the carbon footprint of uk households 1990 2004 a socio economically disaggregated quasi multi regional input output model this paper presents a socio economically disaggregated framework for attributing co2 emissions to people s high level functional needs based around a quasi multi regional input output qmrio model the study in theory takes into account all co2 emissions that arise from energy used in production of goods and services to satisfy uk household demand whether the emissions occur in the uk or abroad results show that co2 emissions attributable to households were 15 above 1990 levels in 2004 and that although absolute decoupling occurred between household expenditure and co2 during the uk s switch from coal to gas in the early 1990s since then only slight relative decoupling is evident the proportion of co2 that arises outside uk borders in support of uk consumption is rising and reducing these emissions is particularly problematic in a global trading system investigation into the carbon footprint of different segments of the uk population shows wide variation the segment with the highest carbon footprint emits 64 more co2 than the segment with the lowest results show that recreation and leisure are responsible for over one quarter of co2 emissions in a typical uk household in 2004 we conclude that expanding lifestyle aspirations are significant factors in driving household co2 emissions but the study also emphasizes that attention must be paid to the infrastructures and institutions that result in considerable amounts of co2 being locked up in basic household activities through which people meet their everyday needs for subsistence protection and communication with family and friends the findings highlight the sheer scale of the challenge facing uk policy makers and suggest that policies should be targeted towards segments of society responsible for the highest carbon footprints

occupational choice and the process of development this paper models economic development as a process of institutional transformation by focusing on the interplay between agents occupational decisions and the distribution of wealth because of capital market imperfections poor agents choose working for a wage over self employment and wealthy agents become entrepreneurs who monitor workers only with sufficient inequality however will there be employment contracts otherwise there is either subsistence or self employment thus in static equilibrium the occupational structure depends on distribution since the latter is itself endogenous we demonstrate the robustness of this result by extending the model dynamically and studying examples in which initial wealth distributions have long run effects in one case the economy develops either widespread cottage industry self employment or factory production employment contracts depending on the initial distribution in the other example it develops into prosperity or stagnation

partisan competition growth and the franchise we present an argument for changes in the franchise in which an elite split along economic interests uses the suffrage to influence implemented policies through the influence of these policies on the character of industrialization we analyze the effects of franchise changes on economic growth we identify in the social structure of society an explanation for the connection between enfranchisement and growth when 1 there exists an economic conflict among the elite 2 landed classes are not politically strong and 3 there exists a critical mass of industrial workers we observe both growth and democratization the lack of conditions 1 or 2 resolves in stagnant autocracies while the absence of condition 3 drives growth deterring democratic expansions we provide historical support for our argument by analyzing the experience of eleven countries

uncertain regulatory timing and market dynamics abstract using a dynamic model of capacity accumulation i examine the relationship between uncertainty about the timing of a new pigouvian tax and oligopolistic competition i find that for some market structures uncertainty about the timing of the regulatory change leads firms to increase investment these results stem from the nature of the uncertainty and its interaction with firms strategic incentive to engage in capacity races they dramatize the importance of accounting for initial conditions when forecasting firms reactions to anticipated regulatory changes in addition i find that more protracted uncertainty leads to greater welfare costs

financial development and financing constraints international evidence from the structural investment model this article provides evidence that financial development impacts growth by reducing financing constraints that would otherwise distort efficient allocation of investment the financing constraints are inferred from the investment euler equation by assuming that the firm s stochastic discount factor is a function of the firm s financial position specifically the stock of liquid assets the magnitude of the changes in the cost of capital is twice as large in a country with a low level of financial development as in a country with an average level of financial development the size effect business cycles and legal environment effects are also considered copyright 2003 oxford university press

option pricing and foreign investment under political risk abstract the paper analyses asset prices in a context of uncertainty over future government policy as current policy is maintained perceived risk abates thus leading to a gradual appreciation of asset prices and a gradual decrease in their conditional variance option values computed under this process have time series and the term structure of conditional volatility which in general are downward sloping in price series without a policy reversal implied volatility from option prices will exceed actual volatility with this wedge progressively disappearing this may be viewed as the volatility analogue of the peso premium for assets subject to large infrequent price drops

inequality redistribution and growth a challenge to the conventional political economy approach abstract this paper reconsiders the conventional political economy view that 1 1 more unequal societies tend to make more redistribution and 2 2 more redistribution is harmful to growth we present a number of theoretical arguments suggesting that the two previous implications are not necessarily true and that the empirically observed negative correlation between inequality and growth might just come from the fact that more unequal societies tend to redistribute less which in turn is actually detrimental to growth

from production based to consumption based national emission inventories abstract under the united national framework convention of climate change unfccc countries are required to submit national emission inventories nei to benchmark reductions in greenhouse gas ghg emissions depending on the definition and system boundary of the nei the mitigation options and priorities may vary the territorial system boundary used by the unfccc has been critiqued for not including international transportation and potentially causing carbon leakage to address these issues past literature has argued in favour of using consumption based nei in climate policy this article discusses several issues in moving from the standard production based nei to consumption based nei first two distinct accounting approaches for constructing consumption based nei are presented the approaches differ in the allocation of intermediate consumption of imported products second a consistent method of weighting production based and consumption based nei is discussed this is an extension of the previous literature on shared responsibility to nei third due to increased uncertainty and a wide system boundary it may be difficult to implement consumption based nei directly into climate policy several alternative options for incorporating consumption based inventories into climate policy are discussed

political regimes and the extractive capacity of governments taxation in democracies and dictatorships recent political and economic transformations in latin america africa asia and eastern europe have brought about a renewed interest in the incentives and capabilities of different types of political regimes to implement policies that are deemed necessary for economic development in particular policies aimed at increasing tax revenue one central question is whether democracies can collect as much in taxes as dictatorships this article addresses this question by examining whether regime type classified as democracy or dictatorship has a causal impact on a government s capacity to mobilize resources through taxation on the basis of data gathered for 108 countries for the period between 1970 and 1990 the article concludes that observed differences across countries regarding the level of taxes collected by the government are not due to the fact that some are under a democracy and others under a dictatorship concerns about the inability of democratic regimes to collect taxes are therefore unfounded

