why do some emerging economies proactively accelerate the adoption of renewable energy abstract this article analyses the determinants of renewable energy consumption in a panel of six major emerging economies namely brazil china india indonesia philippines and turkey that are proactively accelerating the adoption of renewable energy using fully modified ordinary least square fmols dynamic ordinary least square dols and granger causality methods this paper finds that in the long run renewable energy consumption is significantly determined by income and pollutant emission in brazil china india and indonesia while mainly by income in philippines and turkey causal link between renewable energy and income and between renewable energy and pollutant emission are found to be bidirectional in the short run these results suggest that the appropriateness of the efforts undertaken by emerging countries to reduce the carbon intensity by increasing the energy efficiency and substantially increasing the share of renewable in the overall energy mix

some empirical evidence on the effects of shocks to monetary policy on exchange rates this paper investigates the effects of shocks to u s monetary policy on exchange rates we consider three measures of these shocks orthogonalized shocks to the federal funds rate orthogonalized shocks to the ratio of nonborrowed to total reserves and changes in the romer and romer index of monetary policy in sharp contrast to the literature we find substantial evidence of a link between monetary policy and exchange rates specifically according to our results a contractionary shock to u s monetary policy leads to i persistent significant appreciations in u s nominal and real exchange rates and ii significant persistent deviations from uncovered interest rate parity in favor of u s interest rates

parity reversion in real exchange rates during the post bretton woods period abstract a common view among recent studies on purchasing power parity is that the post bretton woods period is far too short to reveal any significant parity reversion in individual series of real exchange rates is this really so the answer this study shows depends very much on the statistical test being used two efficient univariate unit root tests are applied to uncover parity reversion these tests require much shorter sample sizes than conventional tests to attain the same statistical power empirical results show that parity reversion can be unveiled over the modern float if an efficient unit root test is applied

international evidence on the sources of macroeconomic fluctuations abstract this paper examines the causes of macroeconomic fluctuations in five economies germany japan sweden the united kingdom and the united states using a bivariate var model for output and inflation the results demonstrate that both demand and supply shocks are important sources of business cycle fluctuations moreover at the business cycle frequency there are strong similarities between germany the united kingdom and the united states where more than 50 percent of the forecast error variance in both output and inflation are due to supply shocks on the other hand in japan and sweden over 90 percent of the error variance in output and less than 20 percent of the error variance of inflation are due to supply shocks

the response of exchange rates to permanent and transitory shocks under floating exchange rates abstract using the joint behavior of inflation and real exchange rates we develop an empirical model to uncover the sources of the fluctuations in the real dollar exchange rates of four major industrial countries under the current float this model allows us to construct two time series for each country pair one representing the permanent component of each real exchange rate and the other the purely transitory component over the period as a whole transitory shocks played a relatively small but statistically significant role real dollar exchange rates therefore did not simply evolve in response to permanent shocks instead there are instances in which temporary shocks made a substantial contribution we conclude that the random walk model though an approximate statistical description of real exchange rate behavior is a poor guide to model structure jel f31

purchasing power parity and unit root tests using panel data abstract this paper reports the results of unit root tests for real exchange rates using a panel framework this panel approach provides greatly improved power compared to conventional univariate time series unit root tests we obtain evidence supporting ppp over the recent flexible exchange rate period for g 6 and oecd countries we show explicitly that failure to find such evidence in previous research was due to the low power of the tests

distributed photovoltaic power generation possibilities benefits and challenges for a widespread application in the mexican residential sector mexico plans to implement a national program to support the adoption of distributed photo voltaic generation dpvg among qualified households the main objectives of such a program would be to reduce the burden of the substantial federal energy subsidy and increase the share of renewable energy sources used to generate electricity in this paper we assess the current conditions under which the mexican residential electricity sector operates and quantify the potential effects that the massive adoption of dpv systems would have on household expenditure and welfare subsidy reduction pollution and water resource usage based on the positive results in terms of both economic and environmental effects our paper provides a significant support for further design and implementation of a dpvg program

