a conference on postcrisis banking this essay provides an introduction to the special issue we focus on four themes which are important for policymakers and researchers alike in view of the experiences of the global financial crisis of 2007 2009 and the ensuing sovereign debt crisis in the euro area the relevance of the banking sector for the real economy the future structure and regulation of the banking sector the efficacy of past and current regulatory reforms and the impact of crossborder banking on economic stability and financial development

too big to be efficient the impact of implicit subsidies on estimates of scale economies for banks we examine whether too big to fail tbtf factors affect estimates of scale economies for large banks from a standard model of bank production that does not control for any tbtf factors we find evidence of scale economies for our sample of large banks we then control for tbtf factors by using a measure of the implicit subsidy that emerges from a reduction in tbtf banks funding costs due to investor expectations of government support we do this in two ways first we estimate scale economies from an augmented model of bank production that employs a proxy for the counterfactual price of debt that banks would face in the absence of any tbtf funding cost advantage second we estimate scale economies from a model of bank production that is estimated only for a sample of banks considered unlikely to be tbtf after controlling for tbtf factors using either method we no longer find evidence of scale economies for our sample of large banks these results suggest that estimated scale economies for large banks are affected by tbtf factors

quantifying structural subsidy values for systemically important financial institutions abstract claimants to systemically important financial institutions sifis would receive transfers when governments are forced into bailouts ex ante this bailout expectation lowers sifis daily funding costs the funding cost advantage reflects both the structural level of the government support and the time varying market valuation for such a support based on a large worldwide sample of banks we estimate the value of the structural subsidy by exploiting expectations of state support embedded in credit ratings and by applying the long run average value of the rating bonus the value of the structural subsidy was already sizable 60 basis points bp as of the end 2007 before the crisis it increased to 80 bp by the end 2009

energy content in manufacturing exports a cross country analysis abstract this article compares the energy content in manufacturing exports in a set of 30 advanced and emerging economies and examines its evolution from 1995 to 2005 combining information from the oecd input output matrices and international trade data in 17 manufacturing sectors in addition the article suggests a methodology to disentangle export structure and sectoral energy efficiency effects presenting results according to technological categories the article concludes that brazil india and mostly china present a high energy content in manufacturing exports which has increased from 1995 to 2005 conversely many advanced economies notably in europe and north america which showed energy contents below the world average in 1995 reinforced their position as exporters with relatively lower energy usage the contribution of export structure and energy efficiency effects to explain differences in the energy content of exports draws attention to the situation of china this country increased its relative energy usage in the exports of all technological categories of goods this effect was reinforced by the stronger export specialization in high tech products and hindered by a comparatively lower specialization in medium high tech products

evolution rationality and equilibrium in games abstract evolutionary game theory studies the robustness of strategy profiles and sets of strategy profiles with respect to evolutionary forces in games played repeatedly in large populations of boundedly rational agents the approach is macro oriented in the sense of focusing on the strategy distribution in the interacting population s some of the main features of this approach are here outlined and connections with learning models and standard notions of game theoretic rationality and equilibrium are discussed some desiderata and results for robust long run predictions are considered

x efficiency in banking looking beyond the balance sheet the distribution free and stochastic frontier estimation methods are used to derive bank specific measures of cost and profit xefficiency this is done to investigate the importance of including aggregate measures of off balance sheet obs activities the results indicate that economic cost and production cost x efficiency estimates increase with the inclusion of the obs measure profit xefficiency estimates are largely unaffected further the composition of bankso obs activities appears to help explain interbank differences in cost and profit x efficiency estimates whereas bank size and the mix between on and off balance sheet banking activities are largely uncorrelated with the x efficiency estimates

renewable energy consumption and income in emerging economies abstract increased economic growth and demand for energy in emerging economies is creating an opportunity for these countries to increase their usage of renewable energy this paper presents and estimates two empirical models of renewable energy consumption and income for a panel of emerging economies panel cointegration estimates show that increases in real per capita income have a positive and statistically significant impact on per capita renewable energy consumption in the long term a 1 increase in real income per capita increases the consumption of renewable energy per capita in emerging economies by approximately 3 5 long term renewable energy per capita consumption price elasticity estimates are approximately equal to 0 70

