habits hysteresis and catastrophes in labor supply abstract this paper investigates the implications of a general model of locally unstable habit formation with respect to consumption household time and corporate time the model is shown to imply multiple long run equilibria exhibiting hysteresis and catastrophes dependent on rationings and the wage rate this can explain profound changes in labor supply preferences and behavior such as when long term unemployed become little motivated to get a new job or when former housewives develop a strong orientation towards paid work

large scale utilization of wind power in china obstacles of conflict between market and planning the traditional strict planning system that regulates china s power market dominates power industry operations however a series of market oriented reforms since 1997 call for more decentralized decision making by individual market participants moreover with the rapid growth of wind power in china the strict planning system has become one of the significant factors that has curtailed the generation of wind power which contradicts with the original purpose of using the government s strong control abilities to promote wind power development in this paper we first present the reasons why market mechanisms are important for large scale utilization of wind power by using a case analysis of the northeast grid and then we illustrate the impact of conflicts between strict planning and market mechanisms on large scale wind power utilization last we explore how to promote coordination between markets and planning to realize large scale wind power utilization in china we argue that important measures include implementing flexible power pricing mechanisms instead of the current fixed pricing approach formulating a more reasonable mechanism for distributing benefits and costs and designing an appropriate market structure for large scale wind power utilization to promote market liquidity and to send clear market equilibrium signals

poverty and the forward falling labor supply function a microeconomic analysis abstract existing subsistence efficiency target income and limited aspiration theories impose a backward bending labor supply behavior on poor workers in less developed countries recent empirical studies of worker behavior in the unorganized sectors of ldcs contradict this view and report evidence of both a forward falling and an upward rising labor supply this study formulates an increasing elasticity of substitution utility function model to analyze the observed behaviors the function displays both nonhomotheticity and variable elasticity properties and is capable of generating labor supply curves with forward falling and upward rising segments while the upward rising supply is considered to be usual worker behavior the forward falling segment represents a below subsistence distress sale phenomenon and the subsistence income of the worker is implied to occur at the turning point joining the two segments of the supply curve econometric estimates of the utility and the labor supply functions provide support to the theoretical results

why did the energy intensity fall in china s industrial sector in the 1990s the relative importance of structural change and intensity change there have been a variety of studies investigating the relative importance of structural change and real intensity change to the change in china s energy consumption in the 1980s however no detailed analysis to date has been done to examine whether or not the increased energy efficiency trend in the 1980s still prevailed in the 1990s this article has filled this gap by investigating the change in energy consumption in china s industrial sector in the 1990s based on the data sets of value added and end use energy consumption for the 29 industrial subsectors and using the newly proposed decomposition method of giving no residual our results clearly show that the overwhelming contributor to the decline in industrial energy use in the 1990s was the decline in real energy intensity indicating that the trend of real energy intensity declines in the 1980s at the 2 digit level was still maintained in the 1990s this conclusion still holds even if we lower the growth rate dramatically in line with the belief that the growth rate of china s gdp may be overestimated

potential cooperation in renewable energy between china and the united states of america abstract china and the united states of america us are developing renewable energy concurrently in this paper we seek the opportunities for potential cooperation between these two countries based on the analysis of annual economic data a mathematical model has been established to characterize correlations among gdp carbon dioxide emissions energy prices and the renewable energy cooperation index based on statistical analyses such cooperation can promote economic development reduce carbon dioxide emissions improve the environment and realize green growth if us monetary and technology resources and chinese markets are combined benefits can be mutually gained

china s 2020 clean energy target consistency pathways and policy implications abstract china has proposed its 2020 clean energy target together with the climate change target of reducing co2 intensity of the economy by 40 45 below the 2005 level this article investigates the feasibility of these targets by testing their consistency under possible economic development scenarios we analyse these targets from two perspectives consistency with the overall economic growth and consistency with the international society s expectation on china s greenhouse gas ghg abatement responsibilities the main findings are under the recently announced 2020 target of gross domestic product gdp that is double the 2010 level the adoption of a 15 clean energy target could result in excessive primary energy demand and then with 40 45 gdp co2 intensity reduction co2 emissions in 2020 could substantially exceed the international energy agency iea 450 ppm scenario for china thus we propose a 17 clean energy target that can reconcile the domestic plan with international expectation our article also outlines the pathways to realise clean energy development into 2020 and proposes policy recommendations