willingness to pay for renewable energy primary and discretionary choice of british households for micro generation technologies this paper documents the policy context of renewable energy production in the european union the research adopts a choice experiment approach to investigate households wtp for these renewable energy technologies in the uk the micro generation technologies comprise solar photovoltaic micro wind solar thermal heat pumps and biomass boilers and pellet stoves the study compares the results from conditional and mixed logit models which estimate the distribution of utility coefficients and then derives wtp values as a ratio of the attribute coefficient to the price coefficient with a model in which the wtp distribution is estimated directly from utility in the money space the results suggest that whilst renewable energy adoption is significantly valued by households this value is not sufficiently large for the vast majority of households to cover the higher capital costs of micro generation energy technologies

economic performance and policies for grid connected residential solar photovoltaic systems in brazil abstract we analyze the economic competitiveness of grid connected distributed solar photovoltaic generation through small scale rooftop installations in five brazilian state capitals the locations represent a comprehensive set of the two essential parameters for the economic viability of pv solar irradiation and local electricity tariffs levelized electricity costs lec for pv generation and net present values npv for a specific pv system are presented the analysis comprises three different interest rate scenarios reflecting different conditions for capital acquisition to finance the generators subsidized mature market and country specific risk adjusted interest in the npv analysis revenue flow is modeled by the sale of pv electricity at current residential tariffs assuming net metering using subsidized interest rates the analysis shows that solar pv electricity is already competitive in brazil while in the country specific risk adjusted rate the declining but still high capital costs of pv make it economically unfeasible at a mature market interest rate pv competitiveness is largely dependent on the residential tariff economic competitiveness in this scenario is given for locations with high residential tariffs we demonstrate the high potential of distributed generation with photovoltaic installations in brazil and show that under certain conditions grid connected pv can be economically competitive in a developing country

energy populism and household welfare we study a cycle of subsidized energy prices and estimate its welfare impact on households in the buenos aires metropolitan region a simple framework explains its emergence in terms of the preference of a median household voter for receiving transfer gains followed by a future flow of transfer losses we evaluate actual transfers and welfare effects that a departure of prices of natural gas and electricity generation from opportunity costs since 2003 had on households and explore the impact of a way back to opportunity cost pricing

does customer auditing help chinese workers the authors find that auditing by downstream firms has limited effects on chinese firms adherence to labor standards and other measures of blue collar workers well being auditing does not affect the supplier s blue collar employees wages probability of belonging to a union or likelihood of working overtime audited firms however are more likely to provide rural migrant workers who usually face discrimination with government sponsored medical insurance business medical insurance and unemployment insurance

the distributional impact of price changes in hungary and the united kingdom in soviet type economies commodity prices were distorted as part of the redistributive system of the state but with the transition prices have been liberalized and taxes made more uniform has this change adversely affected the distribution of purchasing power this paper develops a new method of measuring the distributional impact of price changes by computing the distributional characteristics of commodities from household budget survey data and applies it to hungary and the united kingdom finding that the distributional impacts over the past decade were negligible and not significantly different from zero in both cases copyright 1995 by royal economic society

technical and economic analysis of domestic high consumption tariff niche market for photovoltaic systems in the mexican household sector abstract this study shows that grid connected photovoltaic systems sfvi are profitable for electricity users falling within the so called domestic high consumption tariff dac these users do not receive any subsidy and make a sfvi feasibly due to the following double mechanism on the one hand the reduced amount of electricity that is drawn from the grid and on the other a re classification which makes them pass from the dac to a lower consumption tariff which benefits from state subsidies it is also shown that the utilisation of sfvi would lead to economic benefits for the electric power sector which in consequence accounts for a social benefit it is estimated that tariff 1 dac users account for a potential sfvi capacity of slightly above 400 mw this capacity may deploy a first significant sfvi market in mexico which so far barely exists and would also represent a reduction in electricity drawn from the grid of nearly 614 gwh per year and reduced co 2eq emissions of 841 thousand tonnes per year finally some recommendations are inferred in order to improve the social benefit of this first deployment of sfvi in the mexican household sector the analysis presented for mexico can be replicated for other countries with subsidised residential tariffs and similar structures such as those countries identified in this paper

