time varying smooth transition autoregressive models nonlinear regime switching behavior and structural change are often perceived as competing alternatives to linearity in this article we study the so called time varying smooth transition autoregressive tv star model which can be used both for describing simultaneous nonlinearity and structural change and for distinguishing between these features two modeling strategies for empirical specification of tv star models are developed monte carlo simulations show that neither of the two strategies dominates the other a specific to general to specific procedure is best suited for obtaining a first impression of the importance of nonlinearity and or structural change for a particular time series a specific to general procedure is most useful in careful specification of a model with nonlinear and or time varying properties an empirical application to a large dataset of u s macroeconomic time series illustrates the relative merits of both modeling strategies

conditional convergence in australia s energy consumption at the sector level abstract we examine the convergence of energy consumption per capita at the sector level in australia over the period 1973 74 to 2013 14 to do so we employ recently developed lm and rals lm unit root tests that accommodate up to two endogenously determined structural breaks we find support for energy consumption per capita convergence for six of seven sectors in australia

energy consumption and gdp in developing countries a cointegrated panel analysis in this paper we re investigate the co movement and the causality relationship between energy consumption and gdp in 18 developing countries using data for the period 1975 to 2001 recently developed tests for the panel unit root heterogeneous panel cointegration and panel based error correction models are employed the empirical results provide clear support of a long run cointegration relationship after allowing for the heterogeneous country effect the long run relationship is estimated using a full modified ols the evidence shows that long run and short run causalities run from energy consumption to gdp but not vice versa this result indicates that energy conservation may harm economic growth in developing countries regardless of being transitory or permanent

what is fractional integration a simple construction that will be referred to as an error duration model is shown to generate fractional integration and long memory an error duration representation also exists for many familiar arma models making error duration an alternative to autoregression for explaining dynamic persistence in economic variables the results lead to a straightforward procedure for simulating fractional integration and establish a connection between fractional integration and common notions of structural change two examples show how the error duration model could account for fractional integration in aggregate employment and in asset price volatility

revisited are shocks to energy consumption permanent or temporary new evidence from a panel suradf approach abstract this paper explores whether the hypothesis of energy consumption stationarity is supported in different regions the stationarity properties indicate that the impact of a reduction in energy consumption or a realignment policy is only temporary and over time the series will revert back to the trend path this paper first applies the panel seemingly unrelated regressions augmented dickey fuller panel suradf test developed by breuer et al breuer j b mcnown r wallace m s 2001 misleading inferences from panel unit root tests with an illustration from purchasing power parity review of international economics 9 3 482 493 which allows us to account for possible cross sectional effects and to identify how many and which members of the panel contain a unit root the main conclusion is that the stationarity of energy consumption will be affected by the differences among the five regions made up of 84 countries during the period 1971 2003 similar conclusions are reached when we analyze country groups based on levels of development moreover the results reveal that conventional panel unit root tests can lead to misleading inferences which are biased towards stationarity even if only one series in the panel is strongly stationary lastly some policy implications emerge from our results

disaggregate energy consumption employment and income in turkey the purpose of this paper is to contribute to literature on energy consumption and economic growth relationship by examining how much of the variance in national income growth can be explained by the growth of different sources of energy consumption and employment in turkey we use the recently developed generalized forecast error variance decomposition technique of koop et al j econom 74 1996 119 and pesaran and shin econ lett 58 1998 17 to determine the information content of the growth rate of energy consumption waste seems to have the largest initial impact followed by oil however over a 3 year horizon lignite appears to explain the largest forecast error variance of gdp the total energy consumption explains 21 of forecast error variance of gdp energy consumption appears to be almost as important as employment in turkey therefore policy makers may be interested in identifying the energy dependencies of economic growth in allocating the energy investment budget

