industrial pollution abatement the impact on balance of trade this paper uses an ex post partial equilibrium framework to measure the impact of marginal changes in industrial p ollution abatement costs on the u s balance of trade in general and balance of trade with canada in particular the impacts are found to be negative for most industries growing with trade volume and smal l relative to domestic consumption in addition some evidence is fou nd that pollution control programs have changed the u s comparative advantage such that more high abatement cost goods are imported and m ore low abatement cost goods are exported

the impact of state taxes on pass through businesses evidence from the 2012 kansas income tax reform abstract in 2012 kansas undertook a large scale tax reform that excluded pass through business income from individual taxation in theory these changes enhance the incentives to undertake more real economic activity such as new business formation or expansion of existing businesses the reform also increased the incentive to avoid taxation by recharacterizing income sources this paper provides evidence of these effects using federal administrative income tax data spanning 2010 2014 several findings suggest that on both the extensive and intensive margins the pass through exclusion led to increased tax avoidance in the form of income recharacterization and shifting of effort from activities compensated through wages to those compensated with business income we do not find much evidence however that the kansas reform led to increases in real economic activity

the growth and distributional consequences of international trade in natural resources and capital goods a neo austrian analysis abstract the problem explored is the role of natural resources in economic growth a neo austrian model is constructed which can represent either a single autarchic country or a pair of trading countries one of which can export natural resources and the other can export manufactured capital it is shown that under autarchy the price of the natural resource has no effect on economic growth while under conditions of trade it has a significant influence falling natural resource prices slow the growth in the resource exporting country and stimulate it in the capital exporting country some policy implications of this finding are explored

the environment and welfare implications of trade and tax policy developing countries with comparative advantage in dirty industries face the risk of environmental degradation unless appropriate policies are implemented using applied general equilibrium analysis we examine how trade influences the environment and assess the welfare and environmental implications of alternative pollution abatement policies for indonesia our results indicate that unilateral trade liberalization by indonesia would increase the ratio of emission levels to real output for almost all major pollution categories more importantly when tariff removal is combined with a cost effective tax policy the twin objectives of welfare enhancement and environmental quality improvement appear to be feasible this sheds new and positive light on the role of trade in sustainable development

state investment tax incentives a zero sum game abstract over the past four decades state investment tax incentives have proliferated this emergence of state investment tax credits itc and other investment tax incentives raises two important questions 1 are these tax incentives effective in achieving their stated objective to increase investment within the state 2 to the extent these incentives raise investment within the state how much of this increase is due to investment drawn away from other states to begin to answer these questions we construct a detailed panel dataset for 48 states for 20 years the dataset contains series on output and capital their relative prices and establishment counts the effects of tax variables on capital formation and establishments are measured by the jorgensonian user cost of capital that depends in a nonlinear manner on federal and state tax variables cross jurisdictional differences in state investment tax credits and state corporate tax rates entering the user cost combined with a panel that is long in the time dimension are key to identifying the effectiveness of state investment incentives two models are estimated the capital demand model is motivated by the first order condition for a profit maximizing firm and relates at the state level the capital output ratio to the relative user cost of capital the twin counties model exploits both the spatial breaks discontinuities in tax policy at state borders and our panel dataset to relate at the county level the relative user cost to the location of manufacturing establishments using the capital demand model we find that own state capital formation is substantially increased by tax induced reductions in the own state price of capital and more interestingly substantially decreased by tax induced reductions in the price of capital in competitive states similarly using our twin counties model we find that county manufacturing establishment counts around state borders are higher on the side of the border with the lower price of capital but the difference is economically small suggesting that establishments are much less mobile than overall capital extensions of the capital demand model also reveal that state capital tax policy appears to be a zero sum game among the states in that an equiproportionate increase in own state and competitive states user costs tends to have no effect on own state capital formation

occupational choice and dynamic incentives we study an overlapping generations version of the principal agent problem where incentive contracts are determined in general equilibrium all individuals are workers when young but have a choice between becoming entrepreneurs or remaining workers when old imperfections in the credit market give rise to rents in entrepreneurial activities involving capital these rents motivate poor young agents to work hard and save to overcome the borrowing constraints with a labour market that is subject to moral hazard the increased effort raises social welfare policies that reduce credit market imperfections or redistribute income may reduce welfare by dampening this effect