are scale economies in banking elusive or illusive evidence obtained by incorporating capital structure and risk taking into models of bank production abstract this paper explores how to incorporate banks capital structure and risk taking into models of production in doing so the paper bridges the gulf between 1 the banking literature that studies moral hazard effects of bank regulation without considering the underlying microeconomics of production and 2 the literature that uses dual profit and cost functions to study the microeconomics of bank production without explicitly considering how banks production decisions influence their riskiness various production models that differ in how they account for capital structure and in the objectives they impute to bank managers cost minimization versus value maximization are estimated using u s data on highest level bank holding companies modeling the bank s objective as value maximization conveniently incorporates both market priced risk and expected cash flow into managers ranking and choice of production plans estimated scale economies are found to depend critically on how banks capital structure and risk taking are modeled in particular when equity capital in addition to debt is included in the production model and cost is computed from the value maximizing expansion path rather than the cost minimizing path banks are found to have large scale economies that increase with size moreover better diversification is associated with larger scale economies while increased risk taking and inefficient risk taking are associated with smaller scale economies

co2 emissions energy consumption trade and income a comparative analysis of china and india in order to prevent the destabilisation of the earth s biosphere co2 emissions must be reduced quickly and significantly the causes of co2 emissions by individual countries need to be apprehended in order to understand the processes required for reducing emissions around the globe china and india are the two largest transitional countries and growing economies but are in two entirely different categories in terms of structural changes in growth trade and energy use co2 emissions from the burning of fossil fuels have significantly increased in the recent past this paper compares china and india using the bounds testing approach to cointegration and the ardl methodology to test the long and short run relationships between growth trade energy use and endogenously determined structural breaks the co2 emissions in china were influenced by per capita income structural changes and energy consumption a similar causal connection cannot be established for india with regard to structural changes and co2 emissions because india s informal economy is much larger than china s india possesses an extraordinarily large number of micro enterprises that are low energy consumers and not competitive enough to reach international markets understanding these contrasting scenarios is prerequisite to reaching an international agreement on climate change affecting these two countries

do large banks have lower costs new estimates of returns to scale for u s banks this paper presents new fully nonparametric estimates of ray scale and expansion path scale economies for u s banks based on a model of bank costs unlike prior studies that use models with restrictive parametric assumptions or limited samples our methodology uses local polynomial estimators and data on all u s banks over the period 1984 2006 our estimates indicate that as recently as 2006 most u s banks faced increasing returns to scale suggesting that scale economies are a plausible but not necessarily only reason for the growth in average bank size and that the tendency toward increasing scale is likely to continue unless checked by government intervention

trade and consumption of energy varieties empirical analysis of selected west africa economies abstract this paper examined the relationship between consumption of energy varieties total electricity and road transport and trade export and import in selected west african countries data spanning 1971 to 2010 was used to estimate vector error correction models vecm for 6 countries based on data availability empirical analysis showed that there is insignificant linkage between consumption of energy varieties and export of benin however there is a one way positive linkage running from energy varieties to import of the country for cote d ivoire energy varieties have insignificant relationship with export and import however while inverse relationship runs from export to both electricity and road transport energy consumption positive direct association runs from import to total energy and transport energy consumption with respect to ghana positive causality runs from electricity and road transport energy consumption to export however there is a significant positive feedback effect between import and electricity as well as road transport energy consumption for nigeria there is a significant positive link running from both electricity and road transport energy consumption to export and import senegal s case suggests a bi directional inverse linkage between export and total energy consumption for togo both export and import are insignificantly linked with energy use these mixed findings generate different policy implications across the selected west african countries which are well articulated in the paper

efficiency and economies of scale of large canadian banks the authors measure the economies of scale of canada s six largest banks and their costefficiency over time using a unique panel data set from 1983 to 2003 they estimate pooled translog cost functions and derive measures of relative efficiency and economies of scale

