Energy consumption, economic growth and prices: A reassessment using panel VECM for developed and developing countries

This paper reinvestigates the energy consumption-GDP growth nexus in a panel error correction model using data on 20 net energy importers and exporters from 1971 to 2002. Among the energy exporters, there was bidirectional causality between economic growth and energy consumption in the developed countries in both the short and long run, while in the developing countries energy consumption stimulates growth only in the short run. The former result is also found for energy importers and the latter result exists only for the developed countries within this category. In addition, compared to the developing countries, the developed countries' elasticity response in terms of economic growth from an increase in energy consumption is larger although its income elasticity is lower and less than unitary. Lastly. the implications for energy policy calling for a more holistic approach are discussed. (c) 2006 Elsevier Ltd. All rights reserved.

Nonstationary brand variables in category management: A cointegration perspective

Category-management models serve to assist in the development of plans for pricing and promotions of individual brands. Techniques to solve the models can have problems of accuracy and interpretability because they are susceptible to spurious regression problems due to nonstationary time-series data. Improperly stated nonstationary systems can reduce the accuracy of the forecasts and undermine the interpretation of the results. This is problematic because recent studies indicate that sales are often a nonstationary time-series. Newly developed correction techniques can account for nonstationarity by incorporating error-correction terms into the model when using a Bayesian Vector Error-Correction Model. The benefit of using such a technique is that shocks to control variates can be separated into permanent and temporary effects and allow cointegration of series for analysis purposes. Analysis of a brand data set indicates that this is important even at the brand level. Thus, additional information is generated that allows a decision maker to examine controllable variables in terms of whether they influence sales over a short or long duration. Only products that are nonstationary in sales volume can be manipulated for long-term profit gain, and promotions must be cointegrated with brand sales volume. The brand data set is used to explore the capabilities and interpretation of cointegration.

On the estimation and comparison of short-rate models using the generalised method of moments

Subsequent to the influential paper of [Chan, K.C., Karolyi, G.A., Longstaff, F.A., Sanders, A.B., 1992. An empirical comparison of alternative models of the short-term interest rate. Journal of Finance 47, 1209-1227], the generalised method of moments (GMM) has been a popular technique for estimation and inference relating to continuous-time models of the short-term interest rate. GMM has been widely employed to estimate model parameters and to assess the goodness-of-fit of competing short-rate specifications. The current paper conducts a series of simulation experiments to document the bias and precision of GMM estimates of short-rate parameters, as well as the size and power of [Hansen, L.P., 1982. Large sample properties of generalised method of moments estimators. Econometrica 50, 1029-1054], J-test of over-identifying restrictions. While the J-test appears to have appropriate size and good power in sample sizes commonly encountered in the short-rate literature, GMM estimates of the speed of mean reversion are shown to be severely biased. Consequently, it is dangerous to draw strong conclusions about the strength of mean reversion using GMM. In contrast, the parameter capturing the levels effect, which is important in differentiating between competing short-rate specifications, is estimated with little bias. (c) 2006 Elsevier B.V. All rights reserved.

Vector Error-Correction Models in a consumer packaged goods category forecasting decision support system

A framework for developing marketing category management decision support systems (DSS) based upon the Bayesian Vector Autoregressive (BVAR) model is extended. Since the BVAR model is vulnerable to permanent and temporary shifts in purchasing patterns over time, a form that can correct for the shifts and still provide the other advantages of the BVAR is a Bayesian Vector Error-Correction Model (BVECM). We present the mechanics of extending the DSS to move from a BVAR model to the BVECM model for the category management problem. Several additional iterative steps are required in the DSS to allow the decision maker to arrive at the best forecast possible. The revised marketing DSS framework and model fitting procedures are described. Validation is conducted on a sample problem.

Fine root respiration in the mangrove Rhizophora mangle over variation in forest stature and nutrient availability

Root respiration uses a significant proportion of photosynthetically fixed carbon (C) and is a globally important source of C liberated from soils. Mangroves, which are an important and productive forest resource in many tropical and subtropical countries, sustain a high ratio of root to shoot biomass which may indicate that root respiration is a particularly important component in mangrove forest carbon budgets. Mangroves are often exposed to nutrient pollution from coastal waters. Here we assessed the magnitude of fine root respiration in mangrove forests in Belize and investigated how root respiration is influenced by nutrient additions. Respiration rates of excised fine roots of the mangrove, Rhizophora mangle L., were low (4.01 +/- 0.16 nmol CO2 g(-1) s(-1)) compared to those measured in temperate tree species at similar temperatures. In an experiment where trees where fertilized with nitrogen (N) or phosphorus (P) in low productivity dwarf forests (1-2 m height) and more productive, taller (47 m height) seaward fringing forests, respiration of fine roots did not vary consistently with fertilization treatments or with forest stature. Fine roots of taller fringe trees had higher concentrations of both N and P compared to dwarf trees. Fertilization with P enhanced fine root P concentrations in both dwarf and fringe trees, but reduced root N concentrations compared to controls. Fertilization with N had no effect on root N or P concentrations. Unlike photosynthetic C gain and growth, which is strongly limited by P availability in dwarf forests at this site, fine root respiration (expressed on a mass basis) was variable, but showed no significant enhancements with nutrient additions. Variation in fine root production and standing biomass are, therefore, likely to be more important factors determining C efflux from mangrove sediments than variations in fine root respiration per unit mass.