the impact of possible climate catastrophes on global warming policy abstract recent studies on global warming have introduced the inherent uncertainties associated with the costs and benefits of climate policies and have often shown that abatement policies are likely to be less aggressive or postponed in comparison to those resulting from traditional cost benefit analyses cba yet those studies have failed to include the possibility of sudden climate catastrophes the aim of this paper is to account simultaneously for possible continuous and discrete damages resulting from global warming and to analyse their implications on the optimal path of abatement policies our approach is related to the new literature on investment under uncertainty and relies on some recent developments of the real option in which we incorporated negative jumps climate catastrophes in the stochastic process corresponding to the net benefits associated with the abatement policies the impacts of continuous and discrete climatic risks can therefore be considered separately our numerical applications lead to two main conclusions i gradual continuous uncertainty in the global warming process is likely to delay the adoption of abatement policies as found in previous studies with respect to the standard cba however ii the possibility of climate catastrophes accelerates the implementation of these policies as their net discounted benefits increase significantly

energy disruptions interfirm price effects and the aggregate economy in an economy with many imperfect competitors monopolistic competition firms that pass through higher oil prices during a disruption will affect the demand for firms in other industries firms that charge higher prices for their final product will include the effect on their own final product in their private decisions but will exclude the effect on the final products of other firms although a pecuniary externality these actions will reduce society s welfare unlike the case of a perfectly competitive market this situation creates a societal risk that is much wider than an externality in any single market policy interest shifts from one of punishing persian gulf oil producers to one of cushioning an industrialized economy from sudden disruptions caused by political and military conflicts although the value of reducing oil use depends upon a number of unknown parameters with wide distributions a representative numerical example suggests that it may approach 5 per barrel

the greenhouse effect damages costs and abatement the buildup of so called greenhouse gases in the atmosphere co2 in particular appears to be having an adverse impact on the global climate this paper briefly reviews current expectations with regard to physical and biological effects their potential costs to society and likely costs of abatement for a worst case scenario it is impossible to assess in economic terms the full range of possible non linear synergistic effects in the most favorable although not necessarily likely case of slow paced climate change however it seems likely that the impacts are within the affordable range at least in the industrialized countries of the world in the third world the notion of affordability is of doubtful relevance making the problem of quantitative evaluation almost impossible we tentatively assess the lower limit of quantifiable climate induced damages at 30 to 35 per ton of co2 equivalent worldwide with the major damages being concentrated in regions most adversely affected by sea level rise the non quantifiable environmental damages are also significant and should by no means be disregarded the costs and benefits of 1 reducing cfc use and 2 reducing fossil fuel consumption as a means of abatement are considered in some detail this strategy has remarkably high indirect benefits in terms of reduced air pollution damage and even direct cost savings to consumers the indirect benefits of reduced air pollution and its associated health and environmental effects from fossil fuel combustion in the industrialized countries range from 20 to 60 per ton of co2 eliminated in addition there is good evidence that modest e g 25 reductions in co2 emissions may be achievable by the u s and by implication for other countries by a combination of increased energy efficiency and restructuring that would permit simultaneous direct economic benefits savings to energy consumers of the order of 50 per ton of co2 saved a higher level of overall emissions reduction possibly approaching 50 could probably be achieved at little or not net cost by taking advantage of these savings we suggest the use of taxes on fossil fuel extraction or a carbon tax as a reasonable way of inducing the structural changes that would be required to achieve significant reduction in energy use and co2 emissions to minimize the economic burden and create a political constituency in support of the approach we suggest the substitution of resource based taxes in general for other types of taxes on labor income real estate or trade that are now the main sources of government revenue while it is conceded that it would be difficult to calculate the optimal tax on extractive resources we do not think this is a necessary prerequisite to policy making in fact we note that the existing tax system has never been optimized according to theoretical principles and is far from optimal by any reasonable criteria

lifting the us crude oil export ban a numerical partial equilibrium analysis the upheaval in global crude oil markets and the boom in shale oil production in north america brought scrutiny on the us export ban for crude oil from 1975 the ban was eventually lifted in early 2016 this paper examines the shifts of global trade flows and strategic refinery investments in a spatial game theoretic partial equilibrium model we consider detailed oil supply chain infrastructure with multiple crude oil types distinct oil products as well as specific refinery configurations and modes of transport prices quantities produced and consumed as well as infrastructure and refining capacity investments are endogenous to the model we compare two scenarios an insulated us crude oil market and a counter factual with lifted export restrictions we find a significant expansion of us sweet crude exports with the lift of the export ban in the us refinery sector more imported heavy sour crude is transformed countries importing us sweet crude gain from higher product output while avoiding costly refinery investments producers of heavy sour crude e g the middle east are incentivised to climb up the value chain to defend their market share and maintain their dominant position

