how renewable energy consumption lower global co2 emissions evidence from countries with different income levels significant difference in the emission renewables nexus across countries with different income levels is frequently ignored in previous studies to empirically investigate whether the effect of renewable energy consumption on carbon dioxide co2 emissions differs across countries with different income levels the emission growth renewables nexus for a global panel of 120 countries and four income based subpanels over the period 1995 2015 is examined fully considering the potential cross sectional dependence and slope heterogeneity a series of econometric techniques allowing for cross sectional dependence and slope heterogeneity is utilised cross sectional dependence and slope heterogeneity are confirmed for the global panel as well as for all four subpanels only for the global panel high income subpanel and upper middle income subpanel is the environmental kuznets curve ekc hypothesis valid renewable energy consumption has a negative effect on co2 emissions but its effect is not significant the mitigation effect may be obscured by higher economic growth and increasing non renewable energy consumption the global panel and four subpanels provide mixed directionality of causality among the variables suggesting that for various income based subpanels significant differences exist in the effect of renewable energy consumption on co2 emissions especially highlighting in various direct and indirect influencing paths between renewable energy consumption and co2 emissions

how strong is the causal relationship between globalization and energy consumption in developed economies a country specific time series and panel analysis we examine the causal relationship between globalization economic growth and energy consumption for 25 developed economies using both time series and panel data techniques for the period 1970 2014 due to the presence of cross sectional dependence in the panel countries from asia north america western europe and oceania we employ the pesaran 2007 cips test to ascertain unit root properties the westerlund 2007 cointegration test indicates the presence of a long run association between globalization economic growth and energy consumption long run heterogeneous panel elasticities are estimated through the pesaran 2006 common correlated effects mean group cmg estimator and the eberhardt and teal 2010 augmented mean group amg estimator the causality between the variables is examined via dumitrescu and hurlin 2012 and emirmahmutoglu and kose 2011 granger causality tests the empirical results reveal that for most countries globalization increases energy consumption in the usa and uk globalization is negatively correlated with energy consumption the causality analysis indicates the presence of the globalization driven energy consumption hypothesis this empirical analysis suggests insightful policy guidelines for policy makers using globalization as an economic tool to utilize energy efficiently for sustainable economic development in the long run

the environmental consequences of globalization a country specific time series analysis abstract the dynamic relationships among trade income and the environment for developed and developing countries are examined using a cointegration analysis results suggest that trade and income growth tend to increase environmental quality in developed countries whereas they have detrimental effects on environmental quality in most developing countries it is also found that for developed countries the causal relationship appears to run from trade and income to the environment a change in trade and income growth causes a consequent change in environmental quality for most developing countries on the other hand the causality is found to run from the environment to trade and income however the opposite causal relationship holds for china

the limits of political compromise debt ceilings and political turnover we study the desirability of limits on the public debt and of political turnover in an economy where incumbents have an incentive to set public expenditures above the socially optimal level due to rent seeking motives parties alternate in office and cannot commit to future policies but they can forge a political compromise where each party curbs excessive spending when in office if it expects future governments to do the same in contrast to the received literature we find that strict limits on government borrowing can exacerbate political economy distortions by making a political compromise unsustainable this tends to happen when political turnover is limited conversely a tight limit on the public debt fosters a compromise that yields the efficient outcome if political turnover is vigorous our analysis thus suggests that to sustain good economic policies a society needs to restrict either the extent of political turnover or the ability of governments to issue debt but not both

does trade liberalization increase national energy use abstract this paper utilises the theoretical principles of antweiler et al antweiler w b r copeland and m s taylor 2001 is free trade good for the environment american economic review 91 4 pp 877 908 to estimate empirically the linkages between trade liberalization and energy use focusing on scale technique and composition effects results suggest that trade will increase energy use for the mean country in the sample

political intervention in debt contracts this paper develops a dynamic general equilibrium model of an agricultural economy in which poor farmers borrow from rich farmers because output is stochastic we allow for idiosyncratic and aggregate shocks there may be default ex post we compare equilibria with and without political intervention intervention takes the form of a moratorium and is decided by voting when bad economic shocks are highly likely state contingent debt moratoria always improve ex post efficiency and may also improve ex ante efficiency moreover the threat of moratoria enhances efficiency when adverse macro shocks are unlikely state contingent moratoria always improve ex ante welfare by completing incomplete debt contracts

a literature survey on energy growth nexus abstract this paper provides a survey of the recent progress in the literature of energy consumption economic growth and electricity consumption economic growth causality nexus the survey highlights that most empirical studies focus on either testing the role of energy electricity in stimulating economic growth or examining the direction of causality between these two variables although the positive role of energy on growth has become a stylized fact there are some methodological reservations about the results from these empirical studies a general observation from these studies is that the literature produced conflicting results and there is no consensus neither on the existence nor on the direction of causality between energy consumption electricity consumption and economic growth as a policy implication to avoid from conflicting and unreliable results the authors may use the autoregressive distributed lags bounds test two regime threshold co integration models panel data approach and multivariate models including new variables such as real gross fixed capital formation labor force carbon dioxide emissions population exchange rates interest rates etc thus the authors should focus more on the new approaches and perspectives rather than by employing usual methods based on a set of common variables for different countries and different intervals of time

energy consumption real income and temporal causality results from a multi country study based on cointegration and error correction modelling techniques abstract unlike previous studies on the causal relationship between energy consumption and economic growth this paper illustrates how the finding of cointegration i e long term equilibrium relationship between these variables may be used in testing granger causality based on the most recent johansen s multivariate cointegration tests preceded by various unit root or non stationarity tests we test for cointegration between total energy consumption and real income of six asian economies india pakistan malaysia singapore indonesia and the philippines non rejection of cointegration between variables rules out granger non causality and imples at least one way of granger causality either unidirectional or bidirectionial secondly by using a dynamic vector error correction model we then analyse the direction of granger causation and hence the within sample granger exogeneity or endogeneity of each of the variables thirdly the relative strength of the causality is gauged through the dynamic variance decomposition technique by decomposing the total impact of an unanticipated shock to each of the variables beyond the sample period into proportions attributable to shocks in the other variables including its own in the bivariate system results based on these tools of methodology indicate that while all pair wise relationships shared common univariate integrational properties only relationships for three countries india pakistan and indonesia were cointegrated for these countries temporal causality results were mixed with unidirectional causality from energy to income for india exactly the reverse for indonesia and mutual causality for pakistan the vdcs were not inconsistent with these results and provided us with an additional insight as to the relatively more dominant direction of causation in pakistan simple bivariate vector autoregressive models for the three non cointegrated systems did not indicate any direction of causality significantly in either direction

