Subsidizing extra jobs : the economics of marginal employment subsidies

Employment subsidies, wage subsidies, unemployment, displacement

economics of happiness : an empirical analysis of the effects of (un-)employment on individual life satisfaction

Magdeburg, Univ., Fak. für Wirtschaftswiss., Diss., 2010

Empiricism in ecological economics: a perspective from complex systems theory

Economies are open complex adaptive systems far from thermodynamic equilibrium, and neo-classical environmental economics seems not to be the best way to describe the behaviour of such systems. Standard econometric analysis (i.e. time series) takes a deterministic and predictive approach, which encourages the search for predictive policy to ‘correct’ environmental problems. Rather, it seems that, because of the characteristics of economic systems, an ex-post analysis is more appropriate, which describes the emergence of such systems’ properties, and which sees policy as a social steering mechanism. With this background, some of the recent empirical work published in the field of ecological economics that follows the approach defended here is presented. Finally, the conclusion is reached that a predictive use of econometrics (i.e. time series analysis) in ecological economics should be limited to cases in which uncertainty decreases, which is not the normal situation when analysing the evolution of economic systems. However, that does not mean we should not use empirical analysis. On the contrary, this is to be encouraged, but from a structural and ex-post point of view.

Ecological economics

Ecological economics is a recently developed field, which sees the economy as a subsystem of a larger finite global ecosystem. Ecological economists question the sustainability of the economy because of its environmental impacts and its material and energy requirements, and also because of the growth of population. Attempts at assigning money values to environmental services and losses, and attempts at correcting macroeconomic accounting, are part of ecological economics, but its main thrust is rather in developing physical indicators and indexes of sustainability. Ecological economists also work on the relations between property rights and resource management, they model the interactions between the economy and the environment, they study ecological distribution conflicts, they use management tools such as integrated environmental assessment and multi-criteria decision aids, and they propose new instruments of environmental policy.

Leveraging the Sydney Olympics for tourism

Paper presented at the 2000 seminar of the International Chair in Olympism. Key issues of the seminar included references to the concern for legacy in terms of tourism, benefits and challenges of the Olympic Games and strategic needs, among others.

Tourism and urban transport: holding demand pressure under supply constraints

Scholars and local planners are increasingly interested in tourism contribution to economic and social development. To this regard, several European cities lead the world rankings on tourist arrivals, and their governments have promoted tourism activity. Mobility is an essential service for tourists visiting large cities, since it is a crucial factor for their comfort. In addition, it facilitates the spread of benefits across the city. The aim of this study is to determine whether city planners respond to this additional urban transport demand pressure by extending supply services. We use an international database of European cities. Our results confirm that tourism intensity is a demand enhancing factor on urban transport. Contrarily, cities do not seem to address this pressure by increasing service supply. This suggests that tourism exerts a positive externality on public transport since it provides additional funding for these services, but it imposes as well external costs on resident users because of congestion given supply constraints.

Explaining High Economic Growth in Small Tourism Countries with a Dynamic General Equilibrium Model

This paper shows that tourism specialisation can help to explain the observed high growth rates of small countries. For this purpose, two models of growth and trade are constructed to represent the trade relations between two countries. One of the countries is large, rich, has an own source of sustained growth and produces a tradable capital good. The other is a small poor economy, which does not have an own engine of growth and produces tradable tourism services. The poor country exports tourism services to and imports capital goods from the rich economy. In one model tourism is a luxury good, while in the other the expenditure elasticity of tourism imports is unitary. Two main results are obtained. In the long run, the tourism country overcomes decreasing returns and permanently grows because its terms of trade continuously improve. Since the tourism sector is relatively less productive than the capital good sector, tourism services become relatively scarcer and hence more expensive than the capital good. Moreover, along the transition the growth rate of the tourism economy holds well above the one of the rich country for a long time. The growth rate differential between countries is particularly high when tourism is a luxury good. In this case, there is a faster increase in the tourism demand. As a result, investment of the small economy is boosted and its terms of trade highly improve.

