merchant guilds taxation and social capital we develop a theory of the emergence of merchant guilds as an efficient mechanism to foster cooperation between merchants and rulers building on the complementarity between merchant guilds ability to enforce monopoly over trade and their social capital unlike existing models we focus on local merchant guilds rather than alien guilds accounting for the main observed features of their behavior internal organization and relationship with rulers our model delivers novel predictions about the emergence variation functioning and eventual decline of this highly successful historical form of network our theory reconciles previous explanations and the large body of historical evidence on medieval merchant guilds in doing so we also shed novel light on the role of the guilds social capital and its importance for taxation welfare and the development of towns and their government in medieval europe

inflation and relative price variability in the euro area evidence from a panel threshold model the impact of inflation on relative price variability rpv generates an important channel for real effects of inflation this article provides first evidence on the empirical relation between inflation and rpv in the euro area stirred by the widespread use of inflation caps or target bands in monetary policy practice we are particularly interested in threshold effects of inflation in line with the predictions of monetary search models our results indicate that expected inflation significantly increases rpv only if inflation is either very low below 0 95 per annum p a or very high above 4 96 p a

reduction potentials of energy demand and ghg emissions in china s road transport sector abstract rapid growth of road vehicles private vehicles in particular has resulted in continuing growth in china s oil demand and imports which has been widely accepted as a major factor effecting future oil availability and prices and a major contributor to china s ghg emission increase this paper is intended to analyze the future trends of energy demand and ghg emissions in china s road transport sector and to assess the effectiveness of possible reduction measures a detailed model has been developed to derive a reliable historical trend of energy demand and ghg emissions in china s road transport sector between 2000 and 2005 and to project future trends two scenarios have been designed to describe the future strategies relating to the development of china s road transport sector the business as usual scenario is used as a baseline reference scenario in which the government is assumed to do nothing to influence the long term trends of road transport energy demand the best case scenario is considered to be the most optimized case where a series of available reduction measures such as private vehicle control fuel economy regulation promoting diesel and gas vehicles fuel tax and biofuel promotion are assumed to be implemented energy demand and ghg emissions in china s road transport sector up to 2030 are estimated in these two scenarios the total reduction potentials in the best case scenario and the relative reduction potentials of each measure have been estimated

optimal state dependent rules credibility and inflation inertia abstract we use a state dependent model where pricing rules are optimal to examine the costs of a money based disinflation under various assumptions about the credibility of the policy change our analysis allows us to relate actual credibility and future inflation inertia to the asymmetry of the price deviation distribution an important implication of our state dependent setting is that disinflation can be attained without substantial cost even in a situation of low credibility provided that a mechanism of price alignment eliminates the asymmetry of the price deviation distribution we also develop an analytical framework for analyzing intermediate imperfect credibility cases

the economics of guilds occupational guilds in medieval and early modern europe offered an effective institutional mechanism whereby two powerful groups guild members and political elites could collaborate in capturing a larger slice of the economic pie and redistributing it to themselves at the expense of the rest of the economy guilds provided an organizational mechanism for groups of businessmen to negotiate with political elites for exclusive legal privileges that allowed them to reap monopoly rents guild members then used their guilds to redirect a share of these rents to political elites in return for support and enforcement in short guilds enabled their members and political elites to negotiate a way of extracting rents in the manufacturing and commercial sectors rents that neither party could have extracted on its own first i provide an overview of where and when european guilds arose what occupations they encompassed how large they were and how they varied across time and space i then examine how guild activities affected market competition commercial security contract enforcement product quality human capital and technological innovation the historical findings on guilds provide strong support for the view that institutions arise and survive for centuries not because they are efficient but because they serve the distributional interests of powerful groups

price setting during low and high inflation evidence from mexico this paper provides new insight into the relationship between inflation and the setting of individual prices by examining a large data set of mexican consumer prices covering episodes of both low and high inflation when the annual rate of inflation is low below 10 15 the frequency of price changes comoves weakly with inflation because movements in the frequency of price decreases and increases partly offset each other in contrast the average magnitude of price changes correlates strongly with inflation because it is sensitive to movements in the relative shares of price increases and decreases when inflation rises beyond 10 15 few price decreases are observed and both the frequency and average magnitude are important determinants of inflation i show that a menu cost model with idiosyncratic technology shocks predicts the average frequency and magnitude of price changes well over a range of inflation similar to that experienced by mexico

