bank loan portfolios and the monetary transmission mechanism abstract we study the portfolio behavior of bank loans following a monetary tightening and find that real estate and consumer loans sharply decrease while commercial and industrial c i loans increase these responses are compared with responses following non monetary shocks which also reduce output but keep interest rates roughly unchanged during such a non monetary downturn c i loans sharply decrease while real estate and consumer loans show no substantial response these responses together with the responses of relevant lending rates are hard to reconcile with a decline in the supply of c i bank loans during a monetary downturn as stressed by the bank lending channel several arguments are presented explaining why the supply of c i loans may actually increase after a monetary contraction

decomposition analysis of co2 emission intensity between oil producing and non oil producing sub saharan african countries abstract the need to decompose co2 emission intensity is predicated upon the need for effective climate change mitigation and adaptation policies such analysis enables key variables that instigate co2 emission intensity to be identified while at the same time providing opportunities to verify the mitigation and adaptation capacities of countries however most co2 decomposition analysis has been conducted for the developed economies and little attention has been paid to sub saharan africa the need for such an analysis for ssa is overwhelming for several reasons firstly the region is amongst the most vulnerable to climate change secondly there are disparities in the amount and composition of energy consumption and the levels of economic growth and development in the region thus a decomposition analysis of co2 emission intensity for ssa affords the opportunity to identify key influencing variables and to see how they compare among countries in the region also attempts have been made to distinguish between oil and non oil producing ssa countries to this effect a comparative static analysis of co2 emission intensity for oil producing and non oil producing ssa countries for the periods 1971 1998 has been undertaken using the refined laspeyres decomposition model our analysis confirms the findings for other regions that co2 emission intensity is attributable to energy consumption intensity co2 emission coefficient of energy types and economic structure particularly co2 emission coefficient of energy use was found to exercise the most influence on co2 emission intensity for both oil and non oil producing sub saharan african countries in the first sub interval period of our investigation from 1971 1981 in the second subinterval of 1981 1991 energy intensity and structural effect were the two major influencing factors on emission intensity for the two groups of countries however energy intensity effect had the most pronounced impact on co2 emission intensity in non oil producing sub saharan african countries while the structural effect explained most of the increase in co2 emission intensity among the oil producing countries finally for the period 1991 1998 structural effect accounted for much of the decrease in intensity among non oil producers while co2 emission coefficient of energy use was the major force driving the decrease among oil producing countries the dynamic changes in the co2 emission intensity and energy intensity effects for the two groups of countries suggest that fuel switching had been predominantly towards more carbon intensive production in oil producing countries and less carbon intensive production in non oil producing ssa countries in addition to the decomposition analysis the article discusses policy implications of the results we hope that the information and analyses provided here would help inform national energy and climate policy makers in ssa of the relative weaknesses and possible areas of strategic emphasis in their planning processes for mitigating the effects of climate change

income inequality and health lessons from a refugee residential assignment program this paper examines the effect of income inequality on health for a group of particularly disadvantaged individuals refugees our analysis draws on longitudinal hospitalization records coupled with a settlement policy where swedish authorities assigned newly arrived refugees to their first area of residence the policy was implemented in a way that provides a source of plausibly random variation in initial location the results reveal no statistically significant effect of income inequality on the risk of being hospitalized this finding holds also for most population subgroups and when separating between different types of diagnoses our estimates are precise enough to rule out large effects of income inequality on health

a semi parametric panel data analysis on the urbanization carbon emissions nexus for oecd countries abstract this study takes a fresh look at the presence of an urbanization carbon emissions environmental kuznets curve for a panel of the organization for economic co operation and development oecd countries from 1960 to 2010 using a recently developed semi parametric panel fixed effects regression model through incorporating a quadratic term for the urbanization variable into the stochastic impacts by regression on population affluence and technology model our analysis represents one of the first oecd studies aimed at determining the effect of urbanization on carbon emissions and identifying the relationship between these two variables compared with parametric panel fixed effects regression more robust results from the recently developed method revealed that energy intensity and per capita gdp had clear effects on per capita carbon emissions urbanization also significantly contributed to changes in per capita carbon emissions we also found strong evidence for an inverse u shaped curve relationship between urbanization and carbon emissions verifying the environmental kuznets curve hypothesis these findings advance the emerging consensus on the urbanization carbon emissions nexus also the novel model used combined with our estimation method can be readily extended to cover other regions for investigating the relationship between development and environmental pollution

the causal effect of income on health evidence from german reunification we investigate whether there was a causal effect of income changes on the health satisfaction of east and west germans in the years following reunification our data source is the german socio economic panel gsoep between 1984 and 2002 and we fit a recently proposed fixed effects ordinal estimator to our health measures and use a causal decomposition technique to account for panel attrition we find evidence of a significant positive effect of income changes on health satisfaction but the quantitative size of this effect is small this is the case with respect to current income and a measure of permanent income

how do banks respond to shocks a dynamic model of deposit taking institutions abstract this paper proposes a dynamic model of the optimal choices of a bank that benefits from market power and takes into account the impact of the deposit generation process interbank lending borrowing emerges as a buffer that assists the bank in smoothing intertemporal adjustments in interdependent loan and deposit choices the bank smooths the impact of interest rates shocks on its customers to minimize the adjustments over time of the stocks of deposits and loans it does not however provide insurance against negative shocks of real origin that increase its expected default costs the predictions of the model help to shed light on the available empirical evidence and to analyze some recent developments of the banking industry

changes in energy requirements of the residential sector in india between 1993 94 and 2006 07 abstract a substantial amount of primary and secondary energy is consumed by the residential sector residential energy consumption includes energy required for construction activity and household consumption hence there is a need to quantify energy consumption its significance and causes calculating energy intensity of goods and services is the first step towards quantifying the causes this research is based on the 115 sector classification input output tables for india for 1993 94 1998 99 and 130 sector classification input output tables for 2003 04 and 2006 07 energy intensity of sectors related to household consumption has been calculated to analyze the trend between 1993 94 and 2006 07 indirect energy requirements of indian households have been assessed in this study from calculations of total primary energy intensity along with private final consumption expenditure results indicate that energy consumption has increased for all categories except medical care and hygiene percentage increase in indirect primary energy consumed by households is maximum for house building and recreation categories finally a complete decomposition analysis of indirect primary energy consumed by households has been carried out based on changing structural composition of the private final consumption expenditure energy intensity patterns per capita expenditures on energy and population

