Reserve accumulation and financial crises: From individual protection to systemic risk

This paper provides a new perspective on the relationship between countries׳ international reserve holdings and financial crises: while the “local” view holds that reserves may prevent domestic crises, it overlooks that the accumulation of reserves relaxes the financing constraint of the reserve currency country and may cause a financial crisis in the centre, which is transmitted globally. According to this “global” view reserve accumulation might destabilize the international financial system. Since the crisis affects all countries alike, the accumulation of reserves imposes a negative externality on non-accumulating countries.We integrate this idea in a theoretical model of the optimal amount of reserves and illustrate the gap between local and global optimality: the consideration of systemic risk lowers the demand for reserves. Moreover, if a supranational authority determines the optimal level of reserves, it internalizes the negative externality and accumulates fewer reserves. A macroprudential tax on reserve hoardings might implement the socially optimal solution. Our calibration analysis shows that these considerations are economically significant: they lower the optimal amount of reserves in the benchmark case by 45%.     

Optimum reserve size,fishing induced change in carrying capacity,and phenotypic diversity

Fish stocks around the world are heavily overexploited in spite of fishing policies in several parts of the world designed to limit overfishing. Recent studies have found that the complexity of ecological systems and the diversity of species, as well as negative impact of fishing activities on environmental carrying capacity of fish stocks—all contribute to the problem. A number of biologists, managers, and practitioners strongly support the use of marine reserves as a management strategy for marine conservation. This paper contributes to this line of research by seeking an optimum reserve size and fishing effort for situations where species diversity decrease at fishing grounds and fishing activities impact carrying capacity. We found that a reserve size which maximizes economic rents could ruin a fish stock if fishing impacts are not accounted for. On the other hand, the reserve serves as a bifurcation term which could improve the resilience of a marine ecosystem.     

Resource Characteristics, Extraction Costs, and Optimal Exploitation of Mineral Resources

This paper modifies the traditional theories ofnon-renewable resource exploitation where reserve sizeis assumed to be the major determinant of extractioncosts. In a competitive model of resourceexploitation, characteristics of aggregate reservesare considered as a determinant of extraction cost. Then dynamic solutions for the price and exploratoryefforts are developed. Various price paths arefeasible under different assumptions with regard tothe changes in the reserve characteristics over time. Past empirical research shows that there is noconsistent price path for all materials. In fact, itis the quality of newly discovered reserves as well astheir size that has affected material prices. Todemonstrate the complexity of a firm's decision torecover mineral from new deposits, potentials forsubstantial high quality marine mineral resources areevaluated as a substitute for land-based resources.However, several factors including the decreasingtrend in marine mining R & D expenditures and thepotential impact of large-scale marine mining on priceof minerals indicate that mining of mostnon-hydrocarbon marine minerals will not take place inthe near future.     

Economic considerations in the optimal size and number of reserve sites

The debate among ecologists on the optimal number of reserve sites under a fixed maximum total reserve area—the single large or several small (SLOSS) problem—has so far neglected the economic aspects of the problem. This paper argues that economic considerations can affect the optimal number and size of reserve sites and should therefore be taken into consideration in the SLOSS discussion. The paper presents a tractable analytical model to determine the socially optimal number of reserve sites to be allocated in a farming area under a fixed total reserve area, taking the opportunity costs of nature conservation (in this case, agricultural profits) into consideration. Furthermore, the effect of land trade and related transaction costs on the socially optimal number of reserve sites is analyzed. The analysis suggests that in the presence of diminishing returns to farming area, the socially optimal number of reserve sites (which maximizes social welfare) is generally larger than the ecologically optimal number (which maximizes an ecological objective such as population viability). When the opportunity costs of conservation can be offset by land transactions, however, the socially optimal number of reserve sites might be closer to the ecological optimum.     

Labor Mobility, Trade, and Social Capital

Labor market integration raises welfare in the absence of distortions. This paper examines labor and goods market integration in a general‐equilibrium model with social capital. The findings are: (i) labor market integration has an ambiguous impact on welfare, and raises it if the goods and labor skills are sufficiently different; (ii) compared to Pareto optimum, labor mobility (social capital) is excessively large (depleted); (iii) trade is superior to labor market integration if trading costs are no higher than private migration costs, otherwise the outcome is ambiguous; and (iv) the creation of new institutions in response to labor market integration has an ambiguous impact on welfare.     

