using genuine savings for climate policy evaluation with an integrated assessment model there has been a recent increase in efforts to develop broader models to assess the impact of climate change and climate change policies both in terms of impact measures beyond gdp and in terms of modelling complexity beyond dice rice models climate policies aimed at reducing co2 emissions can have impacts in multiple sectors of the economy and can change consumption levels over time we show how the sustainability indicator genuine savings can be endogenised within a general equilibrium model and used as a criterion for judging the impacts of such policies in terms of future well being differences in genuine savings rates between co2 emission reduction scenarios are discussed we show how a broader genuine savings based assessment of climate change can result in a re evaluation of the consequences and costs of inaction in terms of various climate change related policies and how multiple environmental and well being outcomes can be analysed within a unified modelling framework

regional climate change policy under positive feedbacks and strategic interactions the surface albedo feedback along with heat and moisture transport from the equator to the poles is associated with polar amplification which is a well established scientific fact the present paper extends brock and xepapadeas in eur econ rev 94 263 282 2017 to a non cooperative framework with polar amplification where regions decide emissions by maximizing own welfare this can be regarded as a case of regional non cooperation regarding climate change open loop and feedback solutions are derived and compared in terms of temperature paths and welfare with the cooperative solution carbon taxes which could bridge the gap between cooperative and non cooperative emissions path are also derived finally the framework is extended to a ramsey set up in which it is shown how the regional climate model can be coupled with standard optimal growth models numerical simulations confirm the theoretical results and provide insights about the size and the direction of deviations between the cooperative and the non cooperative solutions

pricing carbon and adjusting capital to fend off climate catastrophes the optimal reaction to a potential productivity shock as a consequence of climate tipping is to substantially tax carbon in order to curb the risk of tipping but to adjust capital as well in order to smooth consumption when tipping occurs we also allow for conventional marginal climate damages and decompose the optimal carbon tax in two catastrophe components and the conventional component we distinguish constant and increasing marginal hazards moreover the productivity catastrophe is compared with recoverable catastrophes and with a shock to the climate sensitivity finally we allow for investments in adaptation capital as an alternative to counter the potential adverse effects of climate tipping quantitatively the results are investigated with a calibrated model for the world economy

as bad as it gets how climate damage functions affect growth and the social cost of carbon the paper analyzes the effects of varying climate impacts on the social cost of carbon and economic growth we use polynomial damage functions in a model of an endogenously growing two sector economy the framework includes nonrenewable natural resources which cause greenhouse gas emissions pollution stock harms capital and reduces economic growth we find a big effect of the selected damage function on the social cost of carbon and a significant impact on the growth rate in our calibration a quartic damage function raises the social cost of carbon by more than a factor of ten compared to the linear function in the social optimum the growth rate remains positive even when the damage function is highly convex we test the robustness of the results by adding pollution decay lowering the elasticity of intertemporal substitution and addressing uncertainty which does not alter our results we find that high marginal climate damages require stringent climate policies but do not preclude positive economic growth despite convexity provided that policies are designed in an efficient manner

the employment dynamics of different population groups over the business cycle abstractwe examine differences in employment dynamics across population groups using bayesian vector autoregressions we document that groups who are particularly strongly affected by business cycle fluctuations males young people non whites the less educated and workers in blue collar occupations also tend to be affected early in the build up of a boom or bust we further identify the drivers of the different cyclicalities across population groups supply shocks seem to be most important for the heterogeneous employment fluctuations and particularly for the early effects of recessions and booms on the most affected groups dynamics in sectoral activity and in hiring rates can help to understand our findings

weather variations and international trade in this paper i investigate the effect of weather variations in the exporter and importer countries separately as well as a the difference between weather variations in both countries on bilateral trade flows the analysis is done at the country sectoral and product levels worldwide and over the 1992 2014 period i find a negative effect of temperature variations in the exporter country and in the difference between exporter and importer countries on bilateral trade at the country level at the product level both negative and positive effects arise but the negative effect of temperature dominates the temperature effects are on the agricultural and manufacturing sectors especially in the textile and metals sectors i show that possible channels are the impact of temperature on output and labour productivity the negative impacts are larger in exporter countries that are closer to the equator that have lower quality of institutions and that export to more remote countries if countries are able to adapt to climate change the long term effects of temperature variations should be lower than the contemporaneous effect nevertheless my results on the long term effects analysis do not support this hypothesis suggesting no or very low adaptation moreover the negative effect of temperature is persistent and cumulative through several years after the temperature shock concerning precipitation variation effects they are found mainly at the product level with the positive effect dominating for the affected products

democracy economic development and income inequality most cross national tests of inverse association between democracy and inequality have operationalized the concept of democracy by measuring its level at a single point in time more compelling theoretical arguments can be made for causal relationships that operate over time between 1 a country s years of democratic experience and income inequality and 2 income inequality and the stability of democracy continuous and qualitative measures of years of democratic experience are estimated to have a significant negative impact on income inequality independent of economic development and other control variables for a sample of 55 countries a very strong inverse correlation is also observed between income inequality and regime stability for a sample of 33 democracies this association holds independent of economic development which is found to have no direct effect on democratic stability after controlling for income inequality

