Suchergebnisse

Intro -- Preface -- Contents -- Contributors -- 1 Managing, Inducing, and Preventing Regime Shifts: A Review of the Literature -- 1.1 Introduction -- 1.2 Regime Shifts, Thresholds, and Tipping Points -- 1.2.1 Regime Shifts -- 1.2.2 Thresholds and Tipping Points -- 1.3 Unknown Tipping Points: The Hazard Rate Function Approach -- 1.3.1 The Ambiguous Effect of Anticipation of Regime Shifts -- 1.3.2 Knightian Uncertainty: Decision-Making Under Ambiguity About Tipping Points -- 1.4 Preventing Regime Shifts: The Role of Repression, Redistribution, and Education in a Two-Class Economy -- 1.5 Dynamic Games Involving Natural Resources with Threat of Regime Shifts and Thresholds -- 1.5.1 Extraction of an Exhaustible Resource Under Threat of Regime Shift -- 1.5.2 Dynamic Games Involving Natural Resources with Thresholds and Non-linear Dynamics -- 1.6 Dynamic Games Involving Potential Regime Shifts and Skiba Point: R& -- D Races and Sabotage to Prevent Entry -- 1.7 Dynamic Games of Inducing Regime Shifts by a Big Push -- 1.8 Directions for Future Research -- References -- 2 Institutional Change, Education, and Population Growth: Lessons from Dynamic Modelling -- 2.1 Introduction -- 2.2 Models and Implications -- 2.2.1 No Population Growth -- 2.2.2 Population Growth -- 2.2.3 Optimal Timing of Abdication -- 2.2.4 Penalizing Larger Population -- 2.3 Adding a Second Stage: Going Abroad -- 2.4 Concluding Remarks -- References -- 3 Poverty Traps and Disaster Insurance in a Bi-level Decision Framework -- 3.1 Introduction -- 3.2 The Deterministic Dynamic Model -- 3.2.1 The Deterministic Model -- 3.3 Stochastic Shocks and Insurance -- 3.3.1 Catastrophic Events, Insurance and the Modified Deterministic Dynamics -- 3.3.2 The Remaining Capital and Its Transition Distribution -- 3.3.3 Transition Densities -- 3.4 Aiming at the Trapping Probability.

Abstract:Over the past half-century or more, economists have developed a robust literature on the theory and practice of benefit-cost analysis (BCA) as applied to diverse projects and policies. Recent years have seen a growing demand for practical applications of BCA to climate change policy questions. As economists seek to meet this demand, they face challenges that arise from the nature of climate change impacts, such as the long time frame and the potential for non-marginal changes, the importance of intangible effects, and the need to grapple with Knightian uncertainty. As a result of these and other characteristics of climate change, many of the fundamental tenets of BCA are coming under scrutiny and the limits of BCA's methodological and practical boundaries are being tested. This special issue assembles a set of papers that review the growing body of literature on the economics of climate change. The papers describe the state of the literature valuing climate change impacts, both globally and at more disaggregated levels. The papers also discuss the challenges economists face in applying BCA to support climate change decision making and adaptation planning. This introduction provides background and context on the current use of BCA in climate change analysis, and sets each paper firmly in that context, identifying also areas for future research. While the challenges in conducting BCA and interpreting its results are significant, across the papers it becomes clear that economic analysis in general, and the tools and methods of BCA in particular, have a central role to play in supporting decision-making about how to respond to climate change.

Frontmatter -- Contents -- Introduction -- 1. What We Don't Know -- 2. With and Without Numbers -- 3. The Maximin Principle -- 4. The Precautionary Principle -- 5. Uncertainty -- 6. Objections -- 7. Irreversibility -- Conclusion -- Acknowledgments -- Appendix A: Memorandum for the Heads of Executive Departments and Agencies -- Appendix B: Circular A-4 -- Notes -- Index -- About the Author

