poverty effects of food price escalation the importance of substitution effects in mexican households abstract recent food price increases reportedly caused significant numbers of households to fall into poverty particularly in the developing world most research into the welfare effects of these food price changes assumes constant demand or approximates second order substitution effects poverty forecasts with these assumptions may overestimate or underestimate the effect of food price increases in a nation where most households consume diverse food baskets we account for full substitution by calculating a theoretically consistent food demand system accounting for household responses to food price changes by decreasing some food purchases and increasing other food purchases we use mexican data to confirm the mitigation of adverse welfare effects from food price increases after accounting for country specific dietary preferences in modeling demand in comparison to previous literature our welfare measures predict theoretically consistent numbers of mexican households entering poverty due to recent food price changes

the income elasticity of non point source air pollutants revisiting the environmental kuznets curve abstract this paper examines the income pollution relationship for three non point source pollutants in 1990 ambient concentrations reported at monitors throughout the us are regressed on median household income and other socio economic variables for the census tracts in which the monitors were located contrary to earlier studies a u shaped relationship is obtained

the financial crisis and the geography of wealth transfers abstract this paper studies the geography of wealth transfers between 2007q4 and 2008q4 at the height of the global financial crisis we construct valuation changes on bilateral external positions in equity direct investment and portfolio debt to measure who benefited and who lost on their external exposure we find a very diverse set of fortunes governed by the structure of countries external portfolios in particular we are able to relate the gains and losses on debt portfolios to the country s exposure to abs abcp conduits and the extent of dollar shortage

substitution possibility between unpriced pulp and wastepaper in the u s paper and paperboard industry a greater use of recycled wastepaper would preserve virgin forests as well as reducing the amount of wastepaper going to landfills these environmental goals depend critically on the elasticity of substitution between pulp and wastepaper in producing paper and paperboard since most of the pulp consumed by u s paper mills and paperboard mills is transferred internally from vertically integrated pulp mills the price data on pulp is not available this paper constructs an econometric model which enables us to estimate the substitution possibility between unpriced pulp and wastepaper in the u s paper and paperboard industry empirical results show that the elasticity of substitution between unpriced pulp and wastepaper is positive but not statistically significant

quality quantity and nutritional impacts of rice price changes in vietnam summary asian governments intervene in the world rice market to protect domestic consumers whether consumers are nutritionally vulnerable depends on the elasticity of calories with respect to rice prices common demand models applied to household survey and market price data ignore quality substitution and force all adjustment onto the quantity calorie margin this paper uses data from vietnam on market prices food quantity and quality a 10 increase in the relative price of rice reduces household calorie consumption by less than 2 but this elasticity would be wrongly estimated to be more than twice as large if quality substitution is ignored

resource and waste taxation in the theory of the firm with recycling activities the management of solid waste has become an urgent problem in nations with a great population density accordingly waste reduction through source reduction and recycling has become increasingly important our purpose is to show how prevention recycling and disposal of waste could be part of a theory of the firm we first derive efficient production functions from production processes with waste as a by product waste obtained as new scrap can partially be recycled by using additional inputs in order to cut back the purchase of virgin material waste not completely recyclable will leave the firm as disposal which also entails cost to the firm we use the dual cost function approach to develop a theory of the firm under solid residual management since the producer does not bear the full cost of disposal there will be a bias toward virgin materials and away from recycling the goal of the government is to stimulate the firms to recycle with respect to the preservation of exhaustible resources an incentive to recycle is a tax on resources or on waste in order to determine the tax levels the government maximizes welfare subject to the dynamic constraint for decumulation of land fill for waste deposits this gives the user cost and its time profile for taxing waste disposal or virgin material in a comparative statics analysis we compare the effect of taxes on waste vs virgin material on effort to produce in a resource saving manner on the quantity of recycled material on output and on the reduction of waste since the impact of environmental regulation on employment is important our model detects seven effects on labor demand as part of resource conservation policy we finally carry out a comparative statics analysis of waste intensive firms operating in different market structures of interest is the impact of a resource or waste taxation on market volume on the number of firms on resource saving effort and on profit

household production and environmental kuznets curves examining the desirability and feasibility of substitution this paper provides a theoretical explanation for the widely debatedempirical finding of environmental kuznets curves i e u shaped relationships between per capita income and indicators of environmentalquality we present a household production model in which the degradationof environmental quality is a by product of household activities householdscan not directly purchase environmental quality but can reduce degradation by substituting more expensive cleaner inputs to production for less costlydirty inputs if environmental quality is a normal good one expectssubstitution towards the less polluting inputs so that increases in incomewill increase the quality of the environment it is shown that this onlyholds for middle income households poorer households spend all income on dirty inputs when they buy more as income rises the pollution also rises they do not want to substitute as this would reduce consumption ofnon environmental services for environmental amenities that are alreadyabundant thus as income rises from low to middle levels a u shape can result yet an n shape might eventually result as richer households spend all income on clean inputs further substitution possibilities are exhausted thus as income rises again pollution rises and environmental quality falls

partial static equilibrium model of newsprint recycling estimation of the demand for old newspapers as an input to us newsprint production reveals that demand is highly price inelastic in both the short and long run this implies that separation and collection programmes which lower prices in secondary markets will not effectively stimulate recycled newsprint production the results also indicate that policies to raise the price of woodpulp will have little impact a slightly more effectivbe recycling policy may be tax preferences aimed at encouraging investment in newsprint capacity the major finding is that growth in output creates an opportunity for greater old newspaper use thus the most effective recycling policy will be one that promotes us newsprint production

dynamic nonpoint source pollution control policy ambient transfers and uncertainty when a regulator cannot observe or infer individual emissions corrective policy must rely on ambient pollution data assuming this kind of environment we study a class of dierential games of pollution control with prot functions that are polynomial in the global pollution stock given an open loop emissions strategy satisfying mild regularity conditions an ambient transfer scheme is exhibited that induces it in markov perfect equilibrium mpe proposed transfers are a polynomial function of the dierence between actual and desired pollution levels moreover they are designed so that in mpe no tax or subsidy is ever levied their applicability under stochastic pollution dynamics is studied for a symmetric game of polluting oligopolists with linear demand we discuss a quadratic scheme that induces agents to adopt markovian emissions strategies that are stationary and linearly decreasing in total pollution total expected ambient transfers are non positive and their magnitude is linearly increasing in physical volatility the size of the economy and the absolute value of the slope of the inverse demand function however if the regulator is interested in inducing a constant emissions strategy then in expectation transfers vanish the total expected ambient transfer is compared to its point source equivalent

