Are More Innovative Firms Less Vulnerable to New Environmental Regulation?

Compliance with pollution limits and standards requires firms to implement adaptation processes that are not only costly themselves but also affect future profits in as much as they modify production systems and methods. This paper attempts to respond to the question of how technological knowledge moderates the effect that the implementation of a new environmental regulation has on the results of affected firms. The regulation selected for this study is the Integrated Pollution Prevention and Control Act (IPPC). A Multivariate Regression Model (MVRM) has been applied to the regulatory event. The most important implication of this paper is that technological knowledge prepares a firm for adapting to a greater environmental demand such as may be derived from a new regulation. This paper has been developed under the objectives of the CREVALOR Research Group (DGA-Spain). Moreover, it has been financed by the MEC-FEDER Research Project SEJ2005-07341.     

Hysteresis versus NAIRU and convergence versus divergence: The behavior of regional unemployment rates in Brazil

The aim of this work is to analyze the regional unemployment rate behavior in Brazil. Firstly, unit root tests with structural breaks were used to determine which theoretical framework – hysteresis or NAIRU – is more appropriate to explain the unemployment dynamics not only in six Brazilian metropolitan areas – São Paulo, Rio de Janeiro, Belo Horizonte, Porto Alegre, Salvador and Recife – but also at national level. Hysteresis is found to be the best choice in five, but Rio de Janeiro. This indicates a high persistence in the Brazilian regional unemployment rate. Secondly, we investigated whether these five metropolitan regions, characterized by the hysteresis effect, show a stochastic convergence. The latter was found in every case, but Porto Alegre.     

Measuring Synchronization and Convergence of Business Cycles for the Euro area,UK and US*

This paper investigates business cycle relations among different economies in the Euro area. Cyclical dynamics are explicitly modelled as part of a time series model. We introduce mechanisms that allow for increasing or diminishing phase shifts and for time‐varying association patterns in different cycles. Standard Kalman filter techniques are used to estimate the parameters simultaneously by maximum likelihood. The empirical illustrations are based on gross domestic product (GDP) series of seven European countries that are compared with the GDP series of the Euro area and that of the US. The original integrated time series are band‐pass filtered. We find that there is an increasing resemblance between the business cycle fluctuations of the European countries analysed and those of the Euro area, although with varying patterns.     

Time and uncertainty in resource dilemmas: equilibrium solutions and experimental results

Most common pool resource (CPR) dilemmas share two features: they evolve over time and they are managed under environmental uncertainties. We propose a stylized dynamic model that integrates these two dimensions. A distinguishing feature of our model is that the duration of the game is determined endogenously by the users’ collective decisions. In the proposed model, if the resource stock level below which the irreversible event occurs is known in advance, then the optimal resource use coincides with a unique symmetric equilibrium that guarantees survival of the resource. As the uncertainty about the threshold level increases, resource use increases if users adopt decision strategies that quickly deplete the resource stock, but decreases if they adopt path strategies guaranteeing that the unknown threshold level is never exceeded. We show that under relatively high uncertainty about resource size, CPR users frequently implement decision strategies that terminate the game immediately. When this uncertainty is reduced, they maintain a positive resource level for longer durations.