income inequality and health status in the united states evidence from the current population survey several recent studies have identified an association between income inequality and aggregate health outcomes this has been taken to be evidence that inequality is detrimental to individual health we use data from the 1995 99 march current population survey to examine the effect of income inequality on individual health status for both the general population and those individuals in poverty we find no consistent association between income inequality and individual health status our results contradict recent claims that the psychosocial effects of income inequality have dramatic consequences for individual health outcomes

the role of consumption patterns demand and technological factors on the recent evolution of co2 emissions in a group of advanced economies changes in production structures and modifications of patterns of consumption are key factors in the fight against environmental harm initiatives such as agenda 21 promoted by the un highlight the need to evaluate the relationships among factors of production and consumption innovation and demographics and the environment in the attainment of sustainable development in this context our work studies in depth those factors underlying the economic activity of households in a representative group of european union countries and the us within the framework of an input output model a structural decomposition analysis is considered in order to identify the weight that growth in demand changes in patterns of consumption changes in the distribution of income the substitution of inputs and changes in energy intensity have all had on the evolution of co2 emissions the work specifically seeks to identify common patterns and differential behaviors among productive sectors in the european social environment the results show that growth in demand and therefore in production largely absorbs the limited effect of technological and efficiency improvements and the incipient changes observed in consumption patterns

do education and income really explain inequalities in health applying a twin design we apply a twin design to examine the relationship between health and education andincome the estimated associations between health and education and income controlling forunobserved endowments

the energy and environmental impacts of italian households consumptions an input output approach abstract promoting sustainable consumption and production patterns is a key challenge for the future in order to use the earth resources efficiently to reduce the greenhouse gas emissions and to decouple the economic growth from the environmental degradation new or customized methods have to be applied to support decisions makers in the choice of environmental friendly products and to select policy priorities and sustainable strategies a modified input output model can aid to analyse the relationships among economic growth energy consumptions and pollutants in order to assess the energy and environmental impacts due to the actual production and consumption patterns the following paper introduces an energy and environmental extended input output model and combines it with the life cycle assessment lca methodology the authors apply this model to the italian context in order to assess the energy and environmental impacts related to the consumptions of the italian households in the period 1999 2006 and to identify the economic sectors involving the highest impacts the paper represents one of the first italian studies aimed at identifying those national economic sectors and final goods and services to be assumed prior in the definition of sustainable production and consumption strategies results show that about the 70 of the total energy needed to meet the household final demand of products is consumed by the productive sectors in particular tertiary electricity gas and vapour road transports and food and beverage sectors are the most contributors accounting for about 75 further the environmental impact analysis associated to italian households consumptions is carried out starting from three different data sources the results point out that to include emissions arising both from energy and non energy sources in the assessment of environmental impacts is of paramount importance to obtain reliable simulations of the link between households consumptions and energy and environmental performances

co2 emissions from household consumption in india between 1993 94 and 2006 07 a decomposition analysis abstract co 2 emission from anthropogenic activities is one of the major causes of global warming india being an agriculture dependent country global warming would mean monsoon instability and consequent food scarcity natural disasters and economic concerns however with proper policy interventions co 2 emissions can be controlled input output analysis has been used to estimate direct and indirect co 2 emissions by households for 1993 94 1998 99 2003 04 and 2006 07 complete decomposition analysis of the changes in co 2 emissions between 1993 94 and 2006 07 has been done to identify the causes into pollution energy intensity structure activity and population effects according to broad household consumption categories results indicate that activity structure and population effects are the main causes of increase in co 2 emission from household fuel consumption to identify the causes at the sectoral level a second decomposition has been done for changes between 2003 04 and 2006 07 to identify the causes in the next stage finally alternative energy policy options have been examined for each consumption category to reduce emissions combined strategies of technology upgradation fuel switching and market management in order to reduce co 2 emissions for sectors like batteries other non electrical machinery construction and electronic equipments including television for which all the effects are positive need to be adopted

firm behaviour under the threat of liquidation abstract we study the optimal behaviour of a firm whose cash flow is determined by a diffusion process facing liquidation if internal cash balances fall below some threshold there is a conflict between the desire to pay dividends to satisfy shareholders and the need to retain cash as a barrier against possible liquidation stochastic optimal control characterises the value function and gives optimal decision rules for the firm the firm has a precautionary motive for retaining earnings the internal cost of funds and local risk aversion are both decreasing functions of cash held and in natural extensions to our model output and investment are both increasing functions of cash balances

application of the structural decomposition analysis to assess the indirect energy consumption and air emission changes related to italian households consumption abstract the design of sustainable production and consumption strategies and the assessment of implemented actions require to identify the driving forces that influence the trend of energy consumption and environmental impacts for this purpose the structural decomposition analysis sda was developed as a suitable methodology to analyse the driving forces of the changes in economic energy and environmental indicators the paper presents one of the first italian studies that apply an energy and environmental extended input output model opportunely shaped to the examined context combined with sda in detail it aims at 1 investigating the energy use and the air emissions arisen from the productive sectors to meet the household final demand in the period 1999 2006 2 identifying the sources of variations in energy and environmental indicators and 3 identifying which economic sectors are the most relevant sources of variation and must to be taken into account in the definition of sustainable production and consumption strategies as sources of changes the authors investigate energy and emission intensity effects leontief effect and final demand effect outcomes point out that the increase of the final consumptions often nullifies the energy and environmental benefits due to the improvement of the eco efficiency and to the introduction of innovative technologies of production the sector level analysis shows that tertiary and electricity gas and vapour result the highest italian consuming sectors of energy thus they should be focused for energy saving strategies agriculture hunting and sylviculture and road transports that are primarily sectors affecting air emissions should be taken into account for the reduction of environmental impacts results highlight that the current dichotomy of final demand growth and improvement of eco efficiency represents a key problem that needs to be addressed therefore the presented study can aid to define suitable oriented strategies for the energy and environmental impact reduction

