a microeconometric test of the theory of exhaustible resources abstract this paper generalizes extant developments of the economic theory of exhaustible resource production derives and extends a halvorsen and smith 1991 quarterly journal of economics 106 123 140 type test of the theory and applies the test to a sample of natural gas resources to facilitate our empirical test we extend the model developed in chermak and patrick 1995 journal of environmental economics and management 28 174 189 to explicitly account for the fact that the extracted resource gross product must be processed to obtain the final saleable product duality theory is used to derive econometric models with which the theory is statistically tested using panel data from 29 natural gas wells shadow prices of the resource stock through time which are generally unobservable but necessary for the test are estimated via the indirect cost function contrary to the extant literature we find inter alia that i at any point in time ceteris paribus the in situ resource price a decreases with gross production and b increases with final production and ii we cannot reject the theory of exhaustible resources i e producer behavior is consistent with the theory

the elephant in hotelling s room this paper questions the assumption commonly used in theoretical and policy research that scarcity rents make up a large proportion of market prices for oil and coal we show that the empirical literature simple calculations of historical and future scarcity rent shares and possible theoretical explanations all imply the same overall conclusions that scarcity rents seem to have been marginal or non existent historically that they almost certainly do not dominate fossil resource prices today and that there will be other factors shaping the prices in the upcoming decades we therefore argue that using the scarcity rent as the main or only basis for policy or for explaining empirical outcomes is ill advised

interrelationships between income health and the environment extending the environmental kuznets curve hypothesis abstract this paper examines the link between the health indicators and the environmental variables for a cross section of countries widely dispersed on the economic development spectrum while environment and income are seen to have an inverted u shaped relationship environmental kuznets curve ekc hypothesis it is also well established that environment and health are positively related our study focuses on the implications of this for the relationship between health and income in the early phases of income growth the gains in health and the losses in environmental quality could cancel each other out and this challenges the idea that as incomes increase health would always improve to empirically analyse these issues we estimate a two stage least squares model that focuses on the impact of income and the environment on health status with environment being an endogenous variable our results show that the environmental stress variable has a significant negative effect on health status at the same time gross national product gnp levels are shown to vary positively with health status variables we find that the health gains obtained through improved incomes can be negated to a significant extent if the indirect effect of income acting via the environment is ignored research findings in this regard would be a useful policy instrument towards maximising both the environmental and health gains that come with economic growth and development

does the market deliver the right technology abstract we show that the market does not systematically deliver the right technology under monopolistic competition i firms might rush on large scale technology pushing to the exit many desirable varieties produced by small firms ii firms might shun large scale technology though that technology would benefit the society through lower prices iii a bias towards small scale technology in some stage of development and a bias towards large scale technology in another stage is also a possibility

do oil producers act as oil igopolists in this paper the author analyzes an oligopoly model of exhaustible resource extraction and develop predictions about relative extraction patterns of different producers using the open quote oil close quote igopoly model of loury one can show that producers with large stocks produce a larger amount but a smaller percentage of their stocks than producers with small stocks the authors extend loury s model to cases where extraction costs differ among producers and where costs are a function of cumulative extraction an increase in extraction costs for a producer causes it to produce less relative to its rivals when extraction costs rise with cumulative extraction producers with large reserves tend to have lower extraction costs and a smaller ratio of cumulative production to initial reserves than producers with small reserves the authors test the predictions of the model using oil industry data and find that the empirical results are consistent with the predictions of open quotes oil close quotes igopoly theory producers with larger reserves extract a smaller share of their reserves and have lower production costs than producers with smaller reserves this pattern holds for 73 countries with oil reserves during the time period 1970 1989 and for approximately 400 us oil companies in 1983 and 1984 more the observed pattern of production for both opec and non opec producers is consistent with open quote oil close quote igopoly theory opec producers do not appear to restrain production given their level of reserves relative to non opec producers thus viewing the oil market as containing one dominant firm opec with a competitive fringe may be misleading further the pattern of extraction observed in oil markets is inconsistent with the pattern predicted by competitive theory 29 refs 5 figs 6 tabs less

interest rates and metal price movements further evidence abstract we offer a theory about the relationship between interest rates and metal price movements the theory is a version of the hotelling rule eq 8 the results obtained from prices of four different metals based on seasonally and unadjusted quarterly data over the period 1968 2 1982 2 suggest that a reformulated hotelling rule which has a dynamic structure can explain the relationship between metal prices and interest rates in view of this result it appears that the return on exhaustible resources is related to changes in rather than the levels of interest rates this result also confirms the results of g m heal and m m barrow rev econom stud 48 161 181 1979 econom lett 7 95 103 1981