Predators in the market: implications of market interaction on optimal resource management

A two-species bioeconomic model is analyzed, but in contrast to most similar models, there is no biological interaction between the species, only economic. The interaction takes place in the market where the quantity of either species may affect the price of the other. The effects of cross-price elasticities on the optimal steady state and on the optimal paths in the sole-owner case are investigated both analytically (steady states) and numerically (optimal paths). First, it is shown that if the harvest of one species has impact on the price of another species, then this has a positive effect on its steady-state stock. The effect increases with the stock-elasticity in the cost function. Further, in the case of linear demand functions, the steady state outcome depends solely on the sum of the cross-price parameters and not their individual values. Secondly, in the investigation of optimal paths, it is shown that if the harvest of one species has impact on the price of the other, optimal trajectories reach steady state faster for itself and slower for the other species. Further, when cross-price elasticities are sufficiently high, the paths go from being monotonic to feature over- or undershooting.     

Total effort, competitive balance and the optimal contest success function

This paper shows that, in the constrained case, the value weighted contest success function (CSF) maximizes not only total effort, but every objective function which is increasing in total effort and competitive balance. In the unconstrained case, a first price all-pay auction with a reserve price is optimal only if the impact of competitive balance on the objective is small. Otherwise, a modified value weighted CSF is optimal.     

Demand-side factors in optimal land conservation choice

The dominant paradigm of conservation-reserve planning in economics is to optimize the provision of physical conservation benefits given a budget constraint, implicitly assuming the value of biodiversity and ecosystem function is not affected by human proximity to that natural capital. There is evidence, however, that human willingness to pay (WTP) for conservation declines with distance—a phenomenon we call “spatial value decay”. This paper begins a new strand of the conservation planning literature that takes demand-side factors – location of people in the landscape, the degree to which WTP for conservation depends on proximity – into account. We use theoretical models of linear abstract landscapes to explore the impact of demand-side factors on two facets of conservation choices: siting of a single reserve when conservation potential is greatest near a critical site, and siting of multiple reserves when fragmentation reduces physical conservation services produced. Our results show how planners should sometimes employ increased fragmentation to capture value when people's preferences are not very highly localized, and how optimal policy balances proximity to the ecologically critical site with proximity to people. In some scenarios, the payoff to using a reserve design approach that considers demand-side factors is large, but we find that spatial value decay reduces the benefits that can be gained from any conservation-planning approach.     

Modeling the Economics of Biodiversity and Environmental Heterogeneity

It has long been recognized that major drivers of biodiversity loss include both the harvest of wild species and the conversion of habitat for productive purposes. Land that is converted may or may not be lost as habitat for many species. In some cases, monoculture production for example, land conversion reduces the number niches and hence the level of biodiversity. In other cases, it has the opposite effect. We address the problem of anthropogenic biodiversity change due to the effects of both harvest rates and land use decisions on landscape heterogeneity. If the optimal structure of the landscape is extremely homogeneous, forces of competitive exclusion will lead to a single surviving species. If it is extremely heterogeneous, multiple species will coexist, with each species exclusively dominating the patch type to which it is best suited. Where changes in biodiversity due to changes in landscape heterogeneity are not taken into account in land use decisions, they are external effects of those decisions. We identify measures of these effects.     

国际资本流动“突然停止”、消费平滑与最优外汇储备持有量*

通常认为外汇储备具有抵御外部冲击、平滑居民消费、增进社会福利的作用。循此逻辑,文章构建了三部门模型模拟了货币当局面临资本流动“突然停止”时,出于平滑消费目的的最优储备持有行为。研究发现：中国静态最优外汇储备量约占GDP的1926%;中国实际储备与最优储备的差额自2010年起稳定在18万亿美元;最优外汇储备量与“突然停止”发生概率及其导致的产出损失、短期外债规模、居民存款规模及危机时的资产置换比率、风险规避程度正相关,与银行备付金比率、国际风险溢价程度负相关;从危机应急的角度看,提高银行备付金比率、控制居民存款置换外币比例能有效节约外汇储备,但从长远来看控制国内短期外债规模、确保银行稳健运营才是应对国际资本“突然停止”风险的关键。     