is trade good or bad for the environment sorting out the causality we seek to contribute to the debate over globalization and the environment by asking what is the effect of trade on a country s environment for a given level of gdp we take specific account of the endogeneity of trade using exogenous geographic determinants of trade as instrumental variables we find that trade tends to reduce three measures of air pollution statistical significance is high for concentrations of so2 moderate for no2 and lacking for particulate matter although results for other environmental measures are not as encouraging there is little evidence that trade has a detrimental effect on the environment

trade liberalization and the environment in the pacific basin coordinated approaches to mexican trade and environment policy in this paper we analyze the environmental implications of growth and opening up of trade in mexico based on an empirical economywide model in particular we study how tradeoffs between growth and environmental objectives can be minimized by using targeted policies on pollution emissions in coordination with outward oriented trade strategies most economywide studies of trade and environment linkages rely on effluent intensities associated with output and do not allow for substitution between nonpolluting factors labor and capital and polluting intermediate consumption such as chemicals or energy lee and roland holst by contrast pollution emissions in the present model are linked to using polluting inputs rather than directly to output levels we also embed this analysis in a dynamic framework to take account of exogenous components of factor supply and productivity growth over the twenty year period 1990 to 2010 the analysis is presented in three stages first pollution abatement policies are considered alone and their effects on growth sectoral allocation and trade are evaluated the next step is to consider trade liberalization alone trade distortions in place before the nafta and uruguay round accords are removed progressively over time and results calibrate the expansionary effects of trade liberalization as well as its environmental implications these include win win cases such as in the fertilizer sector as well as intensified environmental degradation arising from the transportation sector in a third and last scenario we combine environmental and trade policies and show how they interact these results indicate that the combination of policies generally can mitigate the undesirable effects of each set of policies alone such as trade induced pollution growth and the real contractionary effects of environmental policy thus it appears that more liberal and outward oriented trade policy can coexist with more rigorous attention to environmental values the trade and environment debate has

productivity growth in goods and services across the heterogeneous states of america i introduction the study of income and productivity convergence and structural transformation are central and recurring themes in economic growth research the u s states have been a fertile testing ground for many intellectual advances in these areas the closed economy assumptions of the underlying models notwithstanding the states offer compensating advantages such as being subject to the same macroeconomic policy while simultaneously exhibiting considerable heterogeneity along many dimensions of interest to growth researchers demographics composition of output quality of workforce tax policy natural resource endowments geography etc at the same time knowledge on multifactor productivity mfp growth which is central to many growth models remains sparse for u s states this is mainly due to lack of data on capital accumulation beyond the manufacturing sector this is unfortunate as an emerging body of work has begun to draw attention to the fact that the convergence of state level incomes has slowed down over the past two to three decades in the absence of adequate data at the state level it becomes difficult to further analyze this problem within a multisectoral framework in this study we seek to rectify this shortcoming by constructing and analyzing productivity growth for the broadly defined privately produced goods and service sectors at the state level and undertake both growth accounting and convergence analysis for the period 1980 2007 1 our primary innovation is the use of the dual growth accounting method which relies on factor prices rather than factor stocks to construct mfp growth to get a sense of the underlying heterogeneity in sectoral labor productivity growth consider the convergence plots displayed in figure 1 in figure 1 a we plot labor productivity growth in the nonfarm nonmining private sector between 1980 and 2007 against initial labor productivity there is some evidence of absolute convergence although weak in figures ib and 1c we repeat similar plots but now for the goods sector and for the private service sector separately here we see markedly different patterns while convergence in the goods sector is apparent for services it is quite the opposite moreover if one inspects the values on the vertical axes one can also infer large differences across states this is particularly true for goods where the difference between oregon or and montana mt was almost 7 annually as a result even though montana had slightly higher labor productivity in 1980 by 2007 oregon s productivity was at least five times higher even for the service sector where the range is much smaller the difference between connecticut ct and michigan mi was almost 2 annually as a result though both states began with almost similar values connecticut s labor productivity in services was 60 higher than michigan s by 2007 clearly these are large underlying regional differences these very different patterns motivate some of the questions that we try to answer in this study using our constructed series of mfp growth and its constituent variables we examine the sources of variations in labor productivity growth first we conduct an in depth growth accounting exercise to explore the relative importance of mfp growth versus factor accumulation for the two broad sectors across u s states this allows us to undertake traditional growth accounting exercises and also examine the sources of variations across states as the dual accounting approach relies on the construction of real wage growth and real user cost growth we also investigate the sectoral patterns for these two variables second we conduct convergence analysis at the sectoral level for labor productivity growth mfp growth as well as factor price growth we show that while the goods sector shows convergence both absolute and conditional on initial human capital we see no such evidence for the service sector