path dependency and input substitution implications for energy policy modelling in most policy oriented energy models the effectiveness of energy policy instruments crucially depends both on the values of the substitution elasticities between the various inputs and on the rates of technological progress in this paper we argue that due to the fixed cost nature of adjustments to relative price changes these technological parameters are affected by past developments failing to account for the role of history will result in biased parameter estimates and hence the implication for energy policy modelling is that the estimation period should be carefully selected we provide an empirical illustration using data for the netherlands

leaders followers and equity risk premiums in booms and busts abstract we study an investment problem in which two asymmetric firms face competition and the regime characterizing the economic condition follows a markov switching process we derive the value functions and investment thresholds of the leader and follower the option value of regime uncertainty is found to be quite important for the investment decision of firms we also show the relationship between the equity risk premium and the economic cycle that has not been done in previous studies which proxy economic conditions by the level of demand or other state variables

regulatory risk vertical integration and upstream investment abstract we investigate the impact of regulatory risk on vertical integration and upstream investment by a regulated firm that provides an essential input to downstream competitors regulatory risk reflects uncertainty about the regulator s commitment to a regulatory policy that promotes the regulated firm s noncontractible investment we show that when the regulator sets the regulatory policy after the vertical industry structure has been established some degree of regulatory risk is ex ante socially beneficial regulatory risk makes vertical integration profitable and stimulates high upstream investment at a lower social cost this occurs for moderate costs of high investment and firms small risk aversion our analysis sheds new light on some relevant empirical patterns in vertically related markets

the coevolution of economic and political development from monarchy to democracy this article establishes a unified political economy model to analyze the democratization process from monarchy to oligarchy and to democracy in the context of dynamic economic development as the predominant source of wealth evolves from land to physical capital and finally to human capital the relative economic and hence coercive power of land owners capitalists and workers shifts accordingly inducing the transition of the political system where political power is expanded from landlords to capitalists and finally to workers a smooth transition through political compromise facilitates efficient allocation of savings in physical capital followed by efficient investment in human capital

the impact of constitutions on economic performance constitutions matter for economic performance to the extent that they promote stability accountability and credibility this article considers the nature of political constituions and their impact on economic efficiny and economic security wnder three aspects the basic righs laid down in the constitution the structure of government and the stringency of amedment procedures while emphasizing that constitutions can be usefid by serving as precommitment devices the analysis also emphasizes the dangers of rigidity and the need for flexibility t he relation between political institutions and economic performance is not well understood the causal link goes in both directions well designed insttutions can improve economic performance but some institutions may be feasible or effective only at specific levels of economic development here i consider only one aspect of the relationship the impact of institutions on economic performance however a full treatment of the subject would consider both aspects and the following discussion must be read with this important proviso in mind i further limit myself to the subset of political institutions that are embodied in constitutions the smdy of the impact of constitutions on economic performance is part of what is usually referred to as constitutional political economy a field that can be traced back to the caklcdus of consent by buchanan and tullock 1962 buchanan was also the founder of the journal constitutional political economy the public choice approach to constitutions has focused somewhat narrowly on fiscal and monetary constitutions although actual constitutions rarely stipulate tax systems or monetary institutions in any detail the ban on paper money in the u s constituton for instance has few analogues in modem constitutions moreover even that document is concerned mostly with other matters such as the organization of the executive and the legislature separation of powers and the relations between the federal government and the states constituitional political economy

carbon footprint of a university in a multiregional model the case of the university of castilla la mancha abstract the increasing concern about the environmental performance and sustainability of firms and organizations also involves educational institutions if universities aim to become leaders in sustainability aspects they must adopt strategies that involve the entire university system as a useful tool for this purpose the objective of this study was to calculate the carbon footprint for the university of castilla la mancha for the period 2005 2013 the calculation of the university carbon footprint was accomplished through a hybrid environmentally extended input output model in a multiregional framework which constitutes a novelty of the analysis the proposed tool also allows the calculation of the potential for emissions reduction of abatement measures the carbon footprint induced by the consumption of university employees wages is also undertaken as a way to increase awareness and university outreach to society the results show the relevance of both imports and indirect emissions and highlight the significance of energy related emissions enabled by sectors such as renting electrical and optical equipment manufacturing or even services

investment in technological innovations an option pricing approach abstract this paper develops a model of the optimal investment strategy for a firm confronted with a sequence of technological innovations we incorporate many of the most important characteristics of real world technology markets for example we permit innovations to be stochastic in their arrival times and their profitability we also incorporate learning so that firms adopting current innovations become better able to benefit from future innovations the model yields four distinct investment strategies the model is then used to predict actual firm policy these implications are discussed and compared with observed firm behavior

cost efficiency and banking performances in a partial universal banking system application of the panel smooth threshold model this paper studies the cost efficiency of bank in a partial universal banking system pubs taiwan instead of assuming one common technology in the bank cost function two technologies are assumed to be imbedded in the cost function fee revenues are used as threshold to divide the banks into two technologies a bank whose fee revenues exceeding the threshold is designated as universal bank technology while falling below the threshold is designated as traditional deposit loan technology the panel smooth transition model is adopted which allows banks to smoothly adjust between the two technologies two criteria are suggested overbanking and the trend toward fee revenues to assess the new model s performances with respect to scale economies the results do find a panel smooth transition model yield more reasonable results than the conventional ols and random effect of panel data approach based on the panel smooth transition model the optimal fixed asset size is around ten billion new taiwan dollars

