distributional effects of a carbon tax on car fuels in france this paper analyses the distributional effects of alternative scenarios of carbon taxes on car fuels using disaggregated french panel data from 2003 to 2006 it incorporates household price responsiveness that differs across income groups into a consumer surplus measure of tax burden carbon taxation is regressive before revenue recycling however taking into account the benefits from congestion reduction induced by the tax mitigates regressivity we show also that recycling additional revenues from the carbon tax either in equal amounts to each household or according to household size makes poorest households better off

understanding hank insights from a prank using an analytically tractable heterogeneous agent new keynesian model we show that whether incomplete markets resolve new keynesian paradoxes depends on the cyclicality of income risk incomplete markets reduce the effectiveness of forward guidance and multipliers in a liquidity trap only with procyclical risk countercyclical risk amplifies these puzzles procyclical risk permits determinacy under a peg countercyclical risk may generate indeterminacy even under the taylor principle by affecting the cyclicality of risk even passive fiscal policy influences the effects of monetary policy

a macroeconomic evaluation of a carbon tax in overseas territories a cge model for reunion island reunion island similar to most insular regions is ruled by a carbon based economy that is heavily dependent on fossil fuels in recent years the energy transition towards a low carbon economy has become the watchword of this french overseas region with the objective of a 100 renewable energy mix by 2030 reducing fossil fuel use while maintaining economic growth is an important issue for all countries but is even more important for island territories with structural and geographical handicaps energy transition and drastic greenhouse gas emission reductions represent costs and opportunities that need to be quantified this research paper assesses the environmental and macroeconomic effects of the carbon price policy introduced in france to meet the target of the paris agreement the acceptability of the tax significantly depends on the possibility of recycling tax revenues different schemes for recycling tax revenues are considered in simulations the methodology used is a computable general equilibrium cge model for reunion island getrun nrj that takes into account all island specificities the results show that the carbon tax enables substitutions between fossil and renewable energy production and reduces co 2 emissions however the tax has negative effects on the aggregate economy the implemented tax revenue recycling compensation mechanisms mitigate the negative impacts but the results differ significantly as the recycling schemes do not support the same economic actors

fuel taxes an important instrument for climate policy abstract this article shows that fuel taxes serve a very important role for the environment and that we risk a backlash of increased emissions if they are abolished fuel taxes have restrained growth in fuel demand and associated carbon emissions although fuel demand is large and growing our analysis shows that it would have been much higher in the absence of domestic fuel taxes people often assert that fuel demand is inelastic but there is strong research evidence showing the opposite the price elasticity is in fact quite high but only in the long run in the short run it may be quite inelastic which has important implications for policy makers had europe not followed a policy of high fuel taxation but had low us taxes then fuel demand would have been twice as large hypothetical transport demand in the whole oecd area is calculated for various tax scenarios and the results show that fuel taxes are the single most powerful climate policy instrument implemented to date yet this fact is not usually given due attention in the debate

the ecb s asset purchase programme a model based evaluation abstract this paper uses a dynamic stochastic general equilibrium model with financial frictions to quantify the effects of the european central bank s recent asset purchase programme our results suggest that the macroeconomic effects of purchases are potentially important when the programme is associated with forward guidance on the interest rate the signalling that the future monetary policy stance will remain accommodative is the prominent transmission channel

how does the stock market react to the announcement of green policies abstract we investigate the impact of 19 announcements of environmental regulation on the equities listed on the australian stock exchange over the period 2005 2011 using a well established event study methodology we assess whether these announcements are value constructive or destructive for equity investors additionally we estimate the change in systematic risk following the announcements our results show that the australian market was particularly sensitive to the carbon pollution reduction scheme cprs announcement a cumulative abnormal return of 31 was recorded in the alternative energy sector after australia submitted its target range to the copenhagen accord we observe that a move towards a greener nation has a mixed effect on abnormal returns with apparent sector by sector differences green policies appear to affect the long term systematic risk of industries leading to the diamond risk phenomenon

carbon tax simulations using a household demand model abstract the main objective of this paper is to analyse consumer response and welfare effects due to changes in energy or environmental policy to achieve this objective we formulate and estimate an econometric model for non durable consumer demand in sweden that utilises micro and macro data in the simulations we consider two revenue neutral scenarios that both imply a doubling of the co2 tax one that returns the revenues in the form of a lower vat and one that subsidise public transport one conclusion from the simulations is that the co2 tax has regional distribution effects in the sense that household living in sparsely populated areas carry a larger share of the tax burden