Political economics and normative analysis

The approaches and opinions of economists often dominate public policy discussion. Economists have gained this privileged position partly (or perhaps mainly) because of the obvious relevance of their subject matter, but also because of the unified methodology (neo-classical economics) that the vast majority of modern economists bring to their analysis of policy problems and proposed solutions. The idea of Pareto efficiency and its potential trade-off with equity is a central idea that is understood by all economists and this common language provides the economics profession with a powerful voice in public affairs. The purpose of this paper is to review and reflect upon the way in which economists find themselves analysing and providing suggestions for social improvements and how this role has changed over roughly the last 60 years. We focus on the fundamental split in the public economics tradition between those that adhere to public finance and those that adhere to public choice. A pure public finance perspective views failures in society as failures of the market. The solutions are technical, as might be enacted by a benevolent dictator. The pure public choice view accepts (sometimes grudgingly) that markets may fail, but so, it insists, does politics. This signals institutional reforms to constrain the potential for political failure. Certain policy recommendations may be viewed as compatible with both traditions, but other policy proposals will be the opposite of that proposed within the other tradition. In recent years a political economics synthesis emerged. This accepts that institutions are very important and governments require constraints, but that some degree of benevolence on the part of policy makers should not be assumed non-existent. The implications for public policy from this approach are, however, much less clear and perhaps more piecemeal. We also discuss analyses of systematic failure, not so much on the part of markets or politicians, but by voters. Most clearly this could lead to populism and relaxing the idea that voters necessarily choose their interests. The implications for public policy are addressed. Throughout the paper we will relate the discussion to the experience of UK government policy-making.

Industrial Structure, Trade and Regional Economics : Market Segmentation

We consider a general equilibrium model a la Bhaskar (Review of Economic Studies 2002): there are complementarities across sectors, each of which comprise (many) heterogenous monopolistically competitive firms. Bhaskar's model is extended in two directions: production requires capital, and labour markets are segmented. Labour market segmentation models the difficulties of labour migrating across international barriers (in a trade context) or from a poor region to a richer one (in a regional context), whilst the assumption of a single capital market means that capital flows freely between countries or regions. The model is solved analytically and a closed form solution is provided. Adding labour market segmentation to Bhaskar's two-tier industrial structure allows us to study, inter alia, the impact of competition regulations on wages and - financial flows both in the regional and international context, and the output, welfare and financial implications of relaxing immigration laws. The analytical approach adopted allows us, not only to sign the effect of policies, but also to quantify their effects. Introducing capital as a factor of production improves the realism of the model and refi nes its empirically testable implications.

Where is the economics in spatial econometrics?

Spatial econometrics has been criticized by some economists because some model specifications have been driven by data-analytic considerations rather than having a firm foundation in economic theory. In particular this applies to the so-called W matrix, which is integral to the structure of endogenous and exogenous spatial lags, and to spatial error processes, and which are almost the sine qua non of spatial econometrics. Moreover it has been suggested that the significance of a spatially lagged dependent variable involving W may be misleading, since it may be simply picking up the effects of omitted spatially dependent variables, incorrectly suggesting the existence of a spillover mechanism. In this paper we review the theoretical and empirical rationale for network dependence and spatial externalities as embodied in spatially lagged variables, arguing that failing to acknowledge their presence at least leads to biased inference, can be a cause of inconsistent estimation, and leads to an incorrect understanding of true causal processes.

Comparing the early research performance of PhD graduates in labor economics in Europe and the USA

This paper analyzes the early research performance of PhD graduates in labor economics, addressing the following questions: Are there major productivity differences between graduates from American and European institutions? If so, how relevant is the quality of the training received (i.e. ranking of institution and supervisor) and the research environment in the subsequent job placement institution? The population under study consists of labor economics PhD graduates who received their degree in the years 2000 to 2005 in Europe or the USA. Research productivity is evaluated alternatively as the number of publications or the quality-adjusted number of publications of an individual. When restricting the analysis to the number of publications, results suggest a higher productivity by graduates from European universities than from USA universities, but this difference vanishes when accounting for the quality of the publication. The results also indicate that graduates placed at American institutions, in particular top ones, are likely to publish more quality-adjusted articles than their European counterparts. This may be because, when hired, they already have several good acceptances or because of more focused research efforts and clearer career incentives.

The economics of power and control

John Hardman Moore outlines his joint research with Oliver Hart, looking at the economics of power and control and the foundations of contractual incompleteness

An Optimised Illustrative Investment Model Of The Economics Of Integrated Returns From CCS Deployment In The UK/UKCS

NORTH SEA STUDY OCCASIONAL PAPER No. 118

The Economics of CO2-EOR Cluster Developments in the UK Central North Sea/ Outer Moray Firth

NORTH SEA STUDY OCCASIONAL PAPER No. 123