the performance of universal banks evidence from switzerland abstract this paper examines the performance of swiss banks from 1996 to 1999 using a broad definition of bank output we find evidence of large relative cost and profit inefficiencies in swiss banks a more narrow definition that focuses on only traditional activities leads to efficiency estimates that are even lower we also find evidence of economies of scale for small and mid size banks but little evidence that significant scale economies remain for the very largest banks finally evidence on scope economies is weak for the largest banks that are involved in a wide variety of financial activities taken together these results suggest few obvious benefits from the trend toward larger universal banks in switzerland

economic growth energy consumption financial development international trade and co2 emissions in indonesia this study examines the linkages among economic growth energy consumption financial development trade openness and co2 emissions over the period of 1975q1 2011q4 in the case of indonesia the stationary analysis is performed by using zivot andrews structural break unit root test and the ardl bounds testing approach for a long run relationship between the series in the presence of structural breaks the causal relation between the concerned variable is examined by the vecm granger causality technique and robustness of causal analysis is tested by innovative accounting approach iaa our results confirm that the variables are cointegrated it means that the long run relationship exists in the presence of structural break stemming in the series the empirical findings indicate that economic growth and energy consumption increases co2 emissions while financial development and trade openness compact it the vecm causality analysis has shown the feedback hypothesis between energy consumption and co2 emissions economic growth and co2 emissions are also interrelated i e bidirectional causality financial development granger causes co2 emissions the study opens up a new policy insights to control the environment from degradation by using energy efficient technologies financial development and trade openness can also play their role in improving the environmental quality

energy consumption and gdp causality a three step analysis for emerging european countries abstract the established european targets should play a leading role in the complex economic process of energy consumption and the emerging countries have to consider their implications for adjusting the energy policies at national level this paper develops investigations on the causality relationship between energy consumption and gdp in the context of emerging european countries covering the period 1980 2013 this research covers the limits identified by previous researchers by detailing the energy consumption by sources and by referring to five emerging countries in europe unlike most of the previous studies it has a double approach long and short run bidirectional relationships a detailed analysis on the impact of economic growth on the energy consumption by country is conducted in order to contribute to the enrichment of the research field towards this objective a three step analysis is performed stationarity cointegration and causality tests are considered the empirical study shows mixed results there is a balance in confirming conservation growth and neutrality hypotheses in some specific cases results imply that energy consumption and economic growth are jointly determined however a comparative analysis for different significance levels draws attention on the differences in judgment of results for this type of studies discussions on the results in terms of causality are conducted in order to identify future trends for research

energy and carbon embodied in the international trade of brazil an input output approach abstract all goods and services produced in an economy are directly and or indirectly associated with energy use and according to the type of fuel utilized with co2 emissions as well international trade is an important factor in shaping the industrial structure of a country and consequently in affecting a country s energy use and co2 emissions this study applies input output techniques to the brazilian economy to evaluate the total impacts of international trade on its energy use and co2 emissions a commodity by industry io model in hybrid units energy commodities in physical units and non energy commodities in monetary units is applied to the brazilian economy in 1995 results show that total energy embodied in the exports of non energy goods of brazil equals 831 pj while total carbon embodied is 13 5 mtc these amounts are larger than the relevant amounts embodied in the imports of non energy goods respectively 679 pj and 9 9 mtc these figures are better understood by contrasting them with the total energy use and the corresponding total carbon emissions of the brazilian economy in 1995 estimated by this work 6781 pj and 99 4 mtc respectively this means that international inflows and outflows of energy embodied in non energy goods are in the order of 10 and 12 of the total energy use while inflows and outflows of carbon embodied in non energy goods are approximately 10 and 14 of the corresponding total carbon emissions of the brazilian economy in 1995 the general picture is that brazil is not only a net exporter of energy 153 pj and of carbon 3 6 mtc embodied in the non energy goods internationally traded by the country in 1995 but also that each dollar earned with exports embodied 40 more energy and 56 more carbon than each dollar spent on imports these findings suggest that brazilian policy makers should be concerned about the extra impacts international trade policy may have on energy use and carbon emissions of the country