long run effects of public sector sponsored training in west germany between 1991 and 1997 west germany spent on average about 3 6 bn euro per year on public sector sponsored training programmes for the unemployed we base our empirical analysis on a new administrative data base that plausibly allows for selectivity correction by microeconometric matching methods we identify the effects of different types of training programmes over a horizon of more than seven years using bias corrected weighted multiple neighbours matching we find that all programmes have negative effects in the short run and positive effects over a horizon of about four years however for substantive training programmes with duration of about two years gains in employment probabilities of more than 10 points appear to be sustainable but come at the price of large negative lock in effects

why is bank debt senior a theory of asymmetry and claim priority based on influence costs this theory can explain why bank debt is universally senior consistent with the presence of conflict lawyers and absolute priority violations in financial distress better organized banks would more strongly contest priority in financial distress if they were junior because deterrence can reduce creditors total expenses in a priority contest the ex post stronger lobbyist litigant should be senior ex ante for equivalent reasons the theory can advise when public debt should be senior to trade credit and or implicit contracts and can even suggest one rationale for the absolute priority rule apr this article further shows that chapter hi creditor reimbursement procedures can lower overall costs article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

double co2 and beyond benefits costs and compensation abstract economic decisions over what action if any to take concerning the greenhouse effect tend to revolve around the social discount rate implicitly the debate concerns how to attribute intertemporal weights to welfare and implies a moral stance that is rarely given explicit recognition refocusing on the outcomes of current actions emphasises the role of compensation a conflict is apparent between the view that the current generation need be unconcerned over the loss or injury caused to future generations because they will benefit from advances in technology investments in both man made and natural capital and direct bequests and the requirement to avoid harming the innocent changes in units of welfare cannot be viewed as equivalent regardless of their direction in general doing harm is not cancelled out by doing good the result is a rejection of the potential compensation principle which underlies the current economic stance and a reconsideration of the acceptability of compensation altogether the concept of human rights and a non utilitarian perspective are used to show how cost benefit analysis denies the existence of inalienable rights and economics limits the moral considerability of harm

oil supply risk and affecting parameters associated with oil supplementation and disruption abstract the fossil fuel energy carriers significantly affect the energy security the oil security has turned to one of the main political agenda by considering the two world s oil crises in this study an index of oil supply vulnerability has been developed to compare the world s top fifteen oil importing south asian countries the index includes comprehensive set of indicators like imported oil over gdp ratio market liquidity gdp per capita geopolitical risk diversification the ratio of oil importation over consumption transportation risk oil price volatility and us volatility two popular techniques composite indicator ci and the principal component analysis pca were used to combine all the aforesaid indicators although numerous techniques have been used to assess the oil vulnerability index for example dea like models and markowitz theory of portfolio none of them incorporated the principal component analysis and composite indicator together to develop an oil vulnerability index results shows that the south asian countries have highest economic supply and overall oil vulnerability risk whereas the second group countries belgium thailand spain netherlands japan korea india and china are in a relatively less risky as compared to south asian countries contrary to this third group of countries are canada singapore uk and france italy germany and us are considered as a least vulnerable country

consequences of a carbon tax on household electricity use and cost carbon emissions and economics of household solar and wind abstract the study was conducted to determine the consequences of a carbon tax equal to an estimated social cost of carbon of 37 2 mg on household electricity cost and to determine if a carbon tax would be sufficient to incentivize households to install either a grid tied solar or wind system u s department of energy hourly residential profiles for five locations 20 years of hourly weather data prevailing electricity pricing rate schedules and purchase prices and solar panel and wind turbine power output response functions were used to address the objectives two commercially available household solar panels 4 kw 12 kw two wind turbines 6 kw 12 kw and two price rate structures traditional meter smart meter were considered averaged across the five households the carbon tax is expected to reduce annual consumption by 4 4 552 kwh year for traditional meter households and by 4 9 611 kwh year for households charged smart meter rates the carbon tax increases electricity cost by 19 202 year for a household cost of 202 year the carbon tax is expected to reduce social costs by 11 annual carbon tax collections of 234 household are expected adding the carbon tax was found to be insufficient to incentivize households to install either a solar panel or wind turbine system installation of a 4 kw solar system would increase the annual cost by 1546 247 and decrease co 2 emissions by 38 2526 kg valued at 94 household the consequence of a carbon tax would depend largely on how the proceeds of the tax are used

valuing the impact of co2 emissions valuing the impacts of co2 emissions to the atmosphere has been widely debated with various studies suggesting very different costs when expressed in units of dollar per tonne of carbon emitted there are many complex issues involved and it is often difficult to determine the reasons for the wide range of costs proposed in this paper models based on two very different approaches the page and intera models are considered by applying these models to calculating the marginal impact of co2 emissions it is shown that what appear initially to be divergent estimates can be reconciled this process illustrates some of the key issues in this area and a perspective is provided on which marginal costs are appropriate for different policy decisions

