optimal interest rate rules asset prices and credit frictions we study optimal taylor type interest rate rules in an economy with credit market imperfections our analysis builds on the agency cost framework of carlstrom and fuerst 1997 agency costs net worth and business fluctuations a computable general equilibrium analysis american economic review 87 893 910 which we extend in two directions first we embed monopolistic competition and sticky prices second we modify the stochastic structure of the model in order to generate a countercyclical premium on external finance this is achieved by linking the mean distribution of investment opportunities faced by entrepreneurs to aggregate total factor productivity we model monetary policy in terms of simple welfare maximizing interest rate rules we find that monetary policy should respond to increases in asset prices by lowering interest rates however when monetary policy responds strongly to inflation the marginal welfare gain of responding to asset prices vanishes within the class of linear interest rate rules that we analyze a strong anti inflationary stance always attains the highest level of welfare

coal overcapacity in china multiscale analysis and prediction gaining a quantitative understanding of the causes of coal overcapacity and accurately predicting it are important for both government agencies and coal enterprises following the decomposition reconstruction prediction concept a combined ensemble empirical mode decomposition least square support vector machine autoregressive integrated moving average eemd lssvm arima model is proposed for quantitatively analyzing and forecasting coal overcapacity in china the results show that the main causes of coal overcapacity in china include insufficient demand market failure and institutional distortion institutional distortion with an influence degree of 73 75 is the most fundamental and influential factor from 2017 to 2019 the scale of coal overcapacity in china will reach between 1 721and 1 819 billion tons suggesting that coal overcapacity will remain a serious problem the rate of coal overcapacity caused by insufficient demand will fluctuate slightly while coal overcapacity caused by market failure will trend downward but the impact of institutional distortion on coal overcapacity will be exacerbated a statistical analysis demonstrates that the eemd lssvm arima model significantly outperformed other widely developed baselines e g arima lssvm eemd arima and eemd lssvm

nominal income targeting in an open economy optimizing model abstract this paper presents simulation results regarding the performance of nominal income targeting a monetary policy rule that sets interest rates in response to deviations of nominal gdp growth from a target path the macroeconomic model is one in which agents solve dynamic optimization problems with rational expectations but in an environment with slow price adjustments in the present version consumption choices reflect habit formation and the economy is open to international flows of goods and securities when calibrated to quarterly us data the model s results suggest that nominal income targeting performs well in relation to inflation targeting and taylor rules

financial market illiquidity shocks and macroeconomic dynamics evidence from the uk we examine the link between financial market illiquidity and macroeconomic dynamics by fitting a bayesian time varying parameter var with stochastic volatility to uk data from 1988q1 to 2016q4 we capture liquidity conditions in the stock market using a battery of illiquidity proxies this paper departs from previous studies examining macro financial linkages by using theoretically grounded sign restrictions and conducting structural inference in a non linear framework we document both statistically significant differences in the transmission of these shocks and substantial increases in the economic importance of these shocks during the 2008 recession

primal and dual capacity utilization an application to productivity measurement in the u s automobile industry capacity utilization measures have traditionally been constructed as indexes of actual as compared to potential output this potential or capacity output y can be represented within an economic model of the firm as the tangency between the short and long run average cost curves economic theoretical measures of capacity utilization cu can then be characterized as y y where y is the realized level of output these quantity or primal cu measures allow for economic interpretation they provide explicit inference as to how changes in exogenous variables affect cu additional information for analyzing deviations from capacity production can be obtained by assessing the dual cost of the gap in this article the definitions and representations of primal output and dual cost cu measures are formalized within a dynamic model of a monopolistic firm as an illustration of this approach to characterizing cu measures a model is estimated for the u s automobile industry 1959 1980 and primal and dual cu

ranking trade resistance variables using data envelopment analysis abstract in the context of justus von liebig s law of the minimum this study assesses the impacts that trade barriers have on trade resistance between united states u s manufacturing industries and their trade partners an undesirable trade resistance model is presented where trade barriers are undesirable inputs into the production of the undesirable output trade resistance it is then presented how johansen s notion of capacity is utilized to assess trade barriers impacts estimation takes place by employing data envelopment analysis dea results suggest that u s trade partners port logistics are the most limiting trade barrier for the u s manufacturing industries followed by the distance between the u s and its trade partners the tariff imposed by the u s and the tariff imposed by the trading partner

quota allocation of coal overcapacity reduction among provinces in china abstract laying down fair and economically viable policies to allocate quotas of coal overcapacity reduction to provinces has drawn great attention from both governments and enterprises in this study the production function method and panel variable coefficient model are used to estimate the boundary production function and coal capacities of 25 coal producing provinces the results predict that china s coal overcapacity will reach more than 0 803 billion tons by 2020 then a quota allocation model of coal overcapacity reduction among the provinces is proposed based on nonlinear programming with the aim of minimizing the total cost of national overcapacity reduction the results show that the total cost of national overcapacity reduction based on the optimal allocation scheme is 56 6695 billion yuan less than that based on the government allocation scheme the gini coefficient of the optimal allocation scheme is smaller than 0 3 indicating that this plan considers effectiveness and fairness furthermore we calculate the optimal proportions for the provinces to reduce coal overcapacity based on different capacity utilizations and different national coal production control targets the results show that the optimal proportions for most provinces are approximately the same under different conditions which means the optimal allocation scheme is robust and efficient

nonparametric measures of scale economies and capacity utilization an application to u s manufacturing abstract an economic measure of scale efficiency is the ratio of the minimum average cost to the average cost at the actual output level of a firm it is easily measured by the ratio of the total cost of this output under the constant and variable returns to scale assumptions this procedure does not identify the output level where the average cost reaches a minimum this paper proposes a nonparametric method of measuring this output level using dea the relation between this efficient production scale the short run physical capacity output and the most productive scale size mpss is also discussed an empirical application using state level data from u s manufacturing is used to illustrate the procedure the dea findings are further analyzed using a smoothed bootstrap procedure

liquidity effects and the monetary transmission mechanism several recent papers provide strong empirical support for the view that an expansionary monetary policy disturbance generates a persistent decrease in interest rates and a persistent increase in output and employment existing quantitative general equilibrium models which allow for capital accumulation are inconsistent with this view there does exist a recently developed class of general equilibrium models which can rationalize the contemporaneous response of interest rates output and employment to a money supply shock however a key shortcoming of these models is that they cannot rationalize persistent liquidity effects this paper discusses the basic frictions and mechanisms underlying this new class of models and investigates one avenue for generating persistence we argue that once a simplified version of the model in christiano and eichenbaum 1991 is modified to allow for extremely small costs of adjusting sectoral flow of funds positive money shocks generate long lasting quantitatively significant liquidity effects as well as persistent increases in aggregate economic activity