do fiscal rules dampen the political business cycle this paper develops and tests the theory that fiscal rules limit politicians ability to manipulate the budget for electoral gain using panel data from the american states i find evidence suggesting that stringent balanced budget rules dampen the political business cycle that is while spending rises before and falls after elections in states that can carry deficits into the next fiscal year this pattern does not exist in states with strict no carry rules neither binding gubernatorial term limits nor the partisan composition of government appear to significantly affect the magnitude of the political business cycle

nonlinear globalization threshold effect of energy intensity convergence in belt and road countries abstract this paper investigates the role of globalization especially so called threshold effect in convergence of energy intensity along the belt and road countries during the period 1992 2016 different from the previous studies which primarily consider the linear effect and neglect the cross sectional dependence of convergences we construct a panel smooth transition regression model in this work simultaneously taking dynamics heterogeneity non linear and cross sectional dependence characteristics into account the results show that there exists a non linear globalization threshold effect on the unconditional beta convergence conditional beta convergence and club convergence of energy intensity and the convergence becomes faster when the globalization level is above the threshold these findings imply that a rise in the level of globalization contributes to the convergence of energy intensity in the belt and road countries thus governments in such countries could reduce energy intensity through increasing the level of globalization which may in turn be achieved by deep cross national cooperation in economic social and political areas

valuation and management of wetland ecosystems we recently completed a study of wetland values in coastal louisiana that employed both willingness to pay and energy analysis based methodologies and were able to bracket a range of values within which we feel fairly confident the true value lies however a large amount of uncertainty remains our current estimates of the total prsent value of an average acre of natural wetlands in louisiana are us 2429 6400 per acre assuming an 8 discount rate to 8977 17000 per acre assuming a 3 discount rate at the lowest value the current annual rate of loss of louisiana wetlands 50 sq miles per year is worth about 77 million at the largest value it is worth about 544 million in this paper we a discuss the fundamental theoretical and practical problems underlying natural resources valuation b summarize our methods and findings for louisiana wetlands and c elaborate on some of the more recalcitrant problems attending applied natural resource valuation including discounting and dealing with uncertainty and imprecision the discount rate makes more difference in the final result than any other one factor and yet there is much disagreement about the appropriate approach to discounting natural resources we discuss the discounting problem as applied to natural resources and argue for lower discount rates for valuing renewable natural resources than apply for other aspects of the economy it now seems clear that no reasonable amount of effort will produce very precise estimates of wetland values and we suspect this is also the case for several other classes of natural resources we elaborate a wetlands asurance bonding system to address these problems

a note on the empirical effectiveness of formal fiscal restraints abstract an important agrument in the current debate over european monetary integration is that a monetary union requires formal fiscal restraints limiting individual member states budgetary powers to reduce the common monetary authority s risk of having to bail out insolvent member governments this note presents empirical evidence on the effectiveness of fiscal restraints on state budgets in the united states nonparametric tests reveal that fiscal restraints significantly affect the probability of fiscal choices and performance without however preventing extreme outcomes fiscal restraints induce substitution of nonrestricted for restricted debt instruments

state responses to fiscal crises the effects of budgetary institutions and politics this paper explores the dynamics of state taxes and spending during the late 1980s when regional economic downturns and increased expenditure demands led to substantial state budget deficits more restrictive state fiscal institutions such as no deficit carryover rules and tax and expenditure limitations are correlated with more rapid fiscal adjustment to unexpected deficits political factors are also important when a single party controls the state house and the governorship deficit adjustment is much faster than when party control is divided in gubernatorial election years tax increases and spending cuts are both significantly smaller than at other times

default settlement and signalling lending resumption in a reputational model of sovereign debt this paper develops a simple model of sovereign debt in which defaulting nations are excluded from capital markets and regain access by making partial repayments this implication of the model is consistent with the historical evidence that defaulting countries return to international loan markets soon after a settlement but after varying periods of exclusion copyright 1995 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

energy use exports imports and gdp new evidence from the oecd countries this paper aims to investigate the relationship between energy use gdp energy use exports trade and energy use imports on aggregate level in the oecd countries while the energy use growth nexus is widely examined in the literature studies on the energy use trade nexus are very scarce thus this study also serves to fill this gap by presenting a new research on the oecd countries we employ the panel cointegration technique and use the granger representation theorem to examine the presence of long run relationship and the causality between pairs of variables to investigate the presence of causality several tests developed by canning and pedroni 2008 are used we find that the pairs of energy use gdp energy use exports and energy use imports are cointegrated and there is two way granger causality between each pairs we also estimate the long run elasticities by employing panel dynamic ordinary least squares the results suggest that the sign of long run elasticity is positive for all pairs particularly 1 increase in gdp export and import causes almost 0 32 0 21 and 0 16 increase in energy use respectively

budget institutions and fiscal policy in the u s states this paper summarizes state balanced budget requirements and the available empirical evidence on the effect of these rules on state fiscal policies existing state rules differ from many current proposals at the federal level they are typically restricted to part of the state budget they frequently permit short term borrowing and they lack formal enforcement mechanisms the paper also surveys previous research on how anti deficit provisions affect state fiscal policy the available evidence indicates that stringent anti deficit provisions lead to more rapid adjustment of state taxes and expenditures when fiscal deficits emerge this suggests that changing the federal budget process has the potential to affect federal fiscal policy this abstract was borrowed from another version of this item

does financial development increase energy consumption the role of industrialization and urbanization in tunisia this paper assesses the relationship among energy consumption financial development economic growth industrialization and urbanization in tunisia from 1971 to 2008 the autoregressive distributed lag bounds testing approach to cointegration and granger causality tests is employed for the analysis the result confirms the existence of long run relationship among energy consumption economic growth financial development industrialization and urbanization in tunisia long run bidirectional causalities are found between financial development and energy consumption financial development and industrialization and industrialization and energy consumption hence sound and developed financial system that can attract investors boost the stock market and improve the efficiency of economic activities should be encouraged in the country nevertheless promoting industrialization and urbanization can never be left out from the process of development we add light to policy makers with the role of financial development industrialization and urbanization in the process of economic development