green electricity investments environmental target and the optimal subsidy abstract we investigate the optimal investment decision in renewables under market demand uncertainty in the context of the italian strategy for renewable deployment under the eu policy the firm has to decide about the time and size of the investment we find that a higher subsidy level induces the firm to invest earlier with a smaller investment capacity this implies that a given environmental target cannot be reached by a too high too low subsidy level since this will cause the investment level to be too low too late we show that there exists an optimal intermediate subsidy level due to uncertain demand in some cases ensuring to reach the environmental target in time requires an additional conditional subsidy we propose a heuristic for policy makers stating when and how much subsidy to provide furthermore we find that in a more uncertain economic environment the subsidy adjustment to maintain the target level of investment results in the firm investing earlier which is opposite to the standard real options result

income distribution and macroeconomics this paper analyzes the role of wealth distribution in macroeconomics through investment in human capital it is shown that in the presence of credit markets imperfections and indivisibilities in investment in human capital the initial distribution of wealth affects aggregate output and investment both in the short and in the long run as there are multiple steady states this paper therefore provides an additional explanation for the persistent differences in per capita output across countries furthermore the paper shows that cross country differences in macroeconomic adjustment to aggregate shocks can be attributed among other factors to differences in wealth and income distribution across countries

balance issues in monetary input output tables abstract input output tables iots are widely used in several types of analyses although born in an economic context iots are increasingly used for the environmental impact assessment of product systems e g in environmental policy analysis and for several others such as the accounting of greenhouse gases however the use in these contexts does not ensure the validity of the iot as a consistent and robust multidisciplinary modeling tool in itself it is in respect to certain basic requirements that iots should find their legitimacy in this paper we study their validity with respect to a well established scientific law the mass balance compliance with this basic balance is an important check for data consistency following such a track we focus specifically on monetary input output tables and we reach the conclusion that iots can fail in respecting the basic balance laws whenever prices differ per purchaser therefore caution is needed because the estimations in terms of environmental pressures can be biased the drawback lays in the use of homogeneous prices which determines a discrepancy in physical units between what is used and what is asked for within and between activities

symposium on democracy and development academic fashions often follow the public political mood in a period when euphoric public commentators have announced the end of history in the triumph of capitalist democracy one sees an increasing number of scholarly studies attempting to show often on the basis of crosscountry statistical evidence and a bit of wishful thinking a positive effect of democracy on development it is in this context refreshing to see the agnostic results reported by adam przeworski and fernando limongi in their paper on the basis of their review of the theoretical arguments and statistical studies they conclude rather bluntly we do not know whether democracy fosters or hinders economic growth their brief but fairly exhaustive examination of the various statistical studies of the last few decades shows the studies to be hopelessly inconclusive and beset with serious methodological problems at the analytical level they argue that it is not at all clear if democracy with its slow empowerment of the less wealthy secures growth fostering capitalist property rights better than dictatorships democracies may actually be more susceptible to pressures for immediate consumption and other particularistic demands that may hamper long run investment on the other hand authoritarian rulers who have the capacity to resist such pressures may instead be self aggrandi zing plundering the surplus of the economy in fact authoritarian regimes may come in different kinds some deriving their legitimacy from providing order and stability some from rapid growth sah 1991 has argued that authoritarian regimes exhibit a larger variance in economic performance than democracies

integrating sustainable chain management with triple bottom line accounting abstract triple bottom line accounting is widely advanced as a way in which firms can realise broader societal objectives in addition to increasing shareholder value in our analysis of the australian economy we integrate financial input output tables that describe the interdependencies between economic sectors with national social and environmental accounts to construct numerate triple bottom line accounts for 135 discrete sectors the accounts are portrayed against the numeraire of one dollar of gdp thus for a sector of the economy financial aspects of performance can be expressed for example as dollars of export earnings per dollar of gdp social aspects such as employment can be portrayed as minutes of employment generated per dollar greenhouse issues can be portrayed as kilograms of carbon dioxide emitted per dollar since these indicators of triple bottom line performance are referenced against financial units and are consistent with the system of national accounts they can be applied to financial accounts of a firm a service or a product and allow a robust triple bottom line account to be developed across a range of scales the critical advantage of this approach is that it includes both the direct or immediate effects as well as the indirect or diffuse effects associated with a large and distant chain of supply paths the incorporation of most indirect or upstream effects therefore expands the range of issues and effects within the analytical boundary and also includes imports and exports both products and firms can then be assessed properly in sustainable chain management scm terms thus a firm that uses a key intermediate input that requires a large amount of water for example cannot hide the environmental implications since they are revealed in the analysis of the full production chain this revelation can also underpin progress when firms acknowledge both the direct and indirect effects and improve their selection of key inputs on a wider range of criteria rather than on price alone our analysis is well developed at the economic sector level for australia and is also being applied to number of government institutions firms and individual products before the full benefits of numerate triple bottom line accounting can be applied to the equity issues of globalisation trade interdependencies between groups of typical countries will have to be analysed using these whole economy approaches this will allow country specific intensities to be applied to important items in the international production chain

investment with uncertain tax policy does random tax policy discourage investment we consider the impact of tax policy uncertainty on firm level and aggregate investment comparing investment behaviour when uncertainty is due to a shock following geometric brownian motion gbm versus when random discrete jumps in tax policy occur expectations of the likelihood of a tax policy switch have an important negative impact on the gain to delaying investment in the latter model and time to investment can fall with increasing tax policy uncertainty aggregate investment simulations indicate that capital formation is adversely affected by increases in uncertainty in the traditional gbm model but can be enhanced in the jump process model

regime uncertainty and optimal investment timing abstract we construct a real options model in which a regime change is expected at a pre determined future time and study the effects of regime uncertainty on a firm s strategic investment decision taking into consideration the remaining time to the regime change and the probability of each regime state we show that just before the time of a regime change firms should act as if the worst case scenario was about to happen even if a good state is highly possible

