Do Productivity Improvements Move Us Along the Environmental Kuznets Curve?

The Environmental Kuznets Curve (EKC) hypothesis focuses on the argument that rising prosperity will eventually be accompanied by falling pollution levels as a result of one or more of three factors: (1) structural change in the economy; (2) demand for environmental quality increasing at a more-than-proportional rate; (3) technological progress. Here, we focus on the third of these. In particular, energy efficiency is commonly regarded as a key element of climate policy in terms of achieving reductions in economy-wide CO2 emissions over time. However, a growing literature suggests that improvements in energy efficiency will lead to rebound (or backfire) effects that partially (or wholly) offset energy savings from efficiency improvements. Where efficiency improvements are aimed at the production side of the economy, the net impact of increased efficiency in any input to production will depend on the combination and relative strength of substitution, output/competitiveness, composition and income effects that occur in response to changes in effective and actual factor prices, as well as on the structure of the economy in question, including which sectors are targeted with the efficiency improvement. In this paper we consider whether increasing labour productivity will have a more beneficial, or more predictable, impact on CO2/GDP ratios than improvements in energy efficiency. We do this by using CGE models of the Scottish regional and UK national economies to analyse the impacts of a simple 5% exogenous (and costless) increase in energy or labour augmenting technological progress.

The Export Base Model with a Supply-Side Stimulus to the Export Sector

Paper delivered at the Western Regional Science Association Annual Conference, Sedona, Arizona, February, 2010.

Discretionary Policy in a Monetary Union with Sovereign Debt

This paper examines the interactions between multiple national fiscal policy- makers and a single monetary policy maker in response to shocks to government debt in some or all of the countries of a monetary union. We assume that national governments respond to excess debt in an optimal manner, but that they do not have access to a commitment technology. This implies that national fi scal policy gradually reduces debt: the lack of a commitment technology precludes a random walk in steady state debt, but the need to maintain national competitiveness avoids excessively rapid debt reduction. If the central bank can commit, it adjusts its policies only slightly in response to higher debt, allowing national fiscal policy to undertake most of the adjustment. However if it cannot commit, then optimal monetary policy involves using interest rates to rapidly reduce debt, with signifi cant welfare costs. We show that in these circumstances the central bank would do better to ignore national fiscal policies in formulating its policy.

The EMU sovereign-debt crisis: Fundamentals, expectations and contagion

We offer a detailed empirical investigation of the European sovereign debt crisis based on the theoretical model by Arghyrou and Tsoukalas (2010). We find evidence of a marked shift in market pricing behaviour from a ‘convergence-trade’ model before August 2007 to one driven by macro-fundamentals and international risk thereafter. The majority of EMU countries have experienced contagion from Greece. There is no evidence of significant speculation effects originating from CDS markets. Finally, the escalation of the Greek debt crisis since November 2009 is confirmed as the result of an unfavourable shift in countryspecific market expectations. Our findings highlight the necessity of structural, competitiveness-inducing reforms in periphery EMU countries and institutional reforms at the EMU level enhancing intra-EMU economic monitoring and policy co-ordination.

Rebound Effects from Increased Efficiency in the Use of Energy by UK Households

In this paper, we use CGE modelling techniques to identify the impact on energy use of an improvement in energy efficiency in the household sector. The main findings are that 1) when the price of energy is measured in natural units, the increase in efficiency yields only to a modification of tastes, changing as a result, the composition of household consumption; 2) when households internalize efficiency, the improvement in energy efficiency reduces the price of energy in efficiency units, providing a source of improved competitiveness as the nominal wage and the price level both fall; 3) the short-run rebound can be greater than the long run rebound if the household demand elasticity is the same for both time frames, however, the short run rebound is always lower than in the long-run if the demand for energy is relatively more elastic in the long-run; 4) the introduction of habit formation changes the composition of household consumption, modifying the magnitude of the household rebound only in the short-run. In this period, household and economy wide rebound are lowest for external habit formation and highest when consumers’ preferences are defined using a conventional utility function.

Universal banking, competition and risk in a macro model

A stylized macroeconomic model is developed with an indebted, heterogeneous Investment Banking Sector funded by borrowing from a retail banking sector. The government guarantees retail deposits. Investment banks choose how risky their activities should be. We compared the benefits of separated vs. universal banking modelled as a vertical integration of the retail and investment banks. The incidence of banking default is considered under different constellations of shocks and degrees of competitiveness. The benefits of universal banking rise in the volatility of idiosyncratic shocks to trading strategies and are positive even for very bad common shocks, even though government bailouts, which are costly, are larger compared to the case of separated banking entities. The welfare assessment of the structure of banks may depend crucially on the kinds of shock hitting the economy as well as on the efficiency of government intervention.