云南大山包自然保护区人为噪声分布预测及其对黑颈鹤的潜在影响

人为噪声对生物多样性及动物行为已产生多方面的影响,成为造成生物多样性下降的不可忽视且更加隐蔽的因素,中国相关研究较为缺乏。保护地作为物种和生物多样性保护的首要空间,也日益受到人为噪声的影响,而国内此类研究更是鲜有报道。以云南大山包国家级自然保护区为例,调查了保护区内的人为噪声类型、声级和分布;研究所指的人为噪声包括交通噪声和游客噪声。通过CandaA和GIS模拟了保护区内交通噪声的影响范围,并基于欧盟寂静地标准模拟了游客噪声的影响范围。进而基于上述结果,分析了人为噪声对于大山包自然保护区栖息地濒危物种黑颈鹤(Grus nigricollis)的潜在影响。研究揭示,大山包自然保护区的黑颈鹤全部夜栖地和重要日间觅食地皆处于交通噪声的影响之下,尤其以大海子所受影响最大。交通和游客噪声形成的明显叠加效应,扩大了噪声影响范围。游客噪声与黑颈鹤鸣叫在480~2 000Hz范围产生了较大重叠,以1 000Hz重叠度最高;游客噪声对黑颈鹤影响明显,30名游客可产生75dBA噪声,影响范围可达480m。人为噪声可直接影响黑颈鹤的夜栖和觅食行为,进而影响其生境选择与空间分布,因此建议保护区加强对游客流量及行为的限制、提升观测设施隐蔽度及消声效果、控制重点区域车流量,以达到更好的黑颈鹤保护目的。基于此,也对类似的自然保护地的声景保护与管理提出了建议。     

Species protection from current reserves: Economic and biological considerations, spatial issues and policy evaluation

The expansion of nature reserves is an important public policy strategy for the protection of biological diversity. In this paper, the authors use integer programming model structures derived from Location Set Covering Problem and Maximal Covering Location Problem approaches of location science as tools for selectively augmenting nature reserve sites for special status species protection. The linear programming models presented incorporate the following: biological constraints in the form of species' area needs; economic constraints in the form of opportunity costs of converting smaller administrative districts into nature reserves; and spatial constraints in the form of required connectivity among districts in site selection. The construction of a taxonomic data set for Thailand enables the implementation of the models, the comparison of results and evaluation of the differences in outcomes. The models build upon the existing nature reserve network in Thailand and suggest various public policy options that would augment the reserves for enhancing species protection and for possibly improving national conservation efforts at lowest costs.     

Alternative targets and economic efficiency of selecting protected areas for biodiversity conservation in boreal forest

We examine the relative merits of alternative forest biodiversity targets, which give different weights to species according to their conservation status and abundance. A site selection framework is used for choosing the habitat-protection strategy that maximizes biodiversity subject to an upper bound on funding with six alternative conservation goals. By using Finnish data on old-growth forests, we found that alternative conservation goals yield different benefit-cost tradeoffs. Goals relying on complementarity between protected stands result in great marginal costs at a high conservation level. Therefore, under these conditions it may not be economically efficient to establish a large conservation network to protect all species in a given area. In contrast, a large conservation network is more likely to be justified when the habitat-protection strategy focuses on species abundance. The trade-offs between alternative objectives are explicitly measured by incrementally varying the weights given to the species. We found that the targets for all species representation and species abundance can largely be met simultaneously. Protecting red-listed species reduces overall species coverage and species abundance particularly at low budget levels.     

Internet auctions with many traders

We study a multi-unit auction environment similar to eBay. Sellers, each with a single unit of a homogeneous good, set reserve prices at their own second-price auctions. Each buyer has private value for the good and wishes to acquire a single unit. Buyers can bid as often as they like and move between auctions. We characterize a perfect Bayesian equilibrium for this decentralized dynamic mechanism in which, conditional on reserve prices, an efficient set of trades occurs at a uniform price. In a large but finite market, the sellers set reserve prices equal to their true costs under a very mild distributional assumption, so ex post efficiency is achieved. Buyers’ strategies in this equilibrium are simple and do not depend on their beliefs about other buyers’ valuations, or the number of buyers and sellers.     