strategic real options under asymmetric information abstract this paper studies the effect of private information on the capital allocation decisions of firms who operate under imperfect competition i analyze two interactive firms one with private information and the other without who must decide when to undertake an irreversible and uncertain investment decision traditional non strategic models of irreversible investment under uncertainty involve a single decision maker and result in an optimal period of delay before the investment is undertaken in a strategic setting firms must balance their desire to delay against competitive advantages from early investment i find that an equilibrium may not exist within the standard continuous framework when the private information is over revenues moreover when an equilibrium does exist the competitive pressures from the uninformed firm are weak this is in contrast to existing models with asymmetric information over costs where an equilibrium always exists and the competitive pressures remain strong hsu and lambrecht 2007 this work shows that the investment timing decision and thus the value of the private information is highly sensitive to the nature of incomplete information

investment under uncertainty and policy change in this paper the impact of a policy change on the investment behavior of the firm is studied in an incomplete information setting the policy change occurs when a stochastic process describing the state of the economic environment reaches a certain trigger the firm has incomplete information about the trigger and knows only its probability distribution consequently both the firm s conjecture concerning the trigger value as well as the precision of this conjecture serve as input parameters we derive the optimal investment rule maximizing the value of the firm and show that the impact of the trigger value uncertainty on the optimal investment threshold is non monotonic the threshold decreases with uncertainty for its low levels while the reverse is true if uncertainty is high furthermore we provide results concerning the valuation of the firm s investment opportunity and present some policy implications

government partisanship labor organization and macroeconomic performance governments of the left and right have distinct partisan economic policies and objectives that they would prefer to pursue their propensity to do so however is constrained by their desire for reelection we argue that the ability of governments to further their partisan interests and preside over reelectable macroeconomic outcomes simultaneously is dependent on the organization of the domestic economy particularly the labor movement we hypothesize that there are two different paths to desirable macroeconomic performance in countries with densely and centrally organized labor movements leftist governments can promote economic growth and reduce inflation and unemployment conversely in countries with weak labor movements rightist governments can pursue their partisan preferred macroeconomic strategies and achieve similarly beneficial macroeconomic outcomes performance will be poorer in other cases these hypotheses are supported by analysis of pooled annual time series data for 16 advanced industrial democracies between 1967 and 1984

political regimes and economic growth arguments that relate regimes to growth focus on property rights pressures for immediate consumption and the autonomy of dictators while everyone seems to agree that secure property rights foster growth it is controversial whether democracies or dictatorships better secure these rights the main mechanism by which democracy is thought to hinder growth is pressure for immediate consumption which reduces investment only states that are institutionally insulated from such pressures can resist them and democratic states are not the main argument against dictatorships is that authoritarian rulers have no interest in maximizing total output these views are summarized in turn

a new data set measuring income inequality this article presents a new data set on inequality in the distribution of income the authors explain the criteria they applied in selecting data on gini coefficients and on individual quintile groups income shares comparison of the new data set with existing compilations reveals that the data assembled here represent an improvement in quality and a significant expansion in coverage although differences in the definition of the underlying data might still affect inter temporal and international comparability based on this new data set the authors do not find a systematic link between growth and changes in aggregate inequality they do find a strong positive relationship between growth and reduction of poverty

asymmetric information financing constraints and investment the results of a number of theoretical papers lead to the hypothesis that financial variables affect capital sp ending because of asymmetric information in capital markets the auth ors review the relevant theory and test this hypothesis with a large sample of firm data the results show that financial variables such a s cash flow and interest expense add significant explanatory power to investment equations based on dale jorgenson s neoclassical model w ith a capm specification for the firm s cost of capital and a sales accelerator model the analysis therefore links recent theoretical work on capital markets to long standing empirical debates in the inv estment literature copyright 1987 by mit press

threshold effects of financial status on the cost frontiers of financial institutions in nondynamic panels this article applies hansen s 1999 2000 threshold regression model to estimate translog cost frontiers in the hope of shedding light on the banking industry s production processes and the extent of its technical efficiency te the threshold technique allows for the existence of multiple technologies of production distinguished by an exogenous threshold variable strong evidence of multiple technologies is found in the industry irrespective of which financial indicator as constructed by factor analysis defines the threshold variable cost savings and scale economies among the various underlying technologies are compared herein we also highlight the differences between the threshold results and the conventional cost frontier

finite project life and uncertainty effects on investment abstract this paper revisits the important result of the real options approach to investment under uncertainty which states that increased uncertainty raises the value of waiting and thus decelerates investment typically in this literature projects are assumed to be perpetual however in today s economy firms face a fast changing technology environment implying that investment projects are usually considered to have a finite life the present paper studies investment projects with finite project life and we find that in contrast with the existing theory investments may be accelerated by increased uncertainty it is shown that this particularly happens at low levels of uncertainty and when project life is short

why the poor do not expropriate the rich an old argument in new garb we consider a political economy with two partisan parties each party represents a given constituency of voters if one party labour represents poor voters and the other christian democrats rich voters if a redistributive tax policy is the only issue and if there are no incentive considerations then in equilibrium the party representing the poor will propose a tax rate of unity if however there are two issues tax policy and religion for instance then this is not generally the case the analysis shows that if a simple condition on the distribution of voter preferences holds then as the salience of the non economic issue increases the tax rate proposed by labour in equilibrium will fall possibly even to zero even though a majority of the population may have an ideal tax rate of unity 1998 elsevier science s a all rights reserved

real options and preemption under incomplete information abstract this paper introduces incomplete information and preemption into an equilibrium model of firms facing real investment decisions the optimal investment strategy may lie anywhere between the zero npv trigger level and the optimal strategy of a monopolist depending on the distribution of competitors costs and the implied fear of preemption our model implies that the equity returns of firms which hold real options and are subject to preemption will contain jumps and positive skewness