why is inflation low when productivity growth is high i introduction in the united states since world war ii inflation has been low when productivity growth has been high for example the 1950s and 1960s were a period of low inflation and high productivity growth whereas the 1970s and 1980s were a period of high inflation and low productivity growth the negative correlation between inflation and productivity growth over the years 1949 2000 is much stronger than the correlation between inflation and unemployment i e phillips curve type correlations or the correlation between inflation and growth in monetary aggregates i e quantity theory correlations little research has explored the comovement between inflation and productivity growth the evidence developed herein suggests that the negative correlation reflects the behavior of the federal reserve over the postwar period the federal reserve has not adjusted nominal income growth through changes in the growth of the money supply to changes in trend productivity growth as will be documented such a policy induces a negative correlation between trend productivity growth and inflation as an acceleration in trend productivity growth in the face of constant nominal income growth leads to a deceleration in inflation this focus on monetary policy as the key factor behind medium to long run correlations between inflation and productivity seems more plausible than a focus on peculiarities of phillips curve reduced form relationships because such relationships are plausibly more appropriate guides to the short run dynamics of inflation as a case in point consider the recent shift to inflation targeting monetary policy strategies in the united kingdom and sweden which emphasize the key role that monetary policy plays in the inflation outlook over several years the role of monetary policy in generating the strong correlation between productivity growth and inflation in the medium run is developed in a textbook model based on an expectations augmented phillips curve the model s main empirical predictions are confirmed 1 inflation especially expected inflation should fall when trend productivity growth rises and 2 nominal income and nominal wage growth should not change when trend productivity growth changes the model also implies that productivity growth enters a reduced form phillips curve relationship as a proxy for inflation expectations this implies that traditional estimates of the nonaccelerating inflation rates of unemployment nairu should fall when productivity growth accelerates an empirical regularity that has received a great deal of academic and policy attention in recent years and is typically explained via some type of irrationality perhaps surprisingly these empirically regularities do not rely on the great inflation of 1965 79 when inflation accelerated and productivity growth decelerated recent discussions of phillips curve reduced form relationships have placed a strong emphasis on structural explanations that may explain a link between productivity growth the nairu and hence inflation staiger et al 2001 present evidence that the time series techniques they employ to estimate trend productivity growth and the nairu yield a strong correlation between the nairu and trend productivity growth ball and moffitt 2001 and ball and mankiw 2002 provide a structural interpretation labor market institutions for some reason perhaps irrationality make the real wage aspirations of workers respond very sluggishly with a lag of perhaps 10 years or more to productivity growth and hence an acceleration in productivity growth leads to a prolonged period of downward pressure on labor costs and hence inflation similar reasoning has been used in policy circles for years at the council of economic advisors 1997 2000 and the federal reserve board meyer 2000 reflecting the reasoning in grub b et al 1982 and braun 1984 the focus herein the behavior of policy is consistent with the evidence on inflation productivity growth and empirical estimates of the nairu

competition policy burdens and state owned enterprise reform one of the most important remaining issues in china s transition to a market economy is the reform of state owned enterprises soe s when reforms started in late 1978 soe s dominated china s industrial sectors in every aspect after 18 years of gradual transition the soe share in china s total industrial output has declined from 77 6 percent in 1978 to 28 8 percent in 1996 however in 1996 soe s still employed 57 4 percent of urban workers and possessed 52 2 percent of total investment in industrial fixed assets improving soe performance is crucial for social stability and sustained growth in china however over 40 percent of soe s are losing money in this paper we will argue that the root of the soe problem is the separation of ownership and control and that the oftencriticized soft budget constraints arise from various state imposed policy burdens which make the state accountable for the poor perfornance of soe s the key for a successful soe reform is to remove the policy burdens and to create a level playing field so that market competition can provide sufficient information for the managerial performance of the soe s and make the managers incentives compatible with those of the state io competition and the performance of large corporation in a market economy

does informality facilitate inflation stability abstract informality is a structural trait in emerging economies affecting the behavior of labor markets financial access and economy wide productivity this paper develops a simple general equilibrium closed economy model with nominal rigidities labor and financial frictions to analyze the transmission of shocks and of monetary policy in the model the informal sector provides a flexible margin of adjustment to the labor market at the cost of a lower productivity in addition only formal sector firms have access to financing which is instrumental in their production process in a quantitative version of the model calibrated to mexican data we find that informality i dampens the impact of demand and financial shocks as well as of technology shocks specific to the formal sector on wages and inflation but ii heightens the inflationary impact of aggregate technology shocks the presence of an informal sector also increases the sacrifice ratio of monetary policy actions from a central bank perspective the results imply that informality mitigates inflation volatility for most type of shocks but makes monetary policy less effective

communications on energy growth and overcapacity in the uk electricity industry abstract in the face of a reduced growth rate in the demand for electricity the uk seems to be committing itself to an excessive increase in generating capacity this course of action combined with the endemic overcapacity problem in the uk electricity industry over the last decade is likely to intensify the already strong institutional pressures for keeping electricity demand high raphael papadopoulos considers the implications of the plans for expanded electricity supply

inefficiency of subgame optimal entry regulation the literature on excess entry shows that the free entry equilibrium number of firms may be greater than is socially optimal and proposes government entry regulation as a remedy this article tries to show that such a policy recommendation is misleading a two period three person entry game model which explicitly includes second best government shows that entry regulation aimed at preventing excess entry actually induces the incumbent to behave strategically against the government and makes the final outcome socially suboptimal compared to cases in which there is no government intervention entry regulation is subgame optimal however it is globally suboptimal

capacity utilization measures underlying economic theory and an alternative approach measures of industrial capacity utilization hereafter cu have been used extensively in helping to explain changes in the rate of investment labor productivity and inflation the cu measures have also been used to obtain indices of capital in use as distinct from capital stock in place a number of alternative measures of cu are periodically calculated and published the 1980 economic report of the president for example contains three series that by the federal reserve board the u s department of commerce bureau of economic analysis and the wharton school of finance other publicly available series are those prepared by mcgraw hill publishing company the u s department of commerce bureau of the census and rinfret boston associates inc although a host of cu measures is publicly available it is not at all clear how one should interpret changes over time in each measure or variations among them a principal reason underlying these interpretation problems is that the crucial link between underlying economic theory and the constructed measure of cu is weak one way in which this issue has manifested itself in the policy domain over the last five years has been with respect to the uncertain effects of dramatic increases in energy prices on capacity output and on cu each of the cu measures noted above is computed in such a way that explicitly ignores any role for energy prices yet several times during the last decade though growth to apparently high rates of cu had taken place investment and average labor productivity were much lower than expected and the rate of price increase much greater in brief during the last decade the explanatory power of alternative cu measures has dropped sharply some have conjectured that post opec energy price increases may have brought about major changes in the u s economy so that old quantitative relationships between measured cu and investment labor productivity and price inflation may have been altered substantially in order to assess effects of changes in pe on cu a re examination of the notion and measurement of cu is needed based on the framework of the economic theory of the firm that is the focus of this paper

