Optimal compliance with emission constraints: dynamic characteristics and the choice of technique

The paper analyzes how to comply with an emission constraint, which restricts the use of an established energy technique, given the two options to save energy and to invest in two alternative energy techniques. These techniques differ in their deterioration rates and the investment lags of the corresponding capital stocks. Thus, the paper takes a medium-term perspective on climate change mitigation, where the time horizon is too short for technological change to occur, but long enough for capital stocks to accumulate and deteriorate. It is shown that, in general, only one of the two alternative techniques prevails in the stationary state, although, both techniques might be utilized during the transition phase. Hence, while in a static economy only one technique is efficient, this is not necessarily true in a dynamic economy.      

The question mark over coal: Pollution,politics, and CO2

There is a growing concern about the effect of fossil-fuel burning, and the consequent increase in carbon dioxide (CO₂) concentration in the atmosphere. This increasing concentration is now well-documented, and although the evidence of actual or potential climate changes is not conclusive, the growth in energy consumption magnifies the importance of the possible dangers. This article highlights two aspects of the issue. The CO₂ increase will be mainly produced by coal. And whereas the increase in atmospheric CO₂ is now being imposed upon the world principally by the USA, the USSR, and Western Europe, the developing countries will probably be important contributors by early in the next century. Using world energy resource estimates and projections of the global production of CO₂ from fossil-fuel burning in the year 2025, the authors argue that it will be difficult to achieve an international consensus and commitment to deal with the issue. This is because of the relationship between economic growth, industrialisation, and the production of CO₂, and because of the distribution of the beneficial and harmful effects of any climatic change.     

Poor health as a precursor to consumer debt distress in South Africa

While it is well documented that severe consumer indebtedness can lead to mental and physical health problems including unhealthy coping mechanisms, the pathways from poor health to financial strain is still an understudied area. Using the National Income Dynamics Study (NIDS) data, this study examines the relationship between poor health and debt distress while controlling for the possible endogeneity between these two conditions and some health-related variables. The results indicate that poor health significantly increases the probability of financial strain. Insofar as poor health is associated with catastrophic healthcare costs and income deprivation, for instance through inability to work, other factors affecting health such as socioeconomic status and insurance might shape the contours of consumers’ debt performances in the face of health risk. Ultimately, health may be creating a vicious circle in which poor health affects the capacity to earn income and accumulate assets, which limits access to quality healthcare.     

Wasted waste: An evolutionary perspective on industrial by-products

Every production process gives rise to unintended outputs. We argue that whether an output is desired or undesired, is not given per se, but depends on the economic circumstances which change over time. As a result, by-products of one industry, first perceived as non-marketable wastes, may become desired inputs into other production processes. By adopting an evolutionary perspective on economic dynamics, in particular by exploiting the concept of niche exclusion, we identify favorable circumstances for undesired outputs to become marketable. To cope with the pace and unpredictability of economic evolution, we argue for a flexible policy system which favors outcome- over process-oriented waste management policies and balances the responsibility between consumers and producers on the one side, and the society as a whole on the other side.     

Die Erwartungen der Wirtschaft für 2017

In 2016, Germany’s economic sectors had mixed fortunes. Gross domestic income increased by 1.8% in total. The prospects for 2017 are hardly better and subject to uncertainties. Above all the results of the US presidential election and Brexit give cause to fear protectionist tendencies, which are especially adverse for the German export-oriented industries. As a result the representatives of industry and services associations expect in 2017 rather modest growth rates.     

Financial Structure of Farm Businesses Under Imperfect Capital Markets

Recent finance studies have considered whether gaps between a firm's costs of internal and external sources of investment funds, arising from capital market imperfections, influence its investment behavior and funding preferences. This study tests the applicability of the pecking order and partial adjustment theories of financial structure to farm businesses by fitting a set of simultaneous financial equations with farm panel data from Illinois. Model results indicate that Illinois farms adjust to long-run financial targets for equity, debt, and leasing, but that additional financing needs follow a pecking order that is stronger for farms with greater asymmetric information problems.     

DEBT AND DEPRESSION

We investigate the relationship between public debt ratios and per capita output using episodal data. Episodes of debt and depression occur far more frequently than expected. Growth is lower during episodes of low, moderate, and high debt ratios; while debt ratios are higher during depressions. We look at precedence of entries and exits in overlapping episodes, and the decomposition of the debt ratio during intervals just before and after overlaps. Output movements influence the debt ratio more during exit than entry. Debt movements often precede depressions. Developing countries account for these results almost exclusively. (JEL E32, E62, O47)