(In)Efficient Environmental Policy with Interacting Pollutants

Many environmental problems involve the transformation of multiple harmful substances into one or more damage agents much in the same way as a firm transforms inputs into outputs. Yet environmental management differs from a firm’s production in one important respect: while a firm seeks efficient input allocation to maximize profit, an environmental planner allocates abatement efforts to render the production of damage agents as inefficient as possible. We characterize a solution to the multiple pollutants problem and show that the optimal policy is often a corner solution, in which abatement is focused on a single pollutant. Corner solutions may arise even in well-behaved problems with concave production functions and convex damage and cost functions. Furthermore, even concentrating on a wrong pollutant may yield greater net benefits than setting uniform abatement targets for all harmful substances. Our general theoretical results on the management of flow and stock pollutants are complemented by two numerical examples illustrating the abatement of eutrophying nutrients and greenhouse gases.     

Macro‐Fiscal Volatility and the Composition of Public Spending*

Earlier empirical literature has examined some long‐ and medium‐term aspects of macro‐fiscal volatility while leaving its short‐term fiscal impact unexplored. To help fill that gap, we examine the impact of macro‐fiscal volatility on the composition of public spending. To that end, we analyse a panel of 10 EU countries during 1991–2007. Our results suggest that increases in the volatility of regularly‐collected and cyclical revenues such as the VAT and income taxes tend to tilt the expenditure composition in favour of public investment. In contrast, increases in the volatility of ad hoc taxes such as capital taxes tend to favour public consumption spending, albeit only a little. We interpret such volatility innovations as conveying news to the fiscal policymaker about the underlying economic conditions, with especially regularly‐collected and cyclical taxes prompting short‐term cyclical fine‐tuning.     

Using composite indicators to evaluate the efficiency of health care system

This article produces a system-level composite indicator on population health in publicly provided primary health care. We first summarize information from various indicators of care by principal component analysis (PCA). We then regress the costs of care against these indicators to evaluate whether they are related. The existing health status indicator provides a point of comparison. Our results suggest that PCA can be used to extract information efficiently and thus to reduce the dimensionality of data. Furthermore, the use of the existing health status indicator to estimate cost-efficiency leads to invalid inference on overall efficiency, while the use of composite indicator significantly reduces the bias.     

Wage setting,taxes and demand for labour: Multivariate analysis of cointegrating relations

A 10-dimensional vector space is defined which is in accordance with a model of wage setting and demand for labour specified in a bargaining framework. Structural restrictions identifying the long-run relations of interest are specified. Restrictions which characterize wage-seting and labour demand schedules are imposed and tested, first separately and then jointly. The FIML procedure proposed in Johansen and Juselius (1990) is applied. Generally, restrictions satisfying the condition for formal identification pass the tests at a fairly high signficance level. The plausibility of resulting cointegrating relations applies not only to the signs but also to the magnitudes of the coefficients. The relations show up almost identically in partial and joint analysis. They do not appear to be sensitive to the choice between four or three cointegrating relations in the system. Finally, the relations are hardly influenced at all by alterative conjectures concerning endogeneity of various tax rates. The results indicate that there has been a considerable degree of real wage resistance in action in Finland.     

Effects of law on corporate financing practices—international evidence from convertible bond issues

Firms can adjust their convertibles to be more debt-like or equity-like through several contract terms. In particular, by providing call protection, a convertible issuer can assure its convertible bondholders that it will not force them to become equity holders during the call protection period. The possibility of a forced conversion instituted by an early call should be more threatening to investors in an economy where local laws are biased against shareholders. I examine call protection terms in an international sample and find evidence consistent with the hypothesis that convertible bond design varies based on the features of local law.     

Common factors in conditional distributions for bivariate time series

A definition for a common factor for bivariate time series is suggested by considering the decomposition of the conditional density into the product of the marginals and the copula, with the conditioning variable being a common factor if it does not directly enter the copula. We show the links between this definition and the idea of a common factor as a dominant feature in standard linear representations. An application using a business cycle indicator as the common factor in the relationship between U.S. income and consumption found that both series held the factor in their marginals but not in the copula.     

Aufschwung bleibt moderat — Wirtschaftspolitik wenig wachstumsorientiert

The German economy is experiencing a moderate upturn. Gross domestic product is expected to increase by 1.6 per cent this year and by 1.5 per cent in 2017. The upturn will be driven by private consumption, which will benefit from continued employment growth, sizeable increases in wage and transfer income, and also purchasing power gains thanks to lower energy prices. Fiscal policy will also be expansively oriented, partly due to rising costs related to refugee immigration. Public budgets will still post significant surpluses in the forecasting period, however. Failing to use this room for manoeuvre to promote growth, as seen in recent years, is not a sustainable path. In view of the continuous slack in the euro area economy, the monetary policy stance is considered to be appropriate. Should it become obvious in the course of this year that production does not return to normal capacity and that the inflation rate does not move towards two per cent, further measures to stimulate growth might become necessary. The scope for further monetary policy measures has been widely exhausted, though. A further economic stabilization could only be achieved through a combination of expansionary fiscal and monetary policy. This could severely damage the credibility of monetary policy, however.     

Zeit bedeutet Leben

Lebensrettende Sofortma?nahmen auf Station - Bei einem Herz-Kreislauf- Stillstand z?hlt jede Sekunde. Daher muss auch auf peripheren Stationen das Pflegeteam in der Lage sein, sofort die richtigen Basisma?nahmen einzuleiten. H?tten Sie gewusst, was zu tun ist?