are real exchange rates nonstationary evidence from a panel data test it is well documented that real exchange rates between the united states and many industrialized countries in the post bretton woods period are integrated this result implies that purchasing power parity ppp does not hold even as a long run relationship this paper demonstrates that the failure to reject the unit root hypothesis may result from the low power of existing univariate test procedures i test for unit roots in real exchange rates by employing a more powerful panel based procedure using both cpi and wpi real dollar exchange rate data i strongly reject the null hypothesis of a unit root my results provide overwhelming support for the long run ppp under the current float copyright 1996 by ohio state university press

the purchasing power parity persistence paradigm abstract rogoff journal of economic literature 1996 34 647 668 describes the remarkable consensus of 3 5 year half lives of purchasing power parity deviations among studies using long horizon data these studies however focus on rejections of unit roots in real exchange rates and do not use appropriate techniques to measure persistence our half life estimates explicitly account for serial correlation sampling uncertainty and most importantly small sample bias calculating confidence intervals as well as point estimates for long horizon and post 1973 data we find that even though most of the point estimates lie within the 3 5 year range univariate methods provide virtually no information regarding the size of the half lives

productivity shocks and real exchange rates abstract previous studies have concluded that productivity shocks have negligible effects on real exchange rate fluctuations this paper shows that when long run equilibrium relationships between real exchange rate levels and fundamental variables are taken into account relative productivity shocks account for most of the long run movements in the real exchange rates this can be interpreted as empirical support for the balassa 1964 journal of political economy 72 584 596 and samuelson 1964 review of economics and statistics 46 145 154 model where differences in relative productivity is the main source of long run deviations for purchasing power parity

ppp strikes back aggregation and the real exchange rate we show the importance of a dynamic aggregation bias in accounting for the ppp puzzle we prove that the aggregate real exchange rate is persistent because its components have heterogeneous dynamics established time series and panel methods fail to control for this using eurostat data we find that when heterogeneity is taken into account the estimated persistence of real exchange rates falls dramatically its half life for instance may fall to as low as eleven months significantly below the consensus view of three to five years

on the failure of purchasing power parity for bilateral exchange rates after 1973 point estimates suggest mean reversion in real exchange rates however it still remains uncomfortable that models without any mean reversion are often compatible with data from the floating period studies with data over longer periods find mean reversion but at the cost of mixing in data from earlier exchange rate arrangements pooling the floating period data potentially mixes country pairs with and without mean reversion we examine tests for mean reversion for individual country pairs where greater power against close alternatives is gained through modeling other economic variables with the real exchange rate by increasing the power of the tests we find strong evidence of mean reversion

sources of fluctuations in real and nominal exchange rates this paper attempts to distinguish empirically real versus nominal sources of fluctuations in real and nominal exchange rates the distinction is obtained by imposing the following restriction on the bivariate vector autoregression of real and nominal exchange rates over the current flexible rate period nominal shocks are required to have no permanent effect on the level of the real exchange rate given this identification scheme the author analyzes the dynamic effects and relative importance of real and nominal shocks with regards to exchange rates the findings indicate that real shocks dominate nominal shocks for both exchange rate series over short and long frequencies copyright 1992 by mit press