carbon emission flow in the power industry and provincial co2 emissions evidence from cross provincial secondary energy trading in china abstract the accurate calculation of co2 emissions in every province in china is the basis for developing regional energy policies there is a huge fossil fuel reserve and production capacity in western china whereas their underdeveloped social and economic status means that there is lower demand the more developed eastern coastal regions of china show dynamic economic momentum and hence higher energy demand based on the carbon emission flows in network theory this paper proposes an approach to recalculate provincial co2 emissions from the perspective of secondary energy consumption this approach attributes co2 emissions to final energy consumers after considering cross provincial secondary energy trading especially cross provincial electric power trading in the regional power grid given the uneven distribution of energy resources and the imbalance of energy consumption among regions cross provincial secondary energy trading in china is significant especially in the power industry by adopting the approach proposed in this paper the provincial carbon intensity and the corresponding energy policy can be modified to make energy end users pay rather than the primary producer

does unemployment cause unemployment micro evidence from norway the way that unemployment duration affects employment prospects is investigated using norwegian micro transition data encompassing detailed accounts of 14 807 unemployed adults a generalized non proportional weibull model is estimated with two possible exits from the unemployment pool a job or a labour force exit on average the probability of obtaining a job is fairly constant at the individual level while the probability of exiting the labour force increases significantly as unemployment duration is prolonged for some particular groups of unemployed there is also a marked negative duration dependence in the probability of obtaining a job

how ambitious are china and india s emissions intensity targets abstract several developing economies have announced carbon emissions targets for 2020 as part of the negotiating process for a post kyoto climate policy regime china and india s commitments are framed as reductions in the emissions intensity of the economy by 40 45 and 20 25 respectively between 2005 and 2020 how feasible are the proposed reductions in emissions intensity for china and india and how do they compare with the targeted reductions in the us and the eu in this paper we use a stochastic frontier model of energy intensity to decompose energy intensity into the effects of input and output mix climate and a residual technology variable we use the model to produce emissions projections for china and india under a number of scenarios regarding the pace of technological change and changes in the share of non fossil energy we find that china is likely to need to adopt ambitious carbon mitigation policies in order to achieve its stated target and that its targeted reductions in emissions intensity are on par with those implicit in the us and eu targets india s target is less ambitious and might be met with only limited or even no dedicated mitigation policies

labour force participation timing and persistence this paper examines the relative importance of timing and persistence elements in explaining cyclical fluctuations in labour supply data from the natural experiment provided by world war ii and cross sectional data on american local labour markets as well as aggregate time series data are used in the empirical work we find little evidence that timing effects play an important role in labour market dynamics the evidence suggests that views emphasizing persistence are more accurate and that previous employment tends to raise the probability of subsequent employment much of the development of applied economic theory within the past 25 years has emphasized the importance of viewing economic decisions in a life cycle context consumption decisions are today frequently viewed as being determined by wealth or permanent income the human capital revolution has brought life cycle considerations to the forefront of modern labour economics while the life cycle dynamics of labour force participation decisions have important implications for macroeconomic theory and policy they have received relatively little empirical attention with the notable exceptions of lucas and rapping 1969 and hall 1980 none of the large body of work on cyclical fluctuations in employment has explicitly relied on a dynamic model of labour supply this paper uses several types of data to examine two elements of participation dynamics the first is the aspect of timing which is implicit in the work of lucas and rapping and in mincer s 1966 early discussion of hidden unemployment the timing argument which is presented most explicitly in ghez and becker 1975 holds that leisure is easily substitutable across periods hence relatively small transitory movements in the perceived real wage or real rate of return can have large effects on the path of labour supply as individuals time their participation to coincide with periods of high transitory wages on the other hand permanent changes because they do not affect the timing decision are expected to have a much smaller effect on participation it is this view of labour supply which underlies new classical macroeconomic models the dependence is made explicit in lucas 1975 who claims that what we do know indicates that leisure in one period is an excellent substitute for leisure in other nearby periods the ability of classical macroeconomic models to explain fluctuations in employment depends on the presence of strong intertemporal substitution effects unless