Defence date: 6 June 2017 ; Examining Board: Professor Sven Steinmo, European University Institute (Supervisor); Professor Mark Blyth, Brown University; Professor Philipp Genschel, European University Institute; Professor Leonard Seabrooke, Copenhagen Business School ; For all its powers, we know little about how the European Central Bank (ECB) makes its decisions and why. In light of its ever-increasing importance in European governance and the criticism this has attracted, this is particularly regrettable. Often a welcome scapegoat, the ECB has been accused of doing first too little, then too late. Compared to other major central banks, the ECB has indeed long been a laggard – regarding both conventional interest rate policies and unconventional balance sheet operations. Why? I argue that central bankers' policy experiments after the financial crisis are a prime example of policymaking under conditions of Knightian uncertainty. Faced with an unprecedented situation, central bankers were unable to draw on historical experience and had to resort to their beliefs about how the economy works instead. Based on a survey among 422 central bank economists, I quantify these different ways of thinking. My survey data shows a) that certain beliefs matter for policy preferences and b) that both are unevenly distributed among central banks. In particular, the ECB leans more towards orthodox beliefs and hawkish inflation preferences than the US Federal Reserve and the Bank of England. It is considerably more conservative. Within the Eurosystem, different national central banks are clustered regarding both beliefs and preferences, revealing a dividing line in economic philosophy between core and periphery. This suggests that the frequently surfacing conflicts inside the ECB's Governing Council reflect a battle of ideas rather than a conflict of interests between creditor and debtor states. Proponents of activist monetary policy at the ECB had to overcome enormous resistance from within before they could follow the examples set by others. I argue that this is why the ECB first did too little to support the economy, and only changed its orthodox stance very late.

Предмет. В статье доказывается различное влияние инфляционных ожиданий и инфляционной неопределенности на форму кривой бескупонной доходности государственных облигаций. Проведен эмпирический анализ временной структуры рынка ОФЗ с 2014 по 2015 г. Цели. Описание возможности применения теории инфляционных ожиданий для прогнозирования доходности государственных облигаций в условиях российской экономики. Методология. В работе рассматривается, каким именно образом гипотезы, описывающие временную структуру процентных ставок государственных облигаций, могут быть применены в России. Результаты. Низкий уровень инфляционной неопределенности объясняет восходящий наклон кривой доходности государственных облигаций, характерный для стабильного состояния экономики. Периоды, когда инвесторы теряют доверие к своим моделям прогнозирования инфляционных ожиданий и ожиданий темпов роста потребления, совпадают с периодами, когда цены на активы (в том числе, на государственные облигации) снижаются. Это означает, что государственные облигации не являются эффективным инструментом хеджирования против рисков стагнации экономики, а также рисков неопределенности Найта. Значимость. Практическая значимость работы заключается в структуризации существующих знаний о применимости гипотез прогнозирования временной структуры ставок в России. Поскольку рынок государственных облигаций в значительной степени определяет уровень процентных ставок на иных сегментах долгового рынка, использование этой модели позволяет точнее оценивать конъюнктуру долгового рынка при размещении новых выпусков ОФЗ. В работе раскрыты динамика и взаимосвязи между показателями долгового рынка в 2015 г., которые значительно изменились по сравнению с докризисными значениями. Отмечается, что указанное изменение процентных ставок на рынке в меньшей степени стало соответствовать ожиданиям профессионального сообщества при конкурентном рыночном механизме ценообразования. ; Subject The paper proves the influence of inflation expectations and inflation uncertainty on the form of zero-coupon yield curve of government bonds, and analyzes the term structure of government bond interest rates over 2014-2015. Objectives The study aims to describe the possibility of applying the theory of inflation expectations to forecasting the government bond yields in the Russian economy. Methods I analyze how the hypotheses describing the term structure of government bonds can be used in Russia. Results The low level of inflation uncertainty explains the upward slope of the yield curve of government bonds, which is typical of stable economy. The periods, when investors lose confidence in their forecasting models of inflation expectations and expectations of consumption growth rates, coincide with periods when prices for assets (including government bonds) are dropping. This means that government bonds are not an effective tool to hedge against both the risks of economic stagnation and the Knightian uncertainty risks. Conclusions and Relevance The practical significance of the work is in the structuring of the existing knowledge on applicability of hypotheses for predicting the term structure of interest rates in Russia. Since the government bond market largely determines the level of interest rates in other segments of the debt market, this model allows a better evaluating the market sentiment before the government bond issuing. The paper reveals the dynamics and relationship between the debt market indicators in 2015, which changed significantly against the pre-crisis values.

