Rapacious Resource Depletion, Excessive Investment and Insecure Property Rights

For a country fractionalized in competing factions, each owning part of the stock of natural exhaustible resources, or with insecure property rights, we analyze how resources are transformed into productive capital to sustain consumption. We allow property rights to improve as the country transforms natural resources into capital. The ensuing power struggle about the control of resources is solved as a non-cooperative differential game. Prices of resources and depletion increase faster than suggested by the Hotelling rule, especially with many competing factions and less secure property rights. As a result, the country substitutes away from resources to capital too rapidly and invests more than predicted by the Hartwick rule. The power struggle boosts output but depresses aggregate consumption and welfare, especially in highly fractionalized countries with less secure property rights. The theory suggests that adjusted net saving estimates calculated by the World Bank using market prices over-estimate welfare-based measures of genuine saving.exhaustible resources, Hotelling rule, Hartwick rule, capital, sustainable consumption, fractionalization, seepage, insecure property rights, differential game, genuine saving, adjusted net saving

Aeronautical Engineering: A special bibliography with indexes, supplement 48

This special bibliography lists 291 reports, articles, and other documents introduced into the NASA scientific and technical information system in August 1974

JUNO Conceptual Design Report

The Jiangmen Underground Neutrino Observatory (JUNO) is proposed to determine the neutrino mass hierarchy using an underground liquid scintillator detector. It is located 53 km away from both Yangjiang and Taishan Nuclear Power Plants in Guangdong, China. The experimental hall, spanning more than 50 meters, is under a granite mountain of over 700 m overburden. Within six years of running, the detection of reactor antineutrinos can resolve the neutrino mass hierarchy at a confidence level of 3-4$\sigma$, and determine neutrino oscillation parameters $\sin^2\theta_{12}$, $\Delta m^2_{21}$, and $|\Delta m^2_{ee}|$ to an accuracy of better than 1%. The JUNO detector can be also used to study terrestrial and extra-terrestrial neutrinos and new physics beyond the Standard Model. The central detector contains 20,000 tons liquid scintillator with an acrylic sphere of 35 m in diameter. $\sim$17,000 508-mm diameter PMTs with high quantum efficiency provide $\sim$75% optical coverage. The current choice of the liquid scintillator is: linear alkyl benzene (LAB) as the solvent, plus PPO as the scintillation fluor and a wavelength-shifter (Bis-MSB). The number of detected photoelectrons per MeV is larger than 1,100 and the energy resolution is expected to be 3% at 1 MeV. The calibration system is designed to deploy multiple sources to cover the entire energy range of reactor antineutrinos, and to achieve a full-volume position coverage inside the detector. The veto system is used for muon detection, muon induced background study and reduction. It consists of a Water Cherenkov detector and a Top Tracker system. The readout system, the detector control system and the offline system insure efficient and stable data acquisition and processing.Comment: 328 pages, 211 figure

Forest cover change in space and time : combining the von Thunen and forest transition theories

This paper presents a framework for analyzing tropical deforestation and reforestation using the von Thunen model as its starting point: land is allocated to the use which yields the highest rent, and the rents of various land uses are determined by location. Forest cover change therefore becomes a question of changes in rent of forest versus non-forest use. While this is a simple and powerful starting point, more intriguing issues arise when this is applied to analyze real cases. An initial shift in the rent of one particular land use generates feedbacks which affect the rent of all land uses. For example, a new technology in extensive agriculture should make this land use more profitable and lead to more forest clearing, but general equilibrium effects (changes in prices and local wages) can modify or even reverse this conclusion. Another issue is how a policy change or a shift in broader market, technological, and institutional forces will affect various land use rents. The paper deals with three such areas: technological progress in agriculture, land tenure regimes, and community forest management. The second part of the paper links the von Thunen framework to the forest transition theory. The forest transition theory describes a sequence over time where a forested region goes through a period of deforestation before the forest cover eventually stabilizes and starts to increase. This sequence can be seen as a systematic pattern of change in the agricultural and forest land rents over time. Increasing agricultural rent leads to high rates of deforestation. The slow-down of deforestation and eventual reforestation is due to lower agricultural rents (the economic development path) and higher forest rent (the forest scarcity path). Various forces leading to these changes are discussed and supported by empirical evidence from different tropical regions.Environmental Economics&Policies,Forestry,Common Property Resource Development,Economic Theory&Research,Markets and Market Access