a theory of rational addiction we develop a theory of rational addiction in which rationality means a consistent plan to maximize utility over time strong addiction to a good requires a big effect of past consumption of the good on current consumption such powerful complementarities cause some steady states to be unstable they are an important part of our analysis because even small deviations from the consumption at an unstable steady state can lead to large cumulative rises over time in addictive consumption or to rapid falls in consumption to abstention our theory also implies that cold turkey is used to end strong addictions that addicts often go on binges that addicts respond more to permanent than to temporary changes in prices of addictive goods and that anxiety and tensions can precipitate an addiction

energy conservation and emissions reduction in china progress and prospective abstract energy conservation ec has been taken as basic state policy in china for more than 20 years and china achieves 3 9 annual energy saving from 1980 to 2005 in 2006 china central government firstly set up a binding target of reducing gdp energy intensity by 20 in its 11th five year plan fyp at the end of 2010 19 1 reduction in energy intensity has been achieved which is 95 of the target and means 608 million tons stand coal equivalence sce saved 1510 million tons co 2 emission reduced 300 billion rmb saving in energy bill and vast saving in infrastructure investment this paper is systematical review and prospective analysis on energy policy issue in china review on policy evolution and progress of ec and emission reduction er in china during the 11th fyp periods is presented in detail outlook of energy demand and supply into 2050 is presented and the roadmap to realize sustainable energy development is drafted to set the framing constraints for china s energy policy options rationality and feasibility analysis on newly formulated 12th fyp ec and er target is also addressed then lessons from the 11th fyp periods are drawn and factors underlying and limiting the policy formulation and implementation are discussed in details to probe the policy predicament and solutions finally policy suggestions are proposed for long term successful implementation of ec and er in china

unstable bandwagon and habit effects on labor supply abstract this paper develops a dynamic labor supply model based on unstable bandwagon and habit effects it possesses multiple long run equilibria and exhibits hysteresis and transitions between home and market time dependent on the wage rate these properties are robust the model provides an explanation of the long run increase in labor supply by married women in the netherlands the usa and other oecd countries

assets subsistence and the supply curve of labor the backward bending supply curve of labor is now accepted as a matter of course by most economists it has no doubt been perplexing to observe that the most commonly employed types of utility functions do not yield such curves under the usual textbook analysis of the problem 1 particular preference maps have been found that generate backward bending curves 2 however they are nonparametric leading to difficulties of estimation and upon closer examination seem to imply counter intuitive results we will show that taking into account the wealth position of an individual on the one hand and survival consideration on the other greatly expands the variety of shapes that can be derived for the supply curve from some simple utility functions the use of a specific simple utility function also implies some severe restrictions on the form the supply curve can take rendering it testable empirical evidence is shown to support the conclusion that the supply curve is monotonic we will also show that the notion that the aggregate supply curve of labor slopes down rests in part on an error of aggregation and that the empirical evidence usually cited in support of the negative slope when correctly interpreted cannot be so construed

promoting global ccs rdd d by stronger u s china collaboration abstract carbon capture and storage ccs is the only technology available to mitigate greenhouse gas ghg emissions from large scale fossil fuel usage u s and china are the world s largest ghg emitters collaboration between the two nations therefore offers the greatest opportunity for achieving meaningful reductions in global ghg emissions two countries current cooperation on ccs through clean energy research center based on the u s china strategic forum on clean energy cooperation mechanism provides an important initial step towards even closer and stronger cooperation in the future in this paper we justify such possibility by discourse on the seemly different but complementary social political context in two countries including political system government structure economic policy national innovation system energy strategy and energy market structure we further address the key elements of future cooperation model by carefully considering the principle of equality and mutual beneficiary the role of two countries in the whole value chain according to their comparative advantages and the scale and mechanism of the funding a milestone for the cooperation until 2030 is drafted and priority areas for both countries in the cooperation are identified such cooperation will provide the imperative leadership for global climate change and speed up the global ccs deployment