resource prices and planning horizons abstract this paper shows that a seemingly simple assumption that agents use a rolling planning horizon can reconcile the puzzling long run price dynamics of exhaustible resources such as oil gas and metals a rolling horizon has the effect of removing the scarcity consideration of resource owners when stocks are large hence extraction will be non decreasing and resource prices non increasing for a long period of time and there will be no connection between the price growth and the interest rate in line with the trends of a majority of exhaustible resources in the last century a calibration of the model to the oil market yields a price which closely fits the gradually falling real oil price after wwii and the sharply increasing price after 1998 this suggests that while long run scarcity was not an important parameter on the oil market in the 20th century it has been important in shaping the oil price from around 1998 and onwards

strategic resource dependence we consider a situation where an exhaustible resource seller faces demand from a buyer who has a substitute but there is a time to build delay for the substitute we find that in this simple framework the basic implications of the hotelling model 1931 are reversed over time the stock declines but supplies increase up to the point where the buyer decides to switch under such a threat of demand change the supply does not reflect the current resource scarcity but it compensates the buyer for delaying the transition to the substitute the analysis suggests a perspective on costs of oil dependence

carbon taxation opec and the end of oil abstract i develop a differential game between an oil cartel and an importer investing in research and development r d to reduce the cost of a green substitute to oil in equilibrium the cartel is forced to deter the substitute which thus imposes a price ceiling falling over time credible carbon taxes are below the pigovian level implying the importer cannot internalise the full pollution externality much less capture resource rents without carbon pricing the importer curtails long run pollution using a costly r d programme normatively climate policy will be more expensive if relying on green r d programmes only

economic growth and emissions reconsidering the empirical basis of environmental kuznets curves abstract recent empirical research indicates that certain types of emissions follow an inverted u or environmental kuznets curve ekc as income grows this regularity has been interpreted as a possible de linking of economic growth and patterns of certain pollutants for developed economies in this paper the empirical basis of this result is investigated by considering some statistical particularities of the various ekc studies performed it is argued that the inverted u relationship between income and emissions estimated from panel data need not hold for specific individual countries over time based on insights from intensity of use analysis in resource economics an alternative growth model is specified and estimated for three types of emissions co2 nox and so2 in four countries netherlands uk usa and western germany it is found that the time patterns of these emissions correlate positively with economic growth and that emission reductions may have been achieved as a result of structural and technological changes in the economy sustainable growth is defined as the rate of economic growth that does not lead to growth in emissions its rate is calculated for each type of emission and country based on estimated parameter values the resulting indicators reflect a balance between the positive influence of growth and negative influence of structural change and technological progress on emission levels

the uncertainty effect when a risky prospect is valued less than its worst possible outcome expected utility theory prospect theory and most other models of risky choice are based on the fundamental premise that individuals choose among risky prospects by balancing the value of the possible consequences these models therefore require that the value of a risky prospect lie between the value of that prospect s highest and lowest outcome although this requirement seems essential for any theory of risky decision making we document a violation of this condition in which individuals value a risky prospect less than its worst possible realization this demonstration which we term the uncertainty effect draws from more than 1000 experimental participants and includes hypothetical and real pricing and choice tasks as well as field experiments in real markets with financial incentives our results suggest that there are choice situations in which decision makers discount lotteries for uncertainty in a manner that cannot be accommodated by standard models of risky choice from the time of bernoulli on it has been common to argue that a individuals tend to display aversion to the taking of risks and b that risk aversion in turn is an explanation for many observed phenomena in the economic world arrow 1971 p 90

empirical analysis of national income and so2 emissions in selected european countries the linkage between per capita gdp and sulfur emissions for 12 western european countries was analyzed over a period of more than 150 years the analysis also looked at the impact of air pollution regulations on the shape of the income pollution relationship at both the aggregate and country levels we find an inverted u shaped relationship and the estimated turning points of most countries are plausible in addition environmental regulations are found to lower the ekc and they can also shift the turning point of the curve in some cases the shift is to the left and in a few to the right