long run labour market and health effects of individual sports activities abstract this microeconometric study analyzes the effects of individual leisure sports participation on long term labour market variables health and subjective well being indicators for west germany based on individual data from the german socio economic panel study gsoep 1984 2006 econometric problems due to individuals choosing their own level of sports activities are tackled by combining informative data and flexible semiparametric estimation methods with a specific way to use the panel dimension of the data the paper shows that sports activities have sizeable positive long term labour market effects in terms of earnings and wages as well as positive effects on health and subjective well being

management of transnational commons coordination publicness and treaty formation this paper focuses on the formation of treaties to manage transnational commons when efforts must be coordinated among a minimal sized group so as to make cooperation worthwhile by focusing on mixed strategy equilibria we are con cerned with instances where the intentions of others are uncertain the number of required participants the pattern of payoffs transaction costs and the underlying technology of public supply aggregation are key factors behind the achievement of coordina tion we apply our analysis to explain the outcome of negotiations on stratospheric ozone depletion global warming acid rain and tropical deforesta tion jel q20 d70

world oil market or mayhem the world oil market is regarded by many as a puzzle why are oil prices so volatile what is opec and what does opec do where are oil prices headed in the long run is peak oil a genuine concern why did oil prices spike in the summer of 2008 and what role did speculators play any attempt to answer these questions must be informed and disciplined by economics such is the purpose of this essay to illuminate recent developments in the world oil market from the perspective of economic theory

the importance of noncognitive skills lessons from the ged testing program it is common knowledge outside of academic journals that motivation tenacity trustworthiness and perseverance are important traits for success in life thomas edison wrote that genius is 1 percent inspiration and 99 percent perspiration most parents read the aesop fable of the tortoise and the hare to their young children at about the same time they read them the story of the little train that could numerous instances can be cited of high iq people who failed to achieve success in life because they lacked self discipline and low iq people who succeeded by virtue of persistence reliability and self discipline the value of trustworthiness has recently been demonstrated when market systems were extended to eastern european societies with traditions of corruption and deceit it is thus surprising that academic discussions of skill and skill formation almost exclusively focus on measures of cognitive ability and ignore noncognitive skills the early literature on human capital e g gary becker 1964 contrasted cognitive ability models of earnings with human capital models ignoring noncognitive traits entirely the signaling literature e g michael spence 1974 emphasized that education was a signal of a one dimensional ability usually interpreted as a cognitive skill most discussions of ability bias in the estimated return to education treat omitted ability as cognitive ability and attempt to proxy the missing ability by cognitive tests most assessments of school reforms stress the gain from reforms as measured by the ability of students to perform on a standardized achievement test widespread use of standardized achievement and ability tests for admissions and educational evaluation are premised on the belief that the skills that can be tested are essential for success in schooling a central premise of the educational testing movement since its inception much of the neglect of noncognitive skills in analyses of earnings schooling and other lifetime outcomes is due to the lack of any reliable measure of them many different personality and motivational traits are lumped into the category of noncognitive skills psychologists have developed batteries of tests to measure noncognitive skills e g robert sternberg 1985 these tests are used by companies to screen workers but are not yet used to ascertain college readiness or to evaluate the effectiveness of schools or reforms of schools the literature on cognitive tests ascertains that one dominant factor g summarizes cognitive tests and their effects on outcomes no single factor has yet emerged to date in the literature on noncognitive skills and it is unlikely that one will ever be found given the diversity of traits subsumed under the category of noncognitive skills studies by samuel bowles and herbert gintis 1976 rick edwards 1976 and roger klein et al 1991 demonstrate that job stability and dependability are traits most valued by employers as ascertained by supervisor ratings and questions of employers although they present no direct evidence on wages and educational t discussants susan mayer university of chicago cecilia rouse princeton university nan maxwell california state university hayward janet currie university of california los angeles

the rhetorics of ecological economics since the early 1980s there has been a lively discussion about the rhetoric of economics ecological economists however so far have not tried to incorporate this discussion into their work this paper is a first step towards including the discourse on rhetoric into the self awareness of ecological economics after a brief outline of what this discourse is about the importance of metaphors as one aspect of rhetoric is examined connections of the rhetorical discourse to ecological economics as a post normal science are shown it is argued that two rhetorics of ecological economics can be distinguished internal and external rhetoric while the former refers mostly to methodological issues the latter is of particular importance for the political impact that ecological economics can have finally some suggestions for research are made

imperfect competition and the effects of energy price increases on economic activity the authors show that modifying the standard neoclassical growth model by assuming that competition is imperfect makes it easier to explain the size of the declines in output and real wages that follow increases in the price of oil plausibly parameterized models of this type are able to mimic the response of output and real wages in the united states the responses are particularly consistent with a model of implicit collusion where markups depend positively on the ratio of the expected present value of future profits to the current level of output copyright 1996 by ohio state university press