state dependent pricing and the dynamics of money and output standard macroeconomic models of price stickiness assume that each firm leaves its price unchanged for a fixed amount of time we present an alternative model in which the pricing decision depends on the state of the economy we find a method of aggregating individual price changes that allows a simple characterization of macroeconomic variables the model produces a positive money output correlation and an empirical phillips curve in addition the impact of monetary shocks depends crucially on the current level of output which points to a natural connection between state dependent microeconomics and state dependent macroeconomics i introduction there is a long tradition in macroeconomics of attributing the real effects of nominal demand shocks to nominal price stickiness in this view if there is no change in prices when nominal demand rises then quantities must bear the burden of adjustment hence nominal price rigidity provides the friction needed for nominal demand shocks to be transmitted to the real economy standard models of this transmission mechanism such as fischer 1977 and taylor 1980 are based on the assumption that each firm leaves its price unchanged for a fixed amount of time the main reason for considering such time dependent pricing rules is their analytic tractability constraining firms to adjust their prices at prespecified times both simplifies the derivation of equilibrium strategies and allows the use of powerful time series techniques to analyze aggregate dynamics the main disadvantage of the timedependent approach is that between price adjustments firms are not allowed to respond even to extreme changes of circumstance this makes it difficult to know whether the qualitative effects of money in these models are the result of nominal rigidities per se or of the exogenously imposed pattern of price changes an alternative approach to modeling price stickiness is to allow the price setting decision to depend on the actual state of the

the behavior of prices and inflation an empirical analysis of disaggregat price data this paper analyzes the effects of inflation on the dispersion of prices as well as other aspects of price behavior using disaggregated data on prices of foodstuffs in israel during 1978 84 we find that the effect of expected inflation on intramarket price variability is stronger than the effect of unexpected inflation we show that even in times of high inflation price quotations are not trivially short and price changes are not synchronized across firms these facts taken together confirm that there is some staggering in the setting of prices we find that the distribution of real prices is far from being uniform as many menu cost based models assume or conclude in fact as inflation increases to very high levels this distribution is not even symmetric when the annual inflation rate reaches 130 percent there are equal chances of finding real prices above or below the market average but upward deviations in the real price are further away from zero than downward ones furthermore as the annu

energy efficiency in the japanese transport sector abstract we examine energy efficiency in the japanese transportation sector since the 1970s comparisons with the united states and other developed economies illustrate that japan primarily stands out due to low activity levels and modal structure rather than modal energy intensity on road automobile energy intensity has shown little improvement albeit from a low base over the past four decades we also consider policy measures undertaken by the japanese government political arrangements in japan after world war ii made it attractive for politicians to pursue energy conservation by making transportation particularly by automobile expensive for the average japanese citizen the revenues raised from various fees and taxes on automobile transportation were redistributed to core supporters of the ruling liberal democratic party these political arrangements have come under fire in recent years calling into question japan s traditional approach towards transportation sector energy efficiency

energy consumption and the influencing factors in china a nonlinear perspective abstract different from many studies on energy kuznets curve this paper does not directly consider income factor but conducts a nonlinear study on per capita primary energy consumption and electricity consumption in china whose economic development is considered investment driven in which government macroeconomic policies especially government expenditure plays a very important role in particular this paper attempts to compare the different impacts of government expenditures and the other influencing factors on energy consumption based on the results of the threshold regression in the future with the further development of the economy the driving force of labor population growth will slow down comparing with primary energy the relationship between electricity consumption and its influencing factors will change later and the difference in the effects of the influencing factors is mainly reflected in the formation of capital stock investment and the development of urbanization government expenditure on private goods may not be always as inefficient in energy consumption and cleaner production as previously thought in the literature meanwhile the growth of government expenditure on public goods will become a powerful driving factor which indicates that the government needs to assess its overall impact on energy consumption and energy efficiency when participating in the provision of public goods the paper also found that when studying the issue of energy consumption and regional differences in china the geographic classification of eastern central and western regions may not be appropriate grouping according to energy consumption levels may be one of the better options and the distribution of energy consumption levels in china s provinces is consistent with the distribution of government expenditure levels the estimation results also provide us with important policy implications the government expenditure in education is of great importance and it can produce a strong energy saving effect through technological progress

reinterpreting the role of inflation in politico economic models the author attempting to analyze the interplay between politics and economics is faced with a large number of problems ranging from an always too small and idiosyncratic data set to the lack of any generally accepted theory of the process which has testable implications my aims have been 1 to show that past studies have typically treated inflation in an extremely naive way disregarding the fact that it may have political pluses if unanticipated and 2 to test the sensitivity of established formulations to what i believe is the more useful view of voter behavior given in model ii since model i and model ii represent polar extremes of amnesiac and eidetic behavior tests of intermediate lag structures are clearly in order because of administration peculiarities however lost data points will pose a serious problem

reconsidering the relationship between inflation and relative price variability it has long been popularly believed that the relationship between inflation and relative price variability rpv is positive and stable using disaggregated cpi data for the united states and japan however this study finds that the relationship is neither linear nor stable over time the overall relationship is approximately u shaped around a nonzero threshold inflation rate rpv therefore changes not with the inflation rate per se but with the deviation of inflation from the threshold inflation rate more importantly the relationship is by no means stable over time but instead varies significantly in a way that coincides with regime changes of inflation or monetary policy the relationship was positive during the period of high inflation of the 1970s and the early 1980s as has been documented by a number of previous studies whereas it takes a u shape profile during the great moderation the results are robust to the use of core inflation which excludes the traditionally volatile prices of food and energy this paper then presents a modified version of the calvo type sticky price model to describe the observed empirical regularities simulation experiments show that the modified calvo model fits the data well and that the underlying relationship hinges upon the degree of price rigidity which is systematically related to inflation regime for countries and periods with low inflation rates the relationship takes a u shape as price adjustment is more sticky in a high inflation environment when price setting becomes more flexible the u shaped profile vanishes