external balances trade and financial conditions abstract i present a new model for the u s external position that accounts for the accumulation of international debt over the past 60 years the model is based on the present value restriction that links a country s external position to future trade flows and financial conditions in the absence of arbitrage opportunities and ponzi schemes it features the role played by the stochastic discount factor the trade and valuation adjustment channels and provides a decomposition of the u s external position into secular and cyclical components the model shows that shocks operating via the valuation channel are the dominant drivers of cyclical dynamics accounting for approximately 80 of the variance over the 60 year sample this channel works primarily via capital gains and losses on u s foreign assets and is closely tied to the international value of the u s dollar in contrast there is no evidence that valuation channel adjustments contribute to the secular dynamics but differences between the average returns on foreign assets and liabilities raise the steady state debt to gdp ratio from approximately 12 to 15 the long term deterioration in the u s position represents a move towards the steady state before the early 1990s and a move away from the steady state thereafter i quantify the expected improvement in future u s trade balances needed to justify this as a sustainable path and show that they are very different from its actual behavior during the last 60 years i also study the behavior of the u s position during the 2007 2008 financial crisis

the theory of domestic content protection and content preference this paper investigates the resource reallocation effected by content protection and content preference schemes under alternative assumptions regarding the definition of domestic content the number of intermediate goods and the market structure of the domestic intermediate good industry content protection is shown to be equivalent to a combination of more familiar commercial policies however the extent of application of these policies is determined endogenously by parameters of the production functions for intermediate and final goods a number of anomalous and undesirable outcomes that may result from content protection and content preference are discussed

breaking free of the triple coincidence in international finance the traditional approach to international finance is to view capital flows as the financial counterpart to savings and investment decisions assuming further that the gdp boundary defines both the decision making unit and the currency area this triple coincidence of gdp area decision making unit and currency area is an elegant simplification but misleads when financial flows are important in their own right first the neglect of gross flows when only net flows are considered can lead to misdiagnoses of financial vulnerability second inattention to the effects of international currencies may lead to erroneous conclusions on exchange rate adjustment third sectoral differences between corporate and official sector positions can distort welfare conclusions on the consequences of currency depreciation as macroeconomic risks may be underestimated this paper illustrates the pitfalls of the triple coincidence through a series of examples from the global financial system in recent years and examines alternative analytical frameworks based on balance sheets as the unit of analysis

indicators for sustainable energy development a multivariate cointegration and causality analysis from tunisian road transport sector this paper studies causal mechanism between indicators for sustainable energy development related to energy consumption from tunisian road transport sector the investigation is made using the johansen cointegration technique and the environmental kuznets curve ekc approach it examines the nexus between transport value added road transport related energy consumption road infrastructure fuel price and co2 emissions from tunisian transport sector during the period of 1980 2010 empirical results show that road transport related energy consumption transport value added transport co2 emissions and road infrastructure are mutually causal in the long run these results do not support the hypothesis of neutrality between energy and income for the tunisian road transport sector also there is a unidirectional causality running from fuel price to road transport related energy consumption with no feedback in both the short and long runs the fuel price and the road infrastructure are significant in the causal chain though the estimated long run cointegrated equation we conclude that there is an inverse n shaped relation between transport value added and transport co2 emissions with income turning point respectively equal to 75 and 579 constant 2000 tnd prices therefore our empirical findings refute the hypothesis of an inverted u shaped ekc for transport co2 emissions in tunisia the findings of this study have a number of policy implications economic growth environmental degradation energy and transportation policies should be recognized in order to improve the energy efficiency in transport sector all measures that should reduce petroleum consumption and greenhouse gas emissions without affecting economic growth may be undertaken the policymakers in tunisia should plan urban transport relocate production units improve fuel efficient vehicles and reinforce legislation on controlling emissions in order to copying with policies based on low carbon development and climate resilient strategies

a household level environmental kuznets curve some recent evidence on transport emissions and income this paper uses detailed survey data to show no evidence of an environmental kuznets curve ekc for household transport emissions the evidence shows that richer households still do not choose to internalize the social cost of polluting by vehicle emissions

global warming and energy demand list of tables list of figures list of contributors preface 1 global warming and energy elasticities terry barker paul ekins and nick johnstonepart 1 estimating long term energy elasticities 2 alternative approaches to estimating long run energy demand elasticities an application to asian developing countries ron smith and m hashem pesaran 3 a survey of international energy elasticities neil manning and jago atkinson 4 long run demand elasticities for gasoline thomas sterner and mikael franzen 5 responses of energy demand in uk manufacturing to the energy price increases of 1973 and 1979 80 alan ingham 6 elasticities for oecd aggregate final energy demand lakis vouyoukas 7 modelling uk energy demand derek hodgson and keith millerpart ii energy the economy and greenhouse gas abatement 8 endogenous technological progress in fossil fuel demand laurence boone stephen hall david kemball cook and clare smith 9 uk energy price elasticities and their implications for long term co2 abatement terry barker 10 price elasticity and market structure overcoming obstacles to ensure energy efficiency tim jackson 11 rethinking the use of energy elasticities stefan p schleicher 12 revisiting the costs of co2 abatement paul ekins 13 asymmetrical price elasticities of energy demand michael grubb14 conclusions terry barker paul ekins and nick johnstone bibliography index

credit constraints and the international propagation of us financial shocks abstract this paper investigates whether credit constraints in the us economy amplify the international propagation of us financial shocks we model the dynamics of the us economy jointly with global macroeconomic and financial variables using a threshold vector autoregression this model captures regime specific dynamics conditional on the severity of credit constraints in the us economy we identify three main episodes of tight credit in us financial history over the past thirty years these occur in the late 1980s in the early 2000s and during the 2007 09 financial crisis we find that us financial shocks are associated with a significant contraction in global economic activity in times of tight credit by contrast there is little impact of us financial shocks on the global economy in normal times this asymmetry highlights an international dimension of the us financial accelerator mechanism