is there really a green paradox abstract in the absence of a co2 tax the anticipation of a cheaper renewable backstop increases current emissions of co2 since the date at which renewables are phased in is brought forward and more generally future emissions of co2 will decrease the effect on global warming is unclear green welfare falls if the backstop is relatively expensive and full exhaustion of fossil fuels is optimal but may increase if the backstop is sufficiently cheap relative to the cost of extracting the last drop of fossil fuels plus marginal global warming damages as then it is attractive to leave more fossil fuels unexploited and thus limit co2 emissions we establish these results by analyzing depletion of non renewable fossil fuels followed by a switch to a clean renewable backstop paying attention to timing of the switch and the amount of fossil fuels remaining unexploited we also discuss the potential for limit pricing when the non renewable resource is owned by a monopolist finally we show that if backstops are already used and more backstops become economically viable as the price of fossil fuels rises a lower cost of the backstop will either postpone fossil fuel exhaustion or leave more fossil fuel in situ thus boosting green welfare however if a market economy does not internalize global warming externalities and renewables have not kicked in yet full exhaustion of fossil fuel will occur in finite time and a backstop subsidy always curbs green welfare

can carbon tax eat opec s rents abstract we consider the optimal emission tax for a stock pollutant when the pollutant flow is also regulated by a resource exporting cartel we consolidate clarify and generalize a set of previous results to obtain clear isolation of the pigouvian and trade policy components of the tax because of the trade policy component the tax can shift more rents from the cartel than the pollution causes damage related costs this leads to the possibility that the pollution problem accompanied by the coordination of taxation can bring about net benefits at the expense of the cartel

a test of the theory of exhaustible resources an empirical test of the theory of exhaustible resources requires an estimate of the time path of the shadow price of the unextracted resource that generally is not observable because of the prevalence of vertical integration in natural resource industries in this paper we use duality theory to derive an econometric model that provides a statistical test of the theory of exhaustible resources a restricted cost function is used to obtain estimates of the shadow prices of unextracted resources the procedure is illustrated with data for the canadian metal mining industry for this industry the empirical implications of the theory of exhaustible resources are strongly rejected

international trade without ces estimating translog gravity this paper derives a micro founded gravity equation in general equilibrium based on a translog demand system that allows for endogenous markups and substitution patterns across goods in contrast to standard ces based gravity equations trade is more sensitive to trade costs if the exporting country only provides a small share of the destination country s imports as a result trade costs have a heterogeneous impact across country pairs with some trade flows predicted to be zero i test the translog gravity equation and find strong empirical support in its favor

how do oil producers respond to giant oil field discoveries abstract the classical hotelling model predicts that the optimal extraction level rises immediately after an unexpected resource discovery whereas in reality there are substantial adjustment costs in petroleum production and an average lag of several years between a discovery and the start of production using a large panel of country level production data and a difference in differences identification approach i show that domestic production levels respond before a newly found oil field comes on line and that this increase is driven by non opec producers consistent with different responses of opec and non opec drilling activity offshore fields and exceptionally large super or mega giant fields are also more likely to raise country level production given that domestic petroleum consumption rises by less in response to a discovery at least part of the increase in production seems to go into net oil exports

limited horizon forecast in repeated alternate games abstract in two player infinite horizon alternating move games a limited forecast n 1 n 2 equilibrium is such that 1 player i chooses actions according to his n i length forecasts so as to maximise the average payoff over the forthcoming n i periods and 2 players equilibrium forecasts are correct with finite action spaces n 1 n 2 solutions always exist and are cyclical and the memory capacity of the players has no influence on the set of solutions a solution is hyperstable if it is an n 1 n 2 solution for all n 1 n 2 sufficiently large hyperstable solutions are shown to exist and are characterized for generic repeated alternate move 2 2 games journal of economic literature classification numbers c72 d81

economic growth and environmental degradation the environmental kuznets curve and sustainable development abstract in this paper we critically examine the concept of the environmental kuznets curve ekc it proposes that there is an inverted u shape relation between environmental degradation and income per capita so that eventually growth reduces the environmental impact of economic activity the concept is dependent on a model of the economy in which there is no feedback from the quality of the environment to production possibilities and in which trade has a neutral effect on environmental degradation the actual violation of these assumptions gives rise to fundamental problems in estimating the parameters of an ekc the paper identifies other econometric problems with estimates of the ekc and reviews a number of empirical studies the inference from some such ekc estimates that further development will reduce environmental degradation is dependent on the assumption that world per capita income is normally distributed when in fact median income is far below mean income we carry out simulations combining ekc estimates from the literature with world bank forecasts for economic growth for individual countries aggregating over countries to derive the global impact within the horizon of the bank s forecast 2025 global emissions of so 2 continue to increase forest loss stabilizes before the end of the period but tropical deforestation continues at a constant rate throughout the period