no deep pockets some stylized empirical results on firms financial constraints this paper is a survey of recent empirical work on financial constraints faced by firms it is organized as a series of stylized results which mirror what is generally understood about the severity of financial constraints and the effects that they have upon firms the review of the literature shows that a financial constraints are a widespread key concern for firms hindering their ability to carry out their optimal investment and growth trajectories and b the severity of such constraints depends on institutional and firm specific characteristics as well as on the nature of investment projects

china s changing energy intensity trend a decomposition analysis china experienced a dramatic decline in energy intensity from the onset of economic reform in the late 1970s until 2000 but since then the rate of decline slowed and energy intensity actually increased in 2003 most previous studies found that most of the decline was due to technological change but disagreed on the role of structural change to the best of our knowledge no decomposition study has investigated the role of inter fuel substitution in the decline in energy intensity or the causes of the rise in energy intensity since 2000 in this paper we use logarithmic mean divisia index lmdi techniques to decompose changes in energy intensity in the period 1980 2003 we find that 1 technological change is confirmed as the dominant contributor to the decline in energy intensity 2 structural change at the industry and sector sub industry level actually increased energy intensity over the period of 1980 2003 although the structural change at the industry level was very different in the 1980s and in the post 1990 period 3 structural change involving shifts of production between sub sectors however decreased overall energy intensity 4 the increase in energy intensity since 2000 is explained by negative technological progress 5 inter fuel substitution is found to contribute little to the changes in energy intensity

comparing structural decomposition analysis and index to analyze and understand historical changes in economic environmental employment or other socio economic indicators it is useful to assess the driving forces or determinants that underlie these changes two techniques for decomposing indicator changes at the sector level are structural decomposition analysis sda and index decomposition analysis ida for example sda and ida have been used to analyze changes in indicators such as energy use co2 emissions labor demand and value added the changes in these variables are decomposed into determinants such as technological demand and structural effects sda uses information from input output tables while ida uses aggregate data at the sector level the two methods have developed quite independently which has resulted in each method being characterized by specific unique techniques and approaches this paper has three aims first the similarities and differences between the two approaches are summarized second the possibility of transferring specific techniques and indices is explored finally a numerical example is used to illustrate differences between the two approaches

optimal multiperiod contracts and the gain from enduring relationships under private information informational asymmetries can play a key role in explaining the existence and nature of multiperiod contracts in an illustrative risk sharing model even relatively short two period contracts can be mutually beneficial if there is private information though one period contracts suffice otherwise further contracts which are pareto optimal relative to the environment and the information structure are defined and partially characterized an example illustrates how otherwise inefficient intertemporal tie ins can be used optimally to mitigate incentive problems the obvious borrowing lending schemes are not private information pareto optimal in these period by period actions are not sufficiently constrained discounting affects the form of the optimal contract but none of these qualitative conclusions

the increasingly mixed proportional hazard model an application to socioeconomic status health shocks and mortality we introduce a duration model that allows for unobserved cumulative individual specific shocks which are likely to be important in explaining variations in duration outcomes such as length of life and time spent unemployed the model is also a useful tool in situations where researchers observe a great deal of information about individuals when first interviewed in surveys but little thereafter we call this model the increasingly mixed proportional hazard imph model we compare and contrast this model with the mixed proportional hazard mph model which continues to be the workhorse of applied single spell duration analysis in economics and the other social sciences we apply the imph model to study the relationships among socioeconomic status health shocks and mortality using 19 waves of data drawn from the german socio economic panel soep the imph model is found to fit the data statistically better than the mph model and unobserved health shocks and socioeconomic status are shown to play

comparison of energy intensities in european union countries results of a structural decomposition analysis abstract this work proposes an input output structural decomposition analysis model to identify the sources of the differences in the energetic intensities of the european union countries given an economic structure a determined composition of the final demand and determined direct energy intensities by countries the work studies to what extent these factors explain the difference in aggregate energy intensities that are observed for different european union countries on the basis of this information indicators are constructed by sectors and countries that allow us to identify the role that each sector or country plays as an energy consumer the results show that the aggregate total energy differences in europe are strongly influenced by the direct energy intensity effect and by the demand effect without the different economic structures of the countries being an important factor in the explanation of these differences the metallurgical and manufacturing products sectors are identified as the most intensive in the aggregate energy intensity

technological gap scale economy and china s industrial energy demand abstract the industrial sector in china is energy intensive and accounts for more than 60 of the nation s total energy consumption demand narrating the story behind the growth of china s industrial energy consumption could help us understand the past and prepare for the future this paper aims to investigate the factors affecting china s industrial energy consumption in the 21st century by using an extended production theoretical decomposition approach pda with considering the technological gap and scale of the economy effects the new proposed decomposition framework includes four new factors namely the energy technological gap the output technological gap energy scale efficiency and output scale efficiency the results show that in the 21st century the energy consumption of china s industry increased by more than one billion tons of standard coal the expansion of the industrial economy is a dominant driver of china s industrial energy consumption while potential energy intensity energy technology and output technology are the three largest energy saving factors in addition to the conventional factors the newly proposed factors also have important effects on china s industrial energy consumption specifically output scale efficiency is an energy saving factor while the energy technological gap output technological gap and energy scale efficiency are drivers of energy consumption this suggests that china s industry is at the stage of returns to scale that is beneficial to output performance but harmful to energy performance meanwhile the widening of the industrial technological gaps has negative impacts on china s industrial energy conservation the proposed decomposition approach can provide information that cannot be obtained from traditional approaches and it can also be applied to many other cases for investigating feasible paths of energy saving and emissions reduction

