Residential Search and Mobility in a Housing Market Equilibrium Model

In this paper, we propose an equilibrium model for the housing market which provides an explanation for observed housing consumption of households over their lifetimes. The moving behavior of households is described as a stochastic dynamic process in which households moving decisions depend on information which is obtained over time. Households move when the offer exceeds an endogenously determined threshold. On the basis of the households moving behavior, the steady-state distribution of households over the housing stock is obtained. On the supply side of the market, landlords are looking for households to occupy their vacant dwellings. Their strategy is to set rents in a mixed strategy in order to profit from imperfect information. After formulating search behavior of households as well as the behavior of landlords, the market equilibrium is derived. We explore the sensitivity of the equilibrium to changes in the structural parameters.     

Assessing agricultural trade policies options with the European Union: a Brazilian perspective

Brazil has shown interest in agricultural trade negotiations at bilateral, regional, and multilateral levels. This study addresses several important negotiations, using the agricultural sector model CAPRI (Common Agricultural Policy Regional Impact Analysis), to analyze liberalization scenarios between the European Union and the Mercosur countries focusing particularly on their impacts in Brazil. Four possible agreements between Europe and Mercosur are simulated, including a broader multilateral agreement proposed in the G20. The results suggest that a bilateral scenario involving larger tariff rate quota increase, as called for by Mercosur, generates larger gains than accepting the European Union proposal of 2004 or further multilateral trade liberalization based on the G20 proposal. However, much larger increases in tariff rate quotas for all products are not necessarily justified in all cases. Moreover, Brazil's production and export potential is limited by factors other than trade restrictions.     

Europe’s Path Towards the Socio-Ecological Transition

Beset by an unprecedented combination of challenges including globalisation, demographic shifts, high unemployment and climate change, Europe is in dire need of a new kind of growth and development strategy. The authors of this Forum make compelling arguments for a socioecological transition, in which traditional measures of progress like GDP growth are downplayed in favour of factors such as social inclusion, environmental welfare, high levels of employment and the well-being of European citizens. This Forum explores some of the issues that must be resolved in order to fully achieve the socio-ecological transition, including the necessary decoupling of non-renewable energy use from GDP growth, the reduction of income and wealth inequalities, and the encouragement of innovation that is not based on fossil fuel technology. The Forum presents an optimistic path forward for the continent, with practical policy solutions that do not ignore the many obstacles facing a successful transition.     

Environmental regulation and investment: Evidence from European industry data

This paper contributes to the empirical literature on the effects of environmental regulation on investment. In particular, we ask whether and how strongly an industry's investment responds to stringency in environmental regulation. Environmental regulation is measured as (i) an industry's total current expenditure on environmental protection, and (ii) a country-industry's revenue from environmental taxes. Focusing on European data of manufacturing industries between 1998 and 2007, we estimate the differential impact of environmental stringency on four types of investment: gross investment in tangible goods, in new buildings, in machinery, and in ‘productive’ investment (investment in tangible goods minus investment in abatement technologies). Both environmental variables enter positively, and their quadratic terms exhibit significantly negative parameter estimates. This, in turn, indicates a positive but diminishing impact of environmental regulation on investment.     

National Indicators of Well-being: Lessons from Pacific Island Countries' Tourism

Are economic indicators the only nation-level variables that are predictive of future investment returns? Using the tourism industry of the nine independent Pacific Island countries, this study compares economic and non-economic predictors of web media tourism coverage. The results suggest that rather than economic and industry-specific indicators, health conditions, human rights and low population growth are significantly associated with our proxy measures of future performance. Our results support theory-derived predictions that national indicators of trust provide value-relevant information for investors.     

A politico-economic view of the debt-servicing capacity of emerging economies

While there are a multitude of approaches to analysing a country's debt-servicing capacity, these display a number of weaknesses, notably as regards the integration of political and economic risk factors. This article presents a stylised politicoeconomic model that highlights a number of determinants which have so far been neglected in the literature.     

Sectoral Wage Rigidities and Labour and Product Market Institutions in the Euro Area

We estimate wage Phillips curve relationships between sectoral wage growth, unemployment and productivity in a country-industry panel of euro area countries. We find that institutional rigidities – such as labour and product market institutions and regulations – limit the adjustment of euro area wages to unemployment, in both upturns and downturns, particularly in manufacturing and, to a lesser extent, in the construction and service sectors. In addition, there are further limitations in the response of wages to changes in unemployment during economic downturns which suggests that euro area wages are also characterised by significant downward wage rigidities, especially in the manufacturing sector. These results are robust to specifications that account for factors that may affect structural unemployment (such as duration-dependent unemployment effects), as well as changes in the skill composition of employment that may affect the evolution of aggregate wages. The results also hold for panels including or excluding the public sector (where wages may be determined differently to the private sector also due to the effects of fiscal consolidation on public sector wages during the crisis). From a policy perspective, reforms in product and labour markets which reduce wage rigidities can facilitate employment growth and enhance the rebalancing process in the euro area.     

Auto Insurance Ratings Impact on Price and Complaint Index

International Advances in Economic Research -     

The economic effects of the UK government's proposed Brexit deal

The focus of our analysis is on how the UK government's proposed Brexit deal is likely to affect the economy. First, we assess how trade, migration, foreign direct investment, productivity and contributions to the EU budget might change by reviewing current proposals against historical evidence. Second, we use the National Institute Global Econometric Model (NiGEM) to analyse the macroeconomic effects. Our assessment is that trade with the EU, especially in services, would be more costly after Brexit. This would be likely to have adverse effects on living standards in the UK. Our central estimate is that if the government's proposed Brexit deal is implemented, then GDP in the longer term will be around 3% lower per head than it would have been had the UK stayed in the EU. If the UK were to stay in a customs union with the EU, or if the Irish backstop position was to be invoked, there would still be a hit to GDP per capita of 2%. These estimates represent our considered view of the economic impact of the government's proposed Brexit deal, but they are themselves uncertain as there is no historical precedent of a country leaving a major trading block such as the EU.