fiscal rules and discretion in a world economy governments are present biased toward spending fiscal rules are deficit limits that trade off commitment to not overspend and flexibility to react to shocks we compare coordinated rules chosen jointly by a group of countries to uncoordinated rules if governments present bias is small coordinated rules are tighter than uncoordinated rules individual countries do not internalize the redistributive effect of interest rates however if the bias is large coordinated rules are slacker countries do not internalize the disciplining effect of interest rates surplus limits enhance welfare and increased savings by some countries or outside economies can hurt the rest

does globalization affect growth evidence from a new index of globalization the study develops an index of globalization covering its three main dimensions economic integration social integration and political integration using panel data for 123 countries in 1970 2000 it is analysed empirically whether the overall index of globalization as well as sub indexes constructed to measure the single dimensions affect economic growth as the results show globalization indeed promotes growth the dimensions most robustly related with growth refer to actual economic flows and restrictions in developed countries although less robustly information flows also promote growth whereas political integration has no effect

optimal fiscal policy in a business cycle model this paper develops the quantitative implications of optimal fiscal policy in a business cycle model in a stationary equilibrium the ex ante tax rate on capital income is approximately zero there is an equivalence class of ex post capital income tax rates and bond policies that support a given allocation within this class the optimal ex post capital tax rates can range from close to independently and identically distributed to close to a random walk the tax rate on labor income fluctuates very little and inherits the persistence properties of the exogenous shocks thus there is no presumption that optimal labor tax rates follow a random walk most of the welfare gains realized by switching from a tax system like that of the united states to the ramsey system come from an initial period of high taxation on capital income

natural gas consumption and economic growth in pakistan abstract natural gas is a dominant fuel in pakistan it offers the cheapest and a cleaner alternative source of energy this paper examines the relationship of natural gas consumption and economic growth in pakistan we include capital labor and exports in the model with multivariate framework the ardl bounds testing approach to cointegration and innovative accounting approach are employed to investigate the dynamic causality relationships among the variables we find the existence of long run relationship among the variables natural gas consumption capital labor and exports are positively affecting economic growth in pakistan furthermore we support the natural gas consumption led growth hypothesis and suggest that natural gas conservation policies may retard economic growth

the role of natural gas consumption and trade in tunisia s output this paper examines the impact of natural gas consumption real gross fixed capital formation and trade on the real gdp in case of tunisia over the period of 1980 2010 we used auto regressive distributed lag ardl bounds testing approach to test the existence of long run relationship between the variables the vector error correction method vecm granger approach is applied to test the direction of causal relation between the series our findings indicate the existence of long run relationship among the variables natural gas consumption real gross fixed capital formation and trade add in economic growth natural gas consumption real gross fixed capital formation and real trade granger cause real gdp these findings open up new insights for policy makers to formulate a comprehensive energy policy to sustain economic growth for long run

optimal fiscal limits with overrides abstract this paper studies optimal fiscal limits in the context of a simple political economy model a politician chooses the level of taxation for a representative citizen but is biased in favor of higher taxes a constitutional designer sets a tax limit before the citizen s preferred level of taxation is fully known the politician is allowed to override the limit with the citizen s approval the paper solves for the optimal limit and explains how it is impacted by the possibility of overrides the paper also shows that the citizen s welfare can be enhanced if the designer imposes a limit on the politician s override proposals

divided government fiscal institutions and budget deficits evidence from the states does partisan control of american state government have systematic effects on state spending and taxing levels does divided control affect the government s ability to make hard decisions do institutional rules like legal deficit carryover restrictions matter using a formal model of fiscal policy to guide empirical analysis of data covering the american states from 1968 to 1987 we conclude that 1 aggregate state budget totals are driven by different factors under democrats and republicans the net result being that democrats target spending and taxes to higher shares of state level personal income 2 divided government is less able to react to revenue shocks that lead to budget deficits particularly where different parties control each chamber of the legislature and 3 unified party governments with restricted ability to carry deficits into the next fiscal year outside the south have sharper reactions to negative revenue shocks than those without restrictions

optimal taxation without state contingent debt in an economy studied by lucas and stokey tax rates inherit the serial correlation structure of government expenditures belying barro s earlier result that taxes should be a random walk for any stochastic process of government expenditures to recover a version of barro s random walk tax smoothing outcome we modify lucas and stokey s economy to permit only risk free debt having only risk free debt confronts the ramsey planner with additional constraints on equilibrium allocations beyond one imposed by lucas and stokey s assumption of complete markets the ramsey outcome blends features of barro s model with lucas and stokey s in our model the contemporaneous effects of exogenous government expenditures on the government deficit and taxes resemble those in lucas and stokey s model but incomplete markets put a near unit root component into government debt and taxes an outcome like barro s however we show that without ad hoc limits on the government s asset holdings outcomes can diverge in importa

fiscal policy over the real business cycle a positive theory this paper presents a political economy theory of the behavior of fiscal policy over the business cycle the theory predicts that in both booms and recessions fiscal policies are set so that the marginal cost of public funds obeys a submartingale in the short run fiscal policy can be pro cyclical with government debt spiking up upon entering a boom however in the long run fiscal policy is counter cyclical with debt increasing in recessions and decreasing in booms government spending increases in booms and decreases during recessions while tax rates decrease during booms and increase in recessions data on tax rates from the g7 countries supports the submartingale prediction and the correlations between fiscal policy variables and national income implied by the theory are consistent with much of the existing evidence from the u s and other countries

multivariate granger causality between electricity consumption exports and gdp evidence from a panel of middle eastern countries this paper examines the causal relationship between electricity consumption exports and gross domestic product gdp for a panel of middle eastern countries we find that for the panel as a whole there are statistically significant feedback effects between these variables a 1 per cent increase in electricity consumption increases gdp by 0 04 per cent a 1 per cent increase in exports increases gdp by 0 17 per cent and a 1 per cent increase in gdp generates a 0 95 per cent increase in electricity consumption the policy implications are that for the panel as a whole these countries should invest in electricity infrastructure and step up electricity conservation policies to avoid a reduction in electricity consumption adversely affecting economic growth further policy implications are that for the panel as a whole promoting exports particularly non oil exports is a means to promote economic growth and that expansion of exports can be realized without having adverse effects on energy conservation policies