an evolutionary approach to norms iorms provide a powerful mechanism for regulating conflict in groups even when there are more than two people and no central authority this paper investigates the emergence and stability of behavioral norms in the context of a game played by people of limited rationality the dynamics of this new norms game are analyzed with a computer simulation based upon the evolutionary principle that strategies shown to be relatively effective will be used more in the future than less effective strategies the results show the conditions under which norms can evolve and prove stable one interesting possibility is the employment of metanorms the willingness to punish someone who did not enforce a norm many historical examples of domestic and international norms are used to illustrate the wide variety of mechanisms that can support norms including metanorms dominance internalization deterrence social proof membership in groups law and reputation

expected monetary changes and relative prices a look at evidence from the stock market at the heart of the natural rate theory is the assumption that fully perceived monetary growth is neutral with respect to relative price changes unfortunately there have been few attempts to test this assumption directly because the belief that active contracyclical monetary policies are not superior to friedman s constant growth rule rests upon the assumption that expected monetary changes have neutral relative price effects more evidence is needed on whether such changes are in fact neutral to this end we test the hypothesis that only the unexpected components and not the expected components of monetary changes affect relative price changes by looking at the stock market testing is done on a modification of the well known mean variance capital asset pricing model the capm specifically we modify the capm to allow for differential stock returns depending upon expected and unexpected monetary growth rates section ii explains the basic model used to test for non neutral relative price effects of monetary change section iii deals with the empirical definitions of expected and unexpected money growth section iv discusses the basic data while sections v and vi make neutrality tests of monetary growth using actual expected revisions in expected and unexpected money growths the last part summarizes the paper

relative price variability and inflation evidence from us cities we test whether the time series positive correlation of inflation and intermarket relative price variability is also present in a cross section of u s cities we find this correlation to be a robu

inflation inflation uncertainty and relative price dispersion evidence from bivariate garch m models abstract one potential real effect of inflation is its influence on the dispersion of relative prices in the economy menu cost models generally imply that higher trend inflation will increase price dispersion in contrast signal extraction models predict that increased inflation uncertainty will raise relative price dispersion existing empirical studies do not distinguish between these separate hypotheses we constuct a bivariate garch m model of inflation and relative price dispersion to test these differing explanations in a single model and find that inflation uncertainty dominates trend inflation as a predictor of relative price dispersion

elusive persistence wage and price rigidities the new keynesian phillips curve and inflation dynamics abstract we review the main new keynesian inflation equations that have arisen as a result of aggregation from individual firms price rigidities we find that on the whole they cannot account for inflation persistence a key feature of the empirical dynamics of inflation and with important policy implications the only exceptions seem to be when indexation is allowed in price setting or when price stickiness is combined with wage rigidity and staggering

inflation and the distribution of price changes this paper reconsiders the empirical evidence connecting inflation to its higher order moments in particular we examine the statistical properties of the observed positive correlation between the sample mean and the sample cross sectional skewness of price changes this correlation has attracted substantial attention over the years and has recently been the focal point of a debate among macroeconomists we show that the sample mean skewness correlation suffers from a small sample bias that accounts for the entirety of the observed correlation in other words we establish that one of the stylized facts in the literature on aggregate price behavior need not be a fact at all

money and the dispersion of relative prices a price dispersion equation is tested with data from the german hyperinflation the equation is derived from a version of lucas s and barro s partial information localized market models in this extension different excess demand elasticities across commodities imply a testable dispersion equation in which the explanatory variable is the magnitude of the unperceived money growth in order to test this hypothesis a price dispersion series is constructed and a measure of the unperceived part of money growth is estimated the model receives support from the empirical analysis although it is evident that unincluded variables have important effects on price dispersion

rigid prices evidence from u s scanner data this paper uses over two years of weekly scanner data from two small us cities to characterize time and state dependence of grocers pricing decisions in these data the probability of a nominal adjustment declines with the time since the last price change even after controlling for heterogeneity across store product cells and replacing sale prices with regular prices we also detect state dependence the probability of a nominal adjustment is highest when a store s price substantially diers from the average of other stores prices however extreme prices typically reflect the selling store s recent nominal adjustments rather than changes in other stores prices

the effects of fiscal policy on co2 emissions evidence from the u s a abstract this paper examines the effects of fiscal policy on co2 emissions using vector autoregressions on u s quarterly data from 1973 to 2013 in particular we analyze the short and mid term interactions between fiscal policy and emissions by using sign restrictions to identify the policy shocks we construct the impulse responses to linear combinations of fiscal shocks corresponding to the scenarios of deficit financed spending and deficit financed tax cuts to consider possible variations of the effect of fiscal policy according to the sources of pollution we distinguish between production and consumption generated co2 emissions the results point out that the implementation of expansionary fiscal spending provides an alleviating effect on emissions from both sources of the pollutant whereas deficit financed tax cuts are associated with an increase on consumption generated co2 emissions the exact pattern of the effects depends on the source of emissions the scenario of fiscal policy that is implemented and the functional class of government expenditure being increased