the macroeconomic effects of fiscal policy we investigate the macroeconomic effects of fiscal policy using a bayesian structural vector autoregression b svar approach we identify fiscal policy shocks via a partial identification scheme but also i include the feedback from government debt ii look at the impact on the composition of output iii assess the effects on asset markets iv use quarterly data and v analyse empirical evidence from the us the uk germany and italy the results show that government spending shocks in general have a small effect on gross domestic product gdp lead to important crowding out effects have a varied impact on housing prices and generate a quick fall in stock prices government revenue shocks generate a mixed effect on housing prices and a small and positive effect on stock prices the empirical evidence also suggests that it is important to explicitly consider the government debt dynamics in the model

does urbanization lead to more direct and indirect household carbon dioxide emissions evidence from china during 1996 2012 china is experiencing a stage of rapid urban development the energy consumption and related carbon dioxide emissions of households continue to increase this paper calculates direct and indirect carbon dioxide emissions of households based on the input output method in china from 1996 to 2012 the results reveal that there were more total carbon dioxide emissions from urban households than from rural households far more indirect emissions from urban households than from rural households slightly more direct emissions from urban households than from rural households and differences in direct carbon dioxide emissions from various fuels and in indirect emissions from various sectors between urban and rural households to examine the causal relationship between urbanization and the carbon dioxide emissions of households cointegration and granger causality tests are applied a unidirectional causal relation was found running from urbanization to both direct and indirect household carbon dioxide emissions and the direct and indirect carbon dioxide emissions of households would increase 2 9 and 1 1 respectively for every increase of one percent in urbanization we discuss the reasons of why the development of urbanization will lead to more household direct and indirect carbon dioxide emissions and suggest certain policy implications for urbanization and carbon dioxide emissions based on the results of this study

bayesian evaluation of dsge models with financial frictions we evaluate two most popular approaches to implementing financial frictions into dsge models the bernanke gertler and gilchrist 1999 setup where frictions affect the price of loans and the kiyotaki and moore 1997 model where they concern the quantity of loans we take both models to the data and check how well they fit it on several margins overall comparing the models favors the bernanke gertler and gilchrist framework however even this model does not make a clear improvement over the new keynesian benchmark in terms of marginal likelihood and similarity of impulse responses to those obtained from a var

a dynamic game model of strategic capacity investment in the cruise line industry abstract in this paper the cruise line industry is characterized as an oligopoly where a finite number of cruise lines compete to maximize their profits over a fixed planning horizon the oligopolistic competition is modeled as a n person nonzero sum noncooperative dynamic game the noncooperative nash equilibrium capacity investment strategies of cruise lines are theoretically analyzed under the open loop information structure the necessary conditions for an open loop nash equilibrium solution are derived using a pontryagin type maximum principle and the sufficient conditions are also established the economic interpretation of the optimality conditions is given so as to demonstrate the difference between the static and dynamic oligopoly problems the dynamic oligopolistic competition of three cruise lines in a hypothetical setting is also numerically analyzed by using the iterative algorithm numerical results provide a number of important managerial guidelines for cruise capacity investment decisions the paper concludes with a discussion on future research directions

provincial allocation of coal de capacity targets in china in terms of cost efficiency and fairness developing a de capacity scheme that is economical fair and efficient has become a key problem affecting the smooth achievement of coal de capacity targets it is also an important policy issue with regard to the overall implementation of china s supply side structural reforms in this study we use the production function method as well as the panel variable coefficient model to calculate the 25 provinces boundary production functions for the coal industry which leads to the estimation of the coal capacity and capacity utilization rate of each province taking into account the labor resettlement cost and disposal cost of fixed assets a total cost function of coal de capacity is established the growth rate function of total factor productivity tfp in the coal industry is constructed by the solow residual value method an allocation model of coal de capacity is then proposed based on multi objective nonlinear optimization with constraint conditions on the total reduction amount and minimum output of coal in each region finally using the relevant data of china s 25 coal producing provinces in 1990 2015 the allocation of coal de capacity is obtained under the goal of minimizing the total cost and maximizing the tfp growth rate the results show that the capacity utilization rate of china s coal industry is much lower than the lower limit of the reasonable utilization ratio while tfp shows negative growth over a long period the comparative analytical results indicate that in terms of total cost the optimal allocation scheme is 44 5335 billion yuan lower than the government allocation scheme the disposal cost of fixed assets and labor resettlement costs decrease by 29 2749 billion yuan and 15 2586 billion yuan respectively in terms of tfp growth the optimal allocation scheme has a 1 54 higher tfp growth rate compared with the government allocation scheme in terms of fairness the gini coefficients of the optimal scheme calculated by various indexes are all smaller than 0 3 placing the scheme within the category of considerable or absolute fairness in addition we calculate the optimal allocation ratio of coal de capacity in the situation where cost preference and quality preference of central government are considered to verify the intrinsic consistency of the model in brief the optimal allocation scheme proposed in this study effectively realizes the integration of economy efficiency and fairness 2018 elsevier b v

optimal monetary policy in a model of the credit channel we study a simple extension of the basic new keynesian set up in which we relax the assumption of frictionless financial markets due to asymmetric information and default risk bank lending rates incorporate a spread over the deposit rate we demonstrate that financial frictions affect aggregate dynamics mainly through their impact on firms financing costs which increase in both the deposit rate and in the spread between lending and deposit rates welfare includes a concern for smoothing these two financial market variables our numerical simulations suggest that an aggressive easing of policy is optimal in response to adverse financial market shocks

estimating most productive scale size using data envelopment analysis abstract the relation between the most productive scale size mpss for paparticular input and output mixes and returns to scale for multiple inputs multiple outputs situations is explicitly developed this relation is then employed to extend the applications of data envelopment analysis dea introduced by charnes cooper and rhodes ccr to the estimation of most productive scale sizes for convex production possibility sets it is then shown that in addition to productive inefficiencies at the actual scale size the ccr efficiency measure also reflects any inefficiencies due to divergence from the most productive scale size two illustrations of the practical applications of these results to the estimation of most productive scale sizes and returns to scale for hospitals and stem electric generation plants are also provided emphasize the advantage of this method in examining specific segments of the efficient production surface

capacity and capacity utilization in common pool resource industries excess capacity poses one of the most pressingproblems that arise when industries exploitcommon pool natural resources it entailsover investment in the capital stock andexcessive use of variable inputs and placesadditional exploitation pressures on theresource stocks confusion persists over theappropriate definition and measurement ofcapacity and capacity utilization for theseindustries but understanding capacity and itsmeasurement is necessary to properly design acapacity management program this paperaddresses these issues by overviewing theconceptual and theoretical bases for capacityand capacity utilization measurement identifying specific problems for common poolresources outlining alternative methodologiesfor their measurement and illustrating the useof these definitions and measurement methods ina fisheries case study