tourism terrorism and political violence in tunisia evidence from markov switching models abstract this study investigates the impact of terrorist attacks and political violence on the number of tourist arrivals and overnight stays in tunisia the dataset employed consists of monthly data that covers the period from january 2000 to september 2016 which includes several political and terrorist attacks in tunisia and the region empirically we investigate the true data generating process dgp of these two proxies of tourism activity by accounting for four statistical properties that characterize these series 1 seasonality 2 unit roots 3 breaks and 4 long memory behavior our empirical findings show strong evidence of stationarity five breaks in the tourist arrival time series and spurious long memory behavior by estimating a 3 state markov switching model consisting of the mean trend and variance we find that the tunisian jasmine revolution and two recent terrorist attacks one at the bardo national museum on march 18 2015 and the other at the tourist resort at port el kantaoui sousse on june 26 2015 played an important role in influencing the tourism activity of the country our empirical findings show also that local shocks have a more important impact than international shocks in influencing tourism activity interestingly we find that the effects of terrorist shocks have a long duration compared to political violence shocks several security marketing and economic policies have been proposed and discussed in the paper

energy consumption and gdp causality relationship in g 7 countries and emerging markets abstract the causality relationship between energy consumption and income is a well studied topic in energy economics this paper studies the time series properties of energy consumption and gdp and reexamines the causality relationship between the two series in the top 10 emerging markets excluding china due to lack of data and g 7 countries we discover bi directional causality in argentina causality running from gdp to energy consumption in italy and korea and from energy consumption to gdp in turkey france germany and japan hence energy conservation may harm economic growth in the last four countries

oil prices inflation and interest rates in a structural cointegrated var model for the g 7 countries sharp increases in the price of oil are generally seen as a major contributor to business cycle asymmetries moreover the very recent highs registered in the world oil market are causing concern about possible slowdowns in the economic performance of the most developed countries in this paper a structural cointegrated var model has been considered for the g 7 countries in order to study the direct effects of oil price shocks on output and prices and the reaction of monetary variables to external shocks our results can be summarized as follows i a stationary money demand as suggested by the classic theory of money can be identified for most countries ii according to the estimated coefficients of the structural part of the model for all countries except japan and u k the null hypothesis of an influence of oil prices on the inflation rate cannot be rejected inflation rate shocks are transmitted to the real economy by increasing interest rates iii impulse response analysis suggests for most countries the existence of an instantaneous temporary effect of oil price innovations on prices iv impulse response functions indicate different monetary policy reactions to inflationary and growth shocks v the simulation exercises directed to estimate the total impact of the 1990 oil price shock indicate that for some countries u s a significant part of the effects of the oil price shock is due to the monetary policy reaction function for other countries canada france and italy however the total impact is offset at least in part by an easing of monetary conditions

uncovering the us term premium an alternative route abstract the estimates of the us term premium crucially depend upon the ex ante decision on whether the short term rate is either an i 0 or an i 1 process in this paper we estimate a fractionally integrated i d model which simultaneously determines both the order of integration of the short term rate and the associated term premium we show that the term premium experienced a sharp increase from essentially zero in mid 2007 to almost 3 in 2009 we also show that unemployment and term premium dynamics exhibit a very significant positive co movement

empirical generalizations about market evolution and stationarity we present empirical generalizations about conditions under which marketing variables evolve or remain stationary we first define evolution statistically and make the case why it is an important concept for increasing our understanding of long run marketing effectiveness we then briefly review ways in which evolution can be tested empirically from readily available data we present a database of over 400 prior analyses and catalog the relative incidence of stationarity versus evolution in market performance and marketing spending we find that evolution is the dominant characteristic for sales and marketing mix spending but that stationarity is the dominant characteristic for market share thus we find strong support for the conjecture that many markets are in a long run equilibrium where the relative position of the players is only temporarily disturbed by their respective marketing activities we assess the impact of a number of covariates on the likelihood of finding stationarity evolution in sales

an analysis of oil production by opec countries persistence breaks and outliers this study examines the time series behaviour of oil production for opec member countries within a fractional integration modelling framework recognizing the potential for structural breaks and outliers the analysis is undertaken using monthly data from january 1973 to october 2008 for 13 opec member countries the results indicate there is mean reverting persistence in oil production with breaks identified in 10 out of the 13 countries examined thus shocks affecting the structure of opec oil production will have persistent effects in the long run for all countries and in some cases the effects are expected to be permanent