nominal rigidities and retail price dispersion in canada over the twentieth century we introduce a new data set on over 230 000 monthly prices for 10 goods in 50 canadian cities over the 40 year period from 1910 to 1950 this information coupled with previously published price information from the late twentieth century allows us to present one of the first comprehensive views of nominal rigidities and retail price dispersion over the past 100 years we find that nominal rigidities have been conditioned upon prevailing rates of inflation with a greater frequency of price changes occurring in the 1920s and the 1970s additionally the process of retail market integration has followed a u shaped trajectory with many domestic markets being better integrated as measured by the average dispersion of retail prices at mid century than in the 1990s we also consider the linkages between nominal rigidities and price dispersion finding results consistent with present day data on utilise des donnees inedites de 230 000 prix mensuels pour 10 produits dans 50 villes canadiennes au cours de la periode de quarante ans qui va de 1910 a 1950 ces donnees ajoutees aux renseignements deja publies anterieurement sur les prix dans la derniere portion du vingtieme siecle permettent de presenter l un des premiers portraits comprehensifs des rigidites nominales et de la dispersion des prix de detail au cours des derniers 100 ans on decouvre que les rigidites nominales ont ete influencees par les taux d inflation qui ont prevalu avec pour consequence une plus grande frequence de changements de prix dans les annees 1920s et 1970s de plus chose surprenante le processus d integration du marche de detail a suivi une trajectoire en u plusieurs marches domestiques etant davantage integres en prenant comme mesure la dispersion moyenne des prix de detail au milieu du siecle que dans les annees 1990s on examine aussi les liens entre rigidites nominales et dispersion des prix et les resultats concordent avec ce que revelent les donnees recentes

are the roots of the modern lex mercatoria really medieval this article analyzes how trade was conducted between the tenth and thirteenth centuries we claim that as most exchange was simultaneous differences between law codes did not pose a substantial problem and that mercantile guilds developed not to provide institutions comparable to the modem lex mercatoria but rather to supply physical security the development of nonsimultaneous exchange was made possible predominantly by the emergence of urban autonomy and urban law applicable to all merchants trading within town so it appears that the importance of universally accepted commercial institutions in the middle ages has hitherto been vastly overrated

relative price variability inflation and the allocative efficiency of the price system abstract this paper develops a theory of the relationship between aggregate and relative price variability based on the inability of people even in a rational world to identify permanent changes in relative demands whether caused by real or by monetary variability and relative productivities as soon as they occur the theory implies that the variance of the rate of inflation and the variance of relative price change are positively related although expectations are rational and markets always clear production decisions respond sluggishly to changes in relative prices temporary shocks to relative demands cause prolonged changes in the structure of production available information is used so as to maximize the efficiency of the price system however this efficiency decreases when any of the underlying variances increases this decrease is more pronounced when the production lag is longer

the relationship between relative prices and the general price level it is very nearly a truismi amaong neoclassical economists that the public is wont to confuse changes in the general price level with relative price changes correspondingl y one might speak of the independence between the two as one of the central postulates of the neoclassical tradition william stanley jevons was aml ong the first to identify this basic dichotomin economic life as well as to attempt to explain the ordinary citizen s seenming incapacity to understand it

analysis of energy end use efficiency policy in spain abstract the implementation of saving measures and energy efficiency entails the need to evaluate achievements in terms of energy saving and spending this paper aims at analysing the effectiveness and economic efficiency of energy saving measures implemented in the energy savings and efficiency action plan 2008 2012 eap4 in spain for 2010 the lack of assessment related to energy savings achieved and public spending allocated by the eap4 justifies the need of this analysis the results show that the transport and building sectors seem to be the most important from the energy efficiency perspective although they did not reach the direct energy savings that were expected there is scope for reduction with the appropriate energy measures for the effectiveness indicator the best performance are achieved by public service agricultural and fisheries and building sectors while in terms of energy efficiency per monetary unit the best results are achieved by transport industry and agriculture sectors authors conclude that it is necessary that central regional and local administrations will get involved in order to get better estimates of the energy savings achieved and thus to affect the design of future energy efficiency measures at the lowest possible cost to the citizens

menu costs and phillips curves this paper develops a model of a monetary economy in which individual firms are subject to idiosyncratic productivity shocks as well as general inflation sellers can change price only by incurring a real menu cost we calibrate this cost and the variance and autocorrelation of the idiosyncratic shock using a new u s data set of individual prices due to klenow and kryvtsov the prediction of the calibrated model for the effects of high inflation on the frequency of price changes accords well with international evidence from various studies the model is also used to conduct numerical experiments on the economy s response to various shocks in none of the simulations we conducted did monetary shocks induce large or persistent real responses