regulation factor rewards and international trade this paper develops an approach for incorporating regulation into the theory of production distribution and trade using environmental regulation as an example four major conclusions emerge in the course of the analysis 1 production process regulation is equivalent in its effect on other cooperating factors to neutral technical regress i e negative progress 2 specific unambiguous income redistribution consequences follow from such regulation if commodity prices are held constant the factor used relatively intensively in the non regulated industry will gain absolutely in terms of both goods 3 unilateral or uncoordinated regulation destroys the link between uniform world commod ity prices and identical factor proportions factors prices across trading countries or regions 4 if any factor of production is freely mobile across frontiers the least differential regulation as between countries will entirely drive out the regulated industry from the more to the less regulated economy

tax competition among u s states racing to the bottom or riding on a seesaw abstract dramatic declines in capital tax rates among u s states and european countries have been linked by many commentators to tax competition an inevitable race to the bottom and underprovision of local public goods this paper analyzes the reaction of capital tax policy in a given u s state to changes in capital tax policy by other states our study is undertaken with a novel panel data set covering the 48 contiguous u s states for the period 1965 to 2006 and is guided by the theory of strategic tax competition the latter suggests that capital tax policy is a function of foreign out of state tax policy preferences for government services and home state and foreign state economic and demographic conditions the slope of the reaction function the equilibrium response of home state to foreign state tax policy is negative contrary to casual evidence and many prior empirical studies of fiscal reaction functions this result which stands in contrast to most published findings is due to two critical elements that allow for delayed responses to foreign tax changes and responses to aggregate shocks omitting either of these elements leads to a misspecified model and a positively sloped reaction function our results suggest that the secular decline in capital tax rates at least among u s states reflects synchronous responses among states to common shocks rather than competitive responses to foreign state tax policy while striking given prior empirical findings these results are fully consistent with the implications of the theoretical model developed in this paper and presented elsewhere in the literature rather than racing to the bottom our findings suggest that states are riding on a seesaw consequently tax competition may lead to an increase in the provision of local public goods and policies aimed at restricting tax competition to stem the tide of declining capital taxation are likely to be ineffective

free trade and the environment development system abstract we develop a simulation model to analyze the trade environment development system that contains a number of important advances over the earlier and current theoretical models our model like other models has an income induced pollution policy allows country factor endowments to influence trade patterns and allows production factors to be mobile intersectorally unlike other theoretical models our model treats pollution stemming from both production and consumption in a way that does justice to empirical observations we model pollution policy explicitly as an abatement investment thus effectively allowing for differences in pollution intensive technology across countries in addition we allow for an internationally traded intermediate good a natural resource as a result of this novel approach we find that 1 the benefits of trade i can be either positive or negative and ii depend on country endowments and 2 the pollution effects of trade are closely tied to the benefits of trade our model generally shows higher pollution levels under free trade than autarky however our results do not support the pollution haven hypothesis i e trade causes less pollution in developed countries and more pollution in developing ones some developing countries produce more of the pollution intensive good but ultimately consume less pollution under autarky because they have higher per capita income and thus invest more heavily in environmental upgrading under autarky