environmental services as a strategy for sustainable development in rural amazonia abstract rural amazonians especially indians extractivists and other forest dwellers desperately need something that they can sell sale of material commodities taken from the rainforest is the focus of most attempts to encourage sustainable development for these populations but the mother lode waiting to be tapped is not a material commodity but rather the forest s environmental services converting services like biodiversity maintenance carbon storage and water cycling into monetary flows that can support a population of forest guardians requires crossing a series of hurdles reliable quantification of the magnitude of services being offered is a first necessity how to convert forest environmental services into an income stream and how to convert this stream into a foundation for sustainable development in rural amazonia is a great challenge effort should be focused on tapping environmental services as a long term strategy for maintaining both rainforest and its population in addition to progressing toward long term goals immediate measures are needed to support the population and to avoid further loss of forest

the social cost of imported oil abstract this article analyses the social cost of imported oil from both a conceptual and empirical perspective a conceptual framework of the oil import premium the difference between social and private marginal cost of imported oil is developed it is argued that there are two components to the premium the long run effect of changes in import demand on the world oil price and the external costs of oil supply disruption as related to changes in oil use using this framework as a reference point an evaluation of quantitative estimates of the premium is presented the estimates span a wide range from near zero to well over 100 per barrel and are shown to be highly sensitive to behavioural assumptions about the world oil market the article concludes by noting that an oil import fee is likely to be the best policy instrument to capture the first component of the premium and a strategic petroleum reserve the best policy instrument to capture the second component

measuring energy security can the united states achieve oil independence stochastic simulation of the direct economic costs of oil dependence in an uncertain future is proposed as a useful metric of oil dependence the market failure from which these costs arise is imperfect competition in the world oil market chiefly as a consequence of the use of market power by the organization of the petroleum exporting countries opec cartel oil dependence costs can be substantial it is estimated that oil dependence costs to the us economy in 2008 will exceed 500 billion other costs such as military expenditures or foreign policy constraints are deemed to be largely derivative of the actual or potential economic costs of oil dependence the use of quantifiable economic costs as a security metric leads to a measurable definition of oil independence or oil security which can be used to test the ability of specific policies to achieve oil independence in an uncertain future

cooperation and subgame perfect equilibria in global pollution problems with critical threshold the paper examines the issue of international pollution control under a dynamic framework involving heterogeneous countries and a critical threshold we propose an appealing specification for this type of problem and its novelty is illustrated by the fact that countries use linear strategies in equilibrium although their utility and damage functions are highly convex the stock of pollution under cooperation is always lower surprisingly emissions are always higher in distant periods under the cooperative scenario and we show through examples that this is a significant finding rather than some marginal effect it is also shown that the efficient allocation of pollution abatement is driven only by the respective technologies of the countries finally a dynamic transfer scheme allowing to implement the cooperative solution is proposed

heterogeneous sports participation and labour market outcomes in england based on a unique composite dataset measuring heterogeneous sports participation labour market outcomes and local facilities provision this article examines for the first time the association between different types of sports participation and employment and earnings in england clear associations between labour market outcomes and sports participation are established through matching estimation while controlling for some important confounding factors the results which are supplemented and supported by a formal sensitivity analysis suggest a link between different types of sports participation to initial access to employment and then higher income opportunities with ageing however these vary between the genders and across sports specifically the results suggest that team sports contribute most to employability but that this varies by age across genders and that outdoor activities contribute most towards higher incomes

co2 emissions control comparing policy instruments we use a global model to compare the economic performance of three policy instruments for controlling co2 emissions period specific emission limits limit policy period specific taxes tax policy and a cumulative emissions limit cumulative limit policy with known costs and benefits of control tax and limit policies are equivalent and either is better than a cumulative limit policy with uncertain benefits of emission reduction tax and limit policies are equivalent however with uncertain costs of emission reduction a tax policy may be better a cumulative limit policy may occasionally perform well under uncertainty but this is not generally the case

an optimal greenhouse tax in an optimal growth model in the past several years economists have developed a body of research concerning optimal economic policy in response to the possibility of global warming due to greenhouse gas ghg emissions contributors include nordhaus 9 10 11 12 poterba 14 manne and richels 8 cline 1 jorgenson slesnick and wilcoxen 6 goulder 3 4 gaskins and weyant 2 in this paper we attempt to assist policy makers who face the practical problem of estimating the magnitude of the socially optimal initial greenhouse gas tax and the corresponding magnitude of emission control to do this we adapt the optimal growth framework developed by nordhaus 12 in his dice model to investigate the initial optimal tax and emissions control as well as their evolution over a long planning horizon we perform sensitivity analysis not included in his monograph