investigation of the environmental kuznets curve for carbon emissions in malaysia do foreign direct investment and trade matter abstract environmental degradation has become a central issue of discussion among the economists and environmentalists in view of malaysia s position as one of the main contributors to co2 emissions in asia and its status as a fast growing economy it is vital therefore to conduct a study to identify the relationship between economic growth and co2 emissions for malaysia this study attempts to examine empirically the environmental kuznets curve hypothesis for malaysia in the presence of foreign direct investment and trade openness both in the short and long run for the period 1970 to 2008 the bounds testing approach and granger causality methodology are applied to test the interrelationships of the variables the results of our study indicate that the inverted u shaped relationship does exist between economic growth and co2 emission in both the short and long run for malaysia after controlling for two additional explanatory variables namely fdi and trade importantly the results of the study also provide some crucial policy recommendations to the policy makers

optimal monetary policy with an uncertain cost channel the cost channel of monetary transmission describes a supply side effect of interest rates on firms costs previous research has found this effect to vary both over time and across countries moreover the cyclical nature of financial frictions is likely to amplify the cost channel this paper derives optimal monetary policy in the presence of uncertainty about the true size of the cost channel in a min max approach the central bank derives an optimal policy plan to be implemented by a taylor rule it is shown that uncertainty about the cost channel leads to an attenuated interest rate setting behavior in this respect the brainard 1967 principle of cautious policy in the face of uncertainty continues to hold in both a bayesian and a min max framework

un conventional policy and the effective lower bound abstract we study the optimal combination of interest rate policy and unconventional monetary policy in a model where agency costs generate a spread between deposit and lending rates we show that credit policy can be a powerful substitute for interest rate policy in the face of shocks that negatively affect bank monitoring efficiency unconventional measures insulate the real economy from further deterioration in financial conditions and it may be optimal for the central bank not to cut rates to zero thus credit policy lowers the likelihood of hitting the zero bound constraint reductions in the policy rates without non standard measures are sub optimal as they force savers to inefficiently change their intertemporal consumption patterns

policy and regulatory responses to coalmine closure and coal resources consolidation for sustainability in shanxi china abstract the late 1990s and early 2010s witnessed china s efforts to reform its coal industry towards sustainability a series of rigorous initiatives were launched to consolidate its coal resources and upgrade its mining sector the mine closure and production reduction campaign mcprc and coal resources consolidation campaign crcc were among the notable this paper conducts a general review of the policies and regulations relating to these initiatives with shanxi one of the key coal producing provinces and one of the pilot areas for reform as a case study the paper argues that the one size fits all approach may have brought short lived political and economic benefits however in the long run a rationally designed stable socio economically and environmentally co ordinated regulatory framework for both large and small coal mines is needed for the sustainable development of china s coal sector this finding would be helpful for the potential similar reform initiatives for the coal sector and for the wider energy sector across the country

how important is the credit channel an empirical study of the us banking crisis we examine whether by adding a credit channel to the standard new keynesian model we can account better for the behaviour of us macroeconomic data up to and including the banking crisis we use the method of indirect inference which evaluates statistically how far a model s simulated behaviour mimics the behaviour of the data we find that the model with credit dominates the standard model by a substantial margin credit shocks are the main contributor to the variation in the output gap during the crisis

impacts of random noise and specification on estimates of capacity derived from data envelopment analysis abstract data envelopment analysis dea is widely used to estimate the efficiency of firms and has also been proposed as a tool to measure technical capacity and capacity utilization cu random variation in output data can lead to downward bias in dea estimates of efficiency and consequently upward bias in estimates of technical capacity this can be particularly problematic for industries such as agriculture aquaculture and fisheries where the production process is inherently stochastic due to environmental influences this research uses monte carlo simulations to investigate possible biases in dea estimates of technically efficient output and capacity output attributable to noisy data and investigates the impact of using a model specification that allows for variable returns to scale vrs we demonstrate a simple method of reducing noise induced bias when panel data is available we find that dea capacity estimates are highly sensitive to noise and model specification analogous conclusions can be drawn regarding dea estimates of average efficiency

optimal monetary policy with capital and a financial accelerator abstract whether there is a trade off between price and financial stability is an open question this paper characterises optimal monetary policy analytically in a new keynesian economy with capital and a financial accelerator in addition to stabilising inflation there is an incentive to smooth volatility in the net worth of borrowers and this presents a trade off for monetary policy this trade off can be eliminated if policymakers can additionally choose an optimal transfer to borrowers enriching the model with fire sales and countercyclical bankruptcy costs there is also an incentive to smooth volatility in default and the capital stock an optimal transfer to borrowers is not sufficient to eliminate the trade off in that case with fewer instruments than targets optimal transfers are state contingent and countercyclical while monetary policy stabilises inflation

how do us credit supply shocks propagate internationally a gvar approach abstract we study how us credit supply shocks are transmitted to other economies we use the recently developed gvar approach to model financial variables jointly with macroeconomic variables in 33 countries for the period 1983 2009 we experiment with inter country links based on bilateral trade portfolio investment foreign direct investment and banking exposures capturing both bilateral trade and financial exposures in a gvar fits the data better than using trade weights only we use sign restrictions on the short run impulse responses in the us model to identify the credit supply shocks we find that negative credit supply shocks have strong negative effects on us and foreign gdp credit and equity markets in several countries respond clearly to the shocks exchange rate responses are consistent with a flight to quality to the us dollar the credit supply shocks explain about a fifth of one year ahead output forecast error variance in the us and about a tenth in the euro area and the uk but considerably less elsewhere

intertemporal optimization of the coal production capacity in china in terms of uncertain demand economy environment and energy security abstract as coal is the main energy source in china coal overcapacity and undercapacity have negative impacts on the economy environment and energy security to reveal the optimal production capacity opc an intertemporal optimization model under uncertainty is established by a combined dynamic programming influence factor scenario analysis monte carlo method dp if sa mc the opcs in 1990 2025 are solved to minimize the expected cost to the economy and environment driven by the production capacity pc under energy security in addition we define and calculate the pc deviation pcd or the deviation of the actual pc apc from the opc the results show that compared with the apc the opc has advantages of more stable development more timely adjustment and lower cost and it provides cost savings of 302 857 billion yuan in 1990 2017 according to pcd china s coal industry existed under the risk of overcapacity in 1990 1999 and 2009 2017 and undercapacity in 2000 2008 and it can experience overcapacity for most of the time without capacity reduction policies in future the optimal management of the pc should be based on the opc and pcd over the next 5 10 years rather than the current capacity utilization rate and focus on overcapacity management in the long run

the effect of urbanization on co2 emissions in emerging economies the theories of ecological modernization and urban environmental transition both recognize that urbanization can have positive and negative impacts on the natural environment with the net effect being hard to determine a priori this study uses recently developed panel regression techniques that allow for heterogeneous slope coefficients and cross section dependence to model the impact that urbanization has on co2 emissions for a panel of emerging economies the estimated contemporaneous coefficients on the energy intensity and affluence variables are positive statistically significant and fairly similar across different estimation techniques by comparison the estimated contemporaneous coefficient on the urbanization variable is sensitive to the estimation technique in most specifications the estimated coefficient on the urbanization variable is positive but statistically insignificant the implications of these results for sustainable development policy are discussed