the causes of government expenditure growth a survey of the u s evidence abstract the growth of government budgets can be broken down into a institutional and institutional components the former component the familiar substitution income and population public goods tax sharing effects is estimated to contribute about two fifths of the growth of u s government spending the latter component rent seeking political redistributions bureaucracy and perceptual informational impedimentia is important too but an exact imputation cannot be asserted given the state of the art in empirical public choice theory the cross effects on spending of the growth of regulation and tax preferences or tax expenditures though interesting is not pursued

trade in environmental goods evidences from an analysis using elasticities of trade costs negotiations on the liberalization of environmental goods egs and services within the wto doha round mandated in november 2001 are facing specific challenges conflicting interests and differing perceptions of the benefits of increased trade in egs were reflected in different approaches proposed for determining egs using import data of 34 organisation for economic co operation and development oecd member countries and from a sample of 167 countries from 1995 to 2012 we discuss the trade effect of reducing barriers on egs we analyze the lists of egs proposed by the asia pacific economic cooperation and oecd using a translog gravity model we found that removing tariff barriers for egs will have a modest impact because for the biggest importers and exporters elasticities of trade costs are very low while for most trading relationships they are very high making it difficult for exporters to maintain their markets overall our results suggest that because of their substantial effect on international trade future negotiations on egs should also address the issues of standards and nontariff barriers

is there an environmental kuznets curve for deforestation abstract this paper examines the relationship between deforestation and gross domestic product gdp per capita in particular whether an inverted u relationship indicative of worsening then improving deforestation exists between them we note that previous work has used models with restrictive assumptions and recommend a more flexible random coefficients specification which allows for a greater degree of cross country heterogeneity empirical results using data for 76 developing countries between 1961 1992 suggest that the inverted u shaped relationship observed in other studies does not appear to be an empirical regularity with our less restrictive specification statistical tests indicate that this specification is supported by the data we argue that such results are not surprising in view of the wide diversity of physical and social characteristics that exist across countries

the interaction of population growth and environmental quality an important question for policy is whether holding constant per capita income and other relevant factors population pressures have a significant effect upon environmental degradation the authors examine the effect of population pressures upon deforestation in 64 developing countries in an attempt to provide relevant empirical findings data on deforestation were drawn from the food and agriculture organizations production yearbook results suggest that a relationship exists between per capita income and deforestation and that for africa rural population density shifts the relationship upward the increase in the rate of deforestation levels off as income increases the rate of growth in per capita income also has a significant negative impact upon deforestation although the magnitude of the effect is small the authors close in stressing that reducing the rate of population growth is not necessarily the best way to reduce the rate of deforestation deforestation in developing countries is really a problem of market failure since property rights are often neither defined nor enforced there is essentially no private cost of deforestation with no long term stake in the land people have no incentive to use land efficiently this situation must be addressed in conjunction with the problems of poverty and population growth

economic growth and transitions between renewable and nonrenewable energy resources abstract we study transitions between nonrenewable and renewable energy forms at different development stages of an economy it is shown that in the historical context the emphasis on energy production may evolve from renewables to nonrenewables and back to renewables typically both energy forms are used simultaneously along the equilibrium path nonrenewable resource consumption may increase and their price decrease an inverted u relation between carbon emissions and income level may follow even without environmental policy

steady state growth in a hotelling model of resource extraction this paper re examines the hotelling model of optimal nonrenewable resource extraction in light of stock effects and technological progress we assume functional forms for cost and demand so that the solution to the hotelling problem is a steady state consistent with the empirical observation that the growth rates of market prices have remained zero over a long period of time we use data on 14 minerals from 1970 to 2004 to estimate the supply and demand functions using sur and 3sls and to test the model we validate the model for 8 of 14 minerals c 2007 elsevier inc all rights reserved