Austrian Economics Re-examined: The Economics of Time and Ignorance is an expanded version of the 1996 edition of The Economics of Time and Ignorance. This work is a classic statement of the role of subjectivism, radical uncertainty and change through real time in Austrian economics specifically, and in modern economics more generally. The new book contains the full text and Introductions of the earlier edition as well as the comprehensive previously-unpublished essay "What is Austrian Economics?" and a new Introduction. The essay is a comprehensive overview of the central themes of the book from a somewhat different perspective than in the book itself. It supplements the analysis in the book. The new Introduction explains that the 2007-8 financial crisis and recent developments in behavioural economics have made the book more relevant than ever before. Austrian Economic Re-examined develops and systematizes the fundamental principles of the Austrian tradition to the analysis of rational expectations, business cycles, monetary theory competition and monopoly, and capital theory.

Although research on climate policy decision making has made substantial progress in recent years, numerous particular aspects are still not well understood owing to a very complex interplay of the many factors involved. The purpose of this thesis is to provide new insights into the policy response to being confronted with the different (interacting) challenges posed by climate change. In this spirit, particular attention is paid to the effects of facing the following: economic and ecological irreversibilities, the uncertainty and ambiguity, the problem of combining mitigation and adaptation measures, and the implications of the countries' asymmetries concerning international collective cooperation on emissions reduction. The first three chapters take a real options perspective that is developed to explicitly account for the tension between uncertainty and economic irreversibility. This approach discloses the value of waiting for new information to arrive that is incorporated in climate policy assessment. In other words, real options quantify the opportunity costs of taking action now rather than waiting for uncertainty to be reduced. It sets the stage for the investigation of how other characteristics of the climate change problem influence policy decisions. Chapter 2 is motivated by the latest scientific findings that the time to meet climate policy targets, which limit the risk of unacceptable environmental change, is presumably running out. This article allows the question to be posed about whether the knowledge of facing a closing window of opportunity could significantly counteract the incentives to wait, and thus accelerate emission reduction efforts. For this, the paper develops a non-perpetual real options framework in which the option to adopt policies that comply with the target is only available for a limited amount of time. The closing of the window of opportunity is shown to accelerate emission reduction efforts, especially if the option to act expires soon. However, the effects are shown to be comparatively small, which indicates that climate policy inaction is likely to prevail. Chapter 3 investigates how economic irreversibility and Knightian uncertainty in the climate damage costs affect the decision on when to curb emissions. The existing estimates in the literature of the future climate damage costs are subject to enormous ambiguity. This study transfers the recently made ideas of how to enhance a real options model by Knightain uncertainty to a model that examines the decision on when to curb emissions. First, the decision by an ambiguity-averse policy maker is investigated; and then the analysis extends to a range of ambiguity preferences. This study finds that policy adoption is delayed longer when the policy maker is more optimistic about the future outcomes. Furthermore, this study also identifies that the range of optimal policy responses, which are implied by alternative preferences for ambiguity, is of a non-negligible size. This result emphasizes the difficulties in reaching an objectively justified climate policy decision, as the decision crucially depends on subjective attitudes towards ambiguity. Chapter 4 directs attention to the question of how mitigation and adaptation can be optimally combined. This study develops a novel real options modelling framework in which the policy maker holds a portfolio of mitigation and adaptation options. This paper demonstrates that the dualistic approach to climate policy is impeded by the interaction of uncertainty and economic irreversibility. Compared to the expected net present value approach, it gives more priority to adaptation as the preferred measure. If the marginal benefits of investing in adaptation are sufficiently low, mitigation is given more emphasis. Chapter 5 goes beyond considering one global policy maker by taking into account the implications of the countries' heterogeneity when international environmental cooperation is negotiated. This study addresses the research by Fuentes-Albero & Rubio (2010) which analytically solves a non-linear, game-theoretical model that incorporates two types of countries and continuous strategies. In the case of heterogeneity in the damage costs, the authors conclude that, even though side-payments are not made, an agreement between one high- and one low-damage country is self-enforcing, given that the disparities are not very large. This result is proven to be incorrect by demonstrating that such a coalition is only internally stable, while external stability is not satisfied. Consequently, asymmetries in damage costs provoke countries to defect from cooperative behaviour, unless some mechanism is established to extinguish the free-riding incentives without transgressing any notions of fairness. Fuentes-Albero, C., & Rubio, S. J. (2010). Can international environmental cooperation be bought? European Journal of Operational Research, 202, 255–264.