optimizing environmental product life cycles in this paper we propose a methodology based on materials accounting and operational research techniques to assess different industry configurations according to their life cycle environmental impacts rather than evaluating a specific technology our methodology searches for the feasible configuration with the minimum impact this approach allows us to address some basic policy relevant questions regarding technology choice investment priorities industrial structures and international trade patterns

an economic analysis of household waste management abstract this paper provides a comprehensive model of household waste management policy incorporating the possibility of waste reduction effort by the firm and the household and of illegal waste disposal by the household when household waste reduction effort is insignificant the first best optimum can be achieved using various combinations of environmental tax on the firm and waste collection charge on the household however when household waste reduction effort is significant the first best optimum is not achievable and explicit monitoring of illegal waste disposal is needed rendering a simple pigouvian tax sub optimal this paper solves for the second best optimal policy and provides some comparative statics of the optimal policy

income inequality and the environment aggregation bias in environmental kuznets curves abstract the environmental kuznets curve assumes an inverted u shaped relation between environmental damage and per capita income recently it has been argued in the literature that in addition to income levels the inequality in the distribution of power and income is positively related to environmental degradation we provide an additional argument based on simple aggregation for including a measure of income dispersion in empirical analyses when the relationship between environmental damage and household income is concave e g resembles an environmental kuznets curve then income inequality is negatively related to total environmental damage results from an empirical analysis of cross national variation indicate that the aggregation effect can run counter to and outweigh the political economy effect for some environmental indicators

quality quantity and spatial variation of price this paper develops and implements a method for estimating price elasticities of demand using cross sectional household survey data geographically clustered households report unit values which when corrected for quality effects and for measurement error indicate the underlying spatial variation in prices and can be matched to variation in demand patterns a simple model of quality choice is proposed while the correction for measurement error exploits the clustered design of such surveys data from a 1979 household survey from the ivory coast are used to estimate price elasticities for beef meat fish cereals and starches copyright 1988 by american economic association

complementing empirical evidence on global recycling and trade of waste paper this comment provides a critical analysis of van beukering and bouman s world development 29 2001 1717 article on global paper recycling and trade we first question their notion that developin

strategic use of recycled content standards under international duopoly abstract we examine the strategic use of recycled content standards rcss under international duopoly rcss require firms supplying the domestic market to use a certain proportion of recycled materials as inputs we demonstrate that when there is no trade in recycled materials two identical countries both set strategically stricter or laxer rcss however when there is trade in recycled materials it may be the case that one country sets a stricter rcs while the other sets a laxer rcs when a world supply constraint on recycled materials is not binding the main source of the asymmetric distortion in rcss is a demand effect for recycled materials

a post consumer waste management model for determining optimal levels of recycling and landfilling the present study examines the optimal recycling rate for municipal solid waste first an optimal control model is developed to account for the physical costs of recycling the social costs of landfilling and consumers environmental preferences second an optimal solution is simulated using waste disposal data from the helsinki region in finland the benefits from recycling are included in the simulation using the results of a recent contingent valuation study the results of the present research suggest that mandates for achieving 50 recycling in municipalities are not far fetched and are both economically and environmentally justified

understanding the impact of high food prices in latin america since the late 1980s almost all latin american countries have adopted a series of far reaching economic reforms especially trade financial and capital account liberalization increased economic openness has gone hand in hand with large financial inflows particularly in the first half of the 1990s and has brought new sources of economic growth as a result economies grew inflation declined and there was a big surge in foreign cap ital inflows although overall growth slowed after 1995 the region has expe rienced strong growth in the past five years the best sustained performance since the 1970s with the exception of a handful of countries this economic growth has been accompanied by relatively modest inflation despite these positive results virtually all latin american countries share similar problems uneven economic growth unacceptably high poverty and malnutrition rates and lagging agricultural growth more than 60 percent of the region s poor live in rural areas where slow economic growth unequal distribution of assets inadequate public investment and public services and vulnerability to natural and economic shocks are major policy issues the 2007 08 food price crisis exacerbated these problems prior to the cri sis the region was considered relatively stable and capable of absorbing exter nal shocks thanks to its higher foreign exchange liquidity decreased public sector and external borrowing needs exchange rate flexibility lower exposure to currency interest rate and rollover risks in public sector debt portfolios and improved access to local currency loans nevertheless the food price cri sis severely affected most of the latin american countries in terms of inflation especially food inflation

modeling the supply of wastepaper abstract utilizing a price expectations model of wastepaper supplies edwards j environ econ manag 6 332 334 1979 claims to be able to explain certain anomalies in earlier empirical work while reaffirming the view that wastepaper supply is generally price inelastic this paper presents evidence to show that the price expectations model does not offer an adequate explanation of the state of affairs in the u k wastepaper market the low price elasticity of supply findings are however confirmed

empirical evidence on recycling and trade of paper and lead in developed and developing countries empirical evidence on recycling at a global scale is scant often data on recycling are provided on national levels only the few obtainable cross country studies on recycling are mostly focussed on one particular material or region therefore it is difficult to draw general conclusions on recycling in developed and developing countries an aggregated overview of trade and recycling in both regions was presented in chapter 1 it was recognised that trade in secondary materials from developed to developing countries has increased significantly in the last three decades this typical trade pattern is a strong indication for specialisation in the recycling sector of both regions

exhaustible resources and secondary materials a macroeconomic analysis abstract in this paper we have developed an endogenous growth model to deal with exhaustible resources and secondary materials together under the assumptions that these two inputs are or are not technologically perfect substitutes of each other in order to compare the results obtained under both hypotheses we highlight the implication of these two assumptions on the rate of growth of total output and upon the flow of exhaustible resources extracted there are also some other interesting findings related to the spill over on welfare of the waste recycling process and the dynamics of shadow prices of both inputs considered finally some implications on hotelling s rule also emerge in our analytical framework