the effects of the paris climate agreement on stock markets evidence from the german stock market we investigate the effects of the 2016 paris climate agreement on the german stock market by considering the impact of 20 announcements pertaining to the agreement on 17 industries the event study

energy poverty policies in the eu a critical perspective abstract once confined to the uk context where it was struggling to receive political recognition for years the concept of energy or fuel poverty is slowly entering the eu s agenda where it has crept into a number of regulatory documents and policy proposals using evidence gathered from an international workshop and semi structured interviews with decision makers experts and advocacy activists in brussels and sofia this paper explores the adoption of policies aimed at addressing energy poverty within i the organisational context of the eu and ii national state institutions in bulgaria a member state facing considerable problems at the energy affordability social inequality nexus while the former are largely nascent and poorly co ordinated the latter have already been implemented de jure to a significant extent however many unresolved issues surrounding their de facto implementation remain at the same time national policy makers remain largely unaware of the existence of direct energy poverty related initiatives at the eu level

measuring fuel poverty in france which households are the most fuel vulnerable fuel poverty is a growing concern in france following the hike in energy prices that started in 2004 the problem of energy affordability for low income households entered the political debate with the grenelle de l environnement in 2007 according to the standard uk definition 10 ratio 3 8 million households were subject to fuel poverty in france in 2006 we question the way fuel poverty is currently measured and compare the impact of alternative measurement approaches on the extent and composition of fuel poverty in france then we identify and characterize vulnerable households that are not ordinarily poor but can be pushed into poverty because of their fuel bills a logit a clog log and a mixed effect logit model are used to analyze which factors influence the probability of vulnerable households to fall into poverty the study indicates that the proportion of fuel poor people and their characteristics differ significantly depending on the fuel poverty measure chosen the econometric results show that the probability of falling into poverty is higher for those who are retired living alone rent their home use an individual boiler for heating cook with butane or propane and have poor roof insulation current french fuel poverty reduction policies appear to be inappropriate given our conclusions

the power of forward guidance revisited in recent years central banks have increasingly turned to forward guidance as a central tool of monetary policy especially as interest rates around the world have hit the zero lower bound standard monetary models imply that far future forward guidance is extremely powerful promises about far future interest rates have huge effects on current economic outcomes and these effects grow with the horizon of the forward guidance we show that the power of forward guidance is highly sensitive to the assumption of complete markets if agents face uninsurable income risk and borrowing constraints a precautionary savings effect tempers their responses to changes in future interest rates as a consequence forward guidance has substantially less power to stimulate the economy in addition we show that the business cycle dynamics of our incomplete markets model differ substantially from its complete market counterpart this contrasts with the well known results of krusell and smith 1998 we present approximate representations that can easily be incorporated into standard business cycle models

automatic stabilizers and economic crisis us vs europe this paper analyzes the effectiveness of the tax and transfer systems in the eu and the us to provide income insurance through automatic stabilization in the recent economic crisis we find that automatic stabilizers absorb 38 of a proportional income shock in the eu compared to 32 in the us in the case of an unemployment shock 47 of the shock is absorbed in the eu compared to 34 in the us this cushioning of disposable income leads to a demand stabilization of up to 30 in the eu and up to 20 in the us there is large heterogeneity within the eu automatic stabilizers in eastern and southern europe are much lower than in central and northern european countries we also investigate whether countries with weak automatic stabilizers have enacted larger fiscal stimulus programs

inflation and output in new keynesian models with a transient interest rate peg a familiar result in the canonical dynamic new keynesian dnk model is that policymakers constrained by the zero bound can improve outcomes by promising to keep rates low after the zero bound is not binding we examine a general class of interest rate pegs in a variety of dnk models standard versions of the model produce counterintuitive reversals where the effect of the interest rate peg can switch from highly expansionary to highly contractionary for modest changes in the length of the interest rate peg this unusual behavior does not arise in sticky information models of the phillips curve