[eng] This thesis is composed of 3 independent essays on economic theory. Each essay is meant to be read separately, including footnotes and appendices. In particular, essays 2 and 3 include specific bibliography. The general bibliography is included at the end of the thesis. The first essay reviews some well known conceptual and empirical problems that appear when economic theorists deal with preferences and choice theory, in general. While assessing those problems, the essay lays the ground for a detailed discussion of the possibility of preference learning, formation and change. The essay concludes proposing a theoretical framework to study these phenomena. The second essay, although independent from the first, is also devoted to the issue of preference change. In particular, it studies the possibility that cultural preferences evolve as a result of the combination of technological innovation and cultural transmission mechanisms. At the same time, it allows for the possibility that those cultural preferences determine the short term outcome of economic variables. In addition, it builds a framework where the combination of technological innovation, cultural transmission and economic structure lead to a process of endogenous preference heterogeneity and clustering. Hence it provides a model to understand how culture and the economic structure interact and coevolve. The third essay presents some theoretical problems that arise when using the concept of a matching function as a modelling device for the labor market. In particular, necessary conditions for the ratio of the number of matches per job searcher to be interpreted as the average job finding probability are established. References [Abel, 1990] Abel, A. B. (1990). Asset prices under habit formation and catching up with the joneses. The American Economic Review, pages 38-42. [Afriat, 1967] Afriat, S. (1967). The construction of utility functions from expenditure data. International Economic Review, 8(1):67-77. [Al-Najjar, 1993] Al-Najjar, N. (1993). Non-transitive smooth preferences. Journal of Economic Theory, 60(1):14 -41. [[Aragones et al., 2005] Aragones, E., Gilboa, I., Postlewaite, A., and Schmeidler, D. (2005). Fact-free learning. The American Economic Review, 95(5):1355-1368. [Ariely et al., 2003] Ariely, D., Loewenstein, G., and Prelec, D. (2003). coherent arbitrariness: Stable demand curves without stable preferences. The Quarterly Journal of Economics, 118(1):73-106. [Arrow, 1986] Arrow, K. (1986). Rationality of self and others in an economic system. Journal of Business, pages 385-399. [Arrow and Hahn, 1971] Arrow, K. and Hahn, F. (1971). General competitive analysis. Holden-Day San Francisco.165 [Arrow, 1959] Arrow, K. J. (1959). Rational choice functions and orderings. Economica, 26(102):121-127. [Aumann, 1962] Aumann, R. (1962). Utility theory without the completeness axiom. Econometrica: Journal of the Econometric Society, pages 445-462. [Balasko, 2003] Balasko, Y. (2003). Economies with price-dependent preferences. Journal of economic theory, 109(2):333-359. [Balzer, 1982] Balzer, W. (1982). Empirical claims in exchange economics. In Philosophy of Economics, pages 16-40. Springer. [Becker, 1962] Becker, G. (1962). Irrational behavior and economic theory. The Journal of Political Economy, pages 1-13. [Becker, 1978] Becker, G. S. (1978). The economic approach to human behavior. University of Chicago Press. [Berry and Pakes, 2007a] Berry, S. and Pakes, A. (2007a). The pure characteristics demand model. International Economic Review, 48(4):1193-1225. [Berry and Pakes, 2007b] Berry, S. and Pakes, A. (2007b). The pure characteristics demand model*. International Economic Review, 48(4):1193-1225. [Bewley, 1986] Bewley, T. (1986). Knightian uncertainty theory: part i. Yale University. [Blaug, 1992] Blaug, M. (1992). The methodology of economics: Or, how economists explain. Cambridge University Press. [Boudon, 1998] Boudon, R. (1998). Social mechanisms without black boxes. Social mechanisms: An analytical approach to social theory, 172. [Brown and Matzkin, 1996] Brown, D. and Matzkin, R. (1996). Testable restrictions on the equilibrium manifold. Econometrica: Journal of the Econometric Society, pages 1249-1262. [Bunge, 1993] Bunge, M. (1993). Realism and antirealism in social science. Theory and Decision, 35(3):207-235. [Caldwell, 1984] Caldwell, B. J. (1984). Some problems with falsificationism in economics. Philosophy of the Social Sciences, 14(4):489-495. [Chapman and Johnson, 1999] Chapman, G. B. and Johnson, E. J. (1999). Anchoring, activation, and the construction of values. Organizational Behavior and Human Decision Processes, 79(2):115 -153. [Deaton and Muellbauer, 1980] Deaton, A. and Muellbauer, J. (1980). An almost ideal demand system. The American economic review, pages 312-326.