaluate the whole forecast density we also consider whether the probabilities assigned to inflation being in certain ranges are well calibrated where the ranges are chosen to be those of particular relevance to the mpc given its remit of maintaining inflation rates in a band around per annum finally we discuss the decision based approach to forecast evaluation in relation to the mpc forecasts

can the public sector meet the challenge of private research commentary on falcon and fowler and pingali and traxler abstract the growth of private sector participation in agricultural research has serious implications for pro poor technology development but there are other factors that must be considered new plant varieties are not the only things standing between resource poor farmers and secure livelihoods and institutional strengthening is also necessary in addition the current state of public agricultural research is cause for concern it is not clear how many effective public private partnerships can be formed the public sector needs a much clearer definition of its targets and priorities and funding strategies for national and international agricultural research must be overhauled

modern varieties productivity and sustainability recent experience and emerging challenges abstract the contribution of modern varieties of cereal crops to increased productivity in the postgreen revolution period is reviewed and the future role of hybrids and biotechnology discussed particular emphasis is given to the ways in which modern varieties may contribute to input efficiency and sustainability finally economic and institutional issues in restructuring plant breeding programs for the most efficient use of resources in both the public and private sectors and at the national and international levels are analyzed

dynamics of china s provincial level specialization in strategic emerging industries this paper examines the dynamics of technological specialization in strategic emerging industries seis within each of mainland china s 31 provinces and the likely effectiveness based on the experiences of taiwan and south korea of the provinces strategies for developing these industries grounded in economic decentralization theories the empirical method employed includes analyzing the scores on an sei specialization promotion index per each province alongside several analytics of invention patent data from each province in the seven seis newly designated by the central level government as of 2010 the data is quantitatively analyzed according to four groups of indicators based on the following specialization relevant concepts comparative advantages and technological capabilities economy size and income technological uncertainty and lifecycles and latecomer entry into complex technologies where knowledge is most cumulative the analysis finds that china s system of economic decentralization has partially worked to ensure provincial industrial policymaking is effective whereby a notable number of provinces are seemingly pursuing sei development strategies in terms of sei selection and promotion that may enable catch up however paradoxically at the same time the system appears to sometimes facilitate provincial sei development strategies that are quite risky or even likely ineffective

a simple adaptive measure of core inflation this paper proposes a new measure of core inflation and compares it with several existing measures the new measure is adaptive and is designed to track sudden and persistent movements in inflation such as those arising from changes in monetary policy regimes the adaptive measure filters out transients more effectively than existing measures and it is a superior predictor of locally mean reverting components of inflation

combining forecast densities from vars with uncertain instabilities recursive weight forecast combination is often found to an ineffective method of improving point forecast accuracy in the presence of uncertain instabilities we examine the effectiveness of this strategy for forecast densities using many vector autoregressive var and autoregressive ar models of output growth inflation and interest rates our proposed recursive weight density combination strategy based on the recursive logarithmic score of the forecast densities produces well calibrated predictive densities for us real time data by giving substantial weight to models that allow for structural breaks in contrast equal weight combinations produce poorly calibrated forecast densities for great moderation data copyright 2010 john wiley sons ltd

business strategy under institutional constraints evidence from china s energy efficiency regulations abstract this paper links theoretical perspectives from energy efficiency economics with those observed from corporate environmental strategy to develop a framework for explaining energy efficiency strategies by firms in response to national policies and local regulations in china the framework is refined through analytic generalization of 20 cases from four industries and four cities in jiangsu province and reveals two strategies 1 firms with moderate institutional pressure seek incremental competitiveness by adopting energy saving technologies which is reinforced by their informational organizational and financing capabilities and facilitated by voluntary policies and industrial competition 2 firms with survival risk or development constraints under regulation seek a position favored by local governments by replacing old plant and equipment with larger more efficient ones and contributing to the local community the chinese case studies reveal a strong institutional impact on firms choice of business strategies and particularly the positioning strategy the identified business strategies shed additional light on the effectiveness and implications of different policy instruments for energy efficiency

