Reflections on the institutional balance, the Community Method and the interplay between jurisdictions after Lisbon. Research Papers in Law, 04/2012

[Introduction.] Over the last two years, not only inside but also outside the framework of the EU treaties, far reaching measures have been taken at the highest political level in order to address the financial and economic crisis in Europe and in particular the sovereign debt crisis in the Euro area. This has triggered debates forecasting the “renationalisation of European politics.” Herman Van Rompuy, the President of the European Council, countered the prediction that Europe is doomed because of such a renationalisation: “If national politics have a prominent place in our Union, why would this not strengthen it?” He took the view that not a renationalisation of European politics was at stake, but an Europeanization of national politics emphasising that post war Europe was never developed in contradiction with nation states.1 Indeed, the European project is based on a mobilisation of bundled, national forces which are of vital importance to a democratically structured and robust Union that is capable of acting in a globalised world. To that end, the Treaty of Lisbon created a legal basis. The new legal framework redefines the balance between the Union institutions and confirms the central role of the Community method in the EU legislative and judiciary process. This contribution critically discusses the development of the EU's institutional balance after the entry into force of the Treaty of Lisbon, with a particular emphasis on the use of the Community Method and the current interplay between national constitutional courts and the Court of Justice. This interplay has to date been characterised by suspicion and mistrust, rather than by a genuine dialogue between the pertinent judicial actors

Environmental quality and pollution-saving technological change in a two-sector endogenous growth model

Environment;Technological Change;Growth Models;Pollution;Sustainable Development

Transitional impact of environmental policy in an endogenous growth model

Growth Models;Environmental Policy;environmental economics

Explaining environmental Kuznets curves: How pollution induces policy and new technologies

Production often causes pollution as a by-product. Once pollution problems become too severe, regulation is introduced by political authorities which forces the economy to make a transition to cleaner production processes. We model this transition as a change in general purpose technology (GPT) and investigate how it interferes with economic growth driven by qualityimprovements. The model gives an explanation for the inverted U-shaped relationship found in empirical research for many pollutants, often referred to as the Environmental Kuznets Curve (EKC). We provide an analytical foundation for the claim that the rise and decline of pollution can be explained by policyinduced technology shifts. --Environmental Kuznets curve,general purpose technology,growth

The Rising Skill Premium, Technological Change and Appropriability

In the US the skill premium and the nonproduction/production wage differential increased strongly from the late 1970s onwards. Skillbiased technological change, trade with unskilledabundant countries and changes in the (domestic) supply of skilled workers have been proposed as explanatory factors. By the method of eliminating the impossible, skillbiased technological change is argued to be the dominant explanation. This paper shows that the dismissal of the increased supply of skill which is argued to be countervailing rising skill premiums is premature. In a simple model, well embedded in the literature on R&D, knowledge accumulation and (semi)endogenous growth, it is shown that the demand curve for skilled labour might well be upward sloping. Our key assumption is that skilled labour is employed in nonproduction activities that both generate and use knowledge inputs. It is shown that the tension between nonrivalness and appropriability of R&D output is crucial for the sign of the slope of the skilldemand curve. A necessary condition for an upward sloping demand curve is the ability of firms to appropriate the intertemporal returns from nonproduction activities.

Sustainability and Substitution of Exhaustible Natural Resources: How Resource Prices Affect Long-Term R&D Investments

Traditional resource economics has been criticised for assuming too high elasticities of substitution, not observing material balance principles and relying too much on planner solutions to obtain long-term growth.By analysing a multi-sector R&D based endogenous growth model with exhaustible natural resources, labour, knowledge, and physical capital as inputs, the present paper addresses this critique.We study transitional dynamics and the long-term growth path and identify conditions under which firms keep spending on research and development.We demonstrate that long-run growth can be sustained under free market conditions even when elasticities of substitution between capital and resources are low and the supply of physical capital is limited, which seems to be crucial for today's sustainability debate.economic growth;natural resources;investment;incentives;technological change;sustainable development;prices;research and development