中国外汇储备增长对物价水平的影响

外汇储备快速增长与物价水平上升已成为我国经济中的两个突出问题。目前中外学者关于外汇储备与物价水平之间关系存在着不同观点;基于中央银行的资产负债表和货币数量理论,对外汇储备增长对物价水平的影响进行理论分析;表明：从长期来看,我国外汇储备增长可以通过影响货币供应量而间接影响消费物价指数,从而增加物价上涨的压力。     

Balance-of-payments anti-crises

China and Switzerland have recently experienced foreign exchange reserve accumulation far in excess of what would be implied by the literature on optimal reserves. Using a dynamic general equilibrium model, we show that the credible expectation of an upper limit to how many reserves a country is willing to accumulate would lead to a balance-of-payments anti-crisis. This is characterized by an accelerated pre-crisis accumulation of foreign exchange reserves, followed by a collapse of the monetary target that is instantaneous under exchange rate targeting and gradual under price level targeting. We argue that Switzerland has recently experienced such an event.     

Interest on Reserves and the Flexibility of Monetary Policy in the Euro Area

This paper shows that remunerating required reserves can increase the flexibility of monetary policy. The remuneration at the current policy rate implies constant net marginal interest costs of holding required reserves. This allows the central bank to change the policy rate also within a reserve maintenance period without inducing a problematic reserve shifting on behalf of the banks. In the euro area, required reserves are remunerated at an average rate. Therefore, the way in which reserves are remunerated has to be changed in order to make use of the advantage of a higher flexibility of monetary policy.     

Intraday trade in dealership markets

We develop and test a structural asymmetric information transaction model to characterize the price impact of information when markets are thin. Since orders are accepted individually, the model allows for transaction costs and brokerage fees. Equilibrium demands mixed entry strategies on the part of potentially informed traders. Estimation of the structural parameters is performed using a maximum likelihood procedure on NYSE data. The structural model is rejected primarily because the nonlinear restrictions do not allow for sufficient correlation between price movements and pricing errors. This leads to unreasonably low estimates of the probability of informed trade relative to an unrestricted alternative. The price impact of information is found to be positive and significant, but economically small. This is because although the amount of private information is substantial, the quality of the information signals is poor, particularly in the middle of the trading day. Informed agents do not trade small quantities, which suggests that their ability to divide orders is limited by transaction costs.     

Inflation,price dispersion and market integration through the lens of a monetary search model

Monetary search theory implies that the real effects of inflation via its impact on price dispersion depend on the level of search costs and, thus, on the level of market integration. For less integrated markets, the inflation–price dispersion nexus is predicted to be asymmetrically V-shaped which results in an optimal inflation rate above zero. For highly integrated markets with low search costs, however, the impact of inflation on price dispersion should only be small. Using price data of the European Union member states, this paper tests and confirms these predictions of monetary search theory.     

Foreign exchange reserve adequacy and exogenous shocks

One of the traditional benchmarks in international macroeconomics is that a country should maintain reserves that can cover at least 12 weeks of imports. The notion of reserve adequacy, however, is not static and is intimately associated with the occurrence of financial crises as well as exogenous shocks, with many observers using the reduction in reserves below this benchmark as a sign of fragility. This article provides a benefit-cost type approach to evaluating reserve adequacy. The benefits of holding reserves are evaluated using a dynamic random effects probit model of financial crises while the cost of reserve holdings (output loss due to an over-investment in reserves) is obtained from a panel growth equation. Using the methodology outlined above, the study finds that in small states, the optimal holding of foreign exchange reserves is approximately 25 weeks of imports, approximately 13 weeks higher than the international rule-of-thumb. This estimate of optimal reserve holdings is interrelated with the economic characteristics of the country, particularly its fiscal stance. Indeed, this article finds that countries with a prudent public expenditure management framework in place are able to hold a smaller stock of reserves without necessarily impacting the expected growth for the country.