the role of globalization in energy consumption a quantile cointegrating regression approach abstract this paper examines the quantile behavior of the relationship between the nuances of globalization and energy consumption while incorporating capital and economic growth in case of top two most globalized countries netherlands and ireland by employing the recently developed quantile autoregressive distributed lag qardl model of cho et al 2015 the model is estimated using quarterly data over the period 1970q1 2015q4 the results indicate that the relationship is quantile dependent which may reveal misleading results in studies using traditional analyses that address the averages the wald test confirms our findings by rejecting the null hypothesis of parameter constancy for both the netherlands and ireland the changes in energy consumption are more responsive to past levels and past changes in globalization than the adjustment provided by the error correction method ecm interestingly the findings indicate that globalization is positively correlated with energy consumption in the long term for the two countries furthermore globalization shares a robust long term relationship with energy consumption energy consumption is strongly related to globalization in the long term however the short term effects of globalization on energy demand are limited for those countries important policy implications are then suggested based on the empirical results

growth friendly fiscal rules safeguarding public investment from budget cuts through fiscal rule design abstract we study patterns of public investment behavior during fiscal consolidations in seventy five advanced and emerging economies during 1990 2018 and find that results differ significantly depending on fiscal rule design fiscal rules can be flexible meaning that they include mechanisms to accommodate exogenous shocks e g cyclically adjusted fiscal targets well defined escape clauses and differential treatment of investment expenditures or rigid meaning they establish numerical limits on fiscal targets without taking into account flexible features we find that in countries with either no fiscal rule or with a rigid fiscal rule a fiscal consolidation of at least 2 percent of gdp is associated with an average 10 percent reduction in public investment instead in countries with flexible fiscal rules the negative effect of fiscal adjustments on public investment vanishes which implies that flexible rules protect public investment during consolidation episodes the corollary is that the design of fiscal rules can add a growth friendliness dimension to the fiscal sustainability objective that has typically been the focus of fiscal rules in the past provided public investment is productive

the politics of intergenerational redistribution this paper studies the political economic equilibrium of a two period model with overlapping generations in each period the policy is chosen under majority rule by the generations currently alive the paper identifies a politically viable set of values for public debt any amount of debt within this set is fully repaid in equilibrium even without commitments by issuing debt within this set the first generation redistributes revenue in its favor and away from the second generation the paper characterizes the determinants of the equilibrium intergenerational redistribution and identifies a difference between debt and social security as instruments of redistribution

interactions between energy and imports in singapore empirical evidence from conditional error correction models this study empirically tests for long run equilibrium relationship and the direction of causality between imports and energy consumption in singapore the results of the present study reveal that a long run equilibrium relationship exists between import growth and energy consumption growth in singapore by using bivariate systems imports of singapore converge to long term equilibrium levels by 79 9 percent speed of adjustment through the channel of energy growth furthermore the major finding of this study is that there are long and short term undirectional causalities that run from energy growth to import growth in singapore which denote that energy consumption in singapore is a catalyst for importing

do state balanced budget requirements matter testing two explanatory frameworks balanced budget requirements bbrs affect all aspects of financial operations previous studies relied on characterizations that highlight a constitutional statutory distinction hou and smith public budgeting finance 26 3 22 45 2006 instead propose a political technical construct this article uses probit estimation six measures of balance and long panels to test which framework offers more explanatory power the findings suggest that bbrs matter to varying degrees technical requirements exert bigger effects than political ones the effects are more obvious on narrower than broader measures of balance and in the later phases of the budget cycle and the political technical construct offers more explanatory power than the constitutional statutory distinction

energy consumption in china and underlying factors in a changing landscape empirical evidence since the reform period abstract in recent decades the phenomenal growth in the chinese economy has created increasing energy consumption this is the first study analysing energy consumption in china considering economic social and political dimensions of globalisation along with the effects from trade and financial sectors the time period covers the full trajectory since the start of economic reform until recent times in this respect we use the konjunkturforschungsstelle kof globalisation index to explore the dynamic link between economic growth financial development trade and various dimensions of globalisation and energy consumption modern time series econometric techniques are used in establishing stationarity long run dynamics and causality of the series the findings suggest that globalisation decreases energy consumption in the short run but increases it in the long run however the effect of financial development on energy consumption in china is opposite to the globalisation effect on energy consumption granger causality reveals a feedback effect between economic globalisation and financial development globalisation in china can only reduce energy consumption if china develops its financial sector to a greater extent in future china should invest in its financial sector and low carbon energy alternatives to achieve sustainable development prevention of energy shortfalls and cleaner environment would assist in bridging the gap both from social and political aspects to ensure china benefits significantly with high economic growth in this asian century

a note on the causal relationship between energy and gdp in taiwan abstract this paper re examines the causality between energy consumption and gdp by using updated taiwan data for the period 1954 1997 as a secondary contribution we investigate the causal relationship between gdp and the aggregate as well as several disaggregate categories of energy consumption including coal oil natural gas and electricity applying granger s technique we find bidirectional causality between total energy consumption and gdp we find further that different directions of cause exist between gdp and various kinds of energy consumption

political economy of debt and growth abstract a theory of endogenous fiscal policy and growth is developed fiscal policy debt income tax spending on local public goods and public investment is determined through legislative bargaining economic growth depends directly on public investment private investment in human capital and via learning by doing labor supply the model economy converges to a balanced growth path during the transition to the balanced growth path public debt grows faster than gdp provisions of public goods and infrastructure grow slower than gdp and the tax rate declines the model is used to assess welfare implications of austerity programs

toward consilience between biology and economics the contribution of ecological economics abstract during its ten year history ecological economics has made a real difference in the way economists look at the natural world and in the way biologists look at the economy in this survey article we examine the contributions to the journal in terms of e o wilson s concept of consilience that is his argument that the methods and assumptions of any field of study should be consistent with the known and accepted facts in other disciplines in particular we examine the contributions of ecological economics to reconciling the economic theory of the consumer and producer with biophysical reality