energy efficiency and marginal carbon dioxide emission abatement cost in urban china abstract energy efficiency improvement and carbon emission reduction are two important ways to mitigate energy consumptions and global warming this paper aims to examine energy efficiency and carbon dioxide co2 emissions abatement costs of city urban areas in china to this end an improved slacks based measure approach is introduced which considers the linkage between desirable and undesirable outputs then measures of energy efficiency co2 emission abatement cost and comprehensive state index of co2 emissions abatement cost and co2 emissions reduction potential are defined the proposed model is then applied to the dataset of 285 cities in china during 2008 2012 the results show that most city urban areas in china have relatively low energy efficiencies surprisingly there are gradually narrowing gaps regarding mean energy efficiencies between areas during 2008 2012 nevertheless there are great disparities in energy efficiencies between cities within a typical area and even a provincial region it is found that co2 emissions abatement cost in urban china exhibits an increasing trend during the study period also significantly geographic disparities in abatement costs between areas regions and cites are found specifically energy efficiency has significantly positive correlation with the comprehensive state index in china some important findings and useful policy implications are achieved

federal reserve information and the behavior of interest rates this paper tests for the existence of asymmetric information between the federal reserve and the public by examining federal reserve and commercial inflation forecasts it demonstrates that the federal reserve has considerable information about inflation beyond what is known to commercial forecasters it also shows that monetary policy actions provide signals of the federal reserve s information and that commercial forecasters modify their forecasts in response to those signals these findings may explain why long term interest rates typically rise in response to shifts to tighter monetary policy jel e52 e43 d82 asymmetric information between the federal reserve and the public is a phenomenon that is often posited but rarely tested numerous models of central bank behavior for example show that the existence of asymmetric information has important implications for the effectiveness of policy and the consequences of dynamic inconsistency yet there

internationalization as a strategy to overcome industry barriers an assessment of the marine energy industry abstract research on conditions to develop new innovations within emerging renewable energy industries is often done with a national focus however recent research on international entrepreneurship has revealed that firms operate on international levels very early in their life time thus based on former research on international entrepreneurship and case examples we build the propositions that firms in the marine energy industry use internationalization as a strategy to overcome industry barriers our primary source of data is a unique dataset from a global survey of all the companies in the marine energy industry who are aiming to commercialize a wave or tidal energy device this paper is organized in two steps first we identified the most challenging industry barriers perceived by companies second we use these to form propositions which we assess through empirical data the two most challenging barriers perceived by the companies are need for capital and need for supportive political schemes our findings reveal that internationalization certainly is a common strategy to access capital and attractive support schemes in foreign countries the early internationalization has implications for researchers managers and policy makers

influencing factors of energy technical innovation in china evidence from fossil energy and renewable energy abstract based on china s provincial panel data from 2001 to 2015 the drivers of energy technological innovation e g energy price public financial policy knowledge stocks energy structure and environmental regulation are analyzed by using the generalized method of moment gmm in this paper through the construction of one kind of geometric distribution lag model which is also called partial adjustment model we empirically analyze and compare the influencing factors of energy technological innovation from the perspectives of fossil energy and renewable energy the specific conclusions obtained in this paper are 1 the impact of the energy price on fossil energy technological innovation is greater than renewable energy which means that the current energy price in china is much lower than its optimal level and the development of renewable energy technology needs the support of price mechanism 2 the development of these two kinds of energy technology innovation heavily relies on governmental policy support 3 the accumulation of energy technology innovations will be conducive to the vertical spillover effect of knowledge and further encourage the development of energy technology based on the above findings we then propose some relevant policy proposals to promote energy technological innovation in china

energy policy for low carbon development in nigeria a leap model application this paper applied a scenario based analysis to explore nigeria s future energy demand supply and associated ghg emissions from 2010 to 2040 using the long range energy alternative planning leap model the impact of different energy policies are analysed for the nigerian energy system by considering four scenarios the reference scenario ref the low carbon moderate scenario lcm the low carbon advanced scenario lca and the green optimistic scenario go by considering aggressive energy policies and strategies from lcm to lca and even more aggressive options in the go scenario we find that under the ref scenario energy demand is expected to reach 3 075 pj and a corresponding increase in ghg emissions of 201 2 mt co2e by 2040 more aggressive policy intervention by the nigerian government as in the go scenario would lead to a decrease in energy demand 2 249 pj and ghg emissions 124 4 mt co2e in 2040 a cost benefit and energy system analysis were also carried out in the study