political regimes and economic growth arguments that relate regimes to growth focus on property rights pressures for immediate consumption and the autonomy of dictators while everyone seems to agree that secure property rights foster growth it is controversial whether democracies or dictatorships better secure these rights the main mechanism by which democracy is thought to hinder growth is pressure for immediate consumption which reduces investment only states that are institutionally insulated from such pressures can resist them and democratic states are not the main argument against dictatorships is that authoritarian rulers have no interest in maximizing total output these views are summarized in turn

u s oil dependence 2014 is energy independence in sight abstract the importance of reducing u s oil dependence may have changed in light of developments in the world oil market over the past two decades since 2005 increased domestic production and decreased oil use have cut u s import dependence in half the direct costs of oil dependence to the u s economy are estimated under four u s energy information administration scenarios to 2040 the key premises of the analysis are that the primary oil market failure is the use of market power by opec and that u s economic vulnerability is a result of the quantity of oil consumed the lack of readily available economical substitutes and the quantity of oil imported monte carlo simulations of future oil market conditions indicate that the costs of u s oil dependence are likely to increase in constant dollars but decrease relative to u s gross domestic product unless oil resources are larger than estimated by the u s energy information administration reducing oil dependence therefore remains a valuable goal for u s energy policy and an important co benefit of mitigating greenhouse gas emissions

selection on observed and unobserved variables assessing the effectiveness of catholic schools in this paper we measure the effect of catholic high school attendance on educational attainment and test scores because we do not have a good instrumental variable for catholic school attendance we develop new estimation methods based on the idea that the amount of selection on the observed explanatory variables in a model provides a guide to the amount of selection on the unobservables we also propose an informal way to assess selectivity bias based on measuring the ratio of selection on unobservables to selection on observables that would be required if one is to attribute the entire effect of catholic school attendance to selection bias we use our methods to estimate the effect of attending a catholic high school on a variety of outcomes our main conclusion is that catholic high schools substantially increase the probability of graduating from high school and more tentatively attending college we find little evidence of an effect on test scores

energy security externalities and policies abstract in this paper we review conceptual arguments and empirical evidence related to two potential sources of market failure involving energy security in doing so we consider several questions involving the distinction between externality and market inefficiency and the distinction between market failures that are amenable or not amenable to correction given our current understanding of the workings of an economy several conclusions follow from our analysis regarding the potential sources of market failure and possible remedies the problem of excess wealth transfer from exporter market power may be an issue but current knowledge of oil market behaviour is too weak to support a strong conclusion other supposed costs of oil import dependence also are not well grounded including externalities related to the vulnerability of the economy to energy price shocks

a sketch of the economics of the greenhouse effect over the last decade scientists have studied extensively the greenhouse effect which holds that the accumulation of carbon dioxide co2 and other greenhouse gases ghgs is expected to produce global warming and other significant climatic changes over the next century see stephen schneider 1989 the present study presents an economic approach for analyzing policies to slow climate change

an empirical analysis of state and local tax structure in the context of the leviathan model of government this paper has investigated the ability of an extreme and relatively simple model of political behavior to explain the level of revenues generated by state and local governments in general the behavior of these governments appears to be at least consistent with many of the fiscal outcomes predicted by the leviathan theory several although not all of the specific leviathan theory hypotheses considered received empirical support the evidence was consistent with the hypothesis that states utilizing comprehensive tax bases especially a personal income tax can be expected to generate higher levels of aggregate revenues strong support was also observed for the contention that intergovernmental competition by general purpose substate governments may serve as a substitute for constitutional constraints in limiting the revenue generating power of local governments

the balanced budget amendment clarifying the arguments from the perspective of a supporter this paper responds to the several criticisms that have been raised to the proposed constitutional amendment to require budget balance economists have concentrated on the loss of fiscal flexibility this objection is countered by reference to the political inefficacy of attempted budgetary manipulation lawyers have concentrated on problems of enforcement this objection is countered by reference to observed respect to other constitutional rules

alternative approaches to evaluation in empirical microeconomics four alternative but related approaches to empirical evaluation of policy interventions are studied social experiments natural experiments matching methods and instrumental variables in each case the necessary assumptions and the data requirements are considered for estimation of a number of key parameters of interest these key parameters include the average treatment effect the treatment on the treated and the local average treatment effect some issues of implementation and interpretation are discussed drawing on the labour market programme evaluation literature