the case for a new fiscal constitution for the first 140 years of u s history the federal budget was effectively constrained by two fiscal rules the formal limits within the constitution on the enumerated spending powers and an informal rule that the government could borrow only during recessions and wars at the end of the 1920s federal expenditures were 2 6 percent of gnp the federal debt was constrained to about equal to 16 percent of gnp the general price level was roughly stable over this long period over the past six decades however federal expenditures have increased to nearly 25 percent of gnp larger and more frequent budget deficits have increased the federal debt held by the public to an amount equal to about 50 percent of gnp and the general price level is now about nine times the level at the beginning of this period this dramatic change in fiscal and monetary conditions occurred without one amendment to the constitution to authorize a change in the fiscal rules our effective fiscal constitution has been transformed into one in which congress and the president may authorize any type or amount of expenditures and taxes subject only to the voting rules for routine legislation how did this happen should economists be concerned about this change in the fiscal constitution what if anything should be done about it

optimal fiscal and monetary policy in an economy without capital abstract this paper is concerned with the structure and time consistency of optimal fiscal and monetary policy in an economy without capital in a dynamic context optimal taxation means distributing tax distortions over time in a welfare maximizing way for a barter economy our main finding is that with debt commitments of sufficiently rich maturity structure an optimal policy if one exists is time consistent in a monetary economy the idea of optimal taxation must be broadened to include an inflation tax and we find that time consistency does not carry over an optimal inflation tax requires commitment by rules in a sense that has no counterpart in the dynamic theory of ordinary excise taxes the reason time consistency fails in a monetary economy is that nominal assets should from a welfare maximizing point of view always be taxed away via an immediate inflation in a kind of capital levy this emerges as a new possibility when money is introduced into an economy without capital

considering the effect of biomass energy consumption on economic growth fresh evidence from brics region abstract this paper investigates the relationship between biomass energy consumption and economic growth by incorporating capital and trade openness in production function for the case of brics countries in doing so unit root and cointegration tests have been used in order to examine unit root properties and long run relationship between the series for the period of 1991q1 2015q4 the results confirm the presence of long run equilibrium relationship between the variables moreover biomass energy consumption stimulates economic growth capital increments economic growth and trade openness spurs economic growth the feedback effect exists between biomass energy consumption and economic growth trade openness granger causes economic growth capital and biomass energy consumption the policy to adopt biomass as the primary source of renewable energy helps brics countries to achieve sustainable development goal in both short run and long run however the key innovative point of this study is to establish the sign for granger causality test

german s oil footprint an input output and structural decomposition analysis abstract it is generally thought that the country with net exports in goods is also a net exporter of energy embodied in goods in this work we report a paradox phenomenon which shows that germany was a net goods exporter but also a net importer of embodied oil based on the multi region input output model and structural decomposition analysis this paper comprehensively analyzed the changing trend and main driving factors of oil footprints in german trade the results showed that germany s embodied oil exports increased by 35 06 with the expansion of trade scale and germany s net imports of embodied oil fell by 45 49 during the study period although the focus of embodied oil transfer in trade was eu countries the embodied oil trade volume between germany and developing countries especially china grew rapidly from sectoral level heavy manufacturing and transport industry dominated more than 70 of the germany s embodied oil trade the decomposition analysis showed that the scale effect of final demand was the main factor that contributed to the growth of oil footprints in germany s international trade which offset the inhibition of oil consumption intensity the effect of production structure played an important role in the embodied oil trade and the low oil intensive industrial structure was the main reason why germany was a net importer of embodied oil

the macroeconomic effects of fiscal rules in the us states abstract fiscal policy restrictions are often criticized for limiting the ability of governments to react to business cycle fluctuations and consequently the adoption of quantitative restrictions is viewed as inevitably leading to increased macroeconomic volatility in this paper we use data from 48 us states to investigate how budget rules affect fiscal policy outcomes our key findings are that 1 strict budgetary restrictions lead to lower policy volatility i e less aggressive use of discretion in conducting fiscal policy and 2 fiscal restrictions reduce the responsiveness of fiscal policy to output shocks these two results should have opposite effects on output volatility while less discretion should reduce volatility less responsiveness of fiscal policy might amplify business cycles we provide empirical support for the first effect restrictions by reducing discretion in fiscal policy can reduce macroeconomic volatility

fiscal restraints and voter welfare this paper explores the logic of fiscal restraints in a political agency model with both moral hazard and adverse selection the role of the political process is both to discipline incumbents who may act against the public interest and to sort in those politicians who are most likely act in voters interests we use the model to examine the optimality of inefficient taxation limits on the size of government increasing transparency and yardstick competition some conclusions are surprising for example we show that some forms of fiscal restraint can only be desirable when incumbents are sufficiently likely to be benevolent

the political economy of public debt a laboratory study this paper reports the results from a laboratory experiment designed to study political distortions in the accumulation of public debt a legislature bargains over the levels of a public good and of district specific transfers in two periods the legislature can issue or purchase risk free bonds in the first period and the level of public debt creates a dynamic linkage across policymaking periods in line with the theoretical predictions we find that public policies are inefficient and efficiency is increasing in the size of the majority requirement with higher investment in public goods and lower debt associated with larger majority requirements also in line with the theory we find that debt is lower when the probability of a negative shock to the economy in the second period is higher evidence that legislators use debt to smooth consumption the experiment also highlights two phenomena that are not predicted by standard theories and have not been previously documented first balancing the budget in each period appears to be a focal point for some legislators leading to lower distortions than predicted second higher majority requirements induce significant delays in reaching an agreement

dynamic linkages between globalization financial development and carbon emissions evidence from asia pacific economic cooperation countries abstract this study determines the dynamic linkages between globalization financial development and carbon emissions in asia pacific economic cooperation apec countries in the presence of energy intensity and economic growth under the framework of environment kuznets curve ekc this study employs the panel data from 1990 to 2016 westerlund cointegration technique to find long run cointegration and continuously updated bias corrected cup bc and continuously updated fully modified cup fm methods to check the long run elasticities between the variables empirical results indicate that globalization and financial development significantly reduce carbon emissions but economic growth and energy intensity increase them these results support the ekc hypothesis for apec countries the dumitrescu and hurlin causality analysis shows that globalization granger causes co2 emissions globalization also causes financial development and energy intensity a feedback effect exists between financial development and co2 emissions furthermore financial development causes economic growth but similar is not true from opposite side in granger sense finally this study presents important policy implications with respect to apec countries