a roll call analysis of the endangered species act amendments public choice economics view legislative process as a transaction in the political market interest groups demand regulation in their favor and lobby lawmakers the lawmakers analyze an assortment of factors and supply legislation to the winning group thereby maximizing their rent from the political market this article examines endangered species act esa amendments from a public choice perspective congressional voting on the esa amendments are assessed using a model based on political incentive and ideology the results show that the lawmakers voting behavior is correlated with their party affiliation ideology and several characteristics of their home state such as number of endangered species proportion of urban population contribution of the natural resources and construction sectors in gross state product and geographical location copyright 2001 oxford university press

the growth of government in the united states an economic historian s perspective abstract this paper first outlines the salient features of the growth of government in american history secondly it offers a neoclassical explanation of that history in which increasing specialization and division of labor brought on by the scientific technological revolution of the nineteenth century drastically altered the demand for and supply of government finally it argues that institutions matter and describes the way the particular structure of governments was important in the timing and pace of its growth

short term planning and the life cycle consumption puzzle abstract we develop a new life cycle consumption model where the individual has a short planning horizon standard life cycle consumers with perfect foresight and hand to mouth consumers are both special limiting cases of our model where the length of the planning horizon is set to the entire lifetime and zero respectively we derive an analytical solution to the time inconsistent short term planning problem which reveals the inner workings of the model and facilitates its use in other settings we also show that the short term planning mechanism is powerful enough to generate a consumption hump with the right size and location

macroeconomic conditions in the u s and congressional voting on environmental policy 1970 2008 using the environmental scorecard ratings of congressmen and senators published annually by the league of conservation voters we explore empirically whether political support for pro environment legislation aggregated across each legislative body is sensitive over time to changing economic conditions that is whether there is a political trade off between economic conditions and the environment using lcv scorecard ratings from 1970 to 2008 we find evidence consistent across both the house and senate that political support for the environment is related to per capita income but this general tendency can be decomposed into sharp differences by party

oil and the macroeconomy since the 1970s economists have long been intrigued by empirical evidence that suggests that oil price shocks may be closely related to macroeconomic performance this interest dates back to the 1970s the 1970s were a period of growing dependence on imported oil unprecedented disruptions in the global oil market and poor macroeconomic performance in the united states thus it was natural to suspect a causal relationship from oil prices to u s macroeconomic aggregates since then a large body of work has accumulated that purports to establish this link on theoretical grounds and to provide empirical evidence in its support we do not attempt a comprehensive survey of this literature but rather provide an idiosyncratic synthesis of what we view as the key issues in this debate and the insights gained over the last 30 years the timing seems right for such an account although the experience of the 1970s continues to play an important role in discussions of the link between oil and the macroeconomy there have been a number of new oil price shocks since the 1970s notably the 1986 collapse of oil prices and the 2000 boom in oil prices as well as the oil price increases associated with the 1990 1991 gulf war and the 2003 iraq war given this richer case history we are arguably in a better position than two decades ago to distinguish the idiosyncratic features of each oil crisis from the systematic effects increases in oil prices have been held responsible for recessions periods of excessive inflation reduced productivity and lower economic growth in this paper we review the arguments supporting such views first we highlight some of the conceptual difficulties in assigning a central role to oil price shocks in explaining

optimal taxes on fossil fuel in general equilibrium we analyze a dynamic stochastic general equilibrium dsge model with an externality through climate change from using fossil energy our central result is a simple formula for the marginal externality damage of emissions or equivalently for the optimal carbon tax this formula which holds under quite plausible assumptions reveals that the damage is proportional to current gdp with the proportion depending only on three factors i discounting ii the expected damage elasticity how many percent of the output flow is lost from an extra unit of carbon in the atmosphere and iii the structure of carbon depreciation in the atmosphere thus the stochastic values of future output consumption and the atmospheric co2 concentration as well as the paths of technology whether endogenous or exogenous and population and so on all disappear from the formula we find that the optimal tax should be a bit higher than the median or most well known estimates in the literature we also formulate a parsimonious yet comprehensive and easily solved model allowing us to compute the optimal and market paths for the use of different sources of energy and the corresponding climate change we find coal rather than oil to be the main threat to economic welfare largely due to its abundance we also find that the costs of inaction are particularly sensitive to the assumptions regarding the substitutability of different energy sources and technological progress