rational choice and erratic behaviour in this paper we show that rational choice in a stationary environment can lead to erratic behaviour when preferences depend on experience we mean by erratic behaviour choice sequences that do not converge to a long run stationary value or to any periodic pattern early investigations of the effects of experience on choice goes back to pareto see also benhabib 1979 some keynesian theories of the consumption function incorporate the effects of experience and habit formation on current levels of consumption duesenberry 1949 modigliani 1949 and brown 1952 a general model of experience dependent choice was described in day 1970 and investigated in day and kennedy 1971 while the specific issue of the existence of stable representable long run consumer demand when tastes vary endogenously has been treated by gorman 1967 pollak 1970 1976 weizsaicker 1971 mccarthy 1974 and hammond 1976 pollak gave conditions for the representability of long run choice when the equations of preference dependence are linear and utility additive hammond in a generalization of these findings provides conditions for stable representable long run choice when preferences are acyclic a condition which in essence assures convergence to a long run choice

intertemporal preferences and labor supply in this paper the authors examine whether nonseparable preference structures ar e important in characterizing life cycle labor supply using longitud inal data on prime age males from the panel study of income dynamics they estimate a model of life cycle leisure and consumption under un certainty in which intertemporal preferences are allowed to be nonsep arable in leisure the model tests several alternative specifications considered in the literature they investigate the robustness of the ir findings to certain forms of population heterogeneity and types of model misspecification across alternative specifications the autho rs find that the standard assumption of intertemporally separable pre ferences for leisure is not consistent with the data copyright 1988 by the econometric society

dynamic hours of work functions for husbands wives and single females hours of work equations are derived from the constrained maximization of a utility function that is not separable over time and that varies with a household s demographic structure these equations are fitted to observations on wage rates nonlabor income and other variables for husbands wives and unmarried women the dependence of each household s current work and consumption behavior upon its work and consumption behavior in the past is examined closely and different interpretations of the relationship are confronted with the data

income uncertainty and optimal redistribution 1 introduction redistribution policy under a utilitarian criterion aims to transfer dollars from one group in the population to another if the weighted utility gain to the recipients exceeds the utility cost to the donors under diminishing marginal utility of income part of any exogenous change in one group s income should be shared with the other group for example if taxpaying workers suffer a negative shock to their mean earnings then part of this utility shock should be spread to nonworkers in the form of lower transfer payments and vice versa for the case of a positive shock this article demonstrates the counterintuitive result that under reasonable preference representations a policymaker may respond optimally to a negative utility shock by redistributing income away from the harmed group thus exacerbating the group s utility loss in particular under risk aversion a mean preserving increase in the variance of income typically has an effect on well being analogous to a decrease in mean income 1 it may nevertheless be welfare enhancing to transfer income away from those suffering an increase in income uncertainty even though this policy compounds their welfare loss the main ideas can be demonstrated in a simple framework for illustration the analysis will focus on redistribution from taxpaying workers to nonworkers the central result is that a meanpreserving increase in earnings uncertainty among taxpayers can increase optimal transfer amounts to nonworkers increasing optimal income replacement rates even though the redistribution exacerbates the taxpayers utility loss from the increase in uncertainty 2 model footnote 1 many factors in the economy affect earnings uncertainty even conditional on being employed such as the form of compensation e

labour supply with habit formation abstract in a model with habit forming labour supply we show that standard myopic utility maximisation of a person weakly addicted to a harmful habit is consistent with empirical results on labour supply

unemployment duration and economic incentives a quasi random assignment approach abstract we investigate how economic incentives and spell duration affect hazard rates out of insured unemployment we take into account that insured unemployment not always ends in employment but also in disability training programs or benefit sanctions our empirical basis is norwegian register data containing variation in economic incentives and spell duration similar to that of random assignment experiments we find that the employment and benefit sanction hazards are negatively affected by the unemployment insurance replacement ratio but that the effects vary considerably among individuals there is negative duration dependence in the employment hazard and positive duration dependence in the disability hazard