evidence of long memory behavior in u s renewable energy consumption this study examines the degrees of time persistence in u s total renewable energy consumption using innovative fractional integration and autoregressive models with monthly data from 1981 1 to 2010 10 the results indicate that renewable energy consumption is better explained in terms of a long memory model that incorporates persistence components and seasonality the degree of integration is above 0 5 but significantly below 1 0 suggesting nonstationarity with mean reverting behavior the presence of long memory behavior persistence in renewable energy consumption suggests that random shocks may very well move renewable energy consumption from pre determined target levels for a period of time

is per capita electricity consumption stationary time series evidence from oecd countries this study examines the stationary properties of per capita electricity consumption in which the endogenously determined break points are incorporated in 23 high income oecd countries by using annual data over 1960 2005 period we utilize lagrange multiplier lm unit root test that endogenously determines structural breaks in level and or trend we find that 21 country series reject the unit root null hypothesis at the 5 significance level except for 2 country series thus our empirical findings provide significant evidence that per capita electricity consumption is stationary in almost all countries considered in the study the stationarity of per capita electricity consumption indicates that it should be possible for the series to forecast future movements in the energy consumption based on the past behaviors of the series important policy implications emerge from our empirical results of the unit root test with multiple structural breaks

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

energy production in brazil empirical facts based on persistence seasonality and breaks abstract this paper investigates the statistical properties of the production of energy in brazil using long range dependence techniques in monthly data from january 2000 to february 2013 two important features of the data are analyzed in particular its degree of persistence and seasonality the results indicate first that seasonality is an essential issue in modeling the persistence in energy production also the persistence itself measured in terms of the differencing parameter is relevant with orders of integration in the series found to be positive though smaller than 1 and thus implying mean reversion a single structural break is also found in two of the series policy implications of the results obtained are also derived

resource curse an analysis of causes experiences and possible ways forward abstract higher prices for oil gas and mineral resources have again raised questions about how exporting countries can counter the challenges of resource curse international experience managing the risks of resource curse has varied summarising the continuing discussion on meeting the challenges of the resource curse this paper addresses four questions what are the positive and negative effects of high oil gas and mineral prices on exporters what have been the experiences with managing natural resource revenues can good institutions ensure that natural resource revenues have a positive impact on development and what is the direction for the way forward we argue that the current emphasis on institutions as a potential solution has largely ignored under what conditions institutions are formed and changed

imperfect competition and the effects of energy price increases on economic activity the authors show that modifying the standard neoclassical growth model by assuming that competition is imperfect makes it easier to explain the size of the declines in output and real wages that follow increases in the price of oil plausibly parameterized models of this type are able to mimic the response of output and real wages in the united states the responses are particularly consistent with a model of implicit collusion where markups depend positively on the ratio of the expected present value of future profits to the current level of output copyright 1996 by ohio state university press

the persistence of marketing effects on sales are marketing efforts able to affect long term trends in sales or other performance measures answering this question is essential for the creation of marketing strategies that deliver a sustainable competitive advantage this paper introduces persistence modeling to derive long term marketing effectiveness from time series observations on sales and marketing expenditures first we use unit root tests to determine whether sales are stable or evolving trending over time if they are evolving we examine how strong this evolution is univariate persistence and to what extent it can be related to marketing activity multivariate persistence an empirical example on sales and media spending for a chain of home improvement stores reveals that some but not all advertising has strong trend setting effects on sales we argue that traditional modeling approaches would not pick up these effects and therefore seriously underestimate the long term effectiveness of advertising the paper concludes with an agenda for future empirical research on long run marketing effectiveness

oil price and inflation abstract an oil price rise would be expected to result in an immediate reduction by about 20 in the standard of living of the oil importing countries and a corresponding increase in that of the oil exporters since the price rises experienced during recent years have not been reflected in wage reductions the result has been high long lasting inflation which this paper shows will increase in the coming years to more than 20 measures taken by the oil importers include energy saving which results in a still lower standard of living if instead the industrialized countries increase production by increasing energy consumption and improving production efficiency the effect of a rise in oil price will be compensated for in a few years