emerging green tech specializations and clusters a network analysis on technological innovation at the metropolitan level abstract current models of production and energy use are promoting an effervescent green technology green tech market focused on innovation and improved environmental performance most green tech firms are innovative start ups or small and medium sized enterprises smes characterized by large intangible assets and technological uncertainty which makes it difficult to identify their research and development r d and innovation paths in addition green tech companies tend to aggregate spatially and throughout the world clusters are increasingly seen as a strategy to foster innovative production and r d activities and stimulate a sustainable energy transition this paper investigates green tech companies in san francisco new york and london to identify their specialization and underlying technological and or market complementarities and emerging aggregates and specific clusters based on information from crunchbase and the web we propose a network analysis using metadata on technological innovations produced by green tech companies in these three metropolitan areas metadata are keywords and terms that help to describe an item and in the database they identify the products services and technologies driving innovation the main metrics of the networks identified at both node and network level are discussed from an economic perspective the approach helps in the design and implementation of targeted and information based local policies and facilitates closer relationships between innovative companies suppliers and clients venture capitalists large corporations and research laboratories involved in the green tech industry

innovation and diffusion of clean green technology can patent commons help abstract this paper explores the characteristics of 238 patents on 90 inventions contributed by major multinational innovators to the eco patent commons which provides royalty free access to third parties to patented innovations on green technologies we compare the pledged patents to other patents in the same technologies or held by the same multinationals to investigate the motives of the contributing firms as well as the potential for such commons to encourage innovation and diffusion of climate change related technologies we find pledged patents to protect environmentally friendly technologies and to be of similar value as the average patent in a pledging firm s patent portfolio but of lower value than other patents in their class our analysis of the impact of the patent commons on diffusion of patented technologies suggests that making patents accessible royalty free did not result in any significant increase in diffusion as measured by citing patents this study therefore indirectly provides evidence on the role of patents in the development and diffusion of green technologies

from lagging to leading technological innovation systems in emerging economies and the case of chinese wind power there is increasing attention for the contribution of emerging economies to global innovation including innovation of renewable energy technologies the technological innovation systems tis framework presents a list of system functions for the analysis of the development of a technology it has often been applied to renewable energy technologies but with a strong focus on advanced economies in this paper we elaborate on emerging economy innovation system formation structured according to tis functions rather than analysing development of the technology we analyse the development of the chinese tis vis a vis the global forefront key to this notion is that tis especially for clean tech are transnational phenomena lagging tis depend on the global tis whereas leading tis contribute to its formation it is concluded that china has reduced its dependence on foreign knowledge and investment but the outward contribution remains limited the main challenge to foreign market expansion lies in reforming the domestic tis to focus on turbine quality rather than cost reduction demonstration projects are needed especially for large capacity and offshore turbine models in order to build up operational history and get quality certification

a comprehensive review of data envelopment analysis dea approach in energy efficiency the main aim of this review article is to review of dea models in regarding to energy efficiency this paper reviewed and summarized the different models of dea that have been applied around the world to development of energy efficiency problems consequently a review of 144 published scholarly papers appearing in 45 high ranking journals between 2006 and 2015 have been obtained to achieve a comprehensive review of dea application in energy efficiency accordingly the selected articles have been categorized based on year of publication author s nationalities scope of study time duration application area study purpose results and outcomes results of this review paper indicated that dea showed great promise to be a good evaluative tool for future analysis on energy efficiency issues where the production function between the inputs and outputs was virtually absent or extremely difficult to acquire

microfoundations for stochastic frontiers the purpose of the paper is to propose microfoundations for stochastic frontier models previous work shows that a simple bayesian learning model supports gamma distributions for technical inefficiency in stochastic frontier models the conclusion depends on how the problem is formulated and what assumptions are made about the sampling process and the prior after the new formulation of the problem it turns out that the distribution of the one sided error component does not belong to a known family moreover we find that without specifying a utility function or even the cost inefficiency function the relative effectiveness of managerial input can be determined using only cost data and estimates of the returns to scale the point of this construction is that features of the inefficiency function u z can be recovered from the data based on the solid microfoundation of expected utility of profit maximization but the model does not make a prediction about the distribution