attitudes towards carbon taxes across europe the role of perceived uncertainty and self interest abstract while using carbon taxes to reduce greenhouse gas emissions may well be effective this has recently proved too unpopular to put into practice in a number of countries yet at a time when governments across the world are preparing their nationally determined contributions to the paris agreement our knowledge of whether and why people oppose these taxes originates from a single or small number of cases drawing on the european social survey n 44 387 this article provides evidence on public attitudes towards increasing taxes on fossil fuels to reduce climate change from 23 countries most of which have never featured in the literature before the results point to a widespread aversion to carbon taxes on the one hand this worsens with the perceived costs of taxes such as the case among consumers who depend highly on energy on the other it improves with political trust and external political efficacy factors that help ease the uncertainty around policy proposals our estimations suggest that the effect of changes in these factors alone would be large enough to reverse the public resistance to carbon taxes in some countries these results are robust to a number of alternative specifications and various checks

estimates from a consumer demand system implications for the incidence of environmental taxes abstract most studies suggest that environmental taxes are regressive making them less attractive policy options we consider the distributional effects of a gasoline tax increase using four incidence measures and under three scenarios for gas tax revenue use to incorporate behavioral responses we use consumer expenditure survey data to estimate a consumer demand system that includes gasoline other goods and leisure our estimates confirm that when revenues are not recycled a gasoline tax is regressive use of incidence measures that ignore demand responses however will substantially overstate this regressivity in contrast the differences between the equivalent variation and easier to implement consumer surplus measures are relatively small in addition our results suggest that using the additional gas tax revenue to fund labor tax cuts makes the policy substantially less regressive while using the revenue to fund lump sum transfers actually makes it progressive

a resource based perspective on corporate environmental performance and profitability drawing on the resource based view of the firm we posited that environmental performance and economic performance are positively linked and that industry growth moderates the relationship with the returns to environmental performance higher in high growth industries we tested these hypotheses with an analysis of 243 finns over two years using independently developed environmental ratings results indicate that it pays to be green and that this relationship strengthens with industry growth we conclude by highlighting the study s academic and managerial implications making special reference to the social issues in management literature

distributional impacts of investment subsidies for residential energy technologies abstract this study analyses the distributional impacts of investment subsidies paid to households that install residential energy technologies based on renewable energy sources the subsidies covering a significant part of the total investment play a considerable role in households energy decisions depending on their design support measures may provide the most benefits to certain groups of society and thus may cause increasing inequality the potential distributional impacts of the investment subsidies are determined by the combination of technologies targeted and their costs household income support intensity subsidy design restrictions and the availability of additional measures this study examines the support system for residential renewable energy technologies in the lithuanian case by employing a microsimulation model this analysis of existing measures provides more general results and highlights the policy features that cause distributional impacts therefore the results are applicable in other countries as well the analysis shows that although the support is efficient from an energy point of view it provides the most benefits to households with higher income and thus increases inequality moreover the subsidies fail to reduce energy poverty due to the poorest households low capacity to invest to obtain a flatter distribution of benefits the design of support measures should consider the current situation of lower income households and affordability issues

rule of thumb consumers meet sticky wages it has been argued that rule of thumb consumers substantially alter the determinacy properties of simple interest rate rules and the dynamics of an otherwise standard new keynesian model in this paper we show that nominal wage stickiness helps re establishing standard results key findings are that wage stickiness i affects the shape of determinacy regions in the parameters space restoring the relevance of the taylor principle for the conduct of monetary policy ii implies that a rise in consumption in response to an innovation in government spending is not a robust feature of the model

quantifying the prevalence of fuel poverty across the european union abstract the literature and policy base for fuel poverty in the uk and ireland is well established and there is a growing body of single country studies beyond these two eu member states for example brunner et al 2012 dubois 2012 robine et al 2008 however on a european level the last analysis of fuel poverty was conducted in 2004 prior to the enlargement of the eu using survey data this paper presents an updated overview of the prevalence of european fuel poverty in the context of the accession of numerous former social states and rising fuel prices analysis reveals the phenomenon of fuel poverty is occurring across the eu with particularly high levels of fuel poverty found in eastern and southern european states it is argued that there are both eu and national policy frameworks in place that address climate change and these could be used as a starting point for countries to address fuel poverty through improved domestic energy efficiency measures this paper reflects research undertaken in 2011 supported by eaga charitable trust within the umbrella of work examining issues of poverty and social exclusion across the eu which has enabled access to the eu silc dataset