on the effect of high energy prices on investment empirical analyses of firm behaviour typically assume that there is a stable relationship between investment on the one hand and changes in the relative prices of inputs output demand and other determinants on the other hand however because of the lumpy nature and irreversibility of investments and the presence of uncertainty about future economic developments a specific percentage change in relative prices and output demand may not always lead to the same percentage change in capital stocks that means that different regimes may exist in investment behaviour we test whether such regimes exist using high quality data on eight manufacturing industries in the netherlands three different regimes can be identified that are characterized by differences in the relative input price levels and we find that if relative prices take on extreme values the propensity to adjust the scale of production to changes in demand is very low

is democracy more expropriative than dictatorship tocquevillian wisdom revisited abstract we reexamine the incentive effect of political democracy on the tax rate by defining a political regime over two dimensions the extent of the franchise and the extent that the redistribution of tax revenues is biased towards the rich standard tocquevillian models assume that even if there is limited franchise there is no redistribution bias from this it follows that democracy is more expropriative than oligarchy because a poorer median voter opts for higher taxes introducing the realistic assumption of a redistribution bias we find a countervailing effect democratization decreases exploitation by the rich on the disenfranchised poor since tax revenues are redistributed over a larger base the median voter may gain less from redistributive taxation we call this the olson effect

the effect of financial liberalization on the capital structure and investment decisions of indonesian manufacturing establishments this article analyzes the consequences of financial liberalization using a large panel of indonesian manufacturing establishments it discusses whether financial reforms have had an impact on investment and on the allocation of credit and whether the effects differ depending on the type of firms the overall conclusion is that shifting from administrative toward market based allocation of credit has increased borrowing cost particularly for smaller firms but at the same time has benefited firms by giving them widened access to finance

fulfilling the kyoto protocol in spain a matter of economic crisis or environmental policies abstract in 2008 spain exceeded by 20 9 the co2 emissions allowed by the kyoto protocol for 2012 the financial and economic crisis has transformed these figures as production fell so did energy demand and with it co2 emissions will the spanish economic crisis allow spain to fulfill its commitments with this in mind we have developed an extended input output model able to forecast energy demand and compute co2 emissions linked to the consumption of energy goods petroleum products gas and coal the results show that the crisis and in particularly the stagnation of the construction industry is only one of the pillars which help to contain these emissions at 6 81 the possibility of incorporating environmental policies new technologies and increases in the price of crude oil in these simulations means an even greater reduction of emissions than the impact of the crisis 9 76 the final result of our most pessimistic realistic scenario is that in 2012 spain will exceed its co2 emissions linked to the combustion of energy goods by only 0 9

the economic impact of licensed commercialized inventions originating in university research abstract the purpose of this article is to estimate quantitatively the contribution that university licensing makes to the national u s economy as regions and nations face increased economic problems they seek ways to augment opportunities for economic growth and to identify areas where public funding can be cut it is now well recognized that the research university can be a significant engine of economic growth and job creation university research and research related activities contribute in many important ways to modern economies notably through increased productivity of applied rd provision of highly valued human capital embodied in faculty and students development of equipment and instrumentation used by industry in production and research and creation of concepts and prototypes for new products and processes which may have some unexpected and large social and economic impacts yet clear documentation of the proportional contributions these make to economic growth remains elusive this article provides detailed estimates of the economic impact on the u s national economy of one core university activity licensing of university inventions to industry our approach combines licensing data for u s universities with national input output i o model coefficients and provides more valid and complete estimates of the national economic impacts of university licensing of intellectual property than have previously been available our results estimate national economic impact expressed as annual increases in gross domestic product gdp in total industry output and employment generated over a 15 year period summing over the entire 15 years for which we have data 1996 2010 we estimate that assuming no product substitution effects and a 2 10 royalty fee the total contribution of university licensing to gross industry output is at least 162 1 billion and as much as 686 9 billion 2005 dollars estimates based on 5 royalty rates yields an estimated impact of 293 3 billion 2005 dollars over the period assuming 2 royalty fees and no product substitution effects we estimate that over a 15 year period university licensing agreements based on product sales contributed at least 70 5 billion and as much as 277 6 billion 2005 dollars to the u s gdp with a moderately conservative estimate based on 5 royalty rates such agreements contributed more than 122 2 billion 2005 dollars the i o model also calculates the number of jobs person years of employment directly created or supported per million dollars of final purchases estimates of the total number of additional jobs created as a function of year due to university licensed products assuming no product substitution effects ranged from about 7000 jobs in 1996 to 23 000 in 2010 or more than 277 000 person years of employment over the entire 15 year period because of uncertainty we also provide estimates of the economic impact of university licensing income based on a range of product substitution rates 5 10 and 50 the magnitude of the estimated impact depends significantly on the assumptions made for example the royalty fees and substitution rates but even the most conservative yet reasonable assumptions yield estimates of very large impacts on gdp industry output and employment major discoveries emanating from academic and or publicly funded research have had enormous global economic and social impacts that are obvious but difficult to predict and quantify e g google the world wide web nanotechnologies etc although this article examines the economic impact of only a select technology transfer activity it nevertheless offers quantitative evidence that the economic impact of university research and technology transfer activities is significant

openness country size and government abstract this paper shows that smaller countries have a larger share of public consumption in gdp and are also more open to trade these empirical observations are consistent with recent theoretical models explaining country formation and break up and may account for the observed positive empirical relationship between trade openness and government size

the impact of household consumption patterns on emissions in spain abstract the aim of this paper is to analyse the relationship between household consumption patterns and pollution in the spanish economy the analysis was carried using a social accounting matrix sam for the spanish economy prepared for 1999 taking the final demand of households as the exogenous account in the sam framework and combining this with the information provided by the household budget continuous survey on income and consumption ine 1999 we analyse the pollution produced by both the economy and households in order to satisfy consumption requirements we also consider the effects of income inequality on expenditure levels establishing a link between income level consumption patterns propensity to consume and co2 emissions