an econometric analysis of global waste paper recovery and utilization the main purpose of this paper is to provide aneconometric analysis of the most importantdeterminants of inter country differences inwaste paper recovery and utilization rates byemploying pooled t

crandall gruenspecht keeler and lave s regulating the automobile roger smith gm s chairman called automobiles the newest regulated industry he was referring not to the capturable ministrations of a single agency but rather to the cumulative effects of disparate federal regulatory initiatives over the 1960s and 1970s although some federal initiatives have helped the industry the chrysler financial bailout and restrictions on japanese imports it is easy to be sympathetic to the industry view regulation of auto emissions and safety has had dramatic effects on automobile design although they have rarely been binding the corporate average fuel economy cafe regulations threatened to lower automobile manufacturers profitability during any period with cheap fuel and another attempted fuel saver the federal requirement of 55 mile per hour speed limits has lowered the value of automobiles in use over the period in which these regulations were put into place the domestic industry has seen its demand shifting rapidly back and forth between large and small cars and its overall market share declining as imports rose the regulations by contributing to the uncertainty and uncontrollability of the period seemed to detroit ill timed at best and costly and without benefits at worst in regulating the automobile crandall gruenspecht keeler and lave attempt a definitive treatment of a subset of these new federal regulations they focus on what might be called the auto design regulations emissions control cafe and safety standards 1 an implicit conclusion of the book is that the regulatory problem is important at the peak compliance costs for all three types amounted to more than 10 of the price of a new car see figure 2 2 p 17 the explicit conclusions that current or planned standards in all three areas are not cost beneficial and that the regulations have been poorly thought out and inefficiently implemented are an indictment of the regulatory record the approach throughout is classical the role of government regulation is to pursue the public interest while the role of scholars of regulation is to assess whether that goal is achieved not why it is being missed the conclusions the approach and the topics considered might suggest that this is an autumnal book a great deal has previously been written on these topics some controversy remains however and the book opens some interesting new ground this review will first take up the substantive areas of emissions fuel economy and safety and then turn to the book s general points about the process of regulation

decoupling waste generation from economic growth a cge analysis of the swedish case abstract over the past decades we have seen the quantities of solid waste increase in close relation to economic growth to tackle this problem of continuing waste growth the eu has on its agenda that waste generation should decouple from economic growth within the eu in the future sweden also has stated a target of non increasing future waste quantities the strength of the policy measures needed to attain this target is here illustrated by comparing the waste intensity outcomes in a decoupling scenario and a baseline scenario of the swedish economy 2006 2030 a computable general equilibrium cge model is used for linking waste generation to firms material input firms production and households consumption when projecting future quantities of hazardous and non hazardous waste in sweden we show that to offset the effect of economic growth on waste generation in the decoupling scenario the intensities of material related wastes must decrease at a yearly rate that is about twice the historically estimated reduction rate used in the baseline scenario the reduction in the intensities of waste related to firms production and households consumption must also be substantial compared to historical estimates

the distributional impacts of indonesia s financial crisis on household welfare analyzing the distributional impacts of economic crises is an ever more pressing need if policymakers are to intervene to help those most adversely affected they need to identify those who have been hurt most and estimate the magnitude of the harm they have suffered they must also respond in a timely manner this article develops a simple methodology for measuring these effects and applies it to analyze the impact of the indonesian economic crisis on household welfare using only pre crisis household information it estimates the compensating variation for indonesian households following the 1997 asian currency crisis and then explores the results with flexible nonparametric methods it finds that virtually every household was severely affected although the urban poor fared the worst the ability of poor rural households to produce food mitigated the worst consequences of the high inflation the distributional consequences are the same whether or not households are permitted to substitute toward relat

toward a theory of international currency we use the framework of random matching games and develop a two country model of the world economy in which two national currencies compete and may be circulated as media of exchange there are multiple equilibria which differ in the areas of circulation of the two currencies in one equilibrium the two national currencies are circulated only locally in another one currency is circulated as an international currency there is also an equilibrium in which both currencies are accepted internationally we also find an equilibrium in which the two currencies are directly exchanged we first characterize the existence conditions of these equilibria in terms of the relative country size and the degree of economic integration and then use an evolutionary approach to equilibrium selection to explain the evolution of the international currency as the two economies become more integrated some welfare implications are also discussed for example a country can improve its national welfare by letting its own currency circulate internationally provided the domestic circulation is controlled for when the total supply is fixed however a resulting currency shortage may reduce the national welfare

currency exchange in a random search model this paper investigates foreign exchange trading a phenomenon that typically accompanies international trade a search theoretic general equilibrium approach is adopted to study a two country two currency model for some parameter values of the model there exist some pure strategy equilibria in which commodity currency trade is conducted primarily through local currency and in which there is active currency currency exchange the coexistence of valued foreign currency and its local non acceptability conforms largely with the country specific cash in advance constraint that is often assumed exogenously in international finance literature

income inequality and carbon consumption evidence from environmental engel curves abstract i investigate the relationship between income inequality and the carbon dioxide co2 content of consumption i quantify the co2 content of household expenditure using input output analysis and estimate environmental engel curves eecs which describe the income emissions relationship using eecs for the united states between 1996 and 2009 i decompose the change in co2 over time and the distribution of emissions across households in both cases income is an important driver of household carbon finally i describe a potential equity pollution dilemma progressive income redistribution may raise the demand for aggregate greenhouse gas emissions i estimate that transfers raise emissions by 5 1 at the margin and by 2 3 under complete redistribution

does international harmonization of environmental policy instruments make economic sense harmonization of the instruments used in environmental policy has beenconsidered necessary to guarantee fair competition in internationalmarkets we examine the economic costs of harmonizing paper recyclingstandards in countries where the urgency of the waste disposal problemsdiffer using data of seven european countries we estimate thetechnologically feasible input combinations of pulp and waste paper forpaper production short term effects of two environmental policy measures minimum content requirement and utilization rate target are analyzed bytranslating the two administrative instruments into taxes and subsidies weshow that the shadow costs of the harmonization vary considerably betweencountries the difference in the domestic availability of waste may explainthe variation and a modification of the policy measures to incorporate thisaspect is suggested

