Wake up economists! - Currency-issuing central governments have no budget constraint

Abstract: Despite what mainstream economists preach, currency-issuing central governments have no budget constraint. It is therefore incumbent upon them to use their unique spending and taxing powers to achieve the broader goal of sustainable development. Their failure to do so has meant that nations have fallen well short of realising their full potential. Rather than accept the neo-liberal myth that ‘small government is best’, the citizens of a nation should welcome the central-government’s responsible use of their unique spending and taxing powers to provide sufficient public goods and critical infrastructure, achieve and maintain full employment, resolve critical social and environmental concerns, and meet the requirements of an aging population. Should central governments fail in their responsibility to prudently use their unique powers, public disapproval is best registered through the ballot box, not through degenerative debates that distort the facts about the operation of a modern, fiat-currency economy.Keywords: Central governments, government budgets, fiscal and monetary policy, sustainable development

The New Hampshire Greenhouse Gas Emissions Reduction Fund: Year 3 (July 2011-June 2012) Evaluation

The Greenhouse Gas Emissions Reduction Fund (GHGERF) was created by the New Hampshire legislature in 2008 and has been administered by the New Hampshire Public Utilities Commission (PUC). The purpose of the Fund was to support energy efficiency, energy conservation, and demand response programs to reduce New Hampshire’s greenhouse gas emissions. Funding was derived from the State’s participation in the Regional Greenhouse Gas Initiative (RGGI), a cooperative effort by nine northeastern states to reduce carbon dioxide emissions in the electric power sector via a cap and trade program. As of June 2012, RGGI auctions have resulted in revenues to New Hampshire of $38.7 million, of which$21.8 million had been paid out to grants through June 2012. These funds have been distributed primarily through a competitive grant process administered by the PUC. The total amount of GHGERF grant awards is equal to 0.5% of the $6 billion that New Hampshire spends annually on energy across all sectors. These grants funded a wide variety of projects and programs which directly benefitted New Hampshire homes, schools, businesses, towns, and non-profit organizations. Details for each grant award are available at the PUC’s website. Completed projects supported by GHGERF funds (as of June 2012) have resulted in annual reductions of fossil fuel energy use in NH by 227,400 million BTUs (MMBTUs). Additionally, the GHGERF creates annual energy savings for NH residents and businesses of over$6.7 million and reduces annual carbon dioxide emissions by 22,900 metric tons. Cumulative energy savings due to projects completed as of June 2012 are estimated to be 4.0 million MMBTUs through 2030. NH residents and businesses are expected to save $107.8 million through 2030 based on current energy prices. Carbon dioxide emissions reductions are estimated to be 366,500 metric tons through 2030. In addition to energy reductions, GHGERF has supported energy efficiency workforce development for 700 workers with over 11,300 training hours (as of June 2012). GHGERF has also financially supported almost 2,300 building benchmarking and energy audit evaluations. During the past three years, GHGERF has delivered significant energy savings and served a wide-base of residential, commercial, and industrial energy customers throughout New Hampshire. The experience and capacity built during the three year period allowed GHGERF to deliver the highest amount of energy saved per dollar spent during this past reporting period. The model of having a central specialized expert organization work with multiple energy customers, as seen in all of the grants awarded in 2010, has proven to be a successful one and should be considered as NH’s RGGI program shifts to the NH electric utility energy efficiency programs

Lawmakers as Job Buyers

In 2013, Washington State authorized the largest state tax incentive for private industry in U.S. history. It is not remarkable for a state legislature to use tax benefits to retain a major employer—in this case, the global aerospace manufacturer Boeing. Laws across all states and thousands of cities routinely incentivize companies such as Amazon to relocate or remain in particular areas. Notably, however, Washington did not recover any of the subsidies it authorized despite Boeing’s significant post-incentive workforce reductions. This story leads to several important questions: (1) How effective are state and local legislatures at influencing business-location decisions?; (2) Do such incentive programs actually achieve their goals of increasing and maintaining jobs?; (3) Is the public protected from imprudent spending? This Article looks specifically at the role of state and local governments in encouraging businesses to locate in their jurisdictions. In such cases, state and local lawmakers act as buyers of jobs. This Article argues for a two-step proposal to limit subnational government actions to incentivize business-location decisions. The first step involves a bidding process where companies are awarded incentives based on the lowest subsidy dollar amount required to create or retain a job of a certain quality or pay rate. The second step involves defining job metrics based on certain preconditions and recapturing incentives should a company fail to maintain or achieve a defined number of job and qualities inherent in each job. This two-step proposal has regulatory benefits and it mollifies the political concern for jurisdictions to appear competitive and the need for public financial protection

A feature-based comparison of the centralised versus market-based decision making under lens of environment uncertainty: Case of the mobile task allocation problem