intra firm diffusion of green energy technologies and the choice of policy instruments environmental benefits only unfold if green environmentally friendly technologies are widely diffused and intensively deployed within a firm we investigate how different types of policies directly and in combination affect the number of different green energy technologies adopted by a single firm intra firm diffusion using data from a dedicated survey on the diffusion of green energy technologies of 1200 swiss firms and applying well identified econometric models we found that energy taxes are a very effective policy instrument for the intra firm diffusion of green energy technologies even more important however are non political measures that show the largest effect among all tested instruments additional analyses show that a time consistency in policy making is more important for energy tax regimes than for regulations and b no evidence for complementarities between the policy types could be identified

estimated substitution elasticities of a nested ces production function approach for germany this paper demonstrates an econometric estimation of substitution elasticities of a nested constant elasticity of substitution production function ces between capital energy and labour for the west german industry in the last few years ces production functions have become more important in economic modelling especially for applied general equilibrium models where ces production functions are an important building stone in the literature different results of estimated elasticities can be found this paper investigates three different approaches for nested ces production functions and their estimated substitution elasticities capital energy and labour are estimated as substitutes for the west german industry in the long run

why did the west extend the franchise democracy inequality and growth in historical perspective during the nineteenth century most western societies extended voting rights a decision that led to unprecedented redistributive programs we argue that these political reforms can be viewed as strategic decisions by the political elite to prevent widespread social unrest and revolution political transition rather than redistribution under existing political institutions occurs because current transfers do not ensure future transfers while the extension of the franchise changes future political equilibria and acts as a commitment to redistribution our theory also offers a novel explanation for the kuznets curve in many western economies during this period with the fall in inequality following redistribution due to democratization i introduction the nineteenth century was a period of fundamental political reform and unprecedented changes in taxation and redistribution britain for example was transformed from an oligarchy run by an elite to a democracy the franchise was extended in 1832 and then again in 1867 and 1884 transferring voting rights to portions of the society with no previous political representation the decades after the political reforms witnessed radical social reforms increased taxation and the extension of education to the masses moreover as noted by kuznets inequality which was previously increasing started to decline during this period the gini coefficient for income inequality in england and wales had risen from 0 400 in 1823 to 0 627 in 1871 but fell to 0 443 in 1901 two key factors in the reduction in inequality were the increase in the proportion of skilled workers williamson 1985 and the redistribution of income toward the poorer segments of the society for example taxes rose from 8 12 percent of national product in 1867 to 18 8 percent by 1927 and the progressivity of the tax system increased substantially see lindert 1989

green investment under time dependent subsidy retraction risk abstract driven by ambitious targets to reduce greenhouse gas emissions many countries have introduced support schemes to accelerate investments in renewable energy however in recent years experience showed that over time retraction of support schemes becomes more likely this has a severe effect on investment behaviour in this paper we study the effect of a potential subsidy retraction of a feed in tariff fit on investment in renewable energy capacity where we explicitly account for the fact that the likelihood of policy retraction may change over time we show that the range of fits for which it is optimal to invest immediately decreases the longer a subsidy has been in place if the fit offered is too small and or the subsidy has been installed too long ago it is optimal for the firm to wait with investment until the subsidy is eventually retracted and free market conditions prove to be profitable enough furthermore we show that whether a policy maker aiming at accelerating investment prefers investors to consider retraction risk to be time dependent or not depends on how much time has passed since the subsidy has been introduced at the moment the investor considers investment for the first time

the impact of cross ownership on the reaction of corporate investment and financing constraints a panel threshold model this paper studies whether or not investment decisions are financially constrained in a cross ownership system of taiwan different from the financial structure in the usa subsidiaries in taiwan are allowed to buy stocks of the parent companies hence the conventional debt to equity ratio is inappropriate to divide firms into high and low debt firms instead a new threshold variable the adjusted debt equity ratio ade is employed to divide the sample into high debt firms and low debt firms a panel of 115 taiwan listed firms for the period 1991 1997 is used evidence supports the cash flow hypothesis and ade has a notable significant influence on the financial constraints

investment and demand uncertainty this paper investigates the effects of uncertainty on the investment decisions of a sample of italian manufacturing firms using information on the subjective probability distribution of future demand for firms products according to the entrepreneurs the results support the view that uncertainty weakens the response of investment to demand thus slowing down capital accumulation consistent with the predictions of the theory there is considerable heterogeneity in the effect of uncertainty on investment it is stronger for firms that cannot easily reverse investment decisions and for those with substantial market power we show that the negative effect of uncertainty on investment cannot be explained by uncertainty proxying for liquidity constraints

investment under regime uncertainty impact of competition and preemption abstract in this study we analyze the investment timing problem and introduce a model of two firms competing for investment preemption each of which knows in advance the time at which the economic condition that will have an impact on the investment changes we qualitatively show how two firms strategically optimize their investment timing taking into account competition and preemption

sustainability assessment of u s final consumption and investments triple bottom line input output analysis the u s final demand categories such as household consumption private fixed investments government purchases and investments and export of goods and services have a wide range of environmental economic and social impacts analysis of these impacts termed as the triple bottom line tbl stimulated a tremendous interest by policy makers over the last decade therefore current research aims to analyze the tbl of u s final demands from a systems perspective to accomplish this goal the supply and use tables published by the u s bureau of economic analysis are merged with a range of environmental economic and social metrics the results show that household consumption has the largest indirect tbl sustainability impacts compared to other final demand categories with shares that range between 43 and 88 industrial sectors including manufacturing utilities agriculture construction transportation and mining are generally found to be responsible for the highest impacts for most of the environmental impact categories service sectors generally have the highest impacts on the economic and social indicators of sustainability analysis results also indicate that while meeting the household demand agriculture utilities and manufacturing sectors have relatively more environmental impacts than their contributions to gross domestic product gdp whereas service sectors contribute to gdp with a higher share than their environmental burdens furthermore it is envisioned that significant reductions in environmental footprints of u s households can be achieved if environmental policies that aim to reduce the household consumption are also supported with sustainable growth through greener and resource efficient economy