price dispersion and inflation evidence from israel the paper considers the question whether observed price differentials reflect perceived differences in quality service agreements or location or whether information imperfections can explain this phenomenon it sets out theoretical arguments linking inflation to reductions in the information stock held by agents and thus to greater price dispersion the hypothesis is tested using monthly price data for 13 uniquely defined goods sold in israel between 1971 and 1984 price dispersion is shown to be positively related to the rate of market price inflation since inflation is an unlikely proxy for changes in perceived characteristics the findings support price dispersion theories based on optimally imperfect decision making

reconsidering the natural rate hypothesis in a new keynesian framework abstract this paper formulates a stylized new keynesian model in which each individual firm can select the frequency of its price adjustments the endogeneity of contract duration has a dramatic impact on the magnitude of the aggregate effects of steady state inflation with a plausible calibration of the magnitude of menu costs and other structural parameters this model predicts a relationship between steady state inflation and the frequency of price adjustment that is reasonably close to the empirical findings of cross country studies furthermore at moderate inflation rates steady state inflation generates relative price distortions that have a non trivial impact on aggregate output but this impact wanes and eventually disappears at much higher annual inflation rates because the frequency of price adjustment approaches that of the flexible price economy

relative price variability and inflation regression studies have established that there tend to be convex nonsymmetric relationships between relative price variability and the inflation rate unanticipated inflation and the change in the inflation rate this paper shows that such regression results follow as definitional artifacts for a simple but quite general stochastic model of price changes the analysis is based on the fact that the definitions of relative price variability the inflation rate unanticipated inflation and the change in the inflation rate imply a particular structure for the covariances among these variables the structure of these covariances has implications for the regression coefficients copyright 1991 by ohio state university press

menu costs and the neutrality of money a model of endogenous price adjustment under money growth is presented firms follow s s pricing policies and price revisions are imperfectly synchronized in the aggregate price stickiness disappears and money is neutral the connection between firm price adjustment and relative price variability in the presence of monetary growth is also investigated the results contrast with those obtained in models with exogenous fixed timing of price adjustment

sectoral variability and the foundations of optimal inflation rate abstractthe recent monetary search models argue that the real effects of inflation on economic activity can be gauged through relative price variability rpv our study uses a large panel data of

the naicu and the phillips curve an approach based on micro data in this paper we propose a straightforward method to derive a non accelerating inflation capacity utilisation rate naicu based on micro data we condition the current capacity utilisation of firms on their current and planned price adjustments the non accelerating inflation capacity utilisation rate is then defined as the rate where a firm feels no price adjustment pressure one of the main advantages is that this methodology uses structural aspects and does not make it necessary to operate with often rather arbitrary statistical filters we show that our aggregate naicu performs remarkably well as an indicator of inflationary pressure in a phillips curve estimation

from hyperination to stable prices argentina s evidence on menu cost models we review and extend several comparative statics results of xed menu cost models of price setting rms facing real idiosyncratic shocks such as the type studied by golosov and lucas 2007 as well as by many others these results are confronted with their empirical counterparts using the micro data underlying argentina s consumer price index for a time period where ination rates vary from almost 5000 per year

territoriality and the governance of cyberspace the issue of how to regulate transactions in cyberspace is central to the future of international electronic commerce this paper is based on four assumptions 1 the internet and e commerce cannot exist apart from the social order 2 attempts to regulate and tax activities on the internet through existing territorial jurisdiction will be problematic 3 cyberspace and e commerce are inherently international thus any successful governance regime will involve significant and substantial international cooperation and 4 effective governance of cyberspace will require public private sector cooperation i e hybrid or integrative schemes combining self regulation with government oversight and enforcement capabilities the paper discusses the first three of these assumptions then explores taxation in more detail as a case study that typifies the issues raised by e commerce in a global context next i develop a framework for understanding the governance of cyberspace as an evolving process involving growing formalization and an increase in the number of actors involved over time the paper concludes with a discussion of several issues that require further research

conditional relative price variance and its determinants open economy evidence from germany the authors present empirical tests of two hypothesis derived from an open economy version of the multimarket equilibrium model the first hypothesis holds that the conditional relative price variance is positively related to the variance of domestic monetary and foreign nominal and real shocks the second hypothesis claims a negative impact of an increase in conditional relative price variance on normal output in contrast to earlier studies the authors use direct measures of conditional relative price variance based on arch estimates the authors results show that both hypotheses are consistent with german data copyright 1991 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

five facts about prices a reevaluation of menu cost models are price decreases 3 the frequency of price increases covaries strongly with inflation whereas the frequency of price decreases and the size of price increases and price decreases do not 4 the frequency of price change is highly seasonal it is highest in the first quarter and then declines 5 we find no evidence of upwardsloping hazard functions of price changes for individual products we show that the first second and third facts are consistent with a benchmark menu cost model whereas the fourth and fifth facts are not

conglomerate mergers as defense against the risk of relative price variability this paper studies the effects of the risk of relative price variability on the optimal structure of a firm s cash flows with an application of portfolio theory it is suggested that when relative price risk is greater it is optimal for the management to diversify at the margin and emphasize economies of scale or scope when the risk is smaller conglomerate mergers should therefore be positively associated with relative price risk given the variables affecting mergers as a whole empirical evidence is found to lend support to the theory the inflation rate explains conglomerate mergers even better which suggests that relative price risk may constitute another real resource cost of inflation