banking corporate finance and monetary policy an empirical perspective traditional theories of corporate finance and macroeconomics give no independent role to bank credit in real behavior implicitly assuming perfect capital markets however most recent theoretical work in corporate finance stresses capital market imperfections which limit access to finance for certain borrowers banks are seen as means to overcome these difficulties implying a comparative advantage over securities markets and that bank lending may have real effects empirical results at a micro level tend to support many of these theories based on asymmetric information and incomplete contracts albeit often also being consistent with other hypotheses equally some progress had been made relating recent developments in banking and corporate finance to macroeconomic developments the so called credit channel of monetary transmission the central banks are showing a greater interest in credit as an indicator and component of the monetary policy transmission mechanism partly in the light of this body of research copyright 1994 by oxford university press

health human capital height and wages in china abstract we estimate the returns to height using data from 12 chinese cities we present both ordinary least squares ols and two stage least squares tsls estimates in the latter height is instrumented using proxies for health human capital accumulated in childhood and adolescence which influence adult height the tsls estimates are much higher reflecting the fact that the ols estimates are determined by the random genetic factors influencing height while the tsls estimates also take into account returns from investment in health human capital during childhood and adolescence these results imply considerable returns to investment in health human capital

corporate credit risk dynamics the lack of widely available and comprehensive data of default activity on the corporate level has encouraged the advance of theories of corporate credit risk far beyond related empirical work this article addresses this deficit by examining a unique data set corporate bond defaults and credit ratings compiled by moody s investors service since 1920 the article investigates the time inhomogeneity of company default risk that is the pattern in which the risk of default for a company changes over time the empirical analysis addresses company default risk within a regression framework of competing risks or hazards the analysis identifies and quantifies variations in default risk with macroeconomic conditions with industries and through time an important characterization for many approaches to measuring and managing credit risk

infant mortality relative income and public policy do health outcomes depend on relative income as well as on an individual s absolute level of income we use infant mortality as a health status indicator and find a significant and positive link between infant mortality and income inequality using cross national data for 93 countries holding constant the income of each of the three poorest quintiles of a country s population we find that an increase in the income of the upper 20 of the income distribution is associated with higher not the lower infant mortality our results are robust and not just caused by the concave relationship between income and health the estimates imply a decrease in infant mortality by 1 5 for a one percentage point decrease in the income share of the richest quintile the overall results are sensitive to public policy public health care expenditure educational outcomes and access to basic sanitation and safe water can explain the inequality health relationship thus our findings support the hypothesis of public disinves

financial intermediation business failures and real business cycles in this paper a general equilibrium business cycle model is construct ed that when subjected to real disturbances mimics observed qualita tive comovements among real output money business failures risk pr emia intermediary loans and prices in contrast monetary disturban ces generate cycles that have several inconsistencies with empirical evidence thus providing support for real business cycle theory at th e expense of monetary theories of the business cycle financial inter mediation arises endogenously in the model and intermediation matters for business cycle behavior a credit supply mechanism acts in tande m with an intertemporal substitution effect in propagating stochastic disturbances copyright 1987 by university of chicago press

material implication of chile s economic growth combining material flow accounting mfa and structural decomposition analysis sda abstract over the last three decades the economic integration of the chilean economy into global markets has been taking place at a rapid pace for example in 1986 exports represented 29 of gdp while in 1996 they had increased to 38 of gdp this period of time was characterized by strong economic growth with an average annual growth rate of about 10 from a physical perspective material requirements more than doubled from 220 to 500 million tons of direct material inputs dmi during the same decade the rate of material growth requirements was around 13 per year the main objective of this study is to explain the changes in dmi by using a structural decomposition analysis sda the changes in material flow accounting mfa were broken down into the effects caused by changes in resource use per unit of output material intensity effect changes between and within sectors structural change effect changes in the composition of final demand mix effect changes due to shifting shares of domestic final demand and export categories category effect and finally changes in the overall level of economic activities level effects the results as a percentage of the total level of dmi used in 1986 indicate that economic growth was the major source of material changes 109 the material intensity and category effects explained 31 and 14 of the increase respectively the increase in the material intensity is mainly due to a declining quality of ores in copper production however these components were partly compensated by the structure 14 and mix 13 effects therefore for a southern american country such as chile the main causes of these changes in material consumption have been a combination of the nature of economic growth along with an increase in export production and material intensity of production

identifying the economic and environmental impacts of china s trade in intermediates within the asia pacific region abstract using value added and employment as the representatives of economic benefits and carbon emissions as the proxy of environmental costs of trade this study analyzes the impacts of china s trade in intermediates with major trading partners in the asia pacific region australia canada japan korea mexico taiwan and the usa on its economy and environment during 2000 2014 through hypothetical extraction method and structural decomposition analysis results show that china s trade in intermediates within the region induced a higher share of carbon emissions than those of value added and employment the economic and environmental impacts of china s trade in intermediates with the seven trading partners were mainly driven up by the intensifying international industrial linkages technical factors induced considerable negative effects on the impacted carbon emissions and employment at the sectoral level the expanding intermediate trade of heavy industries brought the major part of increasing impacts on carbon emissions value added and employment the impacted employment shifted toward high skilled occupations especially in heavy industries and services and the impacted low skilled employment decreased in most sectors finally related policy implications are deduced

financial development and economic growth evidence from panel unit root and cointegration tests abstract in this paper we investigate the long run relationship between financial depth and economic growth trying to utilize the data in the most efficient manner via panel unit root tests and panel cointegration analysis in addition we use threshold cointegration tests and dynamic panel data estimation for a panel based vector error correction model the long run relationship is estimated using fully modified ols for 10 developing countries the empirical results provide clear support for the hypothesis that there is a single equilibrium relation between financial depth growth and ancillary variables and that the only cointegrating relation implies unidirectional causality from financial depth to growth