self confirming equilibrium rium path of play thus if a self confirming equilibrium occurs repeatedly no player ever observes play that contradicts his beliefs even though beliefs about play at off path information sets need not be correct we characterize the ways in which self confirming equilibria and nash equilibria can differ and provide conditions under which self con firming equilibria correspond to standard solution concepts nash equilibrium and its refinements describe a situation in which i each player s strategy is a best response to his beliefs about the play of his opponents and ii each player s beliefs about the opponents play are exactly correct we propose a new equilibrium concept self confirming equilibrium that weakens condition ii by requiring only that players beliefs are correct along the equilibrium path of play thus each player may have incorrect beliefs about how his opponents would play in contingencies that do not arise when play follows the equilibrium and moreover the beliefs of different players may be wrong in different ways the concept of self confirming equilibrium is motivated by the idea that noncooperative equilibria should be interpreted as the outcome of a learning process in which players revise their beliefs using their observations of previous play suppose that each time the game is played the players observe the actions chosen by their opponents but that players do not observe the actions their opponents would have played at the information sets that were not reached along the path of play then if a self confirming equilibrium occurs repeatedly no player ever observes play that contradicts his beliefs so the equilibrium is self confirming in the weak sense of not being inconsistent with the evidence by analogy with the literature on the bandit problem e g rothschild 1974 one might expect that a non nash self confirming equilibrium can be the outcome of plausible learning processes this point was made by fudenberg and

consumption savings decisions with quasi geometric discounting we study the consumption savings problem of an infinitely lived rational consumer who has time inconsistent preferences in the form of quasi geometric discounting the consumer operates a weakly concave production function and must simply divide current resources into current consumption and savings there is no uncertainty a solution to the consumer s problem is a subgame perfect equilibrium of a dynamic game between the consumer s successive selves we show that this game has a continuum of equilibria in stationary markov strategies not only is the stationary point of the consumer s asset holdings indeterminate but each stationary point has a continuum of dynamic paths converging to it the savings policy rules underlying these dynamic paths are step functions

estimation of market power in a nonrenewable resource industry in nonrenewable resource industries the existence of a markup of price over marginal market cost may reflect the existence of an implicit user cost for the resource rather than market power we show that valid estimates of market power can be obtained by the joint estimation of a restricted cost function and an inverse supply relation estimation of the model with data for the largest firm in the international nickel industry indicates that output price substantially exceeded marginal market cost with most of the difference due to the exercise of market power rather than the user cost of the resource

how do senators vote disentangling the role of voter preferences party affiliation and senate ideology this paper develops a methodology for consistently estimating the relative weights in senator utility functions despite the fact that senator ideologies are unobserved the empirical results suggest that voter preferences are assigned only one quarter of the weight in senator utility functions the national party line also has some influence but the senator s own ideology is the primary determinant of roll call voting patterns these results cast doubt on the empirical relevance of the median voter theorem estimation of the model requires only roll call voting data making it widely applicable copyright 1996 by american economic association

the time path of scarcity rent in the theory of exhaustible resources there is now a consensus in the literature on resource economics that a depletable resource should command a price in excess of its marginal extraction cost simply to reflect the opportunity cost of using a unit of it today rather that conserving it for the future but how this excess is to change along an optimal or competitive equilibrium path of resource use is still an unresolved question this might at first seem puzzling since according to the fundamental theorem of economics of exhaustible resources or hotelling i 93 i rule on an optimal path price minus marginal extraction cost also termed interchangeably as scarcity rent user cost or royalty should steadily grow over time at the social rate of discount however the literature contains sharply contrasting views on the subject for example kay and mirrlees 1975 have argued that since along an optimal path the scarcity rent grows exponentially as a finite stock of a resourcexnears exhaustion then situations in which the resource stock is still very large and yet the price greatly exceeds the marginal extraction cost should indicate that the price is significantly above its optimal level and that the resource is overconserved in stark contrast to this view heal i976 has argued that as the resource stock nears exhaustion the difference between price and marginal cost or what he termed social cost of extraction falls monotonically to zero hanson i980 analyses the same model as heal s but unlike heal who assumes the unit extraction cost to be convex he postulates it to be concave and yet like heal concludes that the scarcity rent will be monotonically declining over time solow and wan i976 analyse a still different situation where resource deposits differ in quality and the unit extraction cost increases as higher grade deposits are exhausted and extraction proceeds to lower grades they show that along an optimal path the shadow price of a resource must rise at the real rate of interest despite differential extraction costs but that the difference between price and the marginal extraction cost or what they call degradation charge declines monotonically over time to zero these sharply differing conclusions suggest that far from being resolved the question of how scarcity rent changes over time is much in want of a close scrutiny the need for such a scrutiny becomes even stronger once it is noted