collective action and transnational terrorism this paper applies modern tools of economic analysis to examine the nature of transnational terrorism and associated collective action concerns that arise in the aftermath of september 11 throughout the paper the strategic interaction between rational terrorists and targeted governments are underscored networked terrorists draw on their collective strengths to exploit a maximum advantage over targeted governments inadequate and uncoordinated responses a wide range of issues are explored including governments deterrence races undersupplied pre emption and suicidal attacks myriad substitutions by terrorists limit government anti terrorism policy effectiveness a host of policy responses are evaluated in light of economic analysis and past econometric evidence

long memory and aggregation in macroeconomic time series this paper explores the interaction between long memory and aggregation results are derived which link the possibly fractional orders of integration of the aggregate series with those of the underlying series when the aggregation is either cross sectional or temporal in discrete or continuous time these results provide empirically testable hypotheses that are examined using six u k macroeconomic series a semiparametric method is found to be broadly consistent with the implications of the theory but fully parametric arfima models show considerable variation each series appears to be integrated of an order of between one and one and a half

is energy consumption per capita broken stationary new evidence from regional based panels abstract for the first time a new panel unit root testing procedure developed by 51 carrion i silvestre et al 2005 breaking the panels an application to gdp per capita econometrics journal 8 159 175 is applied to re investigate the stationarity of energy consumption per capita for 7 regional panel sets covering the 1971 2002 period with structural breaks and cross sectional correlations introduced into the model it becomes clear that all regional based panels of energy consumption per capita are stationary the structural breakpoints identify the likely causes of major changes in energy consumption in the past the findings underscore the importance of accounting for exogenous shocks to a series and offer several important implications for policy makers and energy economists

long memory and disaggregated energy consumption evidence from fossils coal and electricity retail in the u s abstract in this paper the long memory properties of disaggregated fossils coal and electricity retail consumption in the u s over the 1989 2009 period are examined the presence of long memory is related to autocorrelation persistence of each series our results show that there is heterogeneity in the order of integration between these types of energy consumption and for the different sectors employed which is affected by the inclusion of a break event the order of integration was generally higher for the case of a break in the intercept than in the slope with the latter being more plausible for all series

long run equilibrium real exchange rates and oil prices abstract using cointegration and causality tests this paper demonstrates that the nonstationary behavior of us dollar real exchange rates over the post bretton woods era is due to the nonstationary behavior of real oil prices

the effects of crude oil shocks on stock market shifts behaviour a regime switching approach abstract in this paper we develop a two regime markov switching egarch model introduced by henry henry o 2009 regime switching in the relationship between equity returns and short term interest rates journal of banking and finance 33 405 414 to examine the relationship between crude oil shocks and stock markets an application to stock markets of uk france and japan over the sample period january 1989 to december 2007 illustrates plausible results we detect two episodes of series behaviour one relative to low mean high variance regime and the other to high mean low variance regime furthermore there is evidence that common recessions coincide with the low mean high variance regime in addition we allow both real stock returns and probability of transitions from one regime to another to depend on the net oil price increase variable the findings show that rises in oil price has a significant role in determining both the volatility of stock returns and the probability of transition across regimes

modeling of industrial energy consumption an introduction and context industrial energy accounts for roughly one third of total global energy consumption and is expected to continue to use a similar share in the foreseeable future however this is one of the hardest end uses to analyze model and forecast the reasons for modeling industrial energy consumption are as varied as the ways in which energy is used in production processes this has led to the application of a broad set of emperical tools from several different disciplines in this article we provide an introduction and context for a compendium or survey of the methods used in this area this special issue of energy economics is designed to provide both newcomers and accomplished researchers with an overview of the current state of development in the are of industrial energy modeling