measuring structural change and energy use decomposition of the us economy from 1997 to 2002 abstract the steadily increasing focus on energy production and consumption has led to growing research attention to patterns of energy use within economies of particular interest has been comparing the driving forces of increasing efficiency and economic structural change input output analysis ioa and decomposition analysis have become critical tools for performing such analyses this study analyzes aggregate energy use in the united states in 1997 and 2002 to discover the causes of changing energy usage and flows results show that rising population and household consumption acted to drive up energy demand but this driving force was offset by considerable structural change within the economy particularly related to a quickly increasing trade deficit in manufacturing goods thus while total energy intensity the ratio of energy use to economic output declined by approximately 12 between 1997 and 2002 changes in the structure of the economy explain this drop more than increased energy efficiency the level of aggregation at which decomposition analyses are run was identified as a crucially sensitive parameter for the determination of structural change and future studies should specifically address the amount of detail necessary to adequately measure changes in economic structure

regional and sectoral attribution to percentage changes in the european divisia carbonization index abstract concerns on rising concentrations of co2 in the atmosphere and global warming have increased in recent years numerous environmental studies analyze the trends in co2 emissions and their main drivers in this paper we focus on the dynamics of the carbonization effect as a driving force for co2 emissions in the european union eu by implementing the sato vartia logarithmic mean divisia index method the trend of european emissions in the 2000 2010 period is factorized by both sector and country the analysis stresses the relevance of the carbonization and intensity effects in order to reduce emissions then based on so called attribution analysis we present a new theoretical framework that enables the attribution of both economic sector and individual eu member state to percentage changes in the carbonization index results show strong concentration of this reducing influence in some big economies in fact germany the united kingdom france and italy have contributed by more than 50 industry emerges as the most influential sector contributing to offset any improvement in the carbonization index our findings suggest strategies aiming at encouraging innovation technical change research on higher quality energies fuel substitution and installation of abatement technologies particularly in the industrial sector of large economies

implicit contracts with asymmetric information and bankruptcy the effect of interest rates on layoffs this paper develops a model in which a firm writes labour contracts with workers and debt contracts with creditors firms have more information than do the owners of the factors of production and they are also subject to limited liability we show that if the limited liability constraint is binding then the employment level is inefficient relative to a situation of symmetric information the firm is then embedded into a partial equilibrium model in which the real rate of interest is exogenously determined we show that increases in the real rate of interest increase the inefficiency of the optimal employment contract and lead to layoffs in more states of nature than would occur at lower real interest rates recent literature in the area of implicit contracts has shown considerable interest in the assumption of asymmetric information henceforth a i papers by azariadis 1982 green and kahn 1982 and grossman and hart 1981 have all shown that a i will interfere with optimal risk sharing but although these models produce non walrasian outcomes it is not clear that they are capable of explaining the observed variations in employment over the business cycle in the absence of a link between the level of employment and other macroeconomic variables these new versions of contract theory are open to the charge that they are presenting a complicated explanation of frictional unemployment one potential link between variations in output and variations in intertemporal prices is suggested by models which explicitly allow for the possibility of bankruptcy sappington 1983 has shown that bankruptcy will generate inefficient outcomes even between risk neutral agents and farmer 1984 has shown that if sappington type contracts are incorporated into a macroeconomic structure then the resulting model predicts that bankruptcies will vary countercyclically over the business cycle although bankruptcy is important however it is unlikely that bankruptcies alone will account for all of the output loss during a recession the purpose of this paper is to show that the assumptions of a i and limited liability will generate a model in which the employment level is inefficient and in which the magnitude of this inefficiency varies systematically with the expected real rate of interest this model predicts that the observed increase in the incidence of layoffs during recessions is directly attributable to the effects of high interest rates on aggregate supply some evidence of the phenomenon to be explained is presented below

limited liability contracts between principal and agent abstract the optimal strategy of the principal is examined in an environment where there are ex post limitations on the maximum penalty that can be imposed on a riskneutral agent contrary to the case in which such limitations are not imposed it is in the principal s interest to deliberately forego the opportunity to induce socially efficient behavior and to instead design a contract that induces the agent to realize an efficient outcome only in the most productive state of nature and perhaps in certain very unproductive states the properties of the contract are examined in detail

relative income race and mortality abstract this paper examines the relationship between relative income and mortality our research is motivated by recent literature that posits that holding individual income fixed those whose income are low relative to the incomes of those in a reference group will have worse health we develop an empirical model in which an individual s health is a function of his or her own income and the incomes of those who live in the same geographical area we show how this individual level model can be estimated using semi aggregated data on the mortality rates of people categorized by age race gender and place of residence the model is estimated using mortality data from the 1980 and 1990 compressed mortality files merged with income data from the 1980 and 1990 5 public use samples of the us census we find no evidence that having relatively wealthy neighbors holding own income fixed is associated with higher mortality instead we find evidence that among some demographic and age groups in particular working aged black males having relatively wealthy neighbors is associated with lower mortality for example among younger aged 25 64 black men an increase in the income of others is estimated to have a beneficial effect on mortality that is 40 as large as an equivalent increase in own income

costly monitoring loan contracts and equilibrium credit rationing this paper develops a model with asymmetrically informed agents and costly monitoring of loan contracts where an equilibrium can exhibit credit rationing borrowers are identical ex ante but some receive loans and others do not in contrast to existing credit rationing theories rationing does not occur here due to inflexible prices adverse selection or moral hazard optimizing behaviour produces a standard debt contract in equilibrium the aggregate quantity of loans and equilibrium interest rates respond differently depending on whether there is rationing in equilibrium

is energy efficiency a driver or an inhibitor of energy consumption changes in spain two decomposition approaches abstract the 2000 2008 expansion period of the economy was accompanied by an important increase of energy consumption the desire of decoupling has led us to analyse the driving forces behind the energy consumption changes during this expansion period through a structural decomposition analysis sda based on the spanish input output tables previous decomposition has been supplemented by a logarithmic mean divisia index lmdi analysis of the energy consumption changes during a longer period 2000 2013 the results show that the energy intensity was the main inhibitor effect of the energy consumption changes of sectors of production not only during the recession but also during the expansion period secondly the energy intensity was a driver of the energy consumption change of households during the expansion period however during the recession period the energy intensity of private transport contributed to reducing energy consumption having an inhibitor effect therefore if the activity effect is still the most important driver the energy intensity effect has become the main inhibitor of energy consumption changes the energy policy recommendation is to focus on household energy consumption in the future if the spanish government aims to attain the eu energy efficiency objectives