do corporate global environmental standards create or destroy market value arguments can be made on both sides of the question of whether a stringent global corporate environmental standard represents a competitive asset or liability for multinational enterprises mnes investing in emerging and developing markets analyzing the global environmental standards of a sample of u s based mnes in relation to their stock market performance we find that firms adopting a single stringent global environmental standard have much higher market values as measured by tobin sq than firms defaulting to less stringent or poorly enforced host country standards thus developing countries that use lax environmental regulations to attract foreign direct investment may end up attracting poorer quality and perhaps less competitive firms our results also suggest that externalities are incorporated to a significant extent in firm valuation we discuss plausible reasons for this observation

the impact of terrorism on financial markets an empirical study the main focus of this paper is to previous termstudynext term empirically the previous termimpact of terrorismnext term on the behavior of stock bond and commodity previous termmarkets next term we consider terrorist events that took place in 25 countries over an 11 year time period and implement our analysis using different methods an event previous termstudynext term approach a non parametric methodology and a filtered garch evt approach in addition we compare the effect of terrorist attacks on previous termfinancial markets with the impactnext term of other extreme events such as previous termfinancialnext term crashes and natural catastrophes the results of our analysis show that a non parametric approach is the most appropriate method among the three for analyzing the previous termimpact of terrorism on financial markets next term we demonstrate the robustness of this method when interest rates equity previous termmarketnext term integration spillover and contemporaneous effects are controlled we show how the results of this approach can be used for investors portfolio diversification strategies against previous termterrorismnext term risk

environmental regulation the obama effect and the stock market some empirical results following the signing of the kyoto protocol in 2005 a new wave of green policies emerged with the intention of protecting our planet this study explores the effects these policies have on capital markets in particular we assess how the risk and return of us industrial portfolios react to the announcement of green policies event study methodology and asset pricing models are used to that end we document negative abnormal returns and increase in systematic risk for the biggest polluters whereas environmentally friendly businesses are affected to a lesser degree an apparent obama effect is observed resulting from the 2008 outcome of the us presidential election

asset market participation monetary policy rules and the great inflation this paper argues that limited asset market participation is crucial in explaining u s macroeconomic performance and monetary policy before the 1980s and their changes thereafter in an otherwise conventional sticky price model standard aggregate demand logic is inverted at low enough asset market participation interest rate increases become expansionary passive monetary policy ensures equilibrium determinacy and maximizes welfare this suggests that federal reserve policy in the pre volcker era was better than conventional wisdom implies we provide empirical evidence consistent with this hypothesis and study the relative merits of changes in structure and shocks for reproducing the conquest of the great inflation and the great moderation

the impact of environmental management on firm performance environmental management has the potential to play a pivotal role in the financial performance of the firm many individuals suggest that profitability is hurt by the higher production costs of environmental management initiatives while others cite anecdotal evidence of increased profitability a theoretical model is proposed that links strong environmental management to improved perceived future financial performance as measured by stock market performance the linkage to firm performance is tested empirically using financial event methodology and archival data of firm level environmental and financial performance significant positive returns were measured for strong environmental management as indicated by environmental performance awards and significant negative returns were measured for weak environmental management as indicated by environmental crises the implicit financial market valuation of these events also was estimated cross sectional analysis of the environmental award events revealed differences for first time awards and between industries first time award announcements were associated with greater increases in market valuation although smaller increases were observed for firms in environmentally dirty industries possibly indicative of market skepticism this linkage between environmental management and financial performance can be used by both researchers and practitioners as one measure of the benefits experienced by industry leaders and as one criterion against which to measure investment alternatives

simulation of indirect tax reforms using pooled micro and macro french data this paper assesses the consequences of two reforms of the french indirect taxation system a vat harmonization which is close to initial ec proposals and a carbon tax which aims at decreasing the emissions of carbon dioxide we simulate the effects of tax reforms using estimates of a model of household expenditure behaviour estimation is obtained by using the property of perfect aggregation over households of the almost ideal demand system on pooled micro data from the 1978 1979 1984 1985 1989 issues of the french enquete budgets des familles combined with macro data from the quarterly national accounts from 1970 to 1990 simulations are conducted using a subsample of households from the 1989 consumer survey and generate useful results about the behavioural reactions to tax changes the impact on government revenue and the distributional effects of the reforms