the interplay between preemptive and defensive counterterrorism measures a two stage game a two stage game depiction of counterterrorism is presented emphasizing the interaction between preemptive and defensive measures taken by two commonly targeted countries the preemptor is apt to be the high cost defender with the greater foreign interests a prime target country may also assume the preemptor role the analysis identifies key factors cost comparisons foreign interests targeting risks and domestic terrorism losses that determine counterterrorism allocations market failures associated with preemptive and defensive measures may be jointly ameliorated by a disadvantaged defender nevertheless the subgame perfect equilibrium will still be suboptimal since externalities are not fully internalized

price of oil and world inflation and recession new evidence shows that the commonly held assumption that the 1973 74 oil price increase directly affected us and world inflation and subsequent recession is consistent with the empirical data an extended lucas varro real income equation applied to the us united kingdom canada france germany italy japan and the netherlands gives mixed results partly because of price control and decontrol programs simulation experiments on the price control variable using us data finds strong effects further studies can be made when consistent international data is available for the 1979 80 period 18 references 4 figures 3 tables dck

a re examination of stationarity of energy consumption evidence from new unit root tests abstract in this paper we re examine the stochastic behaviour of per capita total primary energy consumption across 178 countries around the world for this purpose in addition to conventional unit root tests we apply newly developed tests that allow for nonlinear adjustments and structural breaks in the data generating process the results of the unit root tests show that allowing for structural breaks and nonlinearity result in more frequent rejection of the null hypothesis of unit root suggesting that most of the series under consideration follow a stationary process these findings imply that both energy economists and policy makers must be careful and take account of possible nonlinearities and structural breaks in their analyses of energy consumption in addition the results imply that government interventions into the energy markets in most countries have no effect in the long run although the short run effects of the interventions depend on the size and the direction of interventions

long memory in us disaggregated petroleum consumption evidence from univariate and multivariate lm tests for fractional integration previous studies that have tested for a unit root in aggregate energy consumption have potentially reached misleading conclusions because they fail to allow for the possibility that energy consumption might be fractionally integrated and do not distinguish between different types of energy consumption this study tests for long memory in disaggregated petroleum consumption in the united states using univariate and multivariate lagrange multiplier lm tests for fractional integration the results point strongly to the need to distinguish between different forms of energy consumption and allow for a generalization of the i 0 i 1 dichotomy when considering the order of integration of energy consumption allowing for short run dynamics the univariate test suggests that less than 50 of the series are fractionally integrated consistent with expectations the non stationary series are found to have the highest mean and standard deviation the multivariate test suggests that petroleum consumption in the commercial and industrial sectors is clearly fractionally integrated when allowing for short run dynamics and as such exhibits persistent effects while petroleum consumption in the residential sector is a stationary process

seasonality and equilibrium business cycle theories abstract we consider a dynamic stochastic equilibrium business cycle model which is augmented to reflect seasonal shifts in preferences technology and government purchases our estimated parameterization implies implausibly large seasonal variation in the state of technology rising at an annual rate of 24 in the fourth quarter and falling at an annual rate of 28 in the first quarter furthermore our findings indicate that variation in the state of technology of this magnitude is required if the model is to explain the main features of the seasonal cycle

the seasonal cycle and the business cycle almost all recent research on macroeconomic fluctuations has worked with seasonally adjusted or annual data this paper takes a different approach by treating seasonal fluctuations as worthy of study in their own right our results show that seasonal fluctuations are an important source of variation in all macroeconomic quantity variables but are small or entirely absent in both real and nominal price variables the timing of the seasonal fluctuations consists of increases in the second and fourth quarters a large decrease in the first quarter and a mild decrease in the third quarter the paper demonstrates that with respect to each of several major stylized facts about business cycles the seasonal cycle displays the same characteristics as the business cycle in some cases even more dramatically than the business cycle that is we find that at seasonal frequencies as well as at business cycle frequencies output movements across broadly defined sectors move together the timing of production and the

are shocks to energy consumption permanent or temporary evidence from 182 countries this article applies univariate and panel data unit root tests to annual panel data for 182 countries over the period 1979 2000 to examine the stationarity properties of per capita energy consumption the univariate unit root test can only reject the unit root null for 56 countries or 31 of the sample at the 10 level or better however univariate unit root tests have low power with short spans of data and therefore failure to reject the unit root null should be treated with caution when we apply the panel data unit root test we find overwhelming evidence that energy consumption is stationary we discuss the policy implications of these findings and offer suggestions for future research