mr smith and the economy the influence of economic conditions on individual legislator voting this paper estimates the influence of macroeconomic conditions on individual legislator voting over time previous work shows legislator voting to be stable over careers in this paper voting on an ideological issue space ada scores and a fiscal issue space ntu scores from 1976 to 2002 exhibits significant short term cyclicality with economic conditions individual legislators polarize by party in response to rising unemployment and converge in response to rising inflation as legislators accumulate tenure they become more ideologically conservative but more fiscally liberal results are also reported on presidential party divided government and region all results are weaker in the senate than in the house

optimal pricing use and exploration of uncertain natural resource stocks abstract units of natural resources to be called mines are assumed distributed over an unexplored territory according to a poisson process in space at any moment total reserves and unexplored land are given society can determine the rate of consumption and the rate of exploration reserves are drawn down by consumption and increased by discoveries made during exploration the amount of unexplored land is decreased by exploration at any moment the payoff of society is a concave function of consumption less a linear function of exploration with future payoffs discounted optimal policies are considered and in particular it is shown for a large amount of unexplored land the shadow prices of reserves and of unexplored land move in random cycles but show only a slight upward tread thereby casting some light on the failure of mineral prices to rise at the market rate of interest

income inequality and pollution a reassessment of the environmental kuznets curve abstract improvements in some measures of air and water quality can accompany rising per capita income as illustrated by the so called environmental kuznets curve for pollution variables which show such a relationship we hypothesize that a more equitable distribution of power contributes to these outcomes by enhancing the influence on policy of those who bear the costs of pollution relative to the influence of those who benefit from pollution generating activities an empirical analysis of international variations in seven indicators of air and water quality supports this hypothesis literacy political rights and civil liberties are found to have particularly strong effects on environmental quality in low income countries

non renewable resources in the long run we model a competitive economy in which production is dependent on labor and a non renewable resource the stock of which is inhomogeneous we solve the model analytically and show how in infinite time the economy moves away from an initial balanced growth path b g p and towards a mature b g p the characteristics of the initial b g p match historical observations of slowly declining resource price and consumption growth tracking global product the mature b g p depends on the nature of the stock the more steeply cross sectional area declines with depth the faster the rate of price increase we show how the theoretical model may be adapted and parameterized to explain and predict the evolution of markets for specific resources applying the model in two cases copper and petroleum c 2016 elsevier b v all rights reserved

together at last trade costs demand structure and welfare abstract we show that relaxing the assumption of ces preferences in monopolistic competition has surprising implications when trade is restricted integrated and segmented markets behave differentl

logit ces and rational inattention abstract we study the fundamental links between two popular approaches to consumer choice the multinomial logit model of individual discrete choice and the ces utility function which describes a diversified choice of a representative consumer we base our analysis on the rational inattention ri model and show that the demand system of ri agents each of which chooses a single option coincides with the demand system of a fictitious representative agent with ces utility function thus the diversified choice of the representative agent may be explained by the heterogeneity in signals received by the ri agents we obtain a new interpretation for the elasticity of substitution and the weighting coefficients of the ces utility function specifically we provide a correspondence between parameters of the ces utility function prior knowledge and marginal cost of information

politics of environmental law political ideology elitism or urban rural interests this paper examines a number of demographic aspects in congressional districts and states that played important roles in a series of congressional votes on environmental issues in 2000 these characteristics include urbanization or population density education income race and employment our findings are mixed while we find some evidence at least in senate votes that population density is a positive predictor of pro environment votes we also find that things commensurate with the environmental kuznets curve such as income education and lifestyle also play an important role in environmental voting

why are losses from trade unlikely examining a standard monopolistic competition model with unspecified utility cost functions we find necessary and sufficient conditions on their elasticities for welfare losses to arise from trade or market expansion two numerical examples explain the losses under unrealistic elasticities

on measuring natural resource scarcity conclusions concerning trends in natural resource scarcity may depend critically on the choice of scarcity index unfortunately the prevalence of vertical integration in natural resource industries has hindered the use of some otherwise desirable scarcity measures in this paper duality theory is used to derive an econometric procedure for estimating one such measure the shadow price of the resource in situ empirical results for the canadian metal mining industry indicate that resource scarcity as measured by this shadow price has decreased substantially over time