big banks and macroeconomic outcomes theory and cross country evidence of granularity does the mere presence of big banks affect macroeconomic outcomes we develop a theory of granularity for the banking sector by modeling heterogeneous banks charging variable markups using data for a large set of countries we show that the banking sector is indeed granular as the right tail of the bank size distribution follows a power law we demonstrate empirically that the presence of big banks measured by a high degree of market concentration is associated with a positive and significant relationship between bank level credit growth and aggregate growth of credit or gdp

energy consumption and economic growth in central america evidence from a panel cointegration and error correction model abstract this study examines the relationship between energy consumption and economic growth for six central american countries over the period 1980 2004 within a multivariate framework given the relatively short span of the time series data a panel cointegration and error correction model is employed to infer the causal relationship based on the heterogeneous panel cointegration test by pedroni pedroni p 1999 critical values for cointegration tests in heterogeneous panels with multiple regressors oxford bulletin of economics and statistics 61 653 670 pedroni p 2004 panel cointegration asymptotic and finite sample properties of pooled time series tests with an application to the ppp hypothesis new results econometric theory 20 597 627 cointegration is present between real gdp energy consumption the labor force and real gross fixed capital formation with the respective coefficients positive and statistically significant the granger causality results indicate the presence of both short run and long run causality from energy consumption to economic growth which supports the growth hypothesis

efficiency technical change and returns to scale in large us banks panel data evidence from an output distance function satisfying theoretical regularity abstract this paper provides parametric estimates of technical change efficiency change economies of scale and total factor productivity growth for large banks those with assets in excess of 1 billion in the united states over the period from 2000 to 2005 this is done by estimating an output distance function subject to theoretical regularity within a bayesian framework we find that failure to incorporate theoretical regularity conditions results in mismeasured shadow revenue and or cost shares which in turn leads to perverse conclusions regarding productivity growth our results from the regularity constrained model show that total factor productivity of the large us banks grew at an average rate of 1 98 over the sample period however our estimates also show a clear downward trend in the growth rate of total factor productivity and our decomposition of the primal divisia total factor productivity growth index into its three components technical change efficiency change and economies of scale indicates that technical change is the driving force behind this decline

global estimates of energy growth nexus application of seemingly unrelated regressions as the world struggles to emerge from a global recession and financial crisis countries are looking for solutions to improve domestic economic performance and put people back to work global energy demand and prices have been resilient during the recession leading policy makers in countries with the potential to produce energy to look to that sector as a potential engine for economic growth the objective of this study is to undertake an empirical study on linkages among energy consumption economic growth fdi relative price and financial development i e broad money supply m2 in low income middle income high income non oecd high income oecd south africa middle east and north africa mena and the aggregate data of the world over a period of 1975 2011 data is analyzed by the im pesaran shin ips test of unit root to find out the order of integration the long run relationship is investigated through the pedroni 37 test of panel cointegration at last the seemingly unrelated regression sur method is used for estimation of the impact of growth factors on energy consumption in these regions the results reveal that each variable seem to have a unit root at level so we could investigate cointegration of the series at level on the basis of pedroni test we can bring to a close that series are cointegrated the results of seemingly unrelated regression sur suggests that gdp per capita has a positive impact on energy consumption in low income middle income south africa mena and aggregate data of the world however in high income oecd and non oecd regions there is no significant relationship been found in both regions fdi plays a pivotal role in increasing energy demand in middle income high income oecd and non oecd region which implies that whatever other benefits may accrue from fdi it should not be expected to generate sufficient energy in south africa mena and the world directly fdi enhancement policies should be supplemented to stimulate growth in those regions broad money supply exerts positive impact on energy demand in low income middle income high income non oecd and mena regions finally relative prices has either a positive impact i e middle income region and or a negative impact on energy consumption i e low income high income oecd and mena region the results conclude that lower energy prices reduce input costs for nearly all goods and services in the regions thus making them more affordable