is the income elasticity of environmental improvements less than one we estimated the income elasticity of environmental improvements for a number of european data sets the value of this parameter is consistently found to be less than one with few exceptions our findings are compared with state of the art contingent valuation studies from other countries we also compared our findings with those reported in the literature on charitable donations and corporate donations these studies show a similar pattern donations decrease as a percentage of income as income increases

current account deficits during heightened risk menacing or mitigating large current account deficits and the corresponding reliance on capital flows from abroad can increase a country s vulnerability to periods of heightened risk we develop a framework to evaluate such vulnerabilities and clarify which characteristics of a country s international investment portfolio determine whether a current account deficit is menacing or mitigating financial factors namely international investment income and valuation changes on international investments are critical our framework explores how domestic and global risk shocks affect these factors an application to 10 oecd economies shows that a substantial degree of international risk sharing can occur through current accounts and international portfolios

the distributional impacts of indonesia s financial crisis on household welfare a rapid response methodology analyzing the distributional impacts of economic crises is an ever more pressing need if policymakers are to intervene to help those most adversely affected they need to identify those who have been hurt most and estimate the magnitude of the harm they have suffered they must also respond in a timely manner this article develops a simple methodology for measuring these effects and applies it to analyze the impact of the indonesian economic crisis on household welfare using only pre crisis household information it estimates the compensating variation for indonesian households following the 1997 asian currency crisis and then explores the results with flexible nonparametric methods it finds that virtually every household was severely affected although the urban poor fared the worst the ability of poor rural households to produce food mitigated the worst consequences of the high inflation the distributional consequences are the same whether or not households are permitted to substitute toward relatively cheaper goods households with young children may have suffered disproportionately large adverse effects

transboundary effects of environmental policy markets and emission leakages abstract one of many explanations for environmental kuznets curves for rich countries can be that dirty production is relocated to economies with laxer abatement regimes if this is caused by national abatement policies environmental stresses are transferred to other countries further the economic costs of national abatement policies can be shared with foreigners to some extent both through a lower demand for imports and losses of market shares for foreign competitors that produce cleaner products we quantify effects internally and abroad of a growth induced unilateral carbon tax policy in a rich open economy we find that the environmental benefits fall and the economic costs rise when a global rather than a national perspective is employed

explaining the variation in household recycling rates across the uk household waste recycling rates vary significantly both across and within regions of the uk this paper attempts to explain the variation by using a new data set of waste recycling rates and policy determinants for all of the uk s 434 local authorities over the period 2006q2 to 2008q4 our results suggest that the method of recycling collection chosen by policy makers is an important factor influencing the recycling rate we also find an inverse relationship between the frequency of the residual waste collection and the recycling rate

cross border returns differentials were the u s to persistently earn substantially more on its foreign investments u s claims than foreigners earn on their u s investments u s liabilities the likelihood that the current environment of sizeable global imbalances will evolve in a benign manner increases however we find that the returns differential of u s claims over u s liabilities is far smaller than previously reported and importantly is near zero for portfolio equity and debt securities for portfolio securities we confirm our finding using a separate dataset on the actual foreign equity and bond portfolios of u s investors and the u s equity and bond portfolios of foreign investors in the context of equity and bond portfolios we find no evidence that the u s can count on earning more on its claims than it pays on its liabilities finally we reconcile our finding of a near zero returns differential with observed patterns of cumulated current account deficits the net international investment position and the net income balance jel codes f3

a household level environmental kuznets curve abstract richer households may create more vehicle emissions because they own more vehicles and drive more poorer households may pollute more because they use high polluting vintages and maintain them less well this paper uses 1993 california vehicle microdata to show that there is a kuznets u shaped hydrocarbon emissions relation

causality between income and emission a country group specific econometric analysis abstract empirical studies of the environmental kuznets curve ekc examine the presence or otherwise of an inverted u shaped relationship between the level of pollution and the level of income customarily in the diagram of ekc the level of income is shown on the horizontal axis and that of pollution on the vertical axis thus it is presumed that the relationship between income and pollution is one of unidirectional causality with income causing environmental changes and not vice versa the validity of this presumption is now being questioned it is being asserted that the nature and direction of causality may vary from one country to the other in this paper we present the results of a study of income co 2 emission causality based on a granger causality test to cross country panel data on per capita income and the corresponding per capita co 2 emission data briefly our results indicate three different types of causality relationship holding for different country groups for the developed country groups of north america and western europe and also for eastern europe the causality is found to run from emission to income for the country groups of central and south america oceania and japan causality from income to emission is obtained finally for the country groups of asia and africa the causality is found to be bi directional the regression equations estimated as part of the granger causality test further suggest that for the country groups of north america and western europe the growth rate of emission has become stationary around a zero mean and a shock in the growth rate of emission tends to generate a corresponding shock in the growth rate of income in contrast for the country groups of central and south america oceania and japan a shock in the income growth rate is likely to result in a corresponding shock in the growth rate of emission finally causality being bi directional for the country groups of asia and africa the income and the emission growth rates seemed to reinforce each other

product design and efficient management of recycling and waste treatment abstract using a general equilibrium model where material is first extracted then used for producing a consumption good recycled and finally treated to reduce environmental damage we study efficiency restoring policies when one or more of the constituent markets are inactive the material is modeled as being embodied in the output and forms an important aspect of green product design if all markets for embodied material per unit output fail and if recycling benefit exceeds environmental damage the policy instruments needed for green design are a tax on the consumption good supply and a subsidy on the demand for material input

are there environmental kuznets curves for us state level co2 emissions abstract the environmental kuznets curve ekc hypothesis argues that the relationship between the pollutant and output is inverted u shaped implying that environmental degradation increases with output during the early stages of economic growth but declines with output after reaching a specified threshold for the first time in the literature on the ekc hypothesis this paper assesses the validity of the hypothesis across 48 us states using the common correlated effects cce estimation procedure by pesaran 2006 which allows us to obtain results in the presence of cointegration in the relationship between carbon emissions and a measure of output and its squared value which captures the inverted u shaped relationship postulated by the ekc hypothesis the panel data approach allows the study individual members of the panel also resulting in efficiency gains that would not be associated with time series approaches based on the small sample size of 51 observations 1960 2010 the findings postulate that the ekc hypothesis holds in only 10 states with the remaining 38 states should be reforming their environmental regulatory policies to prevent environmental degradation coming only at the expense of production and economic growth as for the other 10 states given that a threshold has been achieved higher growth would be accompanied with lower emissions and hence no additional environmental policies are required