do middle classes bring about institutional reforms abstract we reexamine the association between poverty the middle class and institutional outcomes using a newly developed cross country panel dataset containing detailed information on the distribution of income and expenditure when the size of the middle class increases measured as the proportion of people with income above 10 us dollars a day in purchasing power parity ppp terms social policy on health and education becomes more active and the quality of governance regarding democratic participation and official corruption improves this does not occur at the expense of economic freedom as an expansion of the middle class also implies more market oriented economic policy on trade and finance in these respects the impact of a larger middle class appears to be more robust than those of lower poverty lower inequality or higher gross domestic product gdp per capita

the dynamics of foreign direct investments in land and pollution accumulation following the recent increase of foreign direct investments in land this paper studies their possible effects on the development of a local economy to this aim we use a two sector model external and local with heterogeneous agents external investors and local land owners we assume that both sectors are negatively affected by pollution but only the external sector is polluting the local government can tax the external sector s production activities to finance environmental defensive expenditures we first examine the equilibria that emerge in the model from the dynamics of pollution and physical capital and then investigate the conditions for the coexistence of the two sectors and the impact of the external sector on the revenues of the local population using numerical simulations we show that a revenue increasing path may occur only if the pollution tax is high enough and the impact of the external sector on pollution is low enough otherwise foreign direct investments may end up impoverishing the local population

sustainable resource use and economic dynamics we argue that the sustainable use of natural resources has to be placed in a dynamic perspective both in theoretical modelling and in applied research this can be achieved by applying endogenous growth theory and other recent advances in dynamic theory in this paper we discuss five contributions that combine the topics of natural resource use and economic dynamics in particular we show the common features of these contributions thereby providing an overview of a very active and promising research area

does monetary policy affect relative educational unemployment rates this paper examines the empirical relationship between relative educational unemployment rates and monetary policy such an examination is warranted because policymakers attempts to understand the distributional effects of monetary policy may be confounded by vintages of the theoretical literature that offer contrasting views of how skill based relative unemployment with unemployment of the less skilled in the numerator might behave over the business cycle a traditional view emphasizes characteristics of labor markets that could induce countercyclical movements in skill based relative unemployment for example arthur okun 1973 argues that an important benefit of high levels of aggregate economic activity is that opportunities for employment in the high quality jobs sector open up to the relatively unskilled a mechanism for the relative improvement of the employment prospects of the unskilled is changes in hiring standards of high quality job providers that occur over the cycle changes that occur during expansion and boom periods mentioned by okun include accepting younger and less experienced workers or workers without diplomas and more intensive screening of applicants a forceful statement of this highpressure economy view is contained in rebecca blank 2000 a more recent view of the impact of technological adoption could have quite different implications for movements in skill based relative unemployment over the cycle for example dale mortensen and christopher pissarides 1999 show that in their equilibrium search and matching framework the relationship between skill and unemployment is convex in the presence of labor market policies such as unemployment compensation in this environment skill biased technology shocks increase overall unemployment rates with a disproportionate share of the unemployment falling on the unskilled in his popular account of the matter krueger 2002 ties cyclical investment in new technologies to the conduct of monetary policy thereby linking relative educational unemployment to monetary policy my answer to the title question emerges from quantitative results designed to assess the dynamic effect on relative educational unemployment of a monetary policy surprise controlling for supply shocks and the introduction of new technical ideas these findings appear to resolve some of the tension between alternative views on relative unemployment dynamics in favor of the high pressure economy hypothesis discussants seth b carpenter federal reserve board jonah b gelbach university of maryland bridget terry long harvard university

limitations in evaluating environmental and agricultural policy coordination benefits agricultural policy has traditionally been concerned with the maintenance and stability of farm income and the provision of a stable food supply at low relative prices the food security act of 1985 was the first farm legislation to directly tie farm income and environmental concerns through the conservation reserve program conservation compliance sodbuster and swampbuster provisions the coordination of conservation and farm income policies contributed to commodity supply control by reducing the availability of arable land and it promoted environmental quality by removing some highly erodible land and wetlands from crop production a number of new environmental and food safety initiatives are also being enacted outside the agricultural policy process the most significant piece of legislation is the water quality act of 1987 designed to control

distinguished lecture on economics in government fighting poverty lessons from recent u s history in his 1964 state of the union address his first after assuming the presidency president lyndon johnson declared a war this administration today here and now declares unconditional war on poverty in america the result of johnson s declaration was a series of major legislative changes whose success or failure is still hotly debated by the mid 1990s the focus of policy concern had shifted from fighting poverty to reducing welfare dependence however one might argue that the 1990s rather than the 1960s were truly the decade in which the united states fought a war on poverty the 1990s were a time of substantial legislative change in programs designed to assist low income families at the same time a remarkable change also occurred in the behavior of low income families with plummeting use of public assistance and substantial increases in labor market involvement i will start by documenting the magnitude and speed of these behavioral changes during the 1990s and then investigate the role of both the macroeconomy and policy in producing these outcomes i end by discussing how these changes may or may not translate into improvements in long term family well being