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

public economics as if time matters climate change and the dynamics of policy abstract tony atkinson played a crucial role in shaping modern public economics but throughout his life challenged whether we were making the right assumptions and were building models which captured the essence of the issues under examination this paper examines questions discussed with tony concerning public policy to foster change where the pace and nature of change are critical to any serious policy assessment the primary example is climate change the paper argues that subjects such as the dynamics of innovation of potentially immense and destabilising risks and of political economy together with technicalities around non linearities and dynamic increasing returns all of which are at the heart of the challenge of climate change will require a series of focused models for their investigation attempts to build integrated assessment models iams for the analysis of climate change have been largely misplaced and omit key effects and questions of the above kind intertemporal issues and values are at the core of policy towards climate change and the paper shows that much of the intertemporal economic analysis of the issues around climate change has been misguided and has ridden roughshod over the analytical underpinnings and the underlying ethics of discounting where major decline is possible discounting is fiercely endogenous and where capital markets are imperfect and risk intense discount rates cannot be read off from markets notwithstanding the modelling difficulties and the challenging research agenda the paper argues that the urgency of the problem for example world infrastructure will double in the next 15 20 years and there are major dangers of lock in of dirty and damaging capital require strong action and we know enough about policy to begin travelling down the path of an attractive low carbon transition

price differences among crude oils the private costs of supply disruptions i quantify the causes for price differences among crude oils that are set by the law of one price with a special emphasis on country risk for crude oils that are part of the same market i estimate cointegrating relations which represent their long run relation and error correction models which represent the rate at which the market eliminates disequilibrium in their prices results indicate that positive values of country risk impose a 0 51 price penalty on a barrel of crude oil from an unreliable supplier that increases with the variance in risk and the price of crude oil these price penalties are the first empirical estimates for how the market values the private costs of oil supply disruptions beyond country risk the price effects of sulfur content density distance between supply ports and opec membership confirm the importance of oil supply choke points opec s ability to influence prices and differences in refinery technology because private costs of a supply disruption attach only to nations with a non zero country risk previous estimates for the social costs of a supply disruption may be too large

sensitivity to exogeneity assumptions in program evaluation in many empirical studies of the effect of social programs researchers assume that conditional on a set of observed covariates assignment to the treatment is exogenous or unconfounded aka selection on observables often this assumption is not realistic and researchers are concerned about the robustness of their results to departures from it one approach e g charles manski 1990 is to entirely drop the exogeneity assumption and investigate what can be learned about treatment effects without it with unbounded outcomes and in the absence of alternative identifying assumptions there are no restrictions on the set of possible values for average treatment effects this does not mean however that all evaluations are equally sensitive to departures from the exogeneity assumption in this paper i explore an alternative approach developed by paul rosenbaum and donald rubin 1983 where the assumption of exogeneity is explicitly relaxed by allowing for a limited amount of correlation between treatment and unobserved components of the outcomes the starting point of the sensitivity analysis is the assumption that the exogeneity assumption is satisfied only conditional on an additional unobserved covariate making assumptions about the effect of the unobserved covariate on the outcome and its correlation with the treatment i trace out the set of possible values for the treatment effect of interest by considering a sufficiently large set of possible correlations with outcomes and treatment one can recover the bounds on the treatment effect derived by manski 1990 the approach here in the spirit of rosenbaum and rubin 1983 and rosenbaum 1995 is to allow only a limited amount of correlation and to judge the sensitivity of average treatment effect estimates to such correlations there are two novel features of the proposed analysis first rather than formulate the sensitivity in terms of coefficients on the unobserved covariate the sensitivity results are presented in terms of partial r values which may be easier to interpret second the partial r values of the unobserved covariates are compared to those for the observed covariates in order to facilitate judgments regarding the plausibility of values necessary to substantially change results obtained under exogeneity the proposed sensitivity analysis is conceptually related to the practice of assessing sensitivity of estimates by comparisons with results obtained by discarding one or more observed covariates james heckman and v joseph hotz 1989 rajeev dehejia and sadek wahba 1999 jeffrey smith and petra todd 2001 the attraction of the sensitivity analysis is that it is more directly relevant one is not interested in what would have happened in the absence of covariates actually observed but in biases that are the result from not observing all relevant covariates

this is what happened to the oil price macroeconomy relationship abstract many of the quarterly oil price increases observed since 1985 are corrections to even bigger oil price decreases the previous quarter when one looks at the net increase in oil prices over the year recent data are consistent with the historical correlation between oil shocks and recessions

a general model for co2 regulation the case of denmark abstract for both economic political and administrative reasons a mixed design of permit market bubble and tax may be preferable for co 2 regulation in the case of denmark a co 2 market should be introduced for the private manufacturing sector and an administratively set co 2 bubble should be introduced for the public electricity sector permits should then be devaluated in year 2005 by 20 a co 2 tax should be correctly set at a level of 50 in year 2005 for households the transportation sector and private firms not participating in the co 2 market this model may guide future energy policies in other countries as well

oil supply shocks and the u s economy an estimated dsge model abstract we develop and use a medium sized dsge model of the u s economy to evaluate how u s real gdp responds to oil price movements that originate from global oil supply shocks the core of the model is a standard macroeconomic dsge framework that includes nominal and real frictions the model includes oil as an input in multiple domestic sectors consumption intermediate goods and transportation services we include a domestic oil production sector for the united states to reflect the recent development in shale oil technology the model also captures international trade in goods and oil the model parameters are set through a combination of calibration and bayesian estimation using quarterly data for 1991 through 2015 baseline estimation of the model finds the elasticity of u s real gdp with respect to an oil price shock of 0 015 which is among the less elastic estimates in the literature using the model to conduct counterfactual analysis we find that decreasing steady state u s oil consumption substantially reduces the response of real gdp to oil prices increasing u s domestic oil production only modestly reduces the response of real gdp to oil prices