sticky prices new evidence from retail catalogs this paper presents new results on the size frequency and synchronization of price changes for twelve selected retail goods over the past 35 years three basic facts about the data are uncovered first nominal prices are typically fixed for more than one year although the time between changes is very irregular second prices change more often during periods of high overall inflation third when prices do change the sizes of the changes are widely dispersed both large and small changes occur for the same item and the sizes of these changes do not closely depend on overall inflation

privatization and changes in welfare costs of inflation the case of entel argentina abstract in a country with permanent deficit driven inflation problems the proceeds from privatization may translate into potential reductions of the seigniorage needed to finance a given a level of government expenditure the changes in welfare costs of inflation brought about by divestiture are quantified in a monetary model in an argentine case study these changes were found to be small both in terms of gdp and as a percentage of seigniorage revenue within the model this is mainly explained by the low values encountered for the elasticities of money demand with respect to expected inflation and by the exclusion of considerations about unanticipated inflation

on inflation and real price variability this paper studies the consequences of costly price adjustments for the variability of real prices accompanying inflation for constant elasticity demand and cost of production it is shown that a higher demand a lower cost of production or a lower cost of price adjustment leads to less intertemporal variability of real prices if the marginal cost of production does not increase too fast then the average real price is less than the real price that would prevail in the absence of inflation additionally a higher demand a lower cost of production or a lower cost of price adjustment leads to a higher level of real prices

inflation and relative price variability in yugoslavia abstract granger causality tests show that inflation granger causes relative price variability but the feedback relationship cannot be excluded

variability of inflation and the dispersion of relative prices evidence from the chinese hyperinflation of 1946 1949 abstract this paper uses data from the chinese hyperinflation of 1946 1949 to focus on the relationship between the variability in the general price level and the dispersion in relative prices the issue is important because it bears on the natural rate hypothesis which supports the postulate that these two monetary variables are independent our results reinforce the bulk of previous evidence which suggests a positive correlation between the variation in inflation rate and the dispersion in relative prices during inflationary episodes

inflation and price setting in a natural experiment abstract we analyze the behavior of price setters in poland during the transition from a planned to a market economy using a large disaggregated data set the size and frequency of price changes as well as relative price variability all increase as inflation rises the effect of expected inflation on relative price variability is much stronger than the effect of unexpected inflation despite the unusual economic environment the results are qualitatively identical and quantitatively stronger than those in lach and tsiddon 1992 journal of political economy 100 349 389

who will monitor the monitors informal law enforcement and collusion at champagne abstract informal monitors can sometimes substitute for formal law enforcement monitors hired to minimize cheating however are themselves vulnerable to collusion and extortion i focus on one such informal monitor the fair authorities at the trade fairs at champagne asking why the fairs survived for centuries instead of instantly crumbling in the face of the authorities overwhelming incentives to collude milgrom et al s 1990 seminal model of the champagne fairs is not equipped to deal with collusion though it does deal with extortion i show that there is a collusion proof equilibrium in an alternative model with a competing fair and merchant guilds self governed merchant communities and show how these institutions interact with the champagne fair authorities incentives this is invulnerable to collusion extortion and reverse extortion unscrupulous clients threatening to smear a monitor s reputation unless bribed i highlight the crucial roles of competition among monitors the existence of a collective body to organize coordinated punishment of monitors caught colluding and network effects among the monitor s customers that exacerbate any punishment

staggering and synchronization in price setting evidence from multiproduct firms theoretical work on price setting behavior focuses on the single product case while in reality a single price setter sells many products the authors use retail store level multiproduct pricing data to learn about price dynamics they find that while the timing of a product s price changes is staggered across stores selling the same product the timing of the price changes of different products sold within the same store is highly synchronized this finding validates the usual assumption that decisions are staggered across price setters and suggests that price rigidity is due mostly to mechanical reasons and not to informational asymmetries copyright 1996 by american economic association

synchronization of price changes by multiproduct firms evidence from canadian newspaper prices abstract using data for canadian daily newspapers we find that price changes of papers owned by the same firm are synchronized on the other hand independently owned newspapers do not appear to change their prices together

inflation and relative price variability in the short and long run new evidence from the united states this paper presents new evidence that a positive association exists between inflation and relative prices and relative inflation rates in very disaggregated data for the united states over the period 1975 through 1992 there is also evidence that the response of relative prices and relative inflation rates to inflation varies inversely with the information content of a given shock to inflation the relationship is studied from two cross sectional perspectives using individual price series collected from forty eight u s cities evidence on the persistence of the effects of inflation on relative prices is also presented results here demonstrate the absence of a long run relationship between inflation and relative price dispersion i e the two series are not cointegrated finally results from vector autoregressions further imply the effect is smaller than indicated by typical estimates copyright 1996 by ohio state university press