driving effect of technology innovation on energy utilization efficiency in strategic emerging industries abstract under the policy of energy saving and emission reduction technological innovation has become the key power driver to improve energy utilization efficiency by using the panel data of 21 industrial segments between 2000 and 2015 this paper investigates the driving effect of technological innovation on energy utilization efficiency in strategic emerging industries and analyzes the critical factors influencing the driving effect of technological innovation by the stochastic frontier analysis method the empirical result shows that technological innovation between 2000 and 2015 has had a significant positive driving effect on the energy utilization efficiency of strategic emerging industries and exhibits a development trend of year by year steady state growth on the whole the greater the value of the development expenditure of new green products and the investment in environmental pollution treatment the greater the technological efficiency the greater the value of the transformation expenditure of energy saving technology the greater the technological inefficiency finally the paper proposes the countermeasures and suggestions for the driving effect of technological innovation on energy utilization efficiency in strategic emerging industries an empirical study is made to analyze the driving effect of technological innovation on energy utilization efficiency the positive and negative factors of technological innovation are forgotten strategic emerging industries can select optimal innovation behavior to improve quality and efficiency of energy utilization based on the results

shifting endpoints in the term structure of interest rates abstract this paper links the term structure to perceptions of monetary policy long horizon forecasts of short rates required by no arbitrage term structure models are heavily influenced by the endpoints or limiting conditional forecasts of the short rate process common assumptions that the short rate is mean reverting or contains a unit root are shown to generate unrealistic yield predictions failures occur because these assumptions inadequately account for historical shifts in market perceptions of the policy target for inflation this paper links endpoint shifts to agent learning about shifts in long term policy goals shifting endpoints in short rate processes significantly improve yield predictions

the heterogeneous impact of monetary policy on the us labor market abstract we empirically investigate the role of central banks in the context of heterogeneous labor markets jobless recoveries and job polarization specifically we estimate the effect of monetary policy on the us labor market using disaggregated time series based on large scale survey data the impact of interest rate changes on unemployment in 32 occupation groups is explored in a bayesian factor augmented vector autoregression framework the results suggest largely heterogeneous impacts across various occupation groups this heterogeneity can be explained by differential task profiles of the workers in their respective occupations workers with tasks that are easily automated or offshored as well as workers at the bottom of the skill distribution are disproportionately affected following a monetary policy shock this implies that labor market participants that are highly vulnerable to structural developments such as skill biased technological change and the globalization of labor markets are also most sensitive to conventional monetary policy measures from a policy perspective we conclude that central banks are unlikely to be able to take on a stabilizing role in the context of labor market polarization

innovation system strengths and weaknesses in progressing sustainable technology the case of swedish biorefinery development based on the combination of economic challenges and uncertain policy conditions in the united states european union and elsewhere the development of advanced biorefineries has progressed slower than anticipated this has delayed the transition to a more sustainable and less carbon intensive economy in this article we adopt the technological innovation system tis approach to analyze advanced biorefinery development in sweden a front runner country in current development the analysis highlights a number of system strengths e g long term research funding significant research infrastructure strong actor networks that have contributed to developing the swedish tis but also important system weaknesses e g weak coordination among ministries lack of industrial absorptive capacity unclear roles inhibiting it the article highlights a combination of four policy measures that build on the system strengths to address the system weaknesses a the implementation of a deployment policy for creating domestic niche markets b improved policy timing and more structured coordination among different governmental agencies c the provision of stronger incentives for mature industries to invest in rd and d improved organization and financing of existing research infrastructure in addition to the empirical contribution the article contributes with novel insights into the tis framework by highlighting the dynamics between system strengths and weaknesses and suggests that system strengths should be better emphasized in future tis studies

a bayesian markov switching correlation model for contagion analysis on exchange rate markets this article develops a new markov switching vector autoregressive var model with stochastic correlation for contagion analysis on financial markets the correlation and the log volatility dynamics are driven by two independent markov chains thus allowing for different effects such as volatility spill overs and correlation shifts with various degrees of intensity we outline a suitable bayesian inference procedure based on markov chain monte carlo algorithms we then apply the model to some major and asian pacific cross rates against the u s dollar and find strong evidence supporting the existence of contagion effects and correlation drops during crises closely in line with the stylized facts outlined in the contagion literature a comparison of this model with its closest competitors such as a time varying parameter var reveals that our model has a better predictive ability supplementary materials for this article are available online