where does economic development really come from constitutional rule among the contemporary sioux and apache governments are public goods that provide the organizational and legal structures by which societies arrange and enforce rules of the game that enable divisions of labor exchange and collective action we argue that shared pre constitutional cultural norms of political legitimacy among rational individuals provide the foundations of effective self government the performance of contemporary apache and sioux economies on indian reservations governed by common federally imposed constitutions is examined to test the framework unlike the impoverished sioux the relatively successful apaches are found to have pre existing political norms that serendipidously match the structure of their formal constitution

are shocks to natural gas consumption temporary or permanent evidence from a panel of u s states abstract this short communication examines whether or not u s natural gas consumption follows a stationary process unlike previous research that has focused on regional country or industrial sector based panel studies this study undertakes a sub national investigation of natural gas consumption for the 50 u s states levin et al 2002 im et al 2003 maddala and wu 1999 and hadri 2000 panel unit root and stationarity tests reveal that natural gas consumption is integrated of order one however once allowance is made for endogenously determined structural breaks the carrion i silvestre et al 2005 im et al 2005 and westerlund 2005 panel unit root and stationarity tests indicate that natural gas consumption is integrated of order zero discussion of the structural breaks is briefly surveyed in relation to the natural gas industry s response to legislative actions

institutional assets for negotiating the terms of development indigenous collective action and oil in ecuador and alaska abstract case studies of two oil fields with superficial similarities same company same time period similar anticipated scale of production similar remote field design similarly situated in indigenous territory show radically different benefits for the adjacent indigenous communities this analysis finds that the major differences driving these results are institutional primarily differences in property rights regimes and secondarily in local institutional development in the alaska context the community was able to negotiate a direct share of the royalties while the ecuadorian community was entitled only to an indirect revenue share from the national government both communities also negotiated for various community assistance projects from the company the ecuadorian communities likely would have succeeded in instituting their sustainable development proposal if they had stronger local organization comparative analysis of the factors for local institutional development fit well in the conceptual

are fluctuations in energy consumption per capita transitory evidence from a panel of pacific island countries this study applies the panel stationarity test developed by carrion i silvestre et al 2005 breaking the panels an application to gdp per capita econometrics journal 8 159 175 to examine the stationarity of energy consumption per capita for a panel of 13 pacific island countries over the period 1980 2005 this test has the advantage that it allows for multiple structural breaks at unknown dates that can differ across countries and can account for all forms of cross sectional correlation between countries the conclusion from the study is that energy consumption per capita in approximately 60 of countries is stationary and that energy consumption per capita for the panel as a whole is stationary the study offers several suggestions for modelling energy consumption and policy making in the pacific islands

income and co2 emissions evidence from panel unit root and cointegration tests abstract this paper re investigates the stationarity properties of per capita carbon dioxide co 2 emissions and real gross domestic product gdp per capita for 109 countries within seven regional panel sets covering 1971 2003 we apply the recent unit root test of the panel seemingly unrelated regressions augmented dickey fuller suradf test developed by breuer et al 2001 misleading inferences from panel unit root tests with an illustration from purchasing power parity review of international economics 9 482 493 2002 series specific unit root tests with panel data oxford bulletin of economics and statistics 64 527 546 the panel suradf test accounts for the presence of cross country correlations in the data and the parameters in the panel specification vary across countries more importantly this test allows us to identify how many and which members of the panel contain a unit root overall our empirical results illustrate that real gdp and co 2 emissions in these countries are a mixture of i 0 and i 1 processes and that the traditional panel unit root tests could lead to misleading inferences as well as the conduct of cointegration analysis being perhaps inappropriate the results of our analysis carry critical implications for the modeling of co 2 emissions and gdp because of the different orders of integration for the two variables