Impacts of Long-Range Increases in the Corporate Average Fuel Economy (CAFE) Standard

CAFE standards have been in place since 1978. After the increase in petroleum prices in 1998-99, CAFE standards again arose as a public policy issue. This paper attempts to model the impact of higher CAFE standards on producer and consumer welfare, gasoline consumption, externalities from increased driving, and the emissions of traditional pollutants, given that CAFE standards are successful in inducing manufacturers to engage in technology forcing. The study then examines CAFE standards from a cost-benefit and a cost-effectiveness viewpoint. In particular, a long-run 3.0 MPG increase in the CAFE standard would impose social welfare losses of $5.556 billion per year and save 5.1 billion gallons of gasoline per year. This amounts to a hidden tax of$1.09 per gallon conserved. An 11 cent per gallon increase in the gasoline tax would save the same amount of fuel at a welfare cost of $275 million per year. The 3.0 MPG increase is thus 20 times more expensive than the gas tax increase. The marginal welfare costs of long-term increases in the CAFE standard amount to$1.26 per gallon and exceed by a factor of five recent estimates of the marginal societal benefits from avoided externalities. Increasing the CAFE standard is therefore neither cost-effective nor cost-beneficial.

Opportunity cost and prudentiality : an analysis of futures clearinghouse behavior

Margin deposits, which serve as collateral to protect the clearinghouse, are typically the most important tool for risk management. The authors develop a model that explains how creating a futures clearinghouse may allow traders simultaneously to reduce both the risk of default and the total amount of margin that members post. Optimal margin levels are determined by the need to balance the deadweight costs of default against the opportunity cost of holding additional margin. Both costs are a consequence of market participants'imperfect access to capital markets. The simultaneous reduction in default risk and in the opportunity cost of margin deposits is possible because the creation of the clearinghouse facilitates multilateral netting. The authors characterize the conditions under which multilateral netting will dominate bilateral netting. They also show that it is credible for the clearinghouse to expel members who default, further reducing the risk of default. Finally, they show that it may (but need not) be optimal for the clearinghouse to monitor the financial condition of its members. If monitoring occurs, it will reduce the amount of margin required, but need not affect the probability of default. The empirical tests run by the authors indicate that the opportunity cost of margin plays an important role in determining margin. The relationship between volatility and margins indicates that participants face an upward-sloping opportunity cost for margin, which appears to more than offset the effects that monitoring and expulsion would be expected to have on margin setting.Environmental Economics&Policies,Banks&Banking Reform,International Terrorism&Counterterrorism,Economic Theory&Research,Insurance&Risk Mitigation

The relationship between regulation and competition policy for network utilities

Should regulation of potentially competitive elements of network utilities be left with sector regulators or solely subject to normal competition laws? Britain evolved licenses for network activities overseen by regulators while the EU places more emphasis on making sector regulation consistent with competition law. The paper discusses the appropriateness of the competition law approach for telecoms and electricity. Post-modern utilities like telecoms, in which facilities-based competition is possible, lend themselves to the approach laid out in the Communications Directives, and its application to mobile call termination is discussed. Electricity, where collective dominance is more likely, does not fit comfortably into this approach. Instead, licence conditions retain advantages where it may be necessary to modify market rules in a timely and well-informed manner, as exemplified by the English Electricity Pool

Asymmetric Labor Markets, Southern Wages, and the Location of Firms

This paper studies the behavior of firms towards weak labor rights in developing countries (South). A less than perfectly elastic labor supply in the South gives firms oligopsonistic power tempting them to strategically reduce output to cut wages. In an open economy, competitors operating in perfectly competitive labor markets meanwhile enjoy less aggressive competitors and raise output. Finally, competition effect reduces the ex-post output of a relocating firm. These effects reduce relative profitability of the South casting doubts on traditional beliefs that multinationals are attracted to regions with lower wages. Adopting a minimum wage unambiguously enhances Southern competitiveness and welfare.Labor standards, Labor market imperfection, Oligopsony, Location of firms, Minimum wages, Strategic behavior, Multinationals, Southern welfare

Oil: Its Time Allocation and Project Independence

macroeconomics, oil