Environmental quality and welfare effects of improving the reporting capability of citizen monitoring schemes

Public participation in environmental monitoring to alert regulators to possible non-compliance events has been credited with improving environmental quality and regulatory efficiency. At the same time, the reporting capability of such citizen monitoring schemes is known to be limited due to technical and organizational deficiencies. Recent enthusiasm for outside interventions that address these deficiencies in order to lower environmental harm and raise overall welfare therefore seems justified. A game-theoretic analysis of a monitoring and enforcement regime with citizen monitoring shows, however, that the effects of such interventions are likely to be subtle. A higher reporting capability of citizens involves substitution effects that have ambiguous effects on the regulator??s monitoring and enforcement costs: Welfare can actually decline and environmental improvements will fall short of expectations. In an extreme scenario we show that improved citizen monitoring can even have adverse effects on environmental quality.     

Real interest rates: nonlinearity and structural breaks

Real interest rate is a crucial variable that determines the consumption, investment and saving behavior of individuals and thereby acts as a key policy tool that the central banks use to control the economy. Although many important theoretical models require the real interest rates to be stationary, the empirical evidence accumulated so far has not been able to provide conclusive evidence on the mean reverting dynamics of this variable. To resolve this puzzle we re-investigate the stochastic nature of the real interest rates by developing unit root tests for nonlinear heterogeneous panels where the alternative hypothesis allows for a smooth transition between deterministic linear trends around which stationary asymmetric adjustment may occur. When the newly developed panel unit root tests are applied to the real interest rates of the 17 OECD countries, we were able to uncover overwhelming empirical support in favor of mean reversion in the short-run and long-run real interest rates. Therefore, these results show that the conclusions drawn from a miss-specified test that ignores the presence of either nonlinearity, structural breaks or cross sectional dependence can give quite misleading results about the stochastic behavior of the real interest rates.     

INFLATION,NONOPTIMAL MONETARY ARRANGEMENTS AND THE BANKING IMPUTATION IN THE NATIONAL ACCOUNTS*

This paper demonstrates, with the use of some recent developments in neoclassical monetary theory, that the banking imputation problem in the national accounts arises because of the regulation of banks by Authorities. It demonstrates as well that the banking imputation problem is a manifestation of the failure of the Authorities to provide optimal monetary arrangements. Some comments on existing imputations, in the light of this theory, are provided.     

Uneven Development and the Destabilization of the North: a Keynesian view

Can Keynesian theory illuminate the questions of rising North–South trade in manufacturing, industrial relocation from North to South, rising wage inequality and unemployment in the North, and the consequent breakdown of Northern labour movements as effective political forces? I think so. Indeed I will argue here that the main relevance of Keynesian theory today may lie in its capacity to capture the dynamics of the North–South relationship, and especially the influence of Northern macroeconomic policy and Northern business cycles on industrial trading patters.     

Some evidence in defense of the vehicle currency hypothesis

The role of the dollar as a vehicle currency has been questioned by reference to patterns of trade invoicing. Here it is shown that a cross-section of country dollar holdings can be explained by reference to trade patterns.     

Book production and the onset of modern economic growth

We provide a new data set on per capita book production as a proxy for advanced literacy skills, and assess this relative to other measures. While literacy proxies very basic skills, book production per capita is an indicator for more advanced capabilities. Growth theory suggests that human capital formation plays a significant role in creating the ‘wealth of nations.’ This study tests whether human capital formation has an impact on early-modern growth disparities. In contrast to some previous studies which denied the role of human capital as a crucial determinant of long-term growth, we confirm its importance.