the relationship between waste paper and other inputs in the swedish paper industry a number of life cycle assessment studies havecompared the environmental impacts of materialrecycling and incineration of waste paper theyhave shown that in most cases a recyclingscenario results in lower total energy use butgreater use of fossil fuels if waste paper andfossil fuels are complements parts of theenvironmental argument for recycling isabolished this paper estimates a cost functionfor the swedish paper industry if the costshares are co integrated an error correctionmodel will be used to model the dynamics short and long run elasticities are thencalculated to address the relationship betweenwaste paper and the other inputs capital labor purchased pulp fiber fossil fuels andelectricity contrary to the life cycleassessment studies the results show that wastepaper and fossil fuels are substitutes andthat waste paper and electricity arecomplements

recycling social norms and warm glow revisited we examine the role of social norms and warm glow in a theoretical framework and establish that improving the quality of recycling facilities for example through kerbside collection will elicit more recycling effort if warm glow is present drawing on the literature we model the role of social norms with reference to age profile ethnicity and geographical location of the reference group using english local authority data we show that a social norm for recycling does exist we find the expected relationship between the quality of kerbside provision and recycling activity if the household derives warm glow from the activity however it is insignificant amongst the control variables we find evidence that multifamily dwellings recycle less

financial intermediation international risk sharing and reserve currencies abstract i model the equilibrium risk sharing between countries with varying financial development the most financially developed country takes greater risks because its financial intermediaries deal with funding problems better in good times the more financially developed country consumes more and runs a trade deficit financed by the higher financial income that it earns as compensation for taking greater risk during global crises it suffers heavier losses its currency emerges as the reserve currency because it appreciates during crises thus providing a good hedge i provide evidence that financial net worth plays a crucial role in understanding this asymmetric risk sharing jel e44 f14 f32 g01 g15 g21

willingness to pay and willingness to accept how much can they differ comment i agree with the point made by edoh y amiran and daniel a hagen 2003 that there can be a substantial or even infinite divergence between the wta and wtp for a public good even where there is a nonzero elasticity of substitution between market goods and the public good provided that the indifference curves are asymptotically bounded with respect to market goods in the manner they describe this is an important point they are also correct to point out that the elasticity of substitution is a local concept whereas their asymptotic boundedness condition applies also for discrete changes my 1991 paper used a local analysis because it was following the structure of the analysis in robert d willig 1976 and alan randall and john r stoll 1980 i wanted to show that while randall and stoll appeared to extend willig s local result on wta versus wtp from price changes to changes in the quantity of a public good the relevant elasticity was in fact different and involved the substitution elasticity as well as the income elasticity i view these points by amiran and hagen as not two separate results but essentially the same result their asymptotic boundedness condition generalizes my zero elasticity of substitution condition to discrete changes the asymptotic boundedness condition can be expressed as follows assuming a bivariate utility function u x q and given a reference point x q associated with a reference utility level u u x q there exists some q q such that for all q q there exists no x such that u x q u in other words no amount of x can substitute for the reduction in public good from q to q q in the case of a zero elasticity of substitution q q but as amiran and hagen show in their theorem 1 this is unnecessarily restrictive when dealing with a discrete reduction in q furthermore their theorem 2 can be viewed as a special case of their theorem 1 in which q 0 which makes q an essential commodity it is well known in consumer theory that the wta to avoid the loss of an essential market good is infinite their theorem 2 extends this result to the case of an essential nonmarket good but as their theorem 1 shows essentialness is not necessary for an infinite wta the boundedness condition is the key and this implies a fundamental lack of substitutability between money market goods and the public good

air quality and economic growth an empirical study abstract in the present empirical study we have observed an inverse and sometimes u shaped relationship between environmental degradation and per capita real income as opposed to the inverted u shaped environmental kuznets curve ekc found in many earlier studies it was felt that a possible explanation of the observed pattern of relationship might be sought in the dynamics of the process of economic growth experienced by the countries concerned thus e g economic development may strengthen the market mechanism as a result of which the economy may gradually shift from non market to marketed energy resources that are less polluting this phenomenon may show up in the form of an inverse relationship as mentioned above also due to the global technical progress the production techniques available to the countries all over the world are becoming more and more capital intensive and at the same time less polluting this may mean that given the income level the pollution level decreases as the capital intensity of an economy rises in the present study it is indeed observed that as capital intensity increases the level of suspended particulate matter spm in the atmosphere decreases per capita real income is also found to be inversely related to spm partially but the interaction effect of per capita income and capital intensity on spm is observed to be positive this suggests that given the level of per capita income capital intensity a more capital intensive production technique a higher per capita income level would cause less pollution for spm a surprising result is also obtained i e a u turn is observed at a very high level of per capita real income i e us 12 500 at 1985 us prices this is possibly indicative of the fact that there are technological limits to industrial pollution control such that beyond a threshold level of income further rise in income cannot be achieved without environmental degradation

current accounts and financial flows in the euro area abstract we construct a new database of bilateral financial flows among euro area countries and their major world partners and explore the role of financial links in the accumulation and then adjustment of current account imbalances in the euro area the data show that the geography of financial flows can differ quite markedly from trade flow patterns and suggest that the nexus between surpluses in the core with deficits in the periphery went along financial rather than trade interlinkages in particular the data document the dominant role of core countries in financing the euro area periphery s current account deficits before the financial crisis both directly and through intermediating financial flows from outside of the euro area most of this financing took the form of debt instruments following the withdrawal of private financing from core countries during the crisis the ecb mediated funding and other official flows helped the periphery to refinance its liabilities and smoothen the external adjustment