market structure and price flexibility abstract the relationship between market form and price adjustment patterns is examined by using disaggregated price data for mexico over the 1940 1984 period frequency of price adjustment and characteristics of goods and industries appear to be related as predicted by menu cost and customer market models the pattern of response followed by individual prices to inflationary shocks is related to their frequency of price adjustment the typical pattern of response to small and large shocks may differ contrary to predictions based on models with overlapping contracts in addition the empirical results have implications for the relationship between inflation and relative price variability

the impact of the economic crisis and policy actions on ghg emissions from road transport in spain abstract road traffic is the greatest contributor to the carbon footprint of the transport sector and reducing it has become one of the main targets of sustainable transport policies an analysis of the main factors influencing greenhouse gas ghg emissions is essential for designing new energy and environmentally efficient strategies for the road transport this paper addresses this need by i identifying factors which influence the carbon footprint including traffic activity fuel economy and socioeconomic development and ii proposing a methodological framework which uses modified laspeyres index decomposition to analyze the effect of important drivers on the changes in emissions of road transport in spain during the period from 1990 to 2010 the results demonstrate that the country s economic growth has been closely linked to the rise in ghg emissions the innovative contribution of this paper is the special analysis of the changes in mobility patterns and ghg emissions during the economic crisis when for the first time spanish road traffic emissions decreased the reduction of road transport and improved energy efficiency has been powerful contributors to this decrease demonstrating the effectiveness of energy saving measures on the basis of this analysis several tailored policy recommendations have been suggested for future implementation

relative price variability and inflation a disaggregated analysis relative price variability has been studied at the cross sectional intermarket level this paper addresses the equally important phenomenon of intramarket variability the dispersion of commodity price movements around the industry average using quarterly price data for 80 disaggregated commodity groups in the united kingdom from 1974 to 1984 the paper investigates the determinants of intramarket price variability and replicates some previous crosssectional tests for the united kingdom intermarket price variability is found to be positively related to inflation which confirms previous results for the united states and other countries intramarket variability is found to be positively related to the average market rate of price change but the strength of this relationship appears to be inversely related to the level of industry concentration these results generally support the propositions and findings reported by stigler and kindahl

determinants of changes in electricity generation intensity among different power sectors abstract this study analyzes the determinants of changes in electricity generation intensity in china and further uncovers the reasons for the differences between the changes in electricity generation intensity in the thermal and sustainable power sectors by developing a factorial intertemporal nested decomposition technique using the refined laspeyres index we demonstrate the contributions of electricity generation structure electricity generation to consumption ratio production electricity consumption intensity residential electricity consumption intensity and electricity consumption loss intensity effects although the electricity generation intensity of the thermal power sector has been lower than that of the sustainable power sector the latter has declined remarkably and has remained the key sector driving the overall changes in electricity generation intensity meanwhile the effect of electricity consumption intensity is the main factor that reduces electricity generation intensity moreover the impact of production electricity consumption intensity in the thermal power sector exceeds its impact in the sustainable power sector ultimately we find that the differences between the changes in electricity generation intensity in the thermal and sustainable power sectors are mainly due to their differences in production electricity consumption intensity

inflation and relative price variability short run vs long run abstract this paper uses recent developments in measuring correlation to examine the relationship between inflation and relative price variability rpv the results suggest that the positive correlation holds not only in the short run but also in the long run this finding has important implications for theoretical models that purport to explain this relationship such models must incorporate features that generate positive relationships that hold even in the long run

neutrality of inflation in the agricultural sector abstract the paper considers the effect of inflation on the relative prices of products traded in auction markets prices of us agricultural products are used for the period 1951 1981 since agricultural products are widely traded the real forces of supply and demand specific to agriculture are represented by foreign agricultural prices the exchange rate is entered as a separate variable influencing domestic agricultural prices trade between the usa and the ten countries included in the federal reserve board s trade weighted dollar is considered the empirical results are consistent with the hypothesis that inflation did not alter relative agricultural prices when the real forces of supply and demand and the exchange rate are held constant

the spontaneous evolution of commercial law jeremy bentham contended that property and state made law are born and must die together before the state s law there was no property take away the law all property ceases 4 309 most economists have taken this argument to heart clearly some system of defining and then protecting and enforcing property rights property law and rules of exchange contract law is needed for a market system to develop but does the state have to develop and enforce property and contract law one purpose of the following presentation is to demonstrate that the commercial sector is completely capable of establishing and enforcing its own laws a second purpose is to illustrate that modern commercial law is in fact largely made by the merchant community despite governmental efforts to take over provision of such law commerce is an evolving process of interaction and reciprocity which is simultaneously facilitated by and leads to an evolving system of commercial law carl menger 17 proposed that the origin formulation and the ultimate process of all social institutions including law is essentially the same as the spontaneous order adam smith 20 described for markets markets guided by smith s invisible hand coordinate interactions and so does customary law 6 7 these systems develop because perhaps through a process of trial and error it is found that the actions they are intended to coordinate are performed more effectively under one institutional arrangement or process than under another the more effective institutions and practices replace the less effective in the case of customary commercial law traditions and practice evolve to produce the observed spontaneous order as hayek explained however while smith s and menger s insights are firmly established in economics the study of jurisprudence has been almost completely unaffected by their arguments 9 101 one reason of course is that the invisible hand explanation for the emergence of market order is highly plausible because there is an obvious mechanism the mechanics of individual but interrelated market prices which provides the necessary coordination we call the price system the mechanism of evolution for a legal order is much less obvious thus the legal positivist view which holds that law is the product of deliberate design has a strong following among economists another major purpose of this discussion of commercial law therefore is to demonstrate that the rules of property and contract necessary for a market economy which most economists and legal scholars feel must be imposed have evolved without the