trend growth and learning about monetary policy rules abstract the paper examines the effect of trend productivity growth on the determinacy and learnability of equilibria under alternative monetary policy rules under zero trend inflation we show that the economic structure is isomorphic to that of bullard and mitra 2002 and show that under a policy rule that responds to current period inflation and output a higher trend growth rate relaxes the conditions for determinacy and learnability results are mixed for other policy rules under the expectations based rule trend growth tightens the conditions for determinacy but it relaxes the conditions for learnability under the lagged data based rule trend growth tightens the conditions for determinacy and learnability our analysis shows that lower higher trend growth has similar effects as higher lower trend inflation in the sense of making inflation more less forward looking thus our results complement previous studies on the role of high trend inflation as a cause of macroeconomic volatility in the u s in the 1970s as this period was also characterized by productivity growth slowdown

measurement of natural and cyclical excess capacity in china s coal industry abstract overcapacity is a persistent problem in china s economy previous de capacity measures based on the quantity of the total excess capacity have failed to prevent the recurrence of increasingly worse overcapacity to solve this problem we attempt to quantitatively analyze china s excess coal capacity by dividing it into the long term natural excess capacity and short term cyclical excess capacity using the state space model and kalman filter algorithm the results show that china s excess coal capacity can indeed be divided into natural excess capacity and cyclical excess capacity and they have different causes fluctuations roles and effects on the price in 1995 2001 cyclical excess capacity was the main factor of overcapacity but in 2002 2015 natural excess capacity played a key role cyclical excess capacity has a negative effect on the price whereas natural excess capacity has little effect on it therefore policy makers should focus on the causes the fluctuations and the roles of natural excess and cyclical excess in addition to those of the total excess capacity they should also consider the relationship between the capacity and price based on the different effects of the natural excess capacity and cyclical excess capacity on the price

learning and protection of proprietary assets in strategic alliances building relational capital one of the main reasons that firms participate in alliances is to learn know how and capabilities from their alliance partners at the same time firms want to protect themselves from the opportunistic behavior of their partner to retain their own core proprietary assets most research has generally viewed the achievement of these objectives as mutually exclusive in contrast we provide empirical evidence using large sample survey data to show that when firms build relational capital in conjunction with an integrative approach to managing conflict they are able to achieve both objectives simultaneously relational capital based on mutual trust and interaction at the individual level between alliance partners creates a basis for learning and know how transfer across the exchange interface at the same time it curbs opportunistic behavior of alliance partners thus preventing the leakage of critical know how between them copyright 2000 john wiley sons ltd

to sign or not to sign on the response of prices to financial and uncertainty shocks abstract based on svar models identified by sign restrictions we estimate the macroeconomic effects of financial and uncertainty shocks in the euro area and the us paying particular attention to their impact on prices while our results confirm that such disturbances are important drivers of output fluctuations in both economies we find the shock responses of consumer prices to be ambiguous moreover restricting prices to co moving with output can considerably attenuate the measured impact of financial and uncertainty shocks on real activity

energy price slump and policy response in the coal chemical industry district a case study of ordos with a system dynamics model we employ system dynamics method towards a coal chemical industry district economy evolution model using coal industry the coal chemical industry their downstream industries and the manufacture related service industry moreover we construct energy price and policy response scenarios based on ordos management experience the results show that the energy price slump had a negative impact on the overall economic development of the coal chemical industry district despite promoting non resource industries furthermore policies had different effects on the industry s output value and profit in the long term developing alternative industries ai helps increase the industrial output value and profit decreasing value added tax vat has immediate results and a distinctive effect on industrial short term production value and profit its long term effect being limited the effect of production limit pl on industrial profit is stronger than output value and financial support fs is more conducive to improve the latter however coal mining and coal chemical loan increases decrease the gross industrial profit level technology innovation ti has the best individual policy overall effect on production value and profits furthermore the simultaneous implementation of pl ti and ai can generate the synergy effect for each of them and the simultaneous implementation of vat and one or couple of other policies will generate the crowding out effect both for vat and other policies

optimal monetary policy with countercyclical credit spreads we study optimal monetary policy in a new keynesian dynamic stochastic general equilibrium dsge model with a credit channel and relationship lending in banking we show that borrowers bank specific deep habits give rise to countercyclical credit spreads which in turn make optimal monetary policy depart substantially from price stability under both discretion and commitment our analysis shows that the welfare costs of setting monetary policy under discretion with respect to the optimal ramsey plan and of using simpler suboptimal policy rules are strictly increasing in the magnitude of deep habits in credit markets and market power in banking

search in the product market and the real business cycle empirical evidence suggests that most firms operate in imperfectly competitivemarkets we develop a search matching model between wholesalers and retailers firms face search costs and form long term relationships price bargain results in both wholesaler and retailer markups depending on firms relative bargaining power we simulate the model to explore the role of product market search frictions in business cycles we show that the way search costs are modelled is crucial to provide a realistic picture of firms business environment and improve the cyclical properties of an otherwise standard real business cycle model

does productivity growth lower inflation in korea we investigate granger causality between productivity growth and inflation in korea using quarterly data for the period 1985q1 2002q4 our results indicate unidirectional granger causality from productivity growth to inflation in light of such causality we estimate the effect of productivity and other variables on productivity according to our regression results a 1 increase in labour and total factor productivity tfp reduces consumer price index cpi inflation by 0 07 0 08 and 0 37 0 44 respectively our results also suggest that the productivity inflation nexus became stronger in korea since the asian financial crisis and that this was largely due to structural reform and technological progress

federalism and the soft budget constraint the government s incentives to bail out inefficient projects are determined by the trade off between political benefits and economic costs the latter depending on the decentralization of government two effects of federalism are derived first fiscal competition among local governments under factor mobility increases the opportunity costs of bailout and thus serves as a commitment device the competition effect second monetary centralization together with fiscal decentralization induces a conflict of interests and thus may harden budget constraints and reduce inflation the checks and balance effect the authors analysis is used to interpret china s recent experience of transition to a market economy copyright 1998 by american economic association

excess labor and the business cycle this paper compares the medoff fay estimates of labor hoarding during troughs which are based on data from manufacturing plants with aggregate estimates of excess labor on hand the two sets of estimates seem consistent which provides a strong argument in favor of the excess labor hypothesis this is one of the few examples in macroeconomics where a hypothesis has been so strongly confirmed using detailed micro data this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abs this abstract was borrowed from another version of this item