optimal timing of technology adoption abstract in a dynamic programming framework this paper investigates the optimal timing of technology adoption by a competitive firm when technology choice is irreversible and the firm faces a stochastic innovation process with uncertainties about both the speed of the arrival and the degree of improvement of new technologies a numerical example illustrates how the optimal timing decision is affected by changes in parameter values reflecting market conditions the firm s initial technological attributes and the characteristics of the stochastic innovation process some of these effects turn out to be in sharp contrast to common intuition contrasting the optimal decision rule derived here with the rule obtained under the net present value shows that the former implies a slower pace of adoption than implied by the latter the optimal decision rule is generalized for the case of multiple technology switches and it is shown that for all the switching decisions except the last one the optimal rule satisfies the net present value criterion

working capital and fixed investment new evidence on financing constraints this article presents new tests for finance constraints on investment by emphasizing the often neglected role of working capital as both a use and a source of funds the coefficient of endogenous working capital investment is negative in a fixed investment regression as expected if working capital competes with fixed investment for a limited pool of finance this finding addresses a criticism of previous research on finance constraints that cash flows may simply proxy shifts in investment demand in addition previous studies may have underestimated the impact of finance constraints on growth and investment because firms smooth fixed investment in the short run with working capital

corporate structure liquidity and investment evidence from japanese industrial groups this paper presents evidence suggesting that information and incentive problems in the capital market affect investment we come to this conclusion by examining two sets of japanese firms the first set has close financial ties to large japanese banks that serve as their primary source of external finance and are likely to be well informed about the firm the second set of firms has weaker links to a main bank and presumably faces greater problems raising capital investment is more sensitive to liquidity for the second set of firms than for the first set the analysis also highlights the role of financial intermediaries in the investment process

risk bearing and the theory of income distribution this paper develops the stochastic theory of distribution with a dynamic model which focuses on the role of incomplete insurance in generating inequality unlike previous work our approach takes explicit account of the reason for market incompleteness in modeling agents behaviour in particular the amount of risk borne is endogenous using a model of growth with altruism in which agents are risk averse and there is moral hazard we show that lineage wealth follows a markov process which converges globally to an ergodic distribution this also represents the long run population distribution of wealth we discuss the role of particular assumptions such as availability of production loans and unboundedness of utility in yielding the qualitative properties of the distribution of wealth the choice of occupation and the prevention of poverty traps

investment under uncertainty the case of replacement investment decisions we analyze the determinants of replacement investment decisions in a contingent claims model with maintenance and operation cost uncertainty we find that the optimal time between replacements is increasing in the volatility of cost the purchase price of a new asset and the corporate tax rate and is decreasing in the systematic risk of cost the salvage value of the asset and the investment tax credit the optimal time between replacements can either increase or decrease with an increase in the depreciation rate extensions of the model to examine the effects of technological and tax policy uncertainty on replacement investment decisions give intuitive but striking results uncertainty about the arrival of a technological innovation that would decrease maintenance and operation cost results in a significant decrease in replacement investment uncertainty in a tax law change that would encourage investment decreases current investment and uncertainty in a tax law change that would discourage investment increases current investment

evidence on the role of cash flow for investment abstract recent work in macroeconomics argues that imperfections in capital markets may lead to business cycle fluctuations by propagating relatively modest shocks evidence for such a mechanism also known as the financial accelerator consists largely of firm level studies showing that cash flow is an important predictor of investment but this evidence is often viewed with skepticism because cash flow is also a good indicator of investment opportunities in this paper we develop a framework for estimating the extent to which the predictive power of cash flow can be attributed to its role as a fundamental versus its role in alleviating credit frictions for firms with access to commercial paper and bond markets we find that the perfect capital markets model of investment can fully account for the role of cash flow for firms with only limited access to capital markets as indicated by lack of participation in public debt markets however investment appears to be excessively sensitive to fluctuations in cash flow these results thus clarify the role of cash flow in investment equations and provide support for the existence of a financial accelerator

a theory of trickle down growth and development this paper develops a model of growth and income inequalities in the presence of imperfect capital markets and it analyses the trickle down effect of capital accumulation moral hazard with limited wealth constraints on the part of the borrowers is the source of both capital market imperfections and the emergence of persistent income inequalities three main conclusions are obtained from this model first when the rate of capital accumulation is sufficiently high the economy converges to a unique invariant wealth distribution second even though the trickle down mechanism can lead to a unique steady state distribution under laissez faire there is room for government intervention in particular redistribution of wealth from rich lenders to poor and middle class borrowers improves the production efficiency of the economy both because it brings about greater equality of opportunity and also because it accelerates the trickle down process third the process of capital accumulation initially has the effect of widening inequalities but in later stages it reduces them in other words this model can generate a kuznets curve

distributive politics and economic growth a crude distinction between economics and politics would be that economics is concerned with expanding the pie while politics is about distributing it in this paper we analyze the relationship between the two we focus on how an economy s initial configuration of resources shapes the political struggle for income and wealth distribution and how that in turn affects long run growth our main conclusion is that inequality is conducive to the adoption of growth retarding policies we derive this result from a simple political economy model of growth and present cross country evidence consistent with it the key feature of our model is that individuals differ in their relative factor endowments we distinguish between two types of factors an accumulated factor called capital and a nonaccumulated factor called labor growth is driven by the expansion of the capital stock which is in turn determined by individual saving decisions long run growth is endogenous as the aggregate production function is taken to be linearly homogeneous in capital and productive government services taken together the provision of government services is financed by a tax on capital because government services are productive a small tax on