spatial spillover effects in determining china s regional co 2 emissions growth 2007 2010 abstract this study proposes an alternative input output based spatial structural decomposition analysis to elucidate the importance of domestic regional heterogeneity and inter regional spillover effects in determining china s regional co 2 emissions growth our empirical results based on the 2007 and 2010 chinese inter regional input output tables show that changes in most regions final demand scale final expenditure structure and export scale have positive spatial spillover effects on other regions co 2 emissions growth changes in most regions consumption and export preference help reduce other regions co 2 emissions changes in production technology and investment preferences may exert positive or negative effects on other region s co 2 emissions growth through domestic supply chains for some regions the aggregate spillover effect from other regions may be larger than the intra regional effect in determining regional emissions growth all these facts can significantly help provide a better deeper understanding of the driving forces behind the growth of regional co 2 emissions and can thus enrich the policy implications concerning a narrow definition of carbon leakage through domestic inter regional trade as well as a relevant political consensus about responsibility sharing between developed and developing regions inside china

interest rates and the channels of monetary transmission some sectoral estimates abstract we estimate a small sectoral var model of the uk macroeconomy this model is then used to simulate the effects of an exogenous monetary policy shock upon asset prices bank balance sheet variables and final target variables activity and prices for the personal and corporate sectors significant sectoral differences are found among the channels of monetary transmission in addition the use of sectoral data facilitates the identification of distinct money and credit channels in the transmission of monetary policy these results contrast with the ambiguous findings on the roles of money and credit in the literature to date

will the aggregation approach affect energy efficiency performance assessment abstract aggregate energy is usually measured in the linear weighted summation of various energy types based on thermal dynamics laws this measurement is scientific and acceptable in the physics or energy engineering world however it implicitly assumes that all energy types are perfectly substitutable and thus may result in distorted conclusions in energy economy research in economics world production factors are usually non linearly aggregated using divisia approach which is derived from microeconomic theory and considers the heterogeneity and imperfect substitutability among various energies using which ruler to measure the aggregate energy the linear one or the others will certainly affect the conclusions and energy saving incentives of the economic agents inequitable energy aggregations may bring out speculations or discouraged behaviors according to china s current provincial energy efficiency performance assessment policy the central government assigned the target of reducing the national aggregate energy intensity by 20 in 2006 2010 to provincial authorities in 2006 and in july 2011 the central government formally released the provincial assessment results based on conventional linear aggregation approach coal equivalent our re examination review this policy and show that the official results are quite different to that based on divisia approach from the perspective of economics some local performances are overestimated and others are underestimated to raise the equity and incentive compatibility of the assessment we suggest the central take the imperfect substitutability or energy structure changes into consideration we also discuss the difficulties and deficiencies when using divisia aggregate approach

bank loan components and the time varying effects of monetary policy shocks the impulse response function irf of an aggregate variable is time varying if the irfs of its components are different from each other and the relative magnitudes of the components are not constant two conditions likely to be true in practice we model the behaviour of loan components and document that the induced time variation for total loans is substantial which helps to explain why studies describing total loans have had such a hard time finding a robust response of total bank loans to a monetary tightening

the indirect energy consumption and co2 emission caused by household consumption in china an analysis based on the input output method in recent decades china s rapid economy development has been coupling with the steadily increasing household consumption which in turn leads to ever growing energy consumption and co2 emission with a focus on the decade of 2000 2010 this study examines the energy consumption and co2 emission caused by household consumption using the input output method as well as the influencing factors of the indirect co2 emission the results show that first the indirect energy consumption and co2 emission appear the main parts of total energy consumption and co2 emission caused by household consumption accounting for 69 77 and 77 84 respectively second the indirect co2 emission indicates an increasing trend mainly driven by per capita household consumption and energy intensity finally the five sectors with relatively higher direct or total co2 emission intensity are the key sectors for reducing co2 emission in china i e 1 production and distribution of electric power and heat power pdeh 2 smelting and pressing of metals spm 3 processing of petroleum coking processing of nuclear fuel ppcpn 4 manufacture of non metallic mineral products mnm and 5 manufacture of chemical materials mcm

financial capacity and output fluctuations in an economy with multi period financial relationships this paper motivates a financial propagation mechanism in the context of an intertemporal production economy with asymmetric information and with borrowers and lenders who enter multi period financial relationships a key feature is that aggregate output and borrowers financial capacity the maximum overhang of past debt they may feasibly carry are determined jointly much in the spirit of gurley and shaw 1955 expectations of future economic conditions govern financial capacity which in turn may constrain current production especially in bad times a small but persistent shift in aggregate conditions may have a large impact on financial capacity making the framework capable of motivating large endogenous fluctuations in financial constraints understanding how small disturbances can induce large output fluctuations is an on going quest in macroeconomics this paper develops a simple framework in which shifts in aggregate economic fundamentals are amplified through their impact on financial conditions a distinguishing feature is that output and borrowers financial capacity the maximum overhang of past debt they may feasibly carry are determined jointly much in the spirit of gurley and shaw 1955 expectations of future economic conditions govern financial capacity and financial capacity may constrain current production especially in bad times a number of recent papers have resurrected the view that financial factors may play a part in propagating business fluctuations the underlying theories exploit the idea that with asymmetric information between borrowers and lenders agency costs may drive the price of uncollateralized external funds above the price of internal funds in this kind of setting a borrower s financial position is a key determinant of the terms of credit she faces in the aggregate swings in borrower balance sheets over the cycle amplify fluctuations in investment and output essentially by inducing counter cyclical movements in the required premium for external finance this simple mechanism is broadly consistent with informal descriptions of how financial and real variables interacted in the great depression bernanke 1983 and in the postwar business cycles eckstein and sinai 1986 in addition numerous recent panel data studies beginning with fazzari hubbard and peterson 1988 support the notion of a financial investment accelerator mechanism