investigating the validity of pollution haven hypothesis in the gulf cooperation council gcc countries this study investigated the validity of the pollution haven hypothesis in the gulf cooperation council gcc countries using a multivariate framework to achieve the goal of this study the non stationary panel techniques were used to examine the hypothesis from 1980 to 2009 based on the pedroni cointegration test results it was found that the variables are cointegrated moreover the fully modified ols results showed that energy consumption and gdp growth increase co2 emission while foreign direct investment inflows have a long run negative relationship with co2 emission furthermore based on the short run granger causality test results fdi has no short run causal relationship with co2 emission and energy consumption while energy consumption and gdp growth have a positive causal relationship with co2 emission thus the results of this study indicate that energy consumption and gdp growth are the source of pollution in the gcc countries and not the foreign direct investment inflows thus the study recommended that these countries should utilize policies to encourage inward foreign investment since it plays an important role in stimulating gdp growth

does the time consistency problem explain the behavior of inflation in the united states abstract this paper derives the restrictions imposed by barro and gordon s theory of time consistent monetary policy on a bivariate time series model for inflation and unemployment and tests those restrictions using quarterly us data from 1960 through 1997 the results show that the data are consistent with the implications of the theory for the long run behavior of the two variables indicating that the theory can explain the initial rise and subsequent fall of inflation over the past four decades the results also suggest that the theory must be extended to account more fully for the short run dynamics that appear in the data

enterprise investment local government intervention and coal overcapacity the case of china abstract long term management of china s coal overcapacity depends on the targeted policy guidance on industry production capacity expansion in the overcapacity formation process in this study coal enterprise and local government are treated as game participants and a three stage dynamic game model has been developed to depict the boosting effect of the game behavior of coal enterprise s and local government s capacity investments in different markets of supply and demand the results are shown in the following 1 local government has been the behind the scenes operator of over investment and redundant construction and its excessive interventions in coal industry investment have been the primary cause of overcapacity formation 2 when the market is in short supply coal enterprise s optimal behavior is to continuously increase the rate of investment growth until it reaches the threshold to obtain the maximum excess profits ultimately leading to overinvestment in the industry and 3 the key factors affecting the game abilities of coal enterprise and local government are the market s self regulation and the central government s supervision intensity although the chinese government a highly vertically oriented bureaucratic structure is implementing a mandatory de capacity policy to alleviate the intensity of excessive coal capacity it is not a long term regularization on the supply side reform

money and interest in a cash in advance economy the authors analyze an aggregative general equilibrium model in which the use of money is motivated by a cash in advance constraint applied to purchases of a subset of consumption goods the system is subject to both real and monetary shocks which are economy wide and observed by all they develop methods for verifying the existence of characterizing and explicitly calculating equilibria copyright 1987 by the econometric society

causes of the current stagflation since 1975 labour slack has been unusually high in the oecd countries and yet inflation has not diminished the less favourable mix of unemployment and rate of change of inflation which we call stagflation is explained by a fall in the feasible rate of growth of real wages unmatched by a reduction in the constant term in phillips curve to investigate this mechanism conventional wage and price equations are estimated for 19 countries and then used for simulation stagflation has been caused in roughly equal amounts by rising relative import prices and by the fall in the rate of productivity growth in the basic model the phillips curve is assumed not to adapt to falls in feasible real wage growth but in a final section an adaptive wage equation is estimated which confirms that the process of adaptation is slow

optimal monetary policy with the cost channel in the standard new keynesian framework an optimizing policy maker does not face a trade off between stabilizing the inflation rate and stabilizing the gap between actual output and output under flexible prices an ad hoc exogenous cost push shock is typically added to the inflation equation to generate a meaningful policy problem in this paper we show that a cost push shock arises endogenously when a cost channel for monetary policy is introduced into the new keynesian model a cost channel is present when firms marginal cost depends directly on the nominal rate of interest besides providing empirical evidence for a cost channel we explore its implications for optimal monetary policy we show that its presence alters the optimal policy problem in important ways for example both the output gap and inflation are allowed to fluctuate in response to productivity and demand shocks under optimal monetary policy

the impact of oil company investment on the world coal industry overcapacity and price destabilization 1973 1992 this paper investigates the impact of oil company investments on the world coal industry since the first oil price shock of 1973 it details the scope of these investments both in the usa and elsewhere and demonstrates how they have served to destabilize and depress international coal prices in particular it establishes a novel and robust link between oil company investment in us coal which is sold on the domestic market and the behaviour of us coal export prices

the natural rate of interest and the financial cycle abstract i extend the model of laubach and williams 2003 by introducing an explicit role for the financial cycle in the joint estimation of the natural rates of interest unemployment and output and the sustainable growth rate of the us economy by incorporating the financial cycle arguably an omitted variable from the system the model is able to deliver more plausible estimates of business cycle dynamics the sustained decline in the natural rate of interest in recent decades is confirmed but i estimate that strong and persistent headwinds due to financial deleveraging have lowered temporarily the natural rate on average by around 1 p p below its long run trend over 2008 14 this may have impaired the effectiveness of interest rate cuts to stimulate the economy and lift inflation back to target in the immediate aftermath of the gfc

european inflation dynamics abstract we provide evidence on the fit of the new phillips curve npc for the euro area over the period 1970 1998 and use it as a tool to compare the characteristics of european inflation dynamics with those observed in the u s we also analyze the factors underlying inflation inertia by examining the cyclical behavior of marginal costs as well as that of its two main components namely labor productivity and real wages some of the findings can be summarized as follows a the npc fits euro area data very well possibly better than u s data b the degree of price stickiness implied by the estimates is substantial but in line with survey evidence and u s estimates c inflation dynamics in the euro area appear to have a stronger forward looking component i e less inertia than in the u s d labor market frictions as manifested in the behavior of the wage markup appear to have played a key role in shaping the behavior of marginal costs and consequently inflation in europe

allocation of coal de capacity quota among provinces in china a bi level multi objective combinatorial optimization approach abstract coal de capacity or capacity cut is an important part of china s energy transition formulating a quota allocation scheme for coal de capacity is the key to realizing smooth exit of coal overcapacity this study proposes a novel method of allocation of coal de capacity quota among provinces based on bi level multi objective combinatorial optimization in this bi level optimal allocation scheme boas the upper level is the central government and the lower level is the provincial governments the results indicate that because of the different costs of coal de capacity in each province the execution rate of each province for tasks assigned by the central government is quite different compared with the government allocation scheme gas and the single level optimal allocation scheme soas the growth rate of total factor productivity of the boas increases by 2 14 and 0 60 respectively the total de capacity cost of boas has reduced 64 billion yuan and 19 billion yuan respectively and the environmental benefits of boas has increased 73 billion yuan and 71 billion yuan respectively the gini coefficient of boas calculated by various indexes is less than 0 3 placing the scheme within the category of considerable or absolute fairness in addition the proposed allocation model truly reflects the complex dynamics of the game process of china s coal overcapacity governance system and can provide a more effective decision making reference for the chinese government in formulating the allocation scheme of coal de capacity

