Can the change in the composition of the US GDP explain the Great Moderation? A test via oil price shocks

The paper investigates whether the growing GDP share of the services sector can contribute to explain the great moderation in the US. We identify and analyze three oil price shocks and use a SVAR analysis to measure their economic impact on the US economy at both the aggregate and the sectoral level. We find mixed support for the explanation of the great moderation in terms of shrinking oil shock volatilities and observe that increases (decreases) in oil shock volatilities are contrasted by a weakening (strengthening) in their transmission mechanism. Across sectors, services are the least affected by any oil shock. As the contribution of services to the GDP volatility increases over time, we conclude that a composition effect contributed to moderate the conditional volatility to oil shocks of the US GDP.

Economic Effects of Global Warming under Stock Growth Uncertainty: The European Sardine Fishery

Global warming of the oceans is expected to alter the environmental conditions that determine the growth of a fishery resource. Most climate change studies are based on models and scenarios that focus on economic growth, or they concentrate on simulating the potential losses or cost to fisheries due to climate change. However, analysis that addresses model optimization problems to better understand of the complex dynamics of climate change and marine ecosystems is still lacking. In this paper a simple algorithm to compute transitional dynamics in order to quantify the effect of climate change on the European sardine fishery is presented. The model results indicate that global warming will not necessarily lead to a monotonic decrease in the expected biomass levels. Our results show that if the resource is exploited optimally then in the short run, increases in the surface temperature of the fishery ground are compatible with higher expected biomass and economic profit.