capital market response to emission rights returns evidence from the european power sector prior studies on the distributional effects of the european union s emission trading scheme eu ets have so far only relied on supply and demand data empirical evidence from capital markets has been missing we address this gap and measure the ets s economic consequences using the expectations of investors towards the regulatory impact on firm value employing a multifactor model we show that returns on common stock of the largest affected industry power generation are positively correlated with rising prices for emission rights this implies that the market predicts that firms are not only able to pass on their share of the regulatory burden to customers but even achieve windfall profits by overcompensating for the costs

the distributional implications of a carbon tax in ireland we study the effects of carbon tax and revenue recycling across the income distribution in the republic of ireland in absolute terms a carbon tax of 20 tco2 would cost the poorest households less than 3 week and the richest households more than 4 week a carbon tax is regressive therefore however if the tax revenue is used to increase social benefits and tax credits households across the income distribution can be made better off without exhausting the total carbon tax revenue

limited asset markets participation monetary policy and inverted aggregate demand logic abstract this paper incorporates limited asset markets participation in dynamic general equilibrium and develops a simple analytical framework for monetary policy analysis aggregate dynamics and stability properties of an otherwise standard business cycle model depend nonlinearly on the degree of asset market participation while moderate participation rates strengthen the role of monetary policy low enough participation causes an inversion of results dictated by conventional wisdom the slope of the is curve changes sign the taylor principle is inverted optimal welfare maximizing discretionary monetary policy requires a passive policy rule and the effects and propagation of shocks are changed however a targeting rule implementing optimal policy under commitment delivers equilibrium determinacy regardless of the degree of asset market participation our results may justify fed s behavior during the great inflation period

the new keynesian cross abstract the new keynesian nk cross is a graphical and analytical apparatus for heterogeneous agent hank models expressing key aggregate demand objects mpc and multipliers as functions of heterogeneity parameters it affords analytical insights into monetary fiscal and forward guidance multipliers and replicates the aggregate implications of quantitative hank the key parameter the constrained agents income elasticity to aggregate income depends on fiscal redistribution when it is larger smaller than one the effects of policies and shocks are amplified dampened with uninsurable idiosyncratic uncertainty this translates intertemporally through compounding discounting in the aggregate euler equation into further amplification dampening of future shocks

the power of forward guidance in a quantitative tank model abstract we quantify the macroeconomic effects of interest rate forward guidance in an estimated medium scale two agent new keynesian tank model although tank models can in principle dampen or amplify the power of forward guidance compared to a representative agent model our estimates indicate a dampening as there is sufficient countercyclical redistribution an interaction of forward guidance with asset purchases gives rise to non linear effects that depend on the horizon of the interest rate peg

the distributional effects of a carbon tax and its impact on fuel poverty a microsimulation study in the french context abstract this paper studies the distributional effects of france s recently introduced carbon tax using a microsimulation model built on a representative sample of the french population from 2012 it simulates the taxes levied on each household s consumption of energy for housing and transport without revenue recycling the carbon tax is regressive and increases fuel poverty from a policy perspective this finding indicates that the question of fuel poverty cannot be ignored in the quest for a fair ecological transition it proposes that some of the revenues from the carbon tax should be redistributed to households different designs of cash transfer to support households are then compared the results show that the inequities of the carbon tax could be offset at reasonable cost relative to total carbon tax revenues however adjusting the design of cash transfers to criteria other than income level does not diminish the cost of compensating households the benefits of finely adjusting cash transfers may therefore be somewhat limited most notably the results show that targeting revenue recycling at low income households would help to reduce fuel poverty substantially this study therefore indicates that carbon taxation actually provides an opportunity to finance ambitious policies to fight fuel poverty

the role of automatic stabilizers in the u s business cycle most countries have automatic rules in their tax and transfer systems that are partly intended to stabilize economic uctuations this paper measures how eective they are at lowering the volatility of u s economic activity we identify seven potential stabilizers in the data and include four theoretical channels through which they may operate in a business cycle model calibrated to the u s data the model is used to compare the volatility of output in the data with counterfactuals where some or all of the stabilizers are shut down our rst nding is that proportional taxes like sales property and corporate income taxes contribute little to stabilization our second