stochastic trends and economic fluctuations are business cycles mainly the result of permanent shocks to productivity this paper uses a long run restriction implied by a large class of real business cycle models identifying permanent productivity shocks as shocks to the common stochastic trend in output consumption and investment to provide new evidence on this question econometric tests indicate that this common stochastic trend cointegration implication is consistent with postwar u s data however in systems with nominal variables the estimates of this common stochastic trend indicate that permanent productivity shocks typically explain less than half of the business cycle variability in output consumption and investment copyright 1991 by american economic association

the impact of attribute preferences on adoption timing the case of photo voltaic pv solar cells for household electricity generation we are concerned with micro generation individual households generating electricity using a renewable technology we focus on modeling the adoption probability of photo voltaic solar panels by households using data from ontario canada where a generous feed in tariff is available to households generating electricity from solar panels we measure household level preferences for panels and use these preferences along with household characteristics to predict adoption time intentions we use discrete choice experiments to measure household level preferences and establish a causal link between the attributes of the technology and adoption time intentions using discrete time survival mixture analysis significant preferences included lower cost greater energy savings and lower fossil fuel inflation the conditional hazard probability of adoption at a particular time given no previous adoption showed that the attribute preferences had intuitively reasonable effects the hazard probabilities allow us to compute the cumulative probability of adoption over a 10 year period per household technology awareness has a significant effect on the adoption probability reinforcing the need for effective education our approach indicates the level of heterogeneity in preferences particularly high for investment criteria and co2 emissions these findings suggest that education campaigns should explain more about investment criteria feed in tariffs and environmental effects

accounting for real and nominal exchange rate movements in the post bretton woods period abstract using the technique developed by blanchard and quah we decompose real and nominal exchange rate movements into the components induced by real and nominal factors nominal shocks have had a minor effect on the real and nominal bilateral exchange rates between the us and canada japan and germany there is little evidence of exchange rate overshooting real demand rather than supply shocks have been responsible for volatile exchange rate movements structural models of exchange rate determination need to consider such shocks as an important fundamental determinant

engel curves household characteristics and low user tariff schemes in natural gas abstract we explore the relative importance of income and household characteristics such as family size in explaining differences in household consumption of natural gas and lpg in a simple model of vertically willingness to pay ordered households we posit that the relative importance of the income elasticity of demand vs the family size elasticity depends positively on the price faced by households thus very low prices tend to depress the across households income elasticity of demand relative to the characteristic elasticity and the opposite holds for under high prices we test this hypothesis using for the first time in argentina data from the household expenditure survey on natural gas and lpg and compare the cross consumption equations for both fuels which have quite different price regimes finally we explore welfare implications for low user tariff scheme reforms in natural gas

long run purchasing power parity is it for real in this paper we re examine the purchasing power parity concept using data from the recent experience with floating exchange rates in particular we utilise the recently developed multivariate cointegration methodology to test for a long run relationship between exchange rates and relative prices and also to test for the proportionality of the exchange rate with respect to relative prices in contrast to much other research we demonstrate that there is a long run relationship between a number of bilateral u s dollar exchange rates and their corresponding relative prices the proportionality of the exchange rate to relative prices does not however receive support from the data this finding may be attributable to the use of measured price series rather than the true series

impulse response analysis of cointegrated systems abstract impulse response or dynamic multiplier analysis of vector autoregressive systems with cointegrated variables is considered the asymptotic distribution of the responses estimated with johansen s 1988 maximum likelihood procedure is derived the results are illustrated with an analysis of a west german money demand system the investigation shows that a direct interpretation of the cointegration relations may be difficult or misleading thereby the virtue of impulse response analysis for applied work is illustrated

knowledge is less power experimental evidence from residential energy use abstract imperfect information about product attributes inhibits efficiency in many choice settings but can be overcome by providing simple low cost information we use a randomized control trial to test the effect of high frequency information about residential electricity usage on the price elasticity of demand informed households are three standard deviations more responsive to temporary price increases an effect that is not attributable to price salience conservation extends beyond pricing events in the short and medium run providing evidence of habit formation and implying that the intervention leads to greenhouse gas abatement survey evidence suggests that information facilitates learning jel d12 d83 l11 l94 q41 q54