the impact of bad writing in economics we find significant style differences between articles written by economists for their professional journals and articles by the same economists in the wall street journal we find no evidence that style influences the professional success of economists which suggests that the private rewards to improving the quality of writing are low indeed each community of scholars has probably adopted a professionally correct writing style from which its members diverge little however scholars do alter their rhetorical style to communicate effectively with audiences other than the professional community this suggests that intra and inter group written communication by economists is efficient

bibliography of james m buchanan s publications 1949 1986 1 prices income and public policy with c l allen and m r colberg new york mcgraw hill 1954 second edition 1959 2 public principles of public debt homewood richard d irwin 1958 3 the public finances homewood richard d irwin 1960 second edition 1965 translated into spanish as hacienda publica 1968 third edition 1970 translated into japanese 1972 fourth edition with marilyn flowers 1975 fifth edition with marilyn flowers 1980 sixth edition with marilyn flowers 1986 4 fiscal theory and political economy chapel hill university of north carolina press 1960 translated into turkish 1965 translated into japanese 1972 5 the calculus of consent logical foundations of constitutional democracy with gordon tullock ann arbor university of michigan press 1962 paperback edition 1965 translated into japanese 1979 translated into spanish 1980 6 public finance in democratic process chapel hill university of north carolina press 1966 translated into japanese 1971 translated into spanish 1973 7 demand and supply of public goods chicago rand mcnally 1968 translated into italian 1968 translated into japanese 1974 8 cost and choice an inquiry in economic theory chicago markham publishing co october 1969 out of print reprinted by university of chicago press midway reprint 1979 9 academia in anarchy an economic diagnosis with nicos devletoglou basic books 1970 english edition 1971 10 theory of public choice political applications of economics edited with robert tollison university of michigan press 1972 11 lse essays on cost edited with g f thirlby london wiedenfeld and nicholson 1973 12 the limits of liberty between anarchy and leviathan chicago university of chicago press 1975 translated into japanese 1977 translated into italian 1979 translated into german 1984 13 democracy in deficit the political legacy of lord keynes with richard e wagner new york academic press 1978 translated into japanese 1979 translated into korean 1981 14 freedom in constitutional contract perspective of a political economist college station texas a m university press 1978 15 whatshould economistsdo indianapolis indiana liberty press 1979

new estimates of the security costs of u s oil consumption abstract in recent years the united states has become much more self reliant in producing oil and a newer economics literature suggests that oil demand may be more elastic and u s gdp may be less sensitive to world oil price shocks than was previously estimated these developments suggest somewhat lower security costs may be associated with u s oil consumption this analysis provides updated estimates of the security premiums for u s consumption of imported oil u s consumption of domestically produced oil and the substitution of imported oil for domestically produced oil estimates of the expected security costs of u s oil consumption are provided over the time horizon from 2015 to 2040 while taking into account projected world oil market conditions the probabilities and sizes of world oil supply disruptions the response of world oil prices to those supply disruptions and the response of u s real gdp to those oil price shocks the estimated oil security premiums suggest that u s oil security has become less of a policy concern

how much do european households pay for green energy abstract the price of electricity for european end users typically fell until development of wind and solar energy began but has increased since then we estimate the savings in co2 emissions due to solar and wind energy and calculate what end users pay per tonne co2 assuming that price increases since the introduction of solar and wind power are due to these types of energy these payments are in most cases well above even high and unlikely estimates of the cost of carbon and in some cases several times as high

carbon price and wind power support in denmark abstract this paper aims at characterizing the conditions of wind power deployment in order to infer a carbon price level that would provide wind power with comparable advantage over fossil fuel technologies as effective wind support policies the analysis is conducted on denmark after the electricity market liberalization probit and tobit techniques are employed to take account of a potential threshold effect i find that the level and type of the support policy are the dominant drivers of deployment a feed in tariff significantly brings more wind power in than a premium policy the additional capacity installed monthly increases by more than 1 mw for each additional mwh of support this is compared to the effect of the electricity price investment cost interest rate and general economic activity if the policy is a premium i find that 23 mwh of support in addition to electricity price is needed to observe the connection of new turbines to the grid with a 0 5 probability i convert this support level into a carbon price of 27 ton if wind power competes with coal and 48 t if it competes with gas