simple rules for climate policy and integrated assessment a simple integrated assessment framework that gives rules for the optimal carbon price transition to the carbon free era and stranded carbon assets is presented which highlights the ethical economic geophysical and political drivers of optimal climate policy for the ethics we discuss the role of intergenerational inequality aversion and the discount rate where we show the importance of lower discount rates for appraisal of longer run benefit and of policy makers using lower discount rates than private agents the economics depends on the costs and rates of technical progress in production of fossil fuel its substitute renewable energies and sequestration the geophysics depends on the permanent and transient components of atmospheric carbon and the relatively fast temperature response and we allow for positive feedbacks the politics stems from international free rider problems in absence of a global climate deal we show how results change if different assumptions are made about each of the drivers of climate policy our main objective is to offer an easy back on the envelope analysis which can be used for teaching and communication with policy makers

man cessions fiscal policy and the gender composition of employment recessions are man cessions as men are disproportionately exposed to cyclical employment fluctuations we provide evidence that fiscal expansions stimulate predominantly female employment implying a further destabilization of the gender composition of employment in recessions our findings can be understood as a consequence of differences in the industry occupation mix of employment by gender

income inequality and democratization revisited comment on muller m uller s 1995 conclusion that income inequality has a major impact on rates of democratization continues a line of thought from muller 1988 and muller and seligson 1994 and is at odds with our earlier empirical results bollen and jackman 1985a the major difference between muller 1988 and muller 1995 is that he is now more concerned with accounting for changes in democracy whereas in the earlier paper he sought to explain years of stable democracy to measure change in political democracy muller 1995 uses 1965 and 1980 measures of democracy developed by bollen 1980 1993 in lieu of his own earlier years of stable democracy measure muller s analysis is not compelling on two counts first he fails to provide a convincing rationale for the hypothesized link between inequality and rates of democratization second using his data we find that his results are not robust but instead are sensitive to plausible respecifications of the model

research issues in nonpoint pollution control research on nonpoint pollution control instruments has focused primarily on incentives applied either to production inputs that affect nonpoint pollution or to ambient pollution concentrations both approaches may in theory yield an efficient solution however input based incentives will generally have to be second best to make implementation practical design issues include which inputs to monitor and the rates to apply to them the limited research indicates that second best input based incentives can be effective in adjusting input use in environmentally desirable ways alternatively ambient based incentives have theoretical appeal because efficient policy design appears to be less complex than for input based incentives these incentives have no track record nor close analogues that demonstrate potential effectiveness however research on how households and firms might react in response to ambient based incentives is needed before these instruments can be seriously considered

do measures of monetary policy in a var make sense no in many vector autoregressions vars monetary policy shocks are identified with the least squares residuals from a regression of the federal funds rate on an assortment of variables such regressions appear to be structurally fragile and are at odds with other evidence on the nature of the u s federal reserve s reaction function furthermore the residuals from these regressions show little correlation across various vars or with funds rate shocks that are derived from forward looking financial markets my results provide a sharp critique of current monetary vars

educational attainment and the cyclical sensitivity of employment this article examines whether there are educational premiums on the quantity side of the labor market we document four findings 1 trend employment patterns shifted for most educational levels post 1977 2 the lower the level of educational attainment the more volatile the employment ratio 3 the volatility of employment for female high school dropouts increased over time even as the economy became less volatile and 4 since 1984 the responses of skilled and unskilled employment to the business cycle have become more alike this latter finding is consistent with a reduced degree of capital skill complementarity during this period

uniform and non uniform second best input taxes we investigate second best input based taxes foragricultural nonpoint pollution control when marketprices are endogenous and production isheterogeneous theoretically we derive the optimalforms of taxes which take account of heterogeneity non uniform taxes and a tax which does not auniform tax empirically we use a multi factor market equilibrium simulation model to determineoptimal tax rates and associated equity effects particularly differences in landowner gains lossesacross a heterogeneous region when market prices areendogenous second best tax policies result inpecuniary externalities that affect existingenvironmental externalities in particular thepecuniary externalities amplify the effect of producerheterogeneity on determination of sub regionaldifferences in tax rates and returns to land particularly for the uniform policy with endogenousprices the uniform tax rate is considerably higherthan any of the non uniform rates and ironically thenon uniform taxes result in less dispersion oflandowner gains across sub regions than the uniformtax

the cleansing effect of recessions the authors investigate industry response to cyclical variations in demand production units that embody the newest process and product innovations are continuously being created and outdated units are being destroyed although outdated units are the most likely to turn unprofitable and be scrapped in a recession they can be insulated from the fall in demand by a reduction in creation the structure of adjustment costs plays a determinant role in the responsiveness of those two margins the calibrated model matches the relative volatilities of the observed manufacturing job creation and destruction series and their asymmetries over the cycle copyright 1994 by american economic association