capacity utilisation and profitability a decomposition of short run profit efficiency the principal aim of this paper is to measure the amount by which the profit of a multi input multi output firm deviates from maximum short run profit and then to decompose this profit gap into components that are of practical use to managers in particular our interest is in the measurement of the contribution of unused capacity along with measures of technical inefficiency and allocative inefficiency in this profit gap we survey existing definitions of capacity and after discussing their shortcomings we propose a new ray economic capacity measure that involves short run profit maximisation with the output mix held constant we go on to describe how the gap between observed profit and maximum profit can be calculated and decomposed using linear programming methods the paper concludes with an empirical illustration involving data on 28 international airline companies the empirical results indicate that these airline companies achieve profit levels which are on average us 815m below potential levels and that 70 of the gap may be attributed to unused capacity

can energy price regulations smooth price fluctuations evidence from china s coal sector abstract due to the dominance of coal in china s energy mix coal prices have always been a challenging part of pricing reform the recent frequent government interventions raise the key research questions what is the actual impact of price policies on coal price fluctuations and how can forward looking pricing policies be made by proposing a novel classification of coal pricing policies and introducing an expectation and forward looking coefficient the paper examines the relationship between coal price fluctuations and pricing policies using the generalized method of moments gmm method it shows that the lagging coal price and coal demand play a positive role in regulating coal prices while coal supply and marketization have significantly negative effects on coal price fluctuations the heterogeneous impacts of price policies are due to differences in market players expectations policy instruments and the methods of policy release in addition china s coal pricing policy portfolio from 2013 to 2016 exerted synergy effects on the restraint of coal price fluctuations as the forward looking coefficient was considerably low the government s intervention behaviors were obviously biased towards ex post facto responses the paper suggests short run and long run policies to advance marketization of coal prices amid the energy transition

unintended consequences of china s coal capacity cut policy in early 2016 china introduced additional capacity cut policies to rebalance supply in the coal market to match demand that had been reduced by slow economic growth and strict environmental regulation ensuing disruptions to the coal market caused these policies to be revised and subsequently discarded as decision makers tried to find a balance between efficient supply economic and social stability and environmental sustainability this paper explores the causes of these unintended consequences using an extended version of the kem china model the results reveal that full and partial compliance with the capacity cut policies results in a significant gap between supply and demand this suggests that implementation of the policy was technically infeasible even allowing for a significant increase in coal prices and economic costs besides significant differences in coal prices and output profiles are registered across the country we argue that the heterogeneous nature of the chinese coal market and policy compliance was a major factor leading to the unintended consequences rendering a single national price benchmark inappropriate as a policy gauge we propose that the capacity cut policy should be differentiated across regions and even types of coalmines market approaches would be preferable to the command and control instruments and policy distortions that cause excess capacity should be removed

optimal monetary policy in a model with agency costs this paper integrates a fully explicit model of agency costs into an otherwise standard dynamic new keynesian model in a particularly transparent way a principal result is the characterization of agency costs as endogenous markup shocks in an output gap version of the phillips curve the model s utility based welfare criterion is derived explicitly and includes a measure of credit market tightness that we interpret as a risk premium the paper also fully characterizes optimal monetary policy and provides conditions under which zero inflation is the optimal policy finally optimal policy can be expressed as an inflation targeting criterion that depending upon parameter values can be either forward or backward looking

decomposing capacity utilization in data envelopment analysis an application to banks in india abstract this paper briefly reviews the existing methods of capacity utilization in nonparametric framework from economic perspectives and then suggests an alternative in the light of limitations therein in the spirit of work by coelli et al coelli t j grifell tatje e perelman s 2002 capacity utilisation and profitability a decomposition of short run profit efficiency international journal of production economics 79 261 278 we propose two methods radial and non radial to decompose the input based physical technological capacity utilization into various meaningful components viz technical inefficiency ray economic capacity utilization and optimal capacity idleness a case study of indian banking industry is taken as an example to illustrate the potential application of these two methods of decomposition our two broad empirical findings are that first competition created after financial sector reforms generates high efficiency growth and reduces excess capacity second the cost gap of the short run cost from the actual cost is higher for the nationalized banks over the private banks indicating that the former banks though old do not reflect their learning experience in their cost minimizing behavior

evaluating the interplays among economic growth and energy consumption and co2 emission of china during 1990 2007 the interplays among economy and energy and environment have been widely concerned this paper put forward several indicators to quantify the relationships among economic growth and energy consumption and co2 emission as an example these indicators were applied to evaluate the comprehensive performances of china during 1990 2007 the results show that chinese people has been living a better life with chinese rapid economic growth but not synchronously in urban and rural areas non carbon energy resources share has increased however fossil energy resources have still acted as the main driver for chinese economic growth during this period technical progress has improved the fossil energy efficiency of chinese economic activity which leads to co2 emission per unit gdp and co2 emission per capita unit gdp dropping simultaneously however the two indicators annual decline rates become smaller and smaller which reflects that technical progress role is dropping and economic scale s effect is climbing people s survival has a rising contribution to co2 emission co2 emission per capita has increased which shows that economic scale has greater impact on co2 emission than technical progress does relatively speaking chinese development patterns have become more and more sustainable during this period finally based on the related issues being discussed some corresponding suggestions are put forward for chinese government to further coordinate the relationship among economic development and energy consumption and co2 emission the proposed indicators can form a set of useful tool for policy makers to promote the harmonious development of economy and energy and environment in different regions and countries

money inflation and output under fiat and commodity standards we examine the behavior of money inflation and output under fiat and commodity standards to better understand how changes in monetary policy affect economic activity using long term historical data for 15 countries we find that under fiat standards the growth rates of various monetary aggregates are more highly correlated with inflation and with each other than under commodity standards money growth inflation and output growth are also higher in contrast we do not find that money growth is more highly correlated with output growth under one standard than under the other

revenue based capacity utilisation measures and decomposition the case of danish north sea trawlers in fisheries capacity analysis has largely been limited to measuring physical capacity defined as the maximum amount of output that can be produced per unit of time given existing plant and equipment and unrestricted availability of variable inputs an economic measure of capacity can be defined as the maximum revenue attainable for the given fixed inputs using relevant outputs and output prices this paper examines these two approaches to capacity by applying data envelopment analysis to physical and economic input output data for danish north sea trawlers the economic and physical measures are compared and contrasted using correlation analysis an innovative analysis into the composition of possible revenue increments is also presented and reasons for economic inefficiency of vessels are identified

monetary and macroprudential policies in a leveraged economy we examine the optimal monetary policy in the presence of endogenous feedback loops between asset prices and economic activity when macroprudential policies can also be pursued absent macroprudential policies the optimal monetary policy leans against asset prices and can be closely approximated using a speed limit rule that responds to the growth of financial variables an endogenous feedback loop is crucial for this result price stability is otherwise quasi optimal similarly a simple macroprudential rule that links reserve requirements to credit growth dampens the endogenous feedback loop and leads to near price stability state contingent taxes on lending are shown to be welfare improving