the dynamics of the wealth distribution and the interest rate with credit rationing are uniquely determined and wealth dispersion among individuals or firms is irrelevant introducing credit rationing into the solow model modifies these conclusions multiple stationary interest rates and wealth distributions can exist because higher initial rates can be self reinforcing through higher credit rationing and lower capital accumulation the wealth accumulation process is ergodic in every steady state but wealth mobility is lower with higher steady state interest rates aggregate output is higher in steady states with lower interest rates because credit is better allocated short run interest rate or distribution shocks can be self sustaining and can have long run effects on output through the induced dynamics of the wealth distribution and credit rationing

inequality and redistribution revisited abstract as inequality rises taxation can be less efficient in the sense that a given tax rate produces a smaller tax base if this tax base effect outweighs the conventional political effect then increasing inequality can induce less public spending or redistribution contrarily to alesina and rodrik and persson and tabellini

decoupling global environmental pressure and economic growth scenarios for energy use materials use and carbon emissions in recent decades economic growth and increased human wellbeing around the globe have come at the cost of fast growing natural resource use including materials and energy and carbon emissions leading to converging pressures of declining resource security rising and increasingly volatile natural resource prices and climate change we ask whether well designed policies can reduce global material and energy use and carbon emissions with only minimal impacts on improvements in living standards we use a novel approach of combined economic and environmental modelling to assess the potential for decoupling for 13 world regions and globally we apply a production territorial and consumption approach to discuss regional differences in natural resource use and carbon emissions across three stylized policy outlooks a reference case with no significant changes to environment and climate policies a high efficiency outlook involving a global carbon price rising from 50 to 236 constant price per tonne of co2 between 2010 and 2050 and improvements in resource efficiency rising from 1 5 historically to between 3 5 and 4 5 in the scenarios and a medium efficiency outlook midway between the no change and high outlooks we find that global energy use will continue to grow rapidly under all three scenarios from 17 billion tonnes of oil equivalent toe in 2010 to between 30 and 36 billion toe carbon emissions would be considerably lower with a global carbon price less than half the level of the reference case 29 37 billion tonnes of co2 instead of 74 billion tonnes and also material use would grow much more slowly under a carbon price and significant investment to increase resource efficiency 95 instead of 180 billion tonnes of materials we find that oecd economies have significant potential to reduce their material throughput and carbon emissions with little impact on economic growth and that developing economies such as china could expand their economies at much lower environmental cost globally the effects of very strong abatement and resource efficiency policies on economic growth and employment until 2050 are negligible our study suggests that decarbonization and dematerialization are possible with well designed policy settings and would not contradict efforts to raise human wellbeing and standards of living the research demonstrates the usefulness of scenarios for unpacking environmental and economic outcomes of policy alternatives the findings have important implications for future economic opportunities in a highly resource efficient and low carbon global economy to set human development and achieving the sustainable development goals on a more resilient path

what do we know about investment under uncertainty recent theoretical developments relating to investment under uncertainty have highlighted the importance of irreversibility for the timing of investment expenditures and their expected returns this has subsequently stimulated a growing empirical literature which examines uncertainty and threshold effects on investment behaviour this paper presents a review of this literature a variety of methods have been used to investigate the empirical implication of irreversibility in investment the majority focusing on the relationship between investment flows and proxy measures of uncertainty a general conclusion is that increased uncertainty at both aggregate and disaggregate levels leads to lower investment rates this suggests that there is an irreversibility effect under which greater uncertainty raises the value of the call option to delay a commitment to investment this effect appears to dominate any positive impact on investment arising from the fact that greater uncertability under certain circumstances increases the marginal profitability of capital the methods used raise a number of issues which call into question the reliability of the findings and these are addressed in the paper however if such irreversibility effects are present then their omission from traditional investment models casts doubt on the efficacy of such specifications jel classification d81 d92 e22

the impact of cash flows and firm size on investment the international evidence abstract this paper examines the degree to which cash flow availability influences firm investment in six oecd countries in particular we are interested in the extent to which the reliance on internal funds is affected by firm size since there is general agreement that smaller firms have less access to external capital markets and thus should be more affected by the availability of internal funds earlier work has concluded that the documented positive relationship between cash flow and investment is evidence of the existence of financial constraints we first examine all firms regardless of size in each country and we find that the amount of corporate investment is affected by internal resources in all six countries that is internal financing affects firm investment we then repeat the analysis segmenting the sample using three measures of firm size contrary to our a priori expectations we find that the cash flow investment sensitivity is generally highest in the large firm size group and smallest in the small firm size group we deduce that the explanations for these findings are grounded in managerial agency considerations and in the greater flexibility enjoyed by large firms in timing their investments thus we conclude that the degree of sensitivity of a firm s investments to its cash flows cannot be interpreted as an accurate measure of its access to capital markets as do kaplan s zingales l 1997 the quarterly journal of economics 169 215 since small firms are known to have less access to external markets

why does liquidity matter in investment equations that liquidity variables affect investment spending is widely accepted despite important recent empirical work questions remain concerning the interpretation of liquidity variables in investment equations and the sources and economic importance of finance constraints these questions are addressed by estimating a variety of econometric models that exploit distinctive canadian institutional features to identify firms that face relatively severe information problems the initial econometric evidence confirms the existence of finance constraints and identifies their source as the problems faced by firms in credibly communicating private information to outsiders this conclusion is robust to biases from the capitalization of finance constraints into asset prices scale economies or imperfect competition which are accounted for directly in the econometric specifications copyright 1995 by ohio state university press

the value of green energy under regulation uncertainty abstract we examine investments in power generation projects under policy uncertainty when the investor has the choice between two alternative technologies a gas fired plant and a wind plant increased likelihood of subsidy withdrawal reduces the payoff from and postpones investments in the wind technology simultaneously it accelerates investments in gas thereby eliminating or further postponing investments in wind capacity we show that this substitution phenomenon can be of first order importance it can have a significant impact on the timing of investment the wind premium and the probability of investing in the wind technology our results provide new insights about the scope and impact of green energy regulation