healthy bodies and thick wallets the dual relation between health and economic status there is abundant evidence of a quantitatively large association between many measures of economic status including income and wealth and a variety of health outcomes such as mortality or morbidity however considerable and often heated debate remains especially across disciplines about the direction of causation and about why the association arises although medical scientists are often convinced that the dominant if not exclusive pathway is that variation in socioeconomic status produces health disparities they are increasingly debating among themselves about why low economic status might lead to poor health at least for modern industrial countries 1 the old standby arguments the less well to do have access to less or lower quality medical care or a stronger pattern of deleterious personal behaviors have been rejected as insufficient instead a series of intriguing competing theories have arisen that emphasize long term impacts of early childhood or even inter uterine environmental factors the cumulative effects of prolonged exposures to individual stressful events or reactions to macro societal factors such as rising levels of income inequality a common link is that each theory attempts to document the physiological processes through which low economic status leads to poorer health while these scientific questions are extremely important this research has taken place with little input from economists economists are now making contributions about the alternative pathway the impact poor health may have on economic resources poor health may restrict a family s capacity to earn income or to accumulate assets by limiting work or by raising medical expenses at a minimum this work should provide a caution against exaggerating the magnitude of causation from economic status to health outcomes but the potential contribution runs deeper as people age the evolving variation in individual health outcomes may offer additional statistical information to estimate parameters of household savings and consumption behavior that so far have proven to be somewhat elusive thus incorporating health uncertainty and risk into economic models should eventually enrich our understanding of basic tenets of household behavior the first section of this paper documents the size of the association between health and one prominent economic status measure household wealth section two deals with how health influences economic status by sketching out reasons why health may alter household savings and eventually wealth and then providing estimates of the empirical magnitude of these effects section three shifts attention to the alternative pathway the links between economic status and health and summarizes 2major controversies and evidence surrounding these issues

the impact of biomass consumption on co2 emissions cointegration analyses with regime shifts abstract the source of carbon dioxide co2 emissions has been of great interest to researcher s and or policy maker s within ongoing efforts to diminish the emissions in the world due to co2 s serious adverse environmental effect this paper investigates the possible existence of long run relationship between co2 emissions and biomass consumption in us for the period january 1990 september 2011 to this end paper first seeks for effect of biomass on co2 through energy literature and later follows cointegration analyses with structural breaks to reveal parameter estimates of long run equilibrium of co2 with fossil fuel consumption and biomass consumption eventually this paper explores that structural breaks are important to understand the course of co2 and that as expected fossil fuel and biomass effect co2 positively and negatively respectively alternative cointegration analyses with regime shifts confirm negative impact of biomass and positive impact of fossil fuel on co2 as well

bank firm relationships and allocative efficiency in northeastern and central italy and in the south abstract we make two contributions on the extent and impact of relationship banking based on close and long lasting bank firm customer relationships in the three sub systems in which italy may be subdivided first we show that relationship banking is more extensive in both sub systems where small businesses prevail the fast growing northeast and center nec and the south the marginal area of dependent development second we demonstrate that relationship banking improves the allocation of credit in the nec but worsens it in the south this evidence suggests that relationship banking may be beneficial or detrimental depending on the socio economic structure

parental income lifetime income and mortality this article studies the relation between parental economic resources and mortality later in life we use a data set on a cohort of individuals born in 1928 in the county of malmo in southern sweden which contains exceptionally detailed measures of parental household income from five years during the individuals childhood between 1929 and 1942 the data also contain very rich information on individual earnings throughout these individuals entire life cycle that allows us to construct a measure of lifetime earnings date and cause of death are obtained from national registers using cox proportional hazard models we find an inverse relationship between parental income and mortality also when controlling for individual lifetime income and when studying those with high education separately a competing risk analysis shows the relation between parental income and mortality to apply to cancer as the cause of death jel d31 i10 i12 j10

industrial co2 emissions from energy use in korea a structural decomposition analysis abstract this paper attempts to quantify energy consumption and co 2 emissions in the industrial sectors of korea the sources of the changes in co 2 emissions for the years 1990 2003 are investigated in terms of a total of eight factors through input output structural decomposition analysis changes in emission coefficient caused by shifts in energy intensity and carbon intensity changes in economic growth and structural changes in terms of shifts in domestic final demand exports imports of final and intermediate goods and production technology the results show that the rate of growth of industrial co 2 emissions has drastically decreased since the 1998 financial crisis in korea the effect on emission reductions due to changes in energy intensity and domestic final demand surged in the second period 1995 2000 while the impact of exports steeply rose in the third period 2000 2003 of all the individual factors economic growth accounted for the largest increase in co 2 emissions the results of this analysis can be used to infer the potential for emission reduction in korea

driving forces of rapid co2 emissions growth a case of korea abstract this study aims to investigate korea s final demand structure and its impacts on co 2 emissions in order to reduce co 2 emissions and develop environmental policy directions based on the environmentally extended input output model this study adopts a two step approach 1 to estimate the embodied emissions and their intensities for 393 sectors induced by final demand and 2 to calculate the driving factors of emission growth between 2003 and 2011 and then evaluate the result by using structural decomposition analysis sda the findings of this study demonstrate that the impact of composition change in export with less embodied emission intensities tends to offset the increase in co 2 emission by the export scale growth the relatively low residential electricity price has resulted in the rapid growth of household electricity consumption and significantly contributed to emissions growth the result of sda indicates that korea s final demand behavior yielded high carbonization over the same period the findings suggest that korean government should promote exports in industries with less embedded co 2 in order to protect environments in addition emission information of each product and service should be provided for consumers to change their purchase patterns towards contributing to low carbon emissions as active players