collective versus unilateral responses to terrorism global terrorism presents collective action issues for targeted nations proactive measures e g preemptive strikes against terrorists create external benefits for all at risk nations in contrast defensive actions deflect attacks to softer targets thereby giving rise to external benefits to protected foreign residents and external costs to venues abroad coordinated antiterrorism measures are particularly difficult to achieve when many nations must participate and nonparticipants can undo the efforts of others thus freezing terrorists assets or abiding by a no negotiation pledge pose difficult collective action problems these same concerns do not plague decisive action against domestic terrorism

the peer effect in counterterrorist policies existing accounts posit that defensively oriented counterterrorist policies create negative externalities and result in regulatory competition that induces governments to increasingly tighten their policies we argue that rather than causing an unconditional global race to the top spatial dependence in counterterrorist policies is limited to within groups of countries exposed to a similar level of threat from international terrorism countries strongly differ in their propensity to become the target of an international terror attack governments can safely ignore counterterrorist policies enacted by countries outside their peer group but they must pay attention to measures undertaken by their peers we test several predictions derived from our theory in an empirical analysis of counterterrorist regulations in twenty western developed country democracies over the period 2001 to 2008

politics and the suboptimal provision of counterterror i present a model of interactions between voters a government and a terrorist organization the model focuses on a previously unexplored conceptualization of counterterrorism as divided into tactic specific observable and general unobservable tactics when there is divergence between voters and government preferences strategic substitution among different modes of attack by terrorists and agency problems between the voters and government create a situation in which the politically optimal counterterrorism strategy pursued by the government in response to electoral and institutional incentives is quite different from the security maximizing counterterrorism strategy in particular in response to electoral pressure the government allocates resources to observable counterterror in excess of the social optimum this problem is particularly severe when governments put great weight on rent seeking or care less about counterterror than do voters and when terrorists have a large set of tactics from which to choose voters can decrease the magnitude of the agency problem by increasing the benefits of reelection by for example slackening requirements for nonsecurity related public goods i have received valuable comments and advice from bruce bueno de mesquita randy calvert martin cripps james fearon amanda friedenberg robert powell matthew stephenson and barbara walter i thank the weidenbaum center on the economy government and public policy at washington university for financial support

an evaluation of interpol s cooperative based counterterrorism linkages abstractthis paper evaluates the payback from efforts of the international criminal police organization interpol to coordinate proactive counterterrorism measures by its member countries to arrest terrorists and weaken their ability to conduct operations we use interpol arrest data and data on utilization of interpol resources by member countries to compute counterfactual benefit measurements which when matched with costs yield benefit cost ratios the average of these ratios is approximately 200 over 12 alternative counterfactual scenarios so each dollar of interpol counterterrorism spending returns approximately 200 this paper also puts forward a perspective on benefits derived from interpol s stolen and lost travel document database interpol provides an inexpensive proactive measure against transnational terrorism that unlike military operations does not result in backlash attacks

structural break unit root and the causality between energy consumption and gdp in turkey abstract this paper tries to investigate a series of unit root and causality tests to detect causality between the gdp and energy consumption in turkey employing hsiao s version of granger causality method for the 1950 2000 period the conventional unit root tests indicate the series are i 1 whereas the endogenous break unit root tests proposed by zivot and andrews zivot e and andrews d w k 1992 further evidence on the great crash the oil price shock and the unit root hypothesis journal of business and economics statistics 10 251 270 and perron perron p 1997 further evidence on breaking trend functions in macroeconomic variables journal of econometrics 80 355 385 reveal that the series are trend stationary with a structural break therefore it is inappropriate to take the first difference of the data to achieve stationarity the main conclusion of this study is that there is no evidence of causality between energy consumption and gdp in turkey based on the detrended data

the asymmetric effects of oil price and monetary policy shocks a nonlinear var approach in this paper we investigate the asymmetric effects of oil price shocks and monetary policy on macroeconomic activity using monthly data for the united states over the period from 1983 1 to 2008 12 in doing so we use a logistic smooth transition vector autoregression var as detailed in terasvirta and anderson 1992 and weise 1999 and make a distinction between two oil price volatility regimes high and low using the realized oil price volatility as a switching variable we isolate the effects of oil price and monetary policy shocks and their asymmetry on output growth and following koop et al 1996 and weise 1999 we employ simulation methods to calculate generalized impulse response functions girfs to trace the effects of independent shocks on the conditional means of the variables our results suggest that in addition to the price of oil oil price volatility has an impact on macroeconomic activity and that monetary policy is not only reinforcing the effects of oil price shocks on output it is also contributing to the asymmetric response of output to oil price shocks

