DELAYED OVERSHOOTING AND REAL EXCHANGE RATE PERSISTENCE IN AN IMPERFECT INFORMATION MODEL

Recent studies have pointed out that monetary shocks in sticky price models cannot generate real exchange rates that exhibit delayed overshooting and are highly persistent. This paper demonstrates that such exchange rate dynamics can be generated by incorporating incomplete information about the true nature of the monetary shock into a standard New Keynesian model of a small open economy.     

Explaining the size differences of exporter premia: theory and evidence

Two decades of research have established pronounced exporter productivity premia (EPP) and exporter size premia (ESP). Yet, we do not know why such exporter premia differ so widely in magnitude across countries or sectors? We take this question to the theory and to the data. We derive the sectoral EPP and ESP in a standard heterogeneous firms trade model and apply the insights from the model to guide our empirical investigation of detailed Danish firm-level data. We show that a significant share of the observed variation in EPP and ESP across sectors can be accounted for by sector differences in the underlying variation in productivity dispersion, variable trade costs, the ratio of fixed export costs to fixed costs of production, and the elasticity of demand.     

The International Reserves Issue in the EMU

This paper examines the effects of the Economic and Monetary Union on demand for foreign reserves. The traditional theory on demand for international reserves assigns a pivotal role to imports. However, in a currency union part of imports are settled in the common currency, leaving no incentive for keeping foreign reserves. Moreover, the pooling of the demand for reserves in the currency union and an increasing role of a currency as an international reserve currency may also influence, among other things, the union demand for reserves. Based on estimated demand functions for reserves it is shown that the Economic and Monetary Union has reduced the demand for reserves substantially. It is argued that an enlargement with new member countries of the European Union will result in further savings of reserves. A simple calculation at the end of the paper illustrates the welfare gain associated with the reduced need of reserves in the Economic and Monetary Union.     

Challenges for land system science

While considerable progress has been made in understanding land use change, land system science continues to face a number of grand challenges. This paper discusses these challenges with a focus on empirical land system studies, land system modelling and the analysis of future visions of land system change. Contemporary landscapes are contingent outcomes of past and present patterns, processes and decisions. Thus, empirical analysis of past and present land-use change has an important role in providing insights into the socio-economic and ecological processes that shape land use transitions. This is especially important with respect to gradual versus rapid land system dynamics and in understanding changes in land use intensity. Combining the strengths of empirical analysis with multi-scale modelling will lead to new insights into the processes driving land system change. New modelling methods that combine complex systems thinking at a local level with macro-level economic analysis of the land system would reconcile the multi-scale dynamics currently encapsulated in bottom-up and top-down modelling approaches. Developments in land use futures analysis could focus on integrating explorative scenarios that reflect possible outcomes with normative visions that identify desired outcomes. Such an approach would benefit from the broad and in-depth involvement of stakeholders in order to link scientific findings to political and societal decision-making culminating in a set of key choices and consequences. Land system models have an important role in supporting future land use policy, but model outputs require scientific interpretation rather than being presented as predictions. The future of land system science is strongly dependent on the research community's capacity to bring together the elements of research discussed in the paper, via empirical data collection and analysis of observed processes, computer simulation across scale levels and futures analysis of alternative, normative visions through stakeholder engagement.     

The Purchase of Equipment in Consumer Production of Outdoor Experiences

Consumers use combinations of goods to produce experiences. In order to produce outdoor experiences, consumers include environmental amenities as production factors in addition to purchasable instruments such as equipment. While amenities are not marketed, equipment is. Inspecting consumer purchases of the latter may uncover attitudes towards the former. Purchases of equipment are realized money outlays in a market and constitute lower bounds for the willingness to pay for one factor in outdoor experience production. This study investigates income and demographic effects in the demand for outdoor equipment over time in Norway, and examines the proportion of purchasing households for each year. Results show that equipment is a luxury item, and that it becomes more popular over time. The findings are relevant to policymakers in two ways since use of equipment may entail environmental degradation, but purchases of equipment may reflect a willingness to pay for environmental standards.     

An annual index of Irish industrial production, 1800–1913

We assemble the Irish industrial data currently available for the years 1800–1921, the period during which the entire island was in a political union with Great Britain, and construct an annual index of Irish industrial output for 1800–1913. We also construct a new industrial price index. Irish industrial output grew by an average of 1.3 per cent per annum between 1800 and the outbreak of the First World War. Industrial growth was slightly slower than previously thought, especially during the two decades immediately preceding the Great Famine. While Ireland did not experience absolute deindustrialisation either before the Famine or afterwards, its industrial growth was disappointing when considered in a comparative perspective.     

Can a Wealthy Economy Gain from an EU Membership? Adjustment Costs and Long Term Welfare Effects of Full Integration—The Norwegian Case

We employ a large scale macroeconometric model to study adjustment problems and long term welfare effects of a Norwegian EU-membership. Accession costs depend significantly on the country's level of GDP, the size of its agricultural sector and tariff and VAT revenues as these elements determine the net membership contribution. Without the transfers, integrating the economy into EU generates a small welfare gain. This result is strongly affected by a long period with under-utilisation of resources. With the net contribution included, we identify a welfare loss. This is especially so if fiscal policy is changed to maintain the public sector budgetary balance.     

Gender differences in recollections of economic socialization,financial self-efficacy,and financial literacy

The OECD/INFE international surveys of adult financial literacy (OECD/INFE 2016, 2020) show gender differences in financial literacy in developed countries in Europe. In this study, we examine whether these differences can be explained by gender differences in parental economic socialization using the Dutch 2018 DHS household survey. We investigate whether respondents' recollection of economic socialization when young predict their adult economic behavior and self-assessed financial knowledge. The results from ordinal logit and logistic regressions and for nonlinear equations decompositions reveal gender differences in the recollection of economic socialization and in how socialization practices are related to economic behavior and self-assessed financial knowledge. Men have to a greater degree than women been socialized in terms of having paid work outside the home, while women more often than men report that their parents controlled their spending. Moreover, we find gender differences in how men and women benefitted from the same socialization practices.     

Ecotour Guide Training in Less Developed Countries: Some Preliminary Research Findings

This paper presents a critical discussion of the internationally prevailing understanding of the concept 'sustainable tourism'. It is argued that the current focus on stationary activities and local, intensive environmental issues is too limited both in relation to the concept of tourism and the concept of sustainable development. There is no tourism without travel. And, as shown in a Norwegian research study, tourist travel is a major source of serious environmental problems. The paper emphasises that sustainable tourism should be linked to a concept of sustainable mobility. However, this mobility would imply not only a change in the means of transport but also a reduced level of mobility in the rich part of the world. As this would entail new forms of tourism, other than those solely based on auto- and aeromobility, it represents a major challenge for the future development of tourism.     

Targeting public services through the unequal treatment of unequals

When private goods are publicly provided, government authorities have to determine the distribution of in-kind benefits to recipients. In this paper, the public service provider is assumed to maximize utility defined over public service supply to different target groups, given a budget constraint. The production technology is target-group-specific and depends on the ability of each target group to produce service outcomes. Three benchmark allocation principles are identified: equality of treatment (ET), equality of outcome (EO), and equality of marginal cost (EMC). These principles can be considered to be consistent with special cases of a public preference model, which allows for compromises between different allocation principles. The condition of technological dominance implies that there is a clear-cut equity–productivity trade-off, whereas violations of this condition may reduce the significance of the trade-off.