monetary policy effects new evidence from the italian flow of funds new evidence on the transmission of monetary policy to the economy is provided through an analysis of the effects of a restrictive monetary policy shock on italian flow of funds over the period 1980 to 2002 firms reduce issuance of debt and decrease the acquisition of financial assets providing no support for the existence of strong financial frictions following the shock in the first quarter households increase short tem liabilities and diminish the acquisition of liquid assets and shares the public sector increases net borrowing during the first 2 years financial corporations decrease their borrowing for three quarters while in the same period the foreign sector increases borrowed funds we claim that our results shed new light on the role of the financial decisions of the economic sectors in the transmission mechanism of monetary policy

evidence on the role of cash flow for investment abstract recent work in macroeconomics argues that imperfections in capital markets may lead to business cycle fluctuations by propagating relatively modest shocks evidence for such a mechanism also known as the financial accelerator consists largely of firm level studies showing that cash flow is an important predictor of investment but this evidence is often viewed with skepticism because cash flow is also a good indicator of investment opportunities in this paper we develop a framework for estimating the extent to which the predictive power of cash flow can be attributed to its role as a fundamental versus its role in alleviating credit frictions for firms with access to commercial paper and bond markets we find that the perfect capital markets model of investment can fully account for the role of cash flow for firms with only limited access to capital markets as indicated by lack of participation in public debt markets however investment appears to be excessively sensitive to fluctuations in cash flow these results thus clarify the role of cash flow in investment equations and provide support for the existence of a financial accelerator

income distribution and infant mortality comparing two countries in which the poor have equal real incomes the one in which the rich are wealthier is likely to have a higher infant mortality rate this anomalous result does not appear to spring from measurement error in estimating the income of the poor and the association between high infant mortality and income inequality is still present after controlling for other factors such as education medical personnel and fertility the positive association of infant mortality and the income of the rich suggests that measured real incomes may be a poor measure of social welfare this paper considers and tests several possible explanations such as the provision of medical services the degree of urbanization the extent of female literacy and differences in the composition of births among different income groups none of these factors adequately accounts for the positive association between the incomes of the rich and infant mortality the geographical scope is worldwide excerpt

information constrained insurance the revelation principle extended abstract private information induced incentive constraints can cause allocations to diverge from full information optimal allocations often in the direction of limited insurance but can bring unanticipated anomalies related plausible contract exclusion restrictions can be damaging in welfare terms more generally private information optimal allocations can be sensitive to the information structure suggesting that the latter be specified with an eye toward realism as well as tractability in an effort to make tractability less of a constraint the paper shows how two apparently difficult information structures a costly state verification environment and a multiperiod multilateral private information environment can be handled theoretically by revelation principle methods the paper also shows how solutions can be generated numerically

international comparisons of income inequality tests for lorenz dominance across nine countries this paper examines income inequality across nine countries using the luxembourg income study data set new statistical tests and comparability of data provide an exceptionally clear picture of relative income inequality only 4 comparisons out of a possible 108 cannot be ranked in most cases differences in the definition of the recipient unit make little difference in the rankings irrespective of recipient units sweden norway and germany come out at the top of the ordinal lorenz ranking with australia canada and the united kingdom in the middle and the united states and switzerland at the bottom copyright 1991 by the london school of economics and political science

the benefits of lending relationships evidence from small business data this paper empirically examines how ties between a firm and its creditors affect the availability and cost of funds to the firm we analyze data collected in a survey of small firms by the small business administration the primary benefit of building close ties with an institutional creditor is that the availability of financing increases we find smaller effects on the price of credit attempts to widen the circle of relationships by borrowing from multiple lenders increases the price and reduces the availability of credit in sum relationships are valuable and appear to operate more through quantities rather than prices

longitudinal analysis of income related health inequality this paper considers the characterisation and measurement of income related health inequality using longitudinal data the paper elucidates the nature of the jones and lopez nicolas 2004 index of health related income mobility and explains the negative values of the index that have been reported in all the empirical applications to date the paper further presents an alternative approach to the analysis of longitudinal data that brings out complementary aspects of the evolution of income related health inequalities over time in particular we propose a new index of income related health mobility that measures whether the pattern of health changes is biased in favour of those with initially high or low incomes we illustrate our work by investigating mobility in the general health questionnaire measure of psychological well being over the first nine waves of the british household panel survey from 1991 to 1999

assessment of reasonably achievable ghg emission reduction target in lithuanian households abstract lithuania has developed several important climate change mitigation policy documents however there are no attempts in lithuania to develop local climate change mitigation policies or to decentralize climate change mitigation policy the aim of the paper is to analyse climate change mitigation policies in households the paper presents the framework for the assessment of reasonably achievable ghg emission reduction raer potential in households based on behavioral changes related to energy consumption the paper presents the results of empirical application of developed framework in lithuanian households community based social marketing approach was implemented and ghg emission reduction potential was assessed in focus groups of kaunas region county during preparation of sustainable development strategy and long term strategic development plan for kaunas region county

liquidity constraint on the production of firms in southern italy the paper shows how small and medium enterprises located in the less developed regions of southern italy face higher liquidity constraints compared to the firms in the central northern italian regions the reasons for these constraints are the undersized nature of firms and higher risk of business activity consequently credit rationing is more extensive in order to analyse the effects on the potential growth of firms production a simple model is presented followed by estimates for growth the results confirm the existence of a bottleneck of financial resources devoted to current finance production that limits the accumulation of working capital even when faced with favourable market opportunities

absolute income relative income income inequality and mortality we test whether mortality is related to individual income mean community income and community income inequality controlling for initial health status and personal characteristics the analysis is based on a random sample from the adult swedish population of more than 40 000 individuals who were followed up for 10 17 years we find that mortality decreases significantly as individual income increases for mean community income and community income inequality we cannot however reject the null hypothesis of no effect on mortality this result is stable with respect to a number of measurement and specification issues explored in an extensive sensitivity analysis