economic growth energy consumption financial development international trade and co2 emissions in indonesia this study examines the linkages among economic growth energy consumption financial development trade openness and co2 emissions over the period of 1975q1 2011q4 in the case of indonesia the stationary analysis is performed by using zivot andrews structural break unit root test and the ardl bounds testing approach for a long run relationship between the series in the presence of structural breaks the causal relation between the concerned variable is examined by the vecm granger causality technique and robustness of causal analysis is tested by innovative accounting approach iaa our results confirm that the variables are cointegrated it means that the long run relationship exists in the presence of structural break stemming in the series the empirical findings indicate that economic growth and energy consumption increases co2 emissions while financial development and trade openness compact it the vecm causality analysis has shown the feedback hypothesis between energy consumption and co2 emissions economic growth and co2 emissions are also interrelated i e bidirectional causality financial development granger causes co2 emissions the study opens up a new policy insights to control the environment from degradation by using energy efficient technologies financial development and trade openness can also play their role in improving the environmental quality

mechanisms for the control of fiscal deficits abstract this paper shows that a simple two stage voting mechanism may implement a constrained optimal state dependent decision about the size of the fiscal deficit i consider a setup with strategic fiscal deficits similar to alesina and tabellini 1990 three groups of voters are informed about the relative desirability of current public spending voters differ in their preferences for public goods and swing voters preferences may change over time the current government decides on the current spending mix and it has an incentive to strategically overspend a simple two stage mechanism under which a deficit requires the approval by a supermajority in parliament approximates a constrained optimal decision and under certain conditions increases social welfare relative to both a strict rule and a laissez faire constitution when the current majority is small political bargaining may further increase social welfare however when the current majority is large a supermajority mechanism with bargaining leads to a biased spending mix and it may reduce welfare whereas the laissez faire mechanism may yield the first best an appropriately adjusted majority threshold can avoid inefficient bargaining whenever necessary

nonuse values in benefit cost analysis benefit cost analysis bca is a pragmatic realization of the theory of welfare economics much of the research associated with bca has sought to expand the types of benefits that can be measured in dollar terms with this research there has been a progressive movement of goods and services from the set without measures usually designated as intangibles in bca terminology to the set with for example the recreational services provided by projects associated with dams for hydroelectric power or flood control were regarded as intangible until the development of the travel cost model for estimating the demand for outdoor recreation sites one of the current frontiers in bca research is associated with modeling and measuring nonuse benefits in contrast to the past efforts with intangibles research on this topic has remained controversial with few direct effects on the practice of applied welfare economics there are two principal reasons for this outcome first there has not been an accepted set of definitions for nonuse benefits and second applied studies with empirical estimates of nonuse benefits have until recently been non existent clearly these problems are related a consistent set of definitions is a necessary prerequisite for empirical implementation i will argue that consistent definitions for nonuse benefits have been elusive because the conceptual frameworks used in the literature to describe its primary components option value and existence values are not mutually consistent in the process of demonstrating this result i will describe the elements of a consistent framework for treating both use and nonuse benefits and apply it in explaining some of the problems with the available empirical estimates of nonuse benefits

the power to tax analytical foundations of a fiscal constitution preface 1 taxation in constitutional perspective 2 natural government a model of leviathan 3 constraints on base and rate structure 4 the taxation of commodities 5 taxation through time income taxes capital taxes and public debt 6 money creation and taxation 7 the disposition of public revenues 8 the domain of politics 9 open economy federalism and taxing authority 10 toward authentic tax reform prospects and prescriptions epilogue notes selected bibliography index

a dynamic theory of public spending taxation and debt this paper presents a dynamic political economy theory of public spending taxation and debt policy choices are made by a legislature consisting of representatives elected by geographically defined districts the legislature can raise revenues via a distortionary income tax and by borrowing these revenues can be used tofinance a national public good and district specific transfers interpreted as pork barrel spending the value of the public good is stochastic reflecting shocks such as wars or natural disasters in equilibrium policy making cycles between two distinct regimes business as usual in which legislators bargain over the allocation of pork and responsible policy making in which policies maximize the collective good transitions between the two regimes are brought about by shocks in the value of the public good in the long run equilibrium tax rates are too high and too volatile public good provision is too low and debt levels are too high in some environments a balanced budget requirement can improve citizen welfare

the impact of economic globalization on renewable energy in the oecd countries abstract this paper analyzes the determinants of renewable energy consumption in the panel data of 30 oecd countries for the period from 1970 to 2015 the unique role is given to the effect of economic globalization on renewable energy we consider several measures of economic globalization and apply different econometric techniques we find the positive impact of the per capita income the per capita carbon dioxide emissions and the real price of oil on renewable energy also a higher level of economic globalization promotes renewable energy and the evidence is robust to the different measures of economic globalization in line with our findings promoting the economic aspects of globalization will enhance renewable energy thus it can suppress the adverse effect of climate change and global warming on living human beings and natural habitats in the long run therefore we need to enhance our knowledge of how globalization promotes renewable energy not only for the oecd countries but also for other developing and developed economies from a policy perspective we suggest that policymakers and governments in oced countries should consider economic globalization as a renewable energy promoting mechanism while designing their energy demand policy for the protection of natural environmental health

intergenerational policies public debt and economic growth a politico economic analysis abstract this study presents a two period overlapping generations model with endogenous growth in each period the government representing young and old generations provides a public good financed by labor income taxation and public debt issuance and the government s policies are determined by probabilistic voting increased political power of the old lowers economic growth a debt ceiling rule is considered to resolve the negative growth effect but it creates a trade off between generations in terms of welfare

production subsidies and redistribution abstract who gains from stimulating output we explore a dynamic model with production subsidies where the population is heterogeneous in one dimension wealth there are two channels through which production subsidies redistribute resources across the population first poorer agents gain from a rise in wages since to the extent there is an operative wealth effect in labor supply they work harder second because a current output boost will raise consumption today relative to the future thus lowering real interest rates poor agents gain in relative terms since their income is based less on interest income we examine optimal redistribution from the perspective of an arbitrary consumer in the population we show that if this consumer has commitment at time zero to set all present and future subsidy rates and for a class of preferences that admits aggregation in wealth then output stimulation and hence redistribution will only occur at time zero after that subsidies are zero a byproduct of our analysis of this environment is a median voter theorem with direct voting over subsidy sequences at time zero the sequence preferred by the median wealth consumer is the unique outcome we also study lack of commitment since interest rate manipulation is associated with time inconsistency we analyze this case formally by looking at the markov perfect time consistent equilibrium in a game between successive identical decision makers e g the median agent here subsidies persist they are constant over time and are more distortionary than under commitment moreover whereas under commitment asset inequality changes initially in favor of the consumer who decides on policy it does not under lack of commitment