responding to fiscal stress fiscal institutions and fiscal adjustment in four brazilian states abstract despite similar external shocks and pressures brazilian state leaders varied in the timing and the manner in which they adjusted to fiscal stress some state leaders rapidly switched to market oriented strategies that cut public intervention in the economy other state leaders delayed adjustment and when they finally put their accounts in order it was through market governing strategies that preserved government activism in part these different fiscal policy regimes were products of the decision making process in which chief executives operated in states where budgeting obeyed a more open and democratic pattern chief executives lacked autonomy and were forced to build coalitions to adjust this meant that they adjusted more slowly and their adjustment strategies included appeals to broad interests including those seeking protection from market pressures in states where budgeting was more autocratic chief executives could act quickly and without building a coalition the current project u

opec and world oil security abstract on the margin the effectiveness of policy to enhance the stability of world oil market oil conditions greatly depends on which countries supply what economists would call the marginal barrels that is the barrels whose production responds to changes in demand if the countries dominating the production of the marginal barrels are relatively unstable policies to reduce world oil consumption or boost oil production from stable suppliers will provide the additional benefit of reducing the contribution of unstable producers to the world oil market if the countries dominating the marginal barrel are relatively stable however policies to reduce world oil consumption or boost oil production from stable suppliers will be less effective in promoting oil market stability typically we think of the highest cost producers as supplying the marginal barrel of oil but our assessment finds it quite likely that opec dominates production of the marginal barrel of world oil moreover opec members have been among the more unstable producers on a historical basis hence reducing world oil consumption and promoting oil production in stable non opec countries will enhance world oil security policies to promote stability in opec countries also would enhance world oil security

commitment and satisfaction in the classroom and on the field evidence from a division i liberal arts college within higher education there has been a persistent concern that student athlete commitments to their athletic activities are detrimental to their academic studies we collect data on student athl

evaluating u s oil security and import reliance abstract we examine the literature that considers the consequences of u s reliance on imported oil we take an approach that covers many ideas about the costs arising from u s reliance on imported oil and we identify which of those ideas have broad support in the economics literature and which ideas have only limited support we also quantify the costs of u s reliance on imported oil using two approaches one is fairly narrow conforms to the economics view of externalities and yields small cost estimates the other is relatively expansive is favored by some policy analysts and yields much larger cost estimates we estimate these costs as expected u s economic losses over a time horizon from 2010 through 2035 while taking into account world oil market conditions market power probable oil supply disruptions and the oil market response to those supply disruptions

assessment of european union transition scenarios with a special focus on the issue of carbon leakage this paper uses the model gemini e3 to simulate and assess the transition scenario to 2020 framed by the european union in its energy climate directive and it raises several issues in this connection after a brief description of the model the paper presents the results of the scenarios mainly the values of the major indicators of carbon price both in the ets and in non ets sectors and the welfare cost of the eu policy under the various configurations considered while it is independent of the scenario in the ets sector in the non ets sector the value of carbon is very sensitive to the provisions of the directive and in particular the option of resorting to the flexibility mechanisms the welfare cost also varies significantly according to scenarios and its value for the entire eu is more than double in the scenario closest to the directive as compared to the least cost one the paper also addresses the very sensitive issue of carbon leakage and argues in favor of a new concept of net leakage the analysis shows that while carbon leakage may affect some specific sectors at the aggregate level it does not represent a real concern with a magnitude of at most a few percent of ghg abatement by annex b countries

charles k rowley william f shughart ii and robert d tollison eds the economics of budget deficits the international library of critical writings in economics 153 ed by mark blaug cheltenham u k and northampton ma u s a edward elgar 2002 2 vols 1 112 pages usd 370 00 gbp 245 00 cloth

assessing the u s oil security premium abstract world oil supply disruptions lead to u s economic losses increased oil consumption increases the vulnerability of the economy to oil supply disruptions but it matters where the additional oil is produced increased production from stable producers can dampen future oil price shocks whereas increased production from unstable producers can exacerbate future oil price shocks because oil is fungible u s pricing and import policies can differentiate only between domestic and imported oil rather than between stable and unstable sources the economic losses associated with oil supply disruptions gdp losses and some transfers abroad are externalities that can be quantified as oil security premiums we estimate these premiums by taking into account projected world oil market conditions probable oil supply disruptions the market response to oil supply disruptions and the resulting u s economic losses

oil and the macroeconomy when prices go up and down an extension of hamilton s results in an important paper hamilton 1983 demonstrated a strong correlation between oil price changes and gross national product growth in u s data however his study pertained to a period in which all the large oil price movements were upward and thus it left unanswered the question whether the correlation persists in periods of price decline moreover the price variable he used was somewhat distorted by price controls in the 1970s this note investigates whether hamilton s results continue to hold when the sample is extended to include the recent oil market collapse and the oil price variable is corrected for the effects of price controls particular attention is given to the possibility of asymmetric responses to oil price increases and decreases as suggested in the structural employment literature loungani 1986 davis 1987 hamilton 1988 like hamilton i based my investigation on the gnp equation in sims s 1 980b six variable quarterly vector autoregressive model