priors from general equilibrium models for vars abstract this paper uses a simple new keynesian dynamic stochastic general equilibrium model as a prior for a vector autoregression shows that the resulting model is competitive with standard benchmarks in terms of forecasting and can be used for policy analysis jel classification c11 c32 c53 key words bayesian analysis dsge models forecasting vector autoregressions 1 introduction dynamic stochastic general equilibrium dsge models are popular nowadays in macroeconomics they are taught in virtually every economics ph d program and represent a predominant share of publications in the field yet when it comes to policy making these models are scarcely used at least from a quantitative point of view the main quantitative workhorse for policy making at the federal reserve system is frb us a macro econometric model built in the cowles foundation tradition a style of macroeconomics that is no longer taught in many ph d programs 1 in their decision process fed policy makers rely heavily on forecasting they want to know the expected path of inflation in the next few quarters and by how much a 50 basis point increase in the federal funds rate would affect that path frb us offers answers to these questions answers that many macroeconomists would regard with suspicion given both the lucas 1976 critique and the fact that in general the restrictions imposed by cowles foundation models are at odds with dynamic general equilibrium macroeconomics sims 1980 general equilibrium models on the other hand have a hard time providing alternative answers the fact that these models are perceived to do badly in terms of forecasting as they are scarcely parameterized is perhaps one of the reasons why they are not at the forefront of policy making while progress is being made in the development of dsge models that deliver acceptable forecasts e g smets and wouters 2003 this paper proposes an approach that combines a stylized general equilibrium model with a vector autoregression var to obtain a specification that both forecasts well and is usable for policy analysis specifically the approach involves using prior information coming from a dsge model in the estimation of a vector autoregression loosely speaking this prior can be thought of as the result of the following exercise i simulate time series data from the dsge model ii fit a var to these data in practice we replace the sample moments of the simulated data by population moments computed from the dsge model solution since the dsge model depends on unknown structural parameters we use a hierarchical prior in our analysis by placing a distribution on the dsge model parameters a tightness parameter controls the weight of the dsge model prior relative to the weight of the actual sample markov chain monte carlo methods are used to generate draws from the joint posterior distribution of the var and dsge model parameters the paper shows that the approach makes even a fairly stylized new keynesian dsge model competitive with standard benchmarks in terms of forecasting real output growth inflation and the nominal interest rate the three variables that are of most interest to policy makers 2 up to this point our procedure borrows from the work of dejong ingram and whiteman 1993 and ingram and whiteman 1994 who are the first to use priors from dsge models for vars ingram and whiteman showed that prior information from the bare bones stochastic growth model of king plosser and rebelo 1988 is helpful in forecasting real economic activity such as output consumption investment and hours worked in addition to documenting the forecasting performance of a trivariate var with a prior derived from a monetary dsge model this paper makes two contributions that significantly extend the earlier work first we show formally how posterior inference for the var parameters can be translated into posterior inference for dsge model parameters

the role of energy technology innovation in reducing greenhouse gas emissions a case study of canada abstract understanding the influence of energy technology innovation in reducing a country s greenhouse gas emissions requires a systematic review to characterize the existing system a comprehensive data review of available financing mechanisms and investments by government and industry is undertaken for the case of canada coupled with an organized examination of existing international federal and regional climate policies that advance innovation results indicate that investments from early research and development through to capital expenditures are heavily weighted towards fossil fuels though federal efforts to meet international commitments have been unsuccessful regions implementing high carbon fuel phase out renewable portfolio standards and feed in tariffs were found to be successful in reducing emissions financing for clean energy projects is readily available however there is no complete database available for investors to discover these opportunities to enhance clean energy innovation in canada and enable success in emissions reductions we suggest that investments from research and development to capital expenditures and regional policies should be aligned with federal commitments along with clear communication of available financing to attract clean energy investors our approach to a systematic review is broadly applicable to other regions where there is interest in understanding and improving the role of innovation in reducing greenhouse gas emissions particularly in countries with federalist political systems and large fossil fuel reserves

term structure views of monetary policy under alternative models of agent expectations abstract term structure models and many descriptions of the transmission of monetary policy rest on the empirical relevance of the expectations hypothesis small differences in the perceived policy reaction function in var models of agent expectations strongly influence the relevance in the transmission mechanism of the expected short rate component of bond yields mean reverting or difference stationary characterizations of interest rates require large and volatile term premiums to match the observable term structure however short rate descriptions that capture shifting perceptions of long horizon inflation evident in survey data support a more substantial term structure role for short rate expectations