growth and energy nexus in europe revisited evidence from a fixed effects political economy model this is an empirical study on the causal relationship between economic growth and energy for 26 european countries in a multivariate panel framework over the period 1975 2009 using a two way fixed effects model and including greenhouse gas emissions capital fossil energy consumption herfindahl index political competition and number of years the government chief executive stays in office political stability as independent variables in the model empirical results confirm bidirectional causality between growth and political stability capital and political stability capital and fossil energy consumption whether political stability favors the implementation of growth or leads to corruption demands further research

rising government debt causes and solutions for a decades old trend over the past four decades government debt as a fraction of gdp has been on an upward trajectory in advanced economies approaching levels not reached since world war ii while normative macroeconomic theories can explain the increase in the level of debt in certain periods as a response to macroeconomic shocks they cannot explain the broad based long run trend in debt accumulation in contrast political economy theories can explain the long run trend as resulting from an aging population rising political polarization and rising electoral uncertainty across advanced economies these theories emphasize the time inconsistency in government policymaking and thus the need for fiscal rules that restrict policymakers fiscal rules trade off commitment to not overspend and flexibility to react to shocks this tradeoff guides design features of optimal rules such as information dependence enforcement cross country coordination escape clauses and instrument versus target criteria

causality between trade openness and energy consumption what causes what in high middle and low income countries abstract this paper explores the relationship between trade openness and energy consumption using data of 91 high middle and low income countries the study covers the period of 1980 2010 we have applied panel cointegration to examine long run relationship between the variables the direction of causal relationship between trade openness is investigated by applying homogenous non causality homogenous causality and heterogeneous causality tests our variables are integrated at i 1 confirmed by time series and panel unit root tests and cointegration is found between trade openness and energy consumption the relationship between trade openness and energy consumption is inverted u shaped in high income countries but u shaped in middle and low income countries the homogenous and non homogenous causality analysis reveals the bidirectional causality between trade openness and energy consumption this paper opens up new insights for policy makers to design a comprehensive economic trade and policies for sustainable economic growth in long run following heterogeneous causality findings

a structural var analysis of electricity consumption and real gdp evidence from the g7 countries in this paper we depart from the literature on electricity consumption real gdp in that for the first time we examine the reaction of real gdp to shocks in electricity consumption to achieve this goal we use the structural vector autoregressive svar model and examine the impact of electricity consumption shocks on real gdp for the g7 countries we find that except for the usa electricity consumption has a statistically significant positive impact on real gdp over short horizons this finding implies that except for the usa electricity conservation policies will hurt real gdp in the g7 countries

fiscal rules and discretion under persistent shocks this paper studies the optimal level of discretion in policymaking we consider a fiscal policy model where the government has time inconsistent preferences with a present bias toward public spending the government chooses a fiscal rule to trade off its desire to commit to not overspend against its desire to have flexibility to react to privately observed shocks to the value of spending we analyze the optimal fiscal rule when the shocks are persistent unlike under independent and identically distributed shocks we show that the ex ante optimal rule is not sequentially optimal as it provides dynamic incentives the ex ante optimal rule exhibits history dependence with high shocks leading to an erosion of future fiscal discipline compared to low shocks which lead to the reinstatement of discipline the implied policy distortions oscillate over time given a sequence of high shocks and can force the government to accumulate maximal debt and become immiserated in the long run

a unified framework for monetary theory and policy analysis search theoretic models of monetary exchange are based on explicit descriptions of the frictions that make money essential however tractable versions of these models typically make strong assumptions that render them ill suited for monetary policy analysis we propose a new framework based on explicit micro foundations within which macro policy can be studied the framework is analytically tractable and easily quantifiable we calibrate the model to standard observations and use it to measure the cost of inflation we find that going from 10 percent to 0 percent inflation is worth between 3 and 5 percent of consumption much higher than previous estimates

energy consumption and growth in south america evidence from a panel error correction model abstract this study examines the relationship between energy consumption and economic growth for a panel of nine south american countries over the period 1980 2005 within a multivariate framework given the relatively short span of the time series data a panel cointegration and error correction model is employed to infer the causal relationship pedroni s heterogeneous panel cointegration test reveals a long run equilibrium relationship between real gdp energy consumption the labor force and real gross fixed capital formation with the respective coefficients positive and statistically significant the granger causality results indicate both short run and long run causality from energy consumption to economic growth which supports the growth hypothesis

the long run and causal analysis of energy growth openness and financial development on carbon emissions in turkey abstract the aim of this paper is to examine the causal relationship between financial development trade economic growth energy consumption and carbon emissions in turkey for the 1960 2007 period the bounds f test for cointegration test yields evidence of a long run relationship between per capita carbon emissions per capita energy consumption per capita real income the square of per capita real income openness and financial development the results show that an increase in foreign trade to gdp ratio results an increase in per capita carbon emissions and financial development variable has no significant effect on per capita carbon emissions in the long run these results also support the validity of ekc hypothesis in the turkish economy it means that the level of co 2 emissions initially increases with income until it reaches its stabilization point then it declines in turkey in addition the paper explores causal relationship between the variables by using error correction based granger causality models

procyclicality of fiscal policy in european union countries abstract using real time data we examine whether fiscal policy has been counter or procyclical in a panel of 27 european union eu member states over the period 2000 2015 we also investigate whether fiscal rules and government efficiency improve the cyclical reaction of fiscal policy our results suggest that even though fiscal plans in eu countries have an acyclical stance budgetary outcomes are procyclical government efficiency and fiscal rules seem to reduce fiscal procyclicality further analysis also reveals that fiscal policy seems to be more procyclical in non euro area countries and in times of economic prosperity

mandatory versus discretionary spending the status quo eect do mandatory spending programs such as medicare improve eciency we analyze a model with two parties allocating a xed budget to a public good and private transfers each period over an innite horizon we compare two institutions that dier in whether public good spending is discretionary or mandatory we model mandatory spending as an endogenous status quo since it is enacted by law and remains in eect until changed mandatory programs result in higher public good spending furthermore they ex ante pareto dominate discretionary programs when parties are patient persistence of power is low and polarization is low