This thesis was submitted for the degree of Doctor of Philosophy and awarded by Brunel University.Decision making problems are amongst the most common challenges facing managers at different management levels in the organisation: strategic, tactical, and operational. However, prior reaching decisions at the operational level of the management hierarchy, operations management departments frequently have to deal with the optimisation process to evaluate the available decision alternatives. Industries with complex supply chain structures and service organisations that have to optimise the utilisation of their resources are examples. Conventionally, operational decisions used to be taken centrally by a decision making authority located at the top of a hierarchically-structured organisation. In order to take decisions, information related to the managed system and the affecting externalities (e.g. demand) should be globally available to the decision maker. The obtained information is then processed to reach the optimal decision. This approach usually makes extensive use of information systems (IS) containing myriad of optimisation algorithms and meta-heuristics to process the high amount and complex nature of data. The decisions reached are then broadcasted to the passive actuators of the system to put them in execution. On the other hand, recent advancements in information and communication technologies (ICT) made it possible to distribute the decision making rights and proved its applicability in several sectors. The market-based approach is as such a distributed decision making mechanism where passive actuators are delegated the rights of taking individual decisions matching their self-interests. The communication among the market agents is done through market transactions regulated by auctions. The system’s global optimisation, therefore, raise from the aggregated self-oriented market agents. As opposed to the centralised approach, the main characteristics of the market-based approach are the market mechanism and local knowledge of the agents. The existence of both approaches attracted several studies to compare them in different contexts. Recently, some comparisons compared the centralised versus market-based approaches in the context of transportation applications from an algorithm perspective. Transportation applications and routing problems are assumed to be good candidates for this comparison given the distributed nature of the system and due to the presence of several sources of uncertainty. Uncertainty exceptions make decisions highly vulnerable and necessitating frequent corrective interventions to keep an efficient level of service. Motivated by the previous comparison studies, this research aims at further investigating the features of both approaches and to contrast them in the context of a distributed task allocation problem in light of environmental uncertainty. Similar applications are often faced by service industries with mobile workforce. Contrary to the previous comparison studies that sought to compare those approaches at the mechanism level, this research attempts to identify the effect of the most significant characteristics of each approach to face environmental uncertainty, which is reflected in this research by the arrival of dynamic tasks and the occurrence of stochasticity delays. To achieve the aim of this research, a target optimisation problem from the VRP family is proposed and solved with both approaches. Given that this research does not target proposing new algorithms, two basic solution mechanisms are adopted to compare the centralised and the market-based approach. The produced solutions are executed on a dedicated multi-agent simulation system. During execution dynamism and stochasticity are introduced. The research findings suggest that a market-based approach is attractive to implement in highly uncertain environments when the degree of local knowledge and workers’ experience is high and when the system tends to be complex with large dimensions. It is also suggested that a centralised approach fits more in situations where uncertainty is lower and the decision maker is able to make timely decision updates, which is in turn regulated by the size of the system at hand

European Labour Mobility: Challenges and Potentials

European Union economies are pressed by (i) a demographic change that induces population ageing and a decline of the workforce, and (ii) a split labour market that is characterized by high levels of unemployment for low -skilled people and a simultaneous shortage of skilled workers. This lack of flexible high-skilled workers and the aging process has created the image of an immobile labour force and the eurosklerosis phenomenon. In such a situation, an economically motivated immigration policy at the European level can generate welfare improvements. A selective policy that discourages unskilled migrants and attracts skilled foreign workers will vitalize the labour market, foster growth and increase demand for unskilled native workers. The paper summarizes the available economic insights, and suggests (i) the need to harmonize the single -country migration policies across Europe and (ii) that the European Union needs to become an active player on the international labour markets.Labour mobility; Migration; Skilled migration; Unskilled migration; Migration policy; Integration policy

The privatization of the Russian coal industry: policies and processes in the transformation of a major industry

This paper provides an overview of the privatization of the Russian coal industry. It reviews the salient aspects of the Government's privatization policy as it evolved over the years, and looks at the reasons for the successes and the pitfalls encountered along the way. Specific procedures and methods of sale are described in detail. A profile of the new owners of the industry is given, with a look at the implications for competition in the industry and at first performance indicators. As the World Bank has been closely involved in the support of the Government's coal sector restructuring program through provision of financing and policy advice, throughout the paper aspects of World Bank advice are considered.Municipal Financial Management,Banks&Banking Reform,Non Bank Financial Institutions,Environmental Economics&Policies,Water and Industry,Water and Industry,Non Bank Financial Institutions,Mining&Extractive Industry (Non-Energy),Banks&Banking Reform,Municipal Financial Management

The Economic Impacts of the Regional Greenhouse Gas Initiative on Ten Northeast and Mid-Atlantic States

Assesses outcomes of the first U.S. market-based program to reduce emissions of carbon dioxide from power plants, including impact on electricity markets, power companies' costs, and consumer prices; use of auction proceeds; and states' economic benefits