A note on the robustness of Card and Krueger (1994) and Neumark and Wascher (2000)

This note adds to the discussion originating from Card and Krueger (Am Econ Rev 84:772–793, 1994) and Neumark and Wascher (Am Econ Rev 90:1362–1396, 2000) by re-evaluating their results using the semiparametric difference-in-differences estimator introduced in Abadie (Rev Econ Stud 72:1–19, 2005). The note addresses the question of whether the differences in the original datasets can explain the differences in their conclusions. Although we observe heterogenous employment effects together with the differences in the distributions, the results show that the original findings on the overall employment effect of a minimum wage are fairly robust and just slightly changed when the differences in the distributions of the observed covariates are taken into account.     

On the dynamics of renewable resource harvesting and pollution control

The paper presents a dynamic partial equilibrium model which combines optimal renewable resource harvesting and optimal pollution control. Pollution accumulates as a slowly decaying stock and is assumed to affect the growth and the quality of the renewable resource stock. The aim is to maximize a social welfare functional which gives the present value of the difference between natural resource benefits and pollution control costs. The existence, uniqueness and the dynamic properties of the steady states are investigated. The analysis also gives a general result concerning the steady state of any two state variable optimal control problems.     

Anticipating the Future of Finnish Agrifood Sector by Using Alternative Research Methods

The goal of this study is to forecast the future of the Finnish agri-food sector for decision makers and interest groups in order to support the process of policy planning and decision making in a changing EU Common Agricultural Policy (CAP) combined with alterations in the global agricultural, trade, and climate policy. Two methods are utilized concurrently in this study—the quantitative method based on a computable general equilibrium model called the GTAP (Global Trade Analysis Project) and the Delphi method based on panels of expert opinions. The quantitative “what if” GTAP modeling is used to forecast the Finnish agri-food sector until 2030, while the qualitative Delphi method with panels of experts is used to foresee the short- and long-term developments in the Finnish agri-food sector. The results from both methods can provide a more complete picture and comprehensive understanding of the future. The GTAP model projects that the relative competitiveness of Finnish milk, cereal, and meat production would decrease and weaken in the EU market as subsidies are being removed and the markets become open and liberated. The interviewed experts in the food supply chain confirm this projection by foreseeing a further decrease in the overall consumption of food that is produced domestically in Finland, and thus the profitability of Finnish farms would weaken and remain low. The results from both methods paint a pessimistic future for the Finnish agri-food sector in the event of trade liberalization and abolition of subsidies for agriculture.     

Renewable Resources with Endogenous Age Classes and Allocation of Land

It is shown that if it is optimal to allocate all land to forestry, the long-run stationary state is a cyclical solution around an equilibrium with an even timber flow. The equilibrium cycles vanish when it is optimal to allocate some fraction of land outside forestry. We present numerical examples on the transitional dynamics and long- and short-run timber supply. When land conversion is costly, the cycles do not vanish and the long-run equilibrium between forestry and agriculture is represented by a continuum.     

International CO2 taxation and the dynamics of fossil fuel markets

International CO₂ taxation may have major implications for fossil fuel markets. These effects must be taken into account in calculating the net gain from CO₂ taxation. The paper assumes that buyers have formed an agency that applies a CO₂ tax and sellers are competitive or constitute a resource cartel. When sellers are competitive, buyers' agency may use monopsony power by applying an import tariff. At the resulting time-consistent equilibrium, the sellers lose their resource rent. In contrast, the solution where the sellers' cartel maximizes its profits is time inconsistent. At the time-consistent Nash feedback equilibrium, the seller's monopoly power vanishes asymptotically. The sellers' export fee reduces the buyers' pollution tax. At this equilibrium, the buyers' pollution tax includes an import subsidy, and the tax falls below the present value of the marginal pollution damage. In the Nash feedback equilibrium, higher pollution damage may imply higher initial producer prices, although this effect is always the reverse in the Pareto optimum.     

Transboundary air pollution and soil acidification: A dynamic analysis of an acid rain game between Finland and the USSR

Transboundary air pollution is analysed as a dynamic game between Finland and the nearby areas of the Soviet Union. Sulphur emissions are used as the environmental control variables and the acidities of the soils as the state variables. Acidification is consequently considered to be a stock pollutant having long-lasting harmful effects on the environment. The state dynamics consist of two relationships: first, of a sulphur transportation model between the regions and, second, of a model describing how the quality of the soil is affected by sulphur deposition. The countries are assumed to be interested in maximizing the net benefits from pollution control as measured by the impacts on the values of forest growth net of the abatement costs. Cooperative and noncooperative solutions of the game are compared to assess the benefits of bilateral cooperation. Using empirical estimates of abatement costs, acidification dynamics and impacts on forest growth it is shown that cooperation is beneficial to Finland but not to the Soviet Union. Consequently, Finland has to offer monetary compensation to induce her neighbor to invest in environmental protection.