existence values in benefit cost analysis and damage assessment existence values for obscure resources should not be ruled out a priori because consumers have limited time and resources for information gathering furthermore to the extent that environmental good things are highly substitutable existence values must be cautiously interpreted when evaluating public choice alternatives but similar concerns do not arise in damage assessments issues associated with adding up existence values across resources high per unit values and property rights in the existence of resources are also addressed

the costs and benefits of balanced budget rules lessons from a political economy model of fiscal policy this paper analyzes the impact of a balanced budget rule that requires that legislators do not run deficits in the political economy model of battaglini and coate 2008 the main finding is that the rule leads to a gradual reduction in the level of public debt legislators reduce debt in periods when the demand for public goods is relatively low they do so because the rule by restricting future fiscal policies raises the expected costs of carrying debt whether the rule increases citizen welfare depends on a comparison of the benefits of a lower debt burden with the costs of greater volatility in taxes and less responsive public good provision a quantitative version of the model is developed in which costs and benefits can be evaluated a welfare loss results if the debt level when the rule is imposed lies in the support of the long run distribution associated with the unconstrained equilibrium

output renewable energy consumption and trade in africa abstract we use panel cointegration techniques to examine the relationship between renewable energy consumption trade and output in a sample of 11 african countries covering the period 1980 2008 the results from panel error correction model reveal that there is evidence of a bidirectional causality between output and exports and between output and imports in both the short and long run however in the short run there is no evidence of causality between output and renewable energy consumption and between trade exports or imports and renewable energy consumption also in the long run there is no causality running from output or trade to renewable energy in the long run our estimations show that renewable energy consumption and trade have a statistically significant and positive impact on output our energy policy recommendations are that national authorities should design appropriate fiscal incentives to encourage the use of renewable energies create more regional economic integration for renewable energy technologies and encourage trade openness because of its positive impact on technology transfer and on output

the role of globalization on the recent evolution of energy demand in india implications for sustainable development using annual data for the period 1971 2012 this study explores the relationship between globalization and energy consumption for india by endogenizing economic growth financial development and urbanization the cointegration test proposed by bayer hanck 2013 is applied to estimate the long run and short run relationships among the variables after confirming the existence of cointegration the overall results from the estimation of an ardl energy demand function reveal that in the long run the acceleration of globalization measured in three dimensions economic social and overall globalization leads to a decline in energy demand in india furthermore while financial development is negatively related to energy consumption economic growth and urbanization are the key factors leading to increased energy demand in the long run these results have policy implications for the sustainable development of india in particular globalization and financial development provide a win win situation for india to increase its economic growth in the long run and become more environmentally sustainable

the role of property rights in economic research on u s wetlands policy abstract the purpose of this essay is to define the role of resource economics in the development of u s wetlands policy i argue that the optimal pollution model based on maximation of net benefits of wetland protection is for the most part not directly applicable to the creation of wetlands policy for two reasons 1 the delineation of property rights among wetland owners and the general public as opposed to the maximization of net benefits is the more fundamental political issue and therefore drives policy making 2 the predominant public benefits of wetlands fall into the economic category of nonuse values which are very difficult to define and measure in a policy relevant way and the public s legal rights to them have not been established these conclusions indicate that resource economics research that focuses upon 1 the economic significance to interested parties of alternative delineations of property rights 2 development of policy tools appropriate for each possible property rights delineation and 3 the relative cost effectiveness of these policy tools is most useful for policy making

fiscal rules and compliance expectations evidence for the german debt brake fiscal rules have become popular to limit deficits and high debt burdens in industrialized countries a growing literature examines their impact based on aggregate fiscal performance so far no evidence exists on how fiscal rules influence deficit expectations of fiscal policy makers in the context of the german debt brake we study this expectation dimension in a first step we introduce a simple dynamic model in an environment characterized by the lagged implementation of a new rule lagged implementation characterizes the setup of the german debt brake and raises credibility issues in a second step we analyze a unique survey of members of all 16 german state parliaments and show that the debt brake s credibility is far from perfect the heterogeneity of compliance expectations in the survey closely corresponds to our theoretical predictions regarding states initial fiscal conditions specific state fiscal rules and bailout perceptions in addition there is a robust asymmetry in compliance expectations between insiders and outsiders both for in state vs out of state politicians and the government vs opposition dimension which we attribute to overconfidence rather than noisy information these results suggest that national fiscal rules can be strengthened through nobailout rules sustainable initial fiscal conditions and complementary sub national rules

the dynamic links between energy consumption economic growth financial development and trade in china fresh evidence from multivariate framework analysis abstract this study investigates the relationship between energy use and economic growth by incorporating financial development international trade and capital as important factors of production function in case of china over the period of 1971 2011 the ardl bounds testing approach to cointegration was applied to examine long run relationship among the series while stationarity properties of the variables was tested by applying structural break test our empirical evidence confirmed long run relationship among the variables the results showed that energy use financial development capital exports imports and international trade have positive impact on economic growth the granger causality analysis revealed that unidirectional causal relationship running from energy use to economic growth financial development and energy use granger cause each other there is bidirectional causality between international trade and energy use the feedback relation exists between financial development and international trade there is also bidirectional causality exists between capital and energy demand financial development and economic growth and international trade and economic growth this paper makes significant contribution in energy economics and opens up new direction for policy makers to explore new and alternative sources of energy which would be helpful in meeting the rising demand of energy due to sustained rate of economic growth

balanced budget rules and fiscal outcomes evidence from historical constitutions this paper studies the long run fiscal consequences of balanced budget rules bbr that are enshrined in a country s constitution using historical data dating back to the 19th century and applying a difference in difference approach we find that the introduction of a constitutional bbr reduces government debt to gdp and expenditure to gdp ratios on average by around 11 and 3 percentage points respectively we do not find evidence that bbrs affect tax revenues our analysis indicates that such rules reduce the probability of experiencing a debt crisis and that the effective enforcement of bbrs can be conditional on the quality of democratic institutions in addition we implement an instrumental variable approach by instrumenting the probability of having budget rules on de jure constraints on changing the constitution this and other tests suggest that the relations we find are largely causal going from bbrs to fiscal outcomes