global terrorism deterrence versus pre emption this paper analyses two anti terrorism policies when a targeted nation s people and property are in jeopardy at home and abroad a country s deterrence decision involves both external benefits and costs as the terrorist threat is deflected while its preemption decision typically gives external benefits when the threat is reduced for all potential targets with damages limited to home interests a country will overdeter while for globalized terror a country will underdeter pre emption is usually undersupplied leader follower behaviour is apt to lessen inefficiency for deterrence but worsen inefficiency for pre emption compared with simultaneous choice equilibrium allocations targeted nations can never achieve the proper counterterrorism policy through leadership ce memoire analyse deux politiques anti terrorisme quand la population et la propriete des nations visees sont en danger tant au pays qu a l etranger la decision de dissuasion d un pays entraine des avantages et des couts externes a proportion que la menace terroriste est evitee alors que la decision de preemption produit typiquement des avantages externes quand la menace est reduite pour toutes les cibles potentielles dans le cas de dommages limites aux cibles dans le pays un pays va etre portea sur dissuader alors que dans le cas de terreur globalisee un pays va etre portea sous dissuader la preemption est generalement sous offerte le comportement leader suiveur est susceptible de reduire l inefficacite de la dissuasion mais d empirer l inefficacite de la preemption par rapport a ce qui se passe quand les choix sont simultanes les nations visees ne peuvent jamais en arriver a la politique d anti terrorisme appropriee par la voie du leadership

the employment and wage effects of oil price changes a sectoral analysis in this paper we use micro panel data to examine the effects of oil price changes on employment and real wages at the aggregate and industry levels we also measure differences in the employment and wage responses for workers differentiated on the basis of skill level we find that oil price increases result in a substantial decline in real wages for all workers but raise the relative wage of skilled workers the use of panel data econometric techniques to control for unobserved heterogeneity is essential to uncover this result which is completely hidden in ols estimates while the short run effect of an oil price increase on aggregate employment is negative the long run effect is in fact positive we find that changes in oil prices induce changes in employment shares and relative wages across industries however we find little evidence that oil price changes cause labor to consistently flow into those sectors with relative wage increases copyright 1996 by mit press

a literature survey on energy growth nexus abstract this paper provides a survey of the recent progress in the literature of energy consumption economic growth and electricity consumption economic growth causality nexus the survey highlights that most empirical studies focus on either testing the role of energy electricity in stimulating economic growth or examining the direction of causality between these two variables although the positive role of energy on growth has become a stylized fact there are some methodological reservations about the results from these empirical studies a general observation from these studies is that the literature produced conflicting results and there is no consensus neither on the existence nor on the direction of causality between energy consumption electricity consumption and economic growth as a policy implication to avoid from conflicting and unreliable results the authors may use the autoregressive distributed lags bounds test two regime threshold co integration models panel data approach and multivariate models including new variables such as real gross fixed capital formation labor force carbon dioxide emissions population exchange rates interest rates etc thus the authors should focus more on the new approaches and perspectives rather than by employing usual methods based on a set of common variables for different countries and different intervals of time

structural breaks and petroleum consumption in us states are shocks transitory or permanent abstract this short communication extends the literature on the stationarity of energy consumption to the case of us petroleum consumption at the state level from 1960 to 2007 the results of lee and strazicich 2003 and narayan and popp forthcoming unit root tests with endogenously determined structural breaks in the intercept and slope of the trend function reveal break dates that correspond to the two opec oil shocks of the 1970s along with the double dip recession of 1980 1982 the null hypothesis of a unit root in petroleum consumption is rejected for a majority of states these results highlight the importance of recognizing the heterogeneity in the behavior of petroleum consumption across states in the formulation of energy conservation and demand management policies