the external wealth of nations measures of foreign assets and liabilities for industrial and developing countries abstract although capital flows are closely monitored surprisingly little is known about the accumulated stocks of foreign assets and liabilities held by various countries especially in the developing world this paper constructs estimates of foreign assets and liabilities and their equity and debt subcomponents for a sample of 67 industrial and developing countries it characterizes the stylized facts of international balance sheets and asks whether there are trends in net foreign asset positions and shifts in debt equity ratios over time finally it explores the sensitivity of estimated stock positions to the treatment of valuation effects not captured in balance of payments data

municipal waste kuznets curves evidence on socio economic drivers and policy effectiveness from the eu waste generation and waste disposal are becoming increasingly prominent in the environmental arena from a policy perspective and in the context of delinking analysis in general waste generation is still increasing proportionally with income and economic and environmental costs associated to landfilling are also increasing this paper provides a comprehensive analysis of waste generation incineration and landfill dynamics based on panel data for the eu25 to assess the effects of different drivers economic structural policy and the eventual differences between western and eastern eu countries we show that for waste generation there is still no waste kuznets curve wkc trend although elasticity to income drivers appears lower than in the past landfill and other policy effects do not seem to provide backward incentives for waste prevention and in terms of landfill and incineration as expected they are respectively decreasing and increasing with policy acting as a strong driver eastern countries appear to be performing generally quite well thus benefiting from eu membership and related policies in terms of environmental performance we can conclude that although absolute delinking is far from being achieved for waste generation there are some first positive signs of an increasing relative delinking for waste generation and robust landfill diversion and varying evidence of a significant role of the eu waste policies implemented in the late 1990s and early 2000s our evidence suggests that if while landfill diversion is currently associated to a delinking partly explained by eu policies waste prevention must be the next objective of waste regulation efforts

does the us dollar confer an exorbitant privilege abstract this paper questions the asserted pecuniary benefits conferred by the dollar s international role if these benefits are smaller than often claimed then the difficult measurement of costs can be finessed the original privilege notion characterised the dollar s systemic role in official foreign exchange reserves before 1973 five subsequently developed notions refer to the broader more evolutionary role of the dollar in the international monetary system 1 as international debtor the us borrows in its own currency but others do too 2 dollar bills held offshore confer a benefit but it is neither large nor exclusive 3 the us treasury may borrow more cheaply owing to official holdings but it shares this advantage through an integrated global bond market 4 the us earns higher yields on its external assets than it pays on its external liabilities but this undoubted advantage arises from direct investment far from the dollar s international role 5 us banks may play on a home court but they have in fact won a modest share of offshore dollar business

the practice of econometrics classic and contemporary provides hands on experience of econometrics with estimation and inference each chapter begins with a discussion of economic theory underlying the application

the synchronization of credit cycles abstract this paper proposes a simple econometric procedure to test for the synchronization of credit cycles using a century of data for 14 advanced economies we find that credit cycle synchronization dropped in the early 1920s from initially relatively high levels between the 1920s and the 1970s synchronization was overall low and concentrated within five predominantly regional clusters however synchronization has significantly increased in the post bretton woods era and has become less associated with geographic proximity australia denmark france italy japan norway spain switzerland the uk and the us form a single major credit cycle cluster since the 1970s a smaller cluster is formed by canada the netherlands and sweden while the german credit cycle follows a distinct path using logistic regressions we find that the synchronization of credit and business cycles go hand in hand our findings are especially relevant for the international coordination of macroprudential policy as well as to spur and inform further analysis on credit cycle dynamics

waves of international banking integration a tale of regional differences abstract we propose an original measure of international banking integration based on gravity equations and a spline function on a panel of 14 countries and their 186 partners between 1999 and 2012 contrary to the conventional wisdom we uncover that 1 the international banking integration outside the euro area has been tenaciously increasing since 1999 and has even strengthened after the crisis 2 in contrast the international banking integration of the euro area has been cyclical since 1999 with a peak in 2006 and a complete reversal since then 3 this decline is not a correction of previous overshooting but a marked disintegration 4 outside the euro area the level of income does not affect the shape of banking integration

mechanisms explaining the impact of economic inequality on environmental deterioration abstract rising economic inequality often considered intrinsically harmful is increasingly being viewed as having a number of secondary impacts as well including impacts on health and economic growth the ongoing nature of today s environmental crisis also raises questions about inequality s role in environmental deterioration despite the large number of papers that have been written on this topic no theoretical or empirical consensus presently exists firstly our article identifies that authors conclusions in this area depend on their hypotheses regarding 1 the relationship between individual income and individual environmental pressure 2 the impact of inequality on the social norms that influence individual environmental pressure 3 the interests that social groups have in degrading or protecting the environment 4 how these interests play out in terms of political demands and 5 how these political demands translate into political decisions secondly the study shows that despite enabling a general test of the causal relationship between inequality and the environment the empirical methods utilised do not account for the full range of theoretical mechanisms in play hence the suggestion that a research programme be launched to conduct empirical studies of the five aforementioned hypotheses by applying a recursive approach

bank business models as a driver of cross border activities abstract much of the post crisis moderation in international banking has been shown to be attributable to euro area banks using a confidential bank level dataset on euro area resident banks this paper sheds light on the type of banks responsible for the decline in cross border lending overall globally systemically important banks g sibs were markedly different from other bank types resident in the euro area as they not only increased their extra euro area positions but also contributed to maintaining cross border flows within the euro area over the past decade in addition we also highlight that banks with initially higher capitalisation more deposit funding and lower non performing loan rates exhibit less cross border retrenchment these findings have clear policy implications for the design of bank regulations appropriate for a deepening european banking union

income inequality and the development of environmental technologies within rich countries a large dispersion in the capacity of generating environmental innovations appears correlated to the level of inequality previous works analyze the relationship between inequality and environmental quality in a static setting this paper builds a dynamic model more suitable to analyze technological externalities driven by the emergence of a new demand for green products under fairly general assumptions on technology and preferences we show that 1 the relationship between inequality and environmental innovation is highly non linear and crucially depends on per capita income 2 an excessive inequality harms the development of environmental technologies especially in rich countries key to our results is the fact that externalities generated by pioneer consumers of green products benefit the entire population only for relatively low income distances the empirical analysis robustly confirms our theoretical results that is whereas for rich countries inequality negatively affects the diffusion of innovations per capita income is paramount in poorer ones