the decomposition of co2 emissions from energy use in greece before and during the economic crisis and their decoupling from economic growth abstract greece recorded a significant decline in co 2 emissions from energy use from 2003 to 2013 accompanied by a reduction in energy consumption particularly during the economic recession this study attempts to identify the driving forces of co 2 emissions related to energy consumption through the use of the complete decomposition technique developed by jw sun the decomposition analysis focuses on the four factors responsible for co 2 emissions the carbon intensity effect the energy intensity effect the structural effect and the economic activity effect the analysis covers all the major productive sectors of the greek economy the study covers the period 2003 2013 and is divided into two subperiods 2003 2008 and 2008 2013 in order to assess changes in the contribution of the examined factors during the economic crisis 2008 2013 the analysis is extended to examine the decoupling relationship between co 2 emissions and economic growth in greece with the use of the decoupling index

relative price dispersion aggregate price movement and the natural rate of unemployment this paper develops a model of relative price stickiness and examines its implications for the relationship between relative prices inflation and the natural rate of unemployment estimation of the model demonstrates that causality in the relationship between relative and aggregate prices runs in both directions however microeconomic disturbances have been the primary source of relative price change variance over the postwar period and these micro disturbances have exerted a strong effect on inflation in the short run it also is shown that micro relative price change dispersion has had a significant influence on the natural rate of unemployment

nominal contracting in a world of uncertainty abstract this paper evaluates corporate sensitivity to relative price risk and inflation risk and suggests how the existence of various nominal contracts particularly debt and forward contracts may modify firm behavior under uncertainty by differentiating between the two types of price risk this paper demonstrates the distinct risk reduction functions served by forward contracts and debt debt primarily protects against inflation risk whereas forward contracts can be used to protect against relative price risk complications arise however because forward contracts which are denominated in nominal terms also have an impact on the firm s degree of inflation risk

trends in road freight transportation carbon dioxide emissions and policies in china we adopted the simple average divisia index approach to explore the impacts of factors on the carbon dioxide co2 emissions from road freight transportation in china from 1985 to 2007 co2 emissions were investigated using the following as influencing factors the emission coefficient vehicle fuel intensity working vehicle stock per freight transport operator market concentration level freight transportation distance market share of road freight transportation ton kilometer per value added of industry industrialization level and economic growth building on the results we suggest that economic growth is the most important factor in increasing co2 emissions whereas the ton kilometer per value added of industry and the market concentration level contribute significantly to decreasing co2 emissions we also discussed some recent important policies concerning factors contained in the decomposition model

the open constitution and its enemies competition rent seeking and the rise of the modern state the article presents a simple non mathematical model that helps to explain how states emerged in medieval and early modern central europe classical feudalism is modelled as an essentially state less political system that is as a market for military security characterized by intensive competition the emergence of states is interpreted as the consequence of rent seeking taking place in this market after the medieval growth of population and the simultaneous reduction in transaction costs changed the market power of the parties contracting for the supply of security

crises and emissions new empirical evidence from a large sample abstract in this paper we empirically assess by means of the local projection method the impact of different types of financial crises on a variety of pollutant emissions categories for a sample of 86 countries between 1980 and 2012 we find that financial crises in general lead to a fall in co2 and methane emissions when hit by a debt crisis a country experiences a rise in emissions stemming from either energy related activities or industrial processes during periods of slack financial crises in general had a positive impact on both methane and nitrous oxide emissions if a financial crisis hit an economy when it was engaging in contractionary fiscal policies this led to a negative response of co2 and production based emissions

price dispersion and inflation new facts and theoretical implications abstract in workhorse macroeconomic models price dispersion is a central determinant of welfare the cost of business cycles optimal inflation and the tradeoff between inflation and output stability while price dispersion increases with inflation in the models this relationship is negative in the data due to sales prices the comovement of price dispersion and inflation for regular prices is positive a model with sales can quantitatively match the comovement in the data whereas a range of similar models without sales cannot even for regular prices these findings have important implications for welfare calculations optimal inflation and the effects of monetary shocks

price adjustment in an automobile insurance market a test of the sheshinski weiss model nominal price rigidity is explained in the sheshinski weiss sw model by costly price adjustment the predictions of the sw model which describe a firm s optimal forward looking price adjustment strategy were derived and tested using microdata on the timing and the magnitude of premium changes by sixty nine firms in the alberta automobile insurance market over the period 1974 82 the model was tested by estimating the structural equations of the model probit equations for premium changes and reduced form equations for the firm s new premium and its old premium the overall conclusion is that the sw model does not explain the price adjustments observed in the alberta automobile insurance market