energy consumption in china and underlying factors in a changing landscape empirical evidence since the reform period abstract in recent decades the phenomenal growth in the chinese economy has created increasing energy consumption this is the first study analysing energy consumption in china considering economic social and political dimensions of globalisation along with the effects from trade and financial sectors the time period covers the full trajectory since the start of economic reform until recent times in this respect we use the konjunkturforschungsstelle kof globalisation index to explore the dynamic link between economic growth financial development trade and various dimensions of globalisation and energy consumption modern time series econometric techniques are used in establishing stationarity long run dynamics and causality of the series the findings suggest that globalisation decreases energy consumption in the short run but increases it in the long run however the effect of financial development on energy consumption in china is opposite to the globalisation effect on energy consumption granger causality reveals a feedback effect between economic globalisation and financial development globalisation in china can only reduce energy consumption if china develops its financial sector to a greater extent in future china should invest in its financial sector and low carbon energy alternatives to achieve sustainable development prevention of energy shortfalls and cleaner environment would assist in bridging the gap both from social and political aspects to ensure china benefits significantly with high economic growth in this asian century

local fiscal competition an application to sales taxation with multiple federations abstract local sales tax rates influence the location of retail activity this paper develops a theory and empirical identification strategy for studying sales tax competition with multiple federations as exemplified by multiple counties each containing several cities in addition to strategic interactions with nearby cities and a city s own county city tax rates are influenced by the tax rates of neighboring counties cities react heterogeneously to own county sales tax rates depending on distance to the county border using data on the driving time to county borders and a comprehensive cross section of local sales tax rates i exploit variation in proximity to county borders to identify vertical fiscal competition cities located near county borders react more intensely to their county s tax rate in comparison to towns at the interior an increase in the neighboring county tax rate raises city tax rates in nearby counties

participation in gvcs and co2 emissions abstract this paper attempts to explore the determinants of co2 emissions in the context of international trade while there exist studies that examine the roles of horizontal specialization and inter industry trade transactions little previous research attention has been paid to the roles of vertical specialization and intra industry trade transactions in affecting co2 emissions to fill the knowledge gap this study uses the panel data of 62 countries and regions for the period of 1995 2011 to estimate the effect of participation in global value chains gvcs on per capita co2 emissions major findings include 1 the relationship between participation degrees in gvcs and per capita co2 emissions is found to be inversely u shaped at the aggregate economy level and for most individual industries 2 per capita gdp shows an n shaped relationship with per capita co2 emissions and 3 benign drivers of co2 emissions include r d energy conservation and population control it can be concluded that countries with low gdp or gvc participation degrees are expected to experience worsening co2 emissions in the short or even medium run this trend however can be moderated or even reversed with more r d investments

estimates of the economic returns to schooling from a new sample of twins this paper uses a new survey to contrast the wages of genetically identical twins with different schooling levels multiple measurements of schooling levels were also collected to assess the effect of reporting error on the estimated economic returns to schooling the data indicate that omitted ability variables do not bias the estimated return to schooling upward but that measurement error does bias it downward adjustment for measurement error indicates that an additional year of schooling increases wages by 12 to 16 percent a higher estimate of the economic returns to schooling than has been previously found copyright 1994 by american economic association

trade and the environment a partial synthesis there is an emerging consensus in the environmentalist community opposing free trade while some economists view this as simply another outlet for protectionism recent work has begun to move beyond the rhetoric to probe more deeply into the theoretical and empirical relationships between international trade and environmental quality the purpose of the present paper is twofold we first integrate some of the existing literature by using the simple concepts of general equilibrium pollution supply and demand our survey of the trade and environment literature is more

global warming agreements international trade and energy carbon embodiments an input output approach to the italian case abstract in the kyoto protocol the absence of green house gases ghgs commitments of developing countries non annex i and the more flexible terms of implementation which are allowed to countries shifting toward a market economy transition economies naturally lead to the absence or to less constraining national measures and policies of reduction of the ghgs emissions which in turn may determine a comparative advantage in the production of the highest energy carbon intensive commodities for these countries these arguments are valid also considering the future implementation of the european emission allowance trading scheme eats thus developing countries may become a haven for the production of not environmental friendly commodities in this case the so called pollution haven hypothesis stating that due to freer international trade the comparative advantage may change the economic structure and consequently the trade patterns of the countries linked by trade relationships could occur this would lead to the increase of the transfers of energy and carbon embodied in traded commodities from developing countries and transition economies toward kyoto or eats constrained countries the aim of this paper is to verify if for italy as a kyoto and eats complying country evidence of a change in the trade patterns occurred on the basis of the pollution haven hypothesis does exist and to estimate the magnitude of the under estimation of the carbon actually emitted the carbon leakage the input output model has been used to calculate the intensities of energy consumption and the related green house gases emission for each italian economic sector