can downstream waste disposal policies encourage upstream design for environment design for environment takes place when firms explicitly incorporate environmental issues in their product design and manufacturing decisions joseph fiksel 1996 to reduce waste associated with consumer products for example firms can reduce product weight including the amount of packaging that comes with a product and make products easier and less costly to recycle the latter can be accomplished by changing the type of material used in a product avoiding mixing of materials in a single product coding and labeling when different materials are used and designing for ease of disassembly u s congress office of technology assessment 1992 fiksel 1996 an important debate centers around the question of whether design for environment dfe needs to be explicitly targeted using policy instruments focused upstream on producers or whether downstream instruments send sufficient signals back upstream one important downstream instrument is a disposal fee i e charging households a price per pound per bag or per can for their trash many observers feel that downstream instruments do not send appropriate signals back upstream some economists and others have suggested on the other hand that disposal fees can in theory send signals upstream to producers karen palmer and walls 1998 we find that disposal fees provide incentives for efficient dfe only when there is a fully functioning recycling market i e only when recyclers pay households a price for each of their recyclable items and that price varies with the degree of product recyclability in the real world transactions costs of paying households for each individual item recycled would be prohibitively high in a more realistic setting in which households may place some items in a recycling bin but are not paid for doing so a disposal fee by itself will not yield a social optimum it encourages households to place items in the bin but all items allowed in the bin are of equal value to the household i e there is no reason to prefer an easily recyclable aluminum can to a difficult to recycle plastic milk jug this means that there is no signal to producers to make products more recyclable if the government can set product taxes that vary with product recyclability the social optimum can be restored but this option is not practicable 2 we argue that the infeasibility of i paying households for recycling and ii taxing products according to their recyclability means that a first best outcome is no longer attainable instead we set up a constrained second best optimum and solve for policy instruments that achieve this outcome we find that a disposal school of economics and finance victoria university of wellington wellington new zealand walls is also a university fellow with resources for the future washington dc the helpful comments of karen palmer don fullerton and hilary sigman are greatlv appreciated 1 manufacturer take back requirements such as germany s well known packaging take back law were developed at least in part as a way to encourage dfe see www oecd org env epr index htm for updates from a series of oecd workshops held in 1997 1999 on the broader topic of extended producer responsibility in practice individual german producers do not actually take back their own products at end of life they have formed a consortium that arranges to collect members waste from households marked with a green dot and recycle it we do not address take back mandates in this paper 2 in calcott and walls 1999 we derive these taxes don fullerton and wenbo wu 1998 show that a direct subsidy to recyclability combined with other instruments can yield a social optimum this subsidy depends on production function parameters thus if firms differ the subsidy would vary across firms more i mportantly observing and measuring recyclability to determine subsidy payments would be virtually impossible

price unit value and quality demanded abstract given the paucity of quality price data it is common to rely on unit value average expenditure per unit as a proxy for price but this is an imperfect proxy if households respond to price increases by substituting to lower quality goods this paper draws on survey data that contain both unit value and price to estimate the severity of quality substitution in indonesia finding that it is prevalent the paper next calculates price elasticities that correct for quality substitution evaluating and ultimately rejecting a commonly used method for calculating price elasticities using only unit value data finally it demonstrates that quality substitution can result in biased price elasticities even when price is perfectly observed

the short run impact of import bans on poverty the case of nigeria 2008 2012 the nigerian government uses food import prohibition as part of policies that seeks to protect existing domestic producers and reduce the country s dependence on imports this paper argues that such policies have negative effects on net consumers of such products due to higher prices with 70 percent of poor households budget spent on food and about 13 percent of the total budget devoted to products subject to import bans poor households are vulnerable to such trade policies prices of some import prohibited food products are found to be higher than what they would be in the absence of such bans the elimination of import bans is estimated to reduce national poverty rates by as much as 2 6 percentage points

optimal policies for solid waste disposal taxes subsidies and standards abstract pricing trash collection and disposal services can be politically unpopular and may lead to increased illegal disposal of trash several studies have shown that deposit refund systems can act like disposal charges without the illegal disposal problem and thus can generate an optimal amount of solid waste disposal we assess the efficiency implications of an alternative policy currently in use in some states in the u s and considered at the federal level recycled content standards these are requirements that a certain fraction of total material use in production be comprised of secondary materials we find that such standards by themselves cannot generate the optimal amount of disposal but must be combined with additional taxes on both the final product and other inputs to production moreover the information requirements for setting the optimal standards and accompanying taxes are high the deposit refund approach would be preferred in most cases

current account adjustment and retained earnings abstract this paper develops a formal strategy to calculate current accounts with retained earnings re on equity investment and analyzes their adjustment during the global financial crisis re are the part of companies profits which is reinvested and not distributed to shareholders as dividends international statistical standards treat re on foreign direct investment and re on portfolio investment differently while the former enter the current and financial account the latter do not we show that this differential treatment strongly affects current accounts of several advanced economies frequently referred to as financial centers with large positions in equity portfolio investment our empirical analysis finds that the differential treatment of re alters the interpretation of current account adjustment for the global financial crisis

discussion of capital mobility and international sharing of cyclical risk abstract this is a comment on capital mobility and international sharing of cyclical risk the comment focuses on the authors choice of portfolio adjustment costs in explaining limited international risk sharing the comment raises two main issues one is that investors hold large gross positions that vary significantly in value over the business cycle the second is that it is difficult to identify portfolio adjustment costs from trade costs within the authors environment

international currency exposures valuation effects and the global financial crisis abstract we examine the evolution of international currency exposures with a particular focus on the 2002 12 period during the run up to the global financial crisis there was a widespread shift towards positive net foreign currency positions such that relatively few countries exhibited the archetypal emerging market short foreign currency position on the eve of the global financial crisis during the crisis the upheaval in currency markets generated substantial currency generated valuation effects much of which were not reversed there is some evidence that the distribution of valuation effects was stabilizing in the sense of showing a negative covariation pattern with pre crisis net foreign asset positions