Market Competition and Lower Tier Incentives

The relationship between competition and performance-related pay has been analyzed in single-principal-single-agent models. While this approach yields good predictions for managerial pay schemes, the predictions fail to apply for employees at lower tiers of a firm's hierarchy. In this paper, a principal-multi-agent model of incentive pay is developed which makes it possible to analyze the effect of changes in the competitiveness of markets on lower tier incentive payment schemes. The results explain why the payment schemes of agents located at low and mid tiers are less sensitive to changes in competition when aggregated firm data is used. Journal of Economic Literature classiffication numbers: D82, J21, L13, L22. Keywords: Cournot Competition, Contract Delegation, Moral Hazard, Entry, Market Size, Wage Cost.

Human Capital in Economic Development: From Labour Productivity to Macroeconomic Impact

Micro-econometric evidence reveals high private returns to education, most prominently in low-income countries. However, it is disputed to what extent this translates into a macro-economic impact. This paper projects the increase in human capital from higher education in Malawi and uses a dynamic applied general equilibrium model to estimate the resulting macroeconomics impact. This is contingent upon endogenous adjustments, in particular how labour productivity affects competitiveness and if this in turn stimulates exports. Choice among commonly applied labour market assumptions and trade elasticities results in widely different outcomes. Appraisal of such policies should consider not only the impact on human capital stocks, but also adjustments outside the labour market.

Predators promote defence of rhizosphere bacterial populations by selective feeding on non-toxic cheaters.

Soil pseudomonads increase their competitiveness by producing toxic secondary metabolites, which inhibit competitors and repel predators. Toxin production is regulated by cell-cell signalling and efficiently protects the bacterial population. However, cell communication is unstable, and natural populations often contain signal blind mutants displaying an altered phenotype defective in exoproduct synthesis. Such mutants are weak competitors, and we hypothesized that their fitness depends on natural communities on the exoproducts of wild-type bacteria, especially defence toxins. We established mixed populations of wild-type and signal blind, non-toxic gacS-deficient mutants of Pseudomonas fluorescens CHA0 in batch and rhizosphere systems. Bacteria were grazed by representatives of the most important bacterial predators in soil, nematodes (Caenorhabditis elegans) and protozoa (Acanthamoeba castellanii). The gacS mutants showed a negative frequency-dependent fitness and could reach up to one-third of the population, suggesting that they rely on the exoproducts of the wild-type bacteria. Both predators preferentially consumed the mutant strain, but populations with a low mutant load were resistant to predation, allowing the mutant to remain competitive at low relative density. The results suggest that signal blind Pseudomonas increase their fitness by exploiting the toxins produced by wild-type bacteria, and that predation promotes the production of bacterial defence compounds by selectively eliminating non-toxic mutants. Therefore, predators not only regulate population dynamics of soil bacteria but also structure the genetic and phenotypic constitution of bacterial communities.

The Black Box of Business Dynamics

Research in business dynamics has been advancing rapidly in the last years but the translation of the new knowledge to industrial policy design is slow. One striking aspect in the policy area is that although research and analysis do not identify the existence of an specific optimal rate of business creation and business exit, governments everywhere have adopted business start-up support programs with the implicit principle that the more the better. The purpose of this article is to contribute to understand the implications of the available research for policy design. Economic analysis has identified firm heterogeneity as being the most salient characteristic of industrial dynamics, and so a better knowledge of the different types of entrepreneur, their behavior and their specific contribution to innovation and growth would enable us to see into the ‘black box’ of business dynamics and improve the design of appropriate public policies. The empirical analysis performed here shows that not all new business have the same impact on relevant economic variables, and that self-employment is of quite a different economic nature to that of firms with employees. It is argued that public programs should not promote indiscriminate entry but rather give priority to able entrants with survival capacities. Survival of entrants is positively related to their size at birth. Innovation and investment improve the likelihood of survival of new manufacturing start-ups. Investment in R&D increases the risk of failure in new firms, although it improves the competitiveness of incumbents.

Are parties domocratizing themselves? the evolution of leardership selection in Spain (1977-2008)

The aim of this paper is to verify, for the Spanish case, whether between 1977 and 2008 has increased the internal democracy of the major political parties (PSOE, AP / PP, PCE / IU, PNV and CDC). To do this, we will focus on their leadership selection processes, one of the key elements associated with intra-party democracy. The paper is going to introduce data on four different dimensions of leadership selection: the certification process, the voting procedure, the inclusiveness of the selectorate and, finally, the degree of competitiveness. The results will show that have been few changes in the leadership selection processes of the Spanish political parties since 1977. However, the results of the Spanish case will also be used to suggest some preliminary links between the four dimensions.