graduate education in ecological economics abstract interest in graduate education in ecological economics is increasing however no formal plan of study for a phd in ecological economics has been disseminated the lack of a formal plan is problematic as the field of ecological economics matures interest grows and new programs are being developed this paper attempts to fill a void by creating a program of study addressing the proficiencies a graduate student in ecological economics should have upon completion of his her phd based on the us educational system the plan of study presented in this paper has been developed to make the graduate of an ecological economics program as competitive on the labor market as students awarded traditional economics degrees the plan i describe is created to meet the requirements necessary for a phd in ecological economics further fields of specialization are suggested to complement the core of an ecological economics program to enhance the education process and to give the student with an ecological economics degree a higher level of marketability

teaching new markets old tricks the effects of subsidized investment on low income neighborhoods abstract this paper examines the effects of investment subsidized by the federal government s new markets tax credit nmtc program which provides tax incentives to encourage private investment in low income neighborhoods i identify the impacts of the program by taking advantage of a discontinuity in the rule determining the eligibility of census tracts for nmtc subsidized investment using this discontinuity as a source of quasi experimental variation in commercial development across tracts i find that subsidized investment has modest positive effects on neighborhood conditions in low income communities though spillovers appear to be small and crowd out incomplete the results suggest that some of the observed impacts on neighborhoods are attributable to changes in the composition of residents as opposed to improvements in the welfare of existing residents

revisiting the environmental kuznets curve in a global economy the present study deals with an empirical investigation between co2 emissions energy intensity economic growth and globalization using annual data over the period of 1970 2010 for turkish economy we applied unit root test and cointegration approach in the presence of structural breaks the direction of causality between the variables is investigated by applying the vecm granger causality approach our results confirmed the existence of cointegration between the series the empirical evidence reported that energy intensity and economic growth globalization increase condense co2 emissions the results also validated the presence of environmental kuznets curve ekc the causality analysis shows bidirectional causality between economic growth and co2 emissions this implies that economic growth can be boosted at the cost of environment

differences among oecd countries ghg emissions causes and policy implications this article assesses the reasons for observed differences in greenhouse gas ghg emissions among high income oecd countries nine factors were tested climate population pressure measured as both growth and density economic output per capita technological development industrial structure energy prices environmental governance pollution abatement and control expenditures and environmental pricing based on a series of regression analyses three factors energy prices economic output per capita and environmental governance were identified as the most important factors for explaining differences in oecd per capita ghg emissions combined these three factors explain about 81 of the variation observed in oecd per capita ghg emissions individually energy prices explains about 55 of the variation in per capita ghg emissions while economic output per capita explains about 19 and environmental governance about 7 these findings show that behavioural choices based on existing technologies rather than exogenous factors such as climate determine differences in ghg emissions and therefore policy options to change behaviour such as increasing energy prices and other regulatory changes have the potential to significantly reduce ghg emissions

a time frequency analysis of trade openness and co2 emissions in france abstract the paper explores the comovement between trade openness and carbon dioxide co2 emissions in france over the period 1960 2013 by using the wavelet tool the investigation offers detailed information about this interaction for different sub periods of time and frequencies it also reveals the lead lag nexus between variables under cyclical and anti cyclical shocks the main findings reveal no comovement at high frequency between trade openness and gas emissions confirming the neutral hypothesis on short term the co2 emissions positively drive the trade openness at medium frequency hence on medium term the inexistence of strong environmental rules stimulate the international trade especially the exports obtained based on pollutant capacities curiously the trade openness positively runs the gas emissions at low frequency herein on long term the interaction between trade and co2 emissions is driven by the business cycle