coal production forecast and low carbon policies in china abstract with rapid economic growth and industrial expansion china consumes more coal than any other nation therefore it is particularly crucial to forecast china s coal production to help managers make strategic decisions concerning china s policies intended to reduce carbon emissions and concerning the country s future needs for domestic and imported coal such decisions which must consider results from forecasts will have important national and international effects this article proposes three improved forecasting models based on grey systems theory the discrete grey model dgm the rolling dgm rdgm and the p value rdgm we use the statistical data of coal production in china from 1949 to 2005 to validate the effectiveness of these improved models to forecast the data from 2006 to 2010 the performance of the models demonstrates that the p value rdgm has the best forecasting behaviour over this historical time period furthermore this paper forecasts coal production from 2011 to 2015 and suggests some policies for reducing carbon and other emissions that accompany the rise in forecasted coal production

investigation of pollution haven hypothesis for china an ardl approach with breakpoint unit root tests abstract china is experiencing a stage of l type economy while climate change challenge appears tougher and tougher however up to now there exists no consensus about whether the influx of foreign direct investment should be responsible for domestic co 2 mounting situation the study aims to investigate the validity of the pollution haven hypothesis phh in china using 1980 2012 annual time series data to achieve this goal the autoregressive distributed lag cointegration ardl approach is used to examine the hypothesis and gross domestic product gdp gdp square energy use inward foreign direct investment fdi economic freedom urbanization financial development as well as trade openness are included as major drivers of co 2 emissions unlike many previous studies we also perform breakpoint unit root tests and incorporated a structural break into our model the results of bounds test show that there is a stable long run relationship between chosen variables in each model co 2 emissions will increase by 0 058 with 1 increase in inward fdi of gdp which indicates that phh does exist in china since china could be regarded as a model for developing countries the results of our study are useful for other developing countries

robustness of the estimates of the hybrid new keynesian phillips curve abstract gali and gertler 1999 inflation dynamics a structural econometric approach journal of monetary eonomics 44 2 195 222 developed a hybrid variant of the new keynesian phillips curve that relates inflation to real marginal cost expected future inflation and lagged inflation gmm estimates of the model suggest that forward looking behavior is dominant the coefficient on expected future inflation substantially exceeds the coefficient on lagged inflation while the latter differs significantly from zero it is quantitatively modest several authors have suggested that our results are the product of specification bias or suspect estimation methods here we show that these claims are incorrect and that our results are robust to a variety of estimation procedures including gmm estimation of the closed form and nonlinear instrumental variables also as we discuss many others have obtained very similar results to ours using a systems approach including fiml techniques hence the conclusions of gg and others regarding the importance of forward looking behavior remain robust

capital utilization and factor specificity in this study a model of firm behavior that allows the level of capital utilization to be optimally chosen by cost minimizing firms is embedded into the standard specific factors model employed in the international trade literature the resulting generalization of the specific factors model provides several new insights for instance allowing for variable utilization in either or both sectors gives rise to a greater variety of possible trade patterns than forcing utilization to remain constant similarly international differences in the willingness to work during abnormal hours generate a wider variety of trade patterns than are possible in the standard specific factors model finally this model allows a reconciliation of the dual scarcity explanation of the nineteenth century anglo american pattern of trade with the historical evidence on levels of utilization

did investment become green in china evidence from a sectoral panel analysis from 2003 to 2012 under conditions of policy incentives and energy transition an investment is considered to become green if greater investment would support a reduction in the proportion of total energy consumption involving coal use however few empirical studies have attempted to investigate green investment in china at the sector level using panel data for 5 sectors in china between 2003 and 2012 we tested the relationships between investment and different factors including carbon dioxide co2 emission reduction policies and energy structure by building panel models for the national sample the results demonstrated that investment did not become green and mainly relied on gross domestic product gdp during the 2003 2012 period in china although investments in the industry sector and the commerce and services sector were weakened by the co2 emission regulations chinese climate policies had no effect on investment in the agriculture sector or the construction sector and had a positive effect on investment in the transportation sector moreover the proportion of total energy consumption involving coal use had no effect on investment in the construction sector or the commerce and services sector but had a negative effect on investments in the agriculture sector and the transportation sector investment in the industry sector showed strong viscosity to low price coal consumption finally we propose a series of policy implications based on the test results which may guide green investment

banking competition collateral constraints and optimal monetary policy we analyze optimal monetary policy in a model with two distinct financial frictions monopolistically competitive banks that charge endogenous lending spreads and collateral constraints we show that welfare maximization is equivalent to stabilization of four goals inflation output gap the consumption gap between borrowers and savers and a housing gap that measures the distortion in the distribution of the collateralizable asset between both groups collateral constraints create a trade off between stabilization goals following both productivity and financial shocks and relative to strict inflation targeting the optimal policy implies sharper movements in the policy rate aimed primarily at reducing fluctuations in asset prices and hence in borrowers net worth the policy trade offs become amplified as banking competition increases due to the fall in lending spreads and the resulting increase in borrowers leverage

do we really understand the development of china s new energy industry abstract countries all over the world have realized that the key to resolving the dilemma between accelerated energy consumption and reduction in carbon dioxide emission is to actively develop new energy industry many scholars have conducted in depth investigation into the main driving forces of the new energy industry however they often adhere to an assumption that the effect of the driving forces on new energy industry is constant across areas ignoring the spatial heterogeneity in economic phenomena geographically weighted regression gwr model and the use of local sample data to implement parameter estimation can make up for the inadequacies of existing research therefore this paper uses the gwr model to carefully investigate the new energy industry the results show that the impact of economic growth on the new energy industry in the eastern region is higher than in the central and western regions owing to the differences in economic structure and fixed asset investment the impact of foreign energy dependence continuously declines from the eastern region to the central and western regions this is attributable to the differences in natural gas and oil imports technological progress has a similar effect on account of the differences in r d funding and r d personnel investments however the impact of the agriculture industry in the central region is higher than in the eastern and western regions due to the differences in crop acreage and agricultural output this study improves our understanding of the new energy industry and would help local authorities to formulate targeted policies for promoting the growth of new energy industry

the impact of financial development on carbon emissions an empirical analysis in china given the complexity between china s financial development and carbon emissions this paper uses some econometric techniques including cointegration theory granger causality test variance decomposition etc to explore the influence of financial development on carbon emissions results indicate that first china s financial development acts as an important driver for carbon emissions increase which should be taken into account when carbon emissions demand is projected second the influence of financial intermediation scale on carbon emissions outweighs that of other financial development indicators but its efficiency s influence appears by far weaker although it may cause the change of carbon emissions statistically third china s stock market scale has relatively larger influence on carbon emissions but the influence of its efficiency is very limited this to some extent reflects the relatively lower liquidity in china s stock markets finally among financial development indicators china s fdi exerts the least influence on the change of carbon emissions due to its relatively smaller volume compared with gdp but it is mainly utilized in carbon intensive sectors now therefore with the increase of china s fdi in the future many efforts should be made to adapt its utilizing directions and play its positive role in promoting low carbon development