The Academic Work and Careers in Europe : Trends, Challenges, Perspectives

This book explores the perceptions of academic staff and representatives of institutional leadership about the changes in academic careers and academic work experienced in recent years. It emphasizes standardization and differentiation of academic career paths, impact of new forms of quality management on academic work, changes in recruitment, employment and working conditions, and academics' perceptions of their professional contexts. The book demonstrates a growing diversity within the academic profession and new professional roles inhabiting a space which is neither located in the core business of teaching and research nor at the top level management and leadership. The new higher education professionals tend to be important change agents within the higher education institutions not only fulfilling service and bridging functions but also streamlining academic work to make a contribution to the reputation and competitiveness of the institutions as a whole. Based on interviews with academic staff, this book explores the situation in eight European countries: Austria, Croatia, Finland, Germany, Ireland, Romania, and Switzerland.

Implantació de noves metodologies docents en el pla d'estudis de l'EUETII d'Igualada en el marc de l'EEES

Aquest projecte pretén incorporar a la titulació d’Enginyeria Tècnica en Química Industrial les competències transversals amb què hauran de comptar els futurs enginyers perquè entrin en el món laboral amb tots els requisits tècnics i competencials que requereixen els canvis dels models educatius (crèdits ECTS) i la canviant situació laboral en l’àmbit de la Unió Europea. La incorporació de competències transversals en les assignatures del pla d’estudis és un dels eixos bàsics plantejats en el Pla Estratègic 2005-2009 de l’Escola Universitària d’Enginyeria Tècnica Industrial d’Igualada. Aquest procés s’ha portat a terme en quatre fases: Disseny: Implicar els empresaris en el disseny de programes de formació que capacitin els estudiant en les competències que demana el mercat de treball. Presentació: Sensibilitzar els professors i els alumnes de la importància de desenvolupar competències transversals dins del marc actual i futur de l’ensenyament. Planificació de les assignatures: Portar a terme la incorporació de competències transversals de forma gradual des del primer curs i donar suport i formació a tot el professorat. Difusió: Divulgar la important transformació que s’està realitzant a l’Escola dins de l’àmbit de la nova implantació de competències transversals per formar als enginyers per tal de fer-los més competitius. Per a aconseguir l’adaptació de les assignatures del pla d’estudis a les noves directrius de l’EEES s’ha treballat des de dues vessants: a) introduint canvis metodològics en la forma d’impartir les assignatures per part del professorat per permetre la incorporació de competències transversals, com ara el treball en equip, a través de l’aprenentatge basat en projectes, i la competència lingüística en anglès, a partir de la introducció de l’anglès a l’aula, i b) adaptant al nou sistema la documentació associada a les matèries que s’imparteixen: guia docent, guies de les assignatures, etc.

IPH response to DSD Urban Regeneration and Community Development Policy Framework Consultation

The Urban Regeneration and Community Development Policy Framework for Northern Ireland sets out for DSD and its partners, clear priorities for urban regeneration and community development programmes, both before and after the operational responsibility for these is transferred to councils under the reform of local government. Four policy objectives have been developed, which will focus on the underlying structural problems in urban areas and also help strengthen community development throughout Northern Ireland. The policy objectives are as follows: Policy Objective 1 – To tackle area-based deprivation: Policy Objective 2 – To strengthen the competitiveness of our towns and cities: Policy Objective 3 – To improve linkages between areas of need and areas of opportunity: and Policy Objective 4 –To develop more cohesive and engaged communities. Key points from IPH response Urban regeneration and community development provide a basis for addressing the social determinants of health and reducing inequalities in health. This policy framework presents an opportunity for coherence and complementarity with ‘Fit and Well - Changing Lives’ as part of government’s overall approach to tackling health inequalities. It is now well established that a focus on early years’ interventions and family support services yields significant returns, so prioritising action in these areas is essential. Defined action plans on child poverty are essential if this policy framework is to make a real and lasting difference in deprived urban areas. Development of the environmental infrastructure to improve health in deprived areas should be supported by well-planned monitoring and evaluation. Linking the policy framework to economic development and local community plans will enhance effectiveness in the areas of education, job creation, commercial investment and access to services, which in turn are critical for the economic growth and stability of urban communities. Community profile data and health intelligence (as available through IPH Health Well) could usefully inform central and local government in terms of resource allocation and targeted service delivery.

IPH response to Department, Trade and Investment (NI) draft strategic energy framework

The draft Framework set out the proposed priorities for Northern Ireland's energy future over the next ten years or so and illustrates the key energy goals in term of competitiveness, security of energy supply, sustainablilty and infrastructure investment. It also proposes new and ambitious renewable electricity and renewable heat targets by 2020, which reflect the need for effected action against climate change and the need to address other policy goals in terms of security and sustainability of supply and costs.