the common trend and transitory dynamics in real exchange rate fluctuations this study examines the behaviour of both common trend ct and transitory components of real exchange rate rer fluctuations under the current float the ct component is in most cases found to be sizeable albeit its relative importance can vary considerably across major currencies and its estimate can be sensitive to whether or not long run purchasing power parity ppp is imposed on the data further analysis suggests that both ct and transitory innovations are linked much more to interest rate changes than to productivity changes accordingly it is interest rate not productivity disturbances that drive the highly persistent rer

multi country evidence on the behavior of purchasing power parity under the current float abstract using panel data for the united states and 22 other oecd countries for the current float this paper presents evidence that despite substantial short term perturbations purchasing power parity actually performed much better than commonly believed average rates of growth of real exchange rates over long horizons bear little relationship either to average rates of growth of nominal exchange rates or to average inflation differentials thus implying a close to one to one relation between average rates of growth of nominal exchange rates and average inflation differentials panel data variants of standard unit root tests suggest that the real exchange rates of these countries can be characterized as mean reverting

long run purchasing power parity with short run data evidence with a null hypothesis of stationarity abstract we investigate long run purchasing power parity with data from the current floating exchange rate period by using tests where stationarity and cointegration are the null rather than the alternative hypotheses in most cases we cannot reject either the null hypothesis of stationarity of the real exchange rate or the null of cointegration between the nominal exchange rate and the domestic and foreign price levels this constitutes evidence of long run purchasing power parity because using the same tests we can reject the null of stationarity for the nominal exchange rate confirmation of the results is provided by a monte carlo study

renewable energy adoption in an ageing population heterogeneity in preferences for micro generation technology adoption abstract many countries are endeavouring to supply more of their energy from renewable resources such countries are also experiencing an aging population with a greater proportion of people aged 65 years this demographic shift may reduce the uptake of renewable energy if older person households are less inclined to accept change and adopt new technologies this paper assesses whether such households have different behavioural responses to energy efficiency compared to the rest of society and investigates whether micro generation renewable energy technologies are less likely to be adopted by these households it uses conditional logit and mixed logit models to investigate the impact of age of household on primary heating adoption and also to assess the impact of older households on the installation of discretionary micro generation technologies solar thermal solar voltaic and wind power to supplement existing heating and lighting systems results indicate that primary heating choice is not affected but that older person households are less inclined to adopt micro generation technologies

sources of real exchange rate fluctuations in the nordic countries in an attempt to move beyond the purchasing power parity hypothesis this paper addresses two issues the first concerns the causes of movements in real exchange rates in contrast to the typical result supply shocks are found to dominate the long run variance decompositions for each of the four nordic countries under study this suggests that productivity developments are the most important determinant of long run movements in real exchange rates a second topic is the relative importance of stationary and non stationary components of real exchange rates also in contrast to previous findings transitory shocks are more important than permanent shocks for three of the four countries

residential energy efficient technology adoption energy conservation knowledge and attitudes an analysis of european countries abstract relationships between measures of household energy use behavior and household characteristics are estimated using a unique dataset of approximately 5000 households in 10 eu countries and norway family age composition patterns are found to have a distinct impact on household energy use behavior households with young children are more likely to adopt energy efficient technologies and energy conservation practices and place primary importance on energy savings for environmental reasons by contrast households with a high share of elderly members place more importance on financial savings and have lower levels of technology adoption energy conservation practice use and knowledge about household energy use education levels also matter with higher levels associated with energy efficient technology adoption and energy conservation practice use similarly university education increases the stated importance of energy savings for greenhouse gas reductions and decreases the stated importance for financial reasons education impacts also vary greatly across survey countries and there is some evidence of an eastern western european divide with respect to attitudes towards energy savings these cross country differences highlight the need to balance a common eu energy efficiency policy framework with flexibility for country specific policies to address unique constraints to energy efficient technology and conservation practice adoption