on the optimality of a gcc monetary union structural var common trends and common cycles evidence this paper examines the suitability of the proposed monetary union among the members of the gulf cooperation council gcc to do so we identify the underlying structural shocks that these economies are subject to and assess the extent to which the shocks are symmetric additionally we test for common trends and common business cycles among the gcc economies we find that while the transitory demand shocks are typically symmetric the permanent supply shocks are asymmetric furthermore we do not find synchronous long run and short run movements in output despite the progress that has been made in terms of integration our findings indicate that the conditions for forming a gcc monetary union have not as yet been met

convergence of inflationary shocks evidence from the caribbean in this paper we aim to shed some light on the inflation dynamics in the caribbean we analyse the inflation rates for twelve countries using various time series methods the results show that the inflation rates are mean reverting processes and that there is evidence of a convergence club in inflation rates within the area which contradicts previous studies our contribution implies a high degree of similarity in the dynamics of our target countries inflation rates

assessment of china s climate commitment and non fossil energy plan towards 2020 using hybrid aim cge model china made a commitment in copenhagen to reduce its carbon dioxide emissions per unit of gdp from 40 to 45 compared with the 2005 level by 2020 and is determined to vigorously develop non fossil fuels this study analyzes the effects and impacts of policies that could help to achieve china s copenhagen commitments with a hybrid static cge model in which the electricity sector is disaggregated into 12 generation technologies four scenarios are developed including the reference scenario a the reference scenario b and two carbon constraint scenarios the results show that carbon intensity in terms of gdp will fall by 30 97 between 2005 and 2020 in the reference scenario a and will be reduced further by 7 97 if china s targeted non fossil energy development plans can be achieved in the reference scenario b however the rest of the 40 45 target must be realized by other measures such as carbon constraint it is also observed that due to carbon intensity constraints gdp loss would be from 0 032 to 0 24 compared to the reference scenario b and co2 emission reductions are due mainly to decreases in coal consumption in the electricity sector and manufacturing sector

what do demand and supply shocks say about caribbean monetary integration this study seeks to ascertain whether the member states of the caribbean community caricom share similar supply and demand shocks if so an argument can be made for the suitability of said countries being part of a currency union the results show that no significant correlation exists for the majority of countries studied and as such no economic justification for the monetary union can be made based on the methodology used however the eastern caribbean currency union eccu whose members are a part of caricom is supported by the results

satiation and habit persistence or the dieter s dilemma abstract frequently individual consumption varies cyclically over time in order to model such behavior we have to generalize the intertemporal utility function so that it depends not only on current consumption but on total previous consumption and on the change in current consumption solving the resulting model requires a generalization of the euler lagrange equations

a nonparametric analysis of energy environmental kuznets curve in chinese provinces energy resources are an important material foundation for the survival and development of human society and the relationship between energy and economy is interactive and complementary this paper analyzes the energy consumption economic growth nexus in chinese provinces using novel and recent nonparametric time series as well as panel data empirical approaches the dataset covers 30 provinces over the period of 1980 2018 the empirical analysis indicates the presence of a nonlinear functional form and smooth structural changes in most of the provinces the nonparametric empirical analysis validates the presence of a nonlinear unit root problem in energy consumption and economic growth and nonlinear cointegration between the variables additionally the nonparametric panel cointegration test reports evidence of convergence in energy consumption and economic growth patterns across the provinces the nonparametric regression analysis finds economic growth to have a positive effect on average on energy consumption in all provinces except for beijing further the energy environmental kuznets curve exists between economic growth and energy consumption in 20 out of 30 chinese provinces the granger causality analysis reveals the presence of a mixed causal relationship between economic growth and energy consumption the empirical findings have important implications for chinese authorities in planning for improving energy efficiency decoupling between economic growth and energy consumption and reducing the environmental footprint of provinces

demand and supply shocks in the caribbean economies implications for monetary union this paper uses the method of structural vector autoregressions to decompose movements of real output and prices into demand and supply innovations for four caribbean economies barbados jamaica trinidad and tobago and guyana the aim of the analysis is to assess if these economies could feasibly form part of a caribbean monetary union correlations between the demand and supply innovations are however typically low indicating that monetary union may lead to greater stabilisation problems for these economies