Adoption incentives and environmental policy timing under asymmetric information and strategic firm behaviour

We consider the incentives of a single firm to invest in a cleaner technology under emission quotas and emission taxation. We assume asymmetric information about the firm's cost of employing the new technology. Policy is set either before the firm invests (commitment) or after (time consistency). Contrary to conventional wisdom, we find that with commitment (time consistency), quotas give higher (lower) investment incentives than taxes. With quotas (taxes), commitment generally leads to higher (lower) welfare than time consistency. Under commitment with quadratic abatement costs and environmental damages, a modified Weitzman rule applies and quotas usually lead to higher welfare than taxes

Migration outflows and optimal migration policy: rules versus discretion

We study the effects of more open borders on return migration and show that migrants are more likely to return to the origin country when migration rules are softened, because this implies that they could more easily re-migrate if return migration is unsuccessful. As a result, softening migration rules leads to lower net inflows than is generally acknowledged. We show that if government follows rules to shape the optimal migration policy, it will choose more open “borders” than were its behaviour to be discretionary. However, this requires an appropriate commitment technology. We show that electoral accountability may be a solution to the commitment problem. As a matter of fact, observed softer immigration rules in western countries suggest the effectiveness of such a mechanism.info:eu-repo/semantics/publishedVersio

Economic-demographic interactions in long-run growth

Cliometrics confirms that Malthus’ model of the pre-industrial economy, in which increases in productivity raise population but higher population drives down wages, is a good description for much of demographic/economic history. A contributor to the Malthusian equilibrium was the Western European Marriage Pattern, the late age of female first marriage, which promised to retard the fall of living standards by restricting fertility. The demographic transition and the transition from Malthusian economies to modern economic growth attracted many Cliometric models surveyed here. A popular model component is that lower levels of mortality over many centuries increased the returns to, or preference for, human capital investment so that technical progress eventually accelerated. This initially boosted birth rates and population growth accelerated. Fertility decline was earliest and most striking in late eighteenth century France. By the 1830s the fall in French marital fertility is consistent with a response to the rising opportunity cost of children. The rest of Europe did not begin to follow until end of the nineteenth century. Interactions between the economy and migration have been modelled with Cliometric structures closely related to those of natural increase and the economy. Wages were driven up by emigration from Europe and reduced in the economies receiving immigrants

Economic fluctuations in Central and Eastern Europe: the facts

This article provides a detailed empirical analysis of quarterly frequency dynamics in macroeconomic aggregates in 12 countries of Central and Eastern Europe (CEE). It shows that business fluctuations in CEE countries are, in general, more pronounced than in developed ones, and are of similar size as in other emerging market economies. Private consumption is particularly volatile. Relative to major developed economies government spending is dominantly procyclical, and net exports are strongly countercyclical. The most frequent country outliers are the high inflation countries of Bulgaria, Romania and Russia, especially in labour market, price and exchange rate variables. Excluding these countries from the sample makes many of the observed patterns in cyclical dynamics more homogenous, and broadly similar to ones established in developed economies.