long run purchasing power parity during the recent float abstract this paper examines the relevance of long run purchasing power parity ppp which allows for measurement errors during the recent floating exchange rate period previous empirical studies generally fail to find support for long run ppp over this period in this paper in this paper the cointegration property of exchange rates and prices is examined using maximum likelihood procedure and we find significant evidence favorable to long run ppp further tests for symmetry and proportionality indicate that these two conditions are not generally with the data the results support the hypothesis of long run ppp with measurement errors in prices

re examining long run purchasing power parity abstract our results complement the recent findings of real exchange rates as stationary processes applying a battery of unit root tests can be problematic since the tests are sensitive to the specifics of the time series process the novelty of our approach is in emphasizing the information content of the data to distinguish between the competing processes stationary and non stationary arima processes are fitted to the us uk real exchange rate series covering 134 years artificial data are generated and the small sample distributions of the chosen test statistics are computed under each of the two hypotheses the values of the actual sample statistics seem to come rather from the stationary than from the non stationary process

an econometric analysis of residential expenditures on energy conservation and renewable energy sources abstract economic theory suggests that residential expenditures on energy conservation and renewable energy sources will be determined by the ability of households to purchase conservation inputs their incentive to invest in conserving energy the energy efficiency of existing homes and miscellaneous factors such as climate and age of the home owner empirical analyses of energy related expenditures reported on individual income tax returns confirm the importance of household income energy price increases and climate conditions in determining energy conservation investments income tax credits are also found to have stimulated residential spending on conservation and renewable energy

unbiased estimation of the half life to ppp convergence in panel data three potential sources of bias introduce complications for panel data estimation of the half life of purchasing power parity deviations they are bias induced by inappropriate cross sectional aggregation of heterogeneous coefficients small sample estimation bias of dynamic lag coefficients and bias induced by time aggregation of commodity prices all of these biases have been addressed individually in the literature in this paper we address all three biases in arriving at our estimates using an annual panel data set of cpi based real exchange rates for 21 oecd countries from 1973 to 1998 we obtain a point estimate of the unbiased half life of 3 0 years with a 95 confidence interval of 2 3 4 2 years

searching for stationarity purchasing power parity under the current float abstract using panel data methods we investigate long run purchasing power parity by testing for unit roots in real exchange rates of industrial countries under the current float the evidence against the unit root hypothesis is stronger for larger than for smaller panels for monthly than for quarterly data and when the german mark rather than the united states dollar is used as the base currency while we find that accounting for serial correlation considerably weakens the evidence against the unit root null the results as a whole are consistent with long run purchasing power parity

stochastic trends and economic fluctuations in a small open economy in this paper we describe how restricted vector autoregressions can be employed to examine the sources of macroeconomic fluctuations we show how cointegration restrictions can be used to identify a var system with common stochastic trends subject to transitory and permanent changes in average growth and how we may investigate the system s responses to permanent shocks i e to innovations to the trends theoretical cointegration vectors are derived from a small open economy growth model for terms of trade real gdp real consumption and real investments applying these methods to swedish annual data 1875 1986 we find that permanent real supply shocks account for most of the fluctuations in gdp even in the short run

rural versus urban preferences for renewable energy developments development of renewable energy resources such as wind farms and hydro electric schemes are being promoted as a new method of expanding and diversifying employment in rural areas however such energy projects are associated with a range of environmental impacts which might be detrimental to other economic activities such as those based on nature tourism the authors use a choice experiment to quantify peoples preferences over environmental and employment impacts that may result from the deployment of renewable energy projects in rural areas of scotland focussing in particular on any differences between the preferences of urban and rural dwellers and on heterogeneity within these groups rural and urban households are shown to have different welfare gains which are dependent on the type of renewable energy technology and on the scale of project under consideration