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The regional employment impacts of renewable energy expenditures: The case for modelling
Get PDFOne aspect of the case for policy support for renewable energy developments is the wider economic benefits that are expected to be generated. Within Scotland, as with other regions of the UK, there is a focus on encouraging domestically‐based renewable technologies. In this paper, we use a regional computable general equilibrium framework to model the impact on the Scottish economy of expenditures relating to marine energy installations. The results illustrate the potential for (considerable) ‘legacy’ effects after expenditures cease. In identifying the specific sectoral expenditures with the largest impact on (lifetime) regional employment, this approach offers important policy guidance
Age, Life-satisfaction, and Relative Income – Insights from the UK and Germany
Get PDFWe first confirm previous results with the German Socio-Economic Panel by Layard et al.
(2010), and obtain strong negative effects of comparison income. However, when we split the
sample by age, we find quite different results for reference income. The effects on lifesatisfaction are positive and significant for those under 45, consistent with Hirschman’s (1973) ‘tunnel effect’, and only negative (and larger than in the full sample) for those over 45, when relative deprivation dominates. Thus for young respondents, reference income’s signalling role, indicating potential future prospects, can outweigh relative deprivation effects. Own-income effects are also larger for the older sample, and of greater magnitude than the comparison income effect. In East Germany the reference income effects are insignificant for all. With data from the British Household Panel Survey, we confirm standard results when encompassing all ages, but reference income loses significance in both age groups, and most surprisingly, even own income becomes insignificant for those over 45, while education has significant negative effects
The Expenditure Impacts of Individual Higher Education Institutions (HEIs) and their Students on the Northern Irish Economy: Homogeneity or Heterogeneity?
Get PDFThis paper replicates the analysis of Scottish HEIs in Hermannsson et al
(2010a) for the case of Northern Ireland in order to provide a self-contained
analysis that is readily accessible by those whose primary concern is with the
regional impacts of Northern-Irish HEIs. When we treat each of the four Higher
Education Institutions (HEIs) that existed in Northern Ireland in 2006 as
separate sectors in conventional input-output analysis, their expenditure
impacts per unit of final demand appear rather homogenous, with the apparent
heterogeneity of their overall impacts being primarily driven by scale.
However, a disaggregation of their income by source reveals considerable variation in their dependence upon funding from the devolved Assembly and their ability to draw in income/funding from external sources. Acknowledging the binding budget constraint of the Northern Ireland Assembly and deriving
balanced expenditure multipliers reveals large differences in the netexpenditure
impact of HEIs upon the Northern Irish economy, with the source of variation being the origin of income. Applying a novel treatment of student expenditure impacts, identifying the amount of exogenous spending per student, modifies the heterogeneity of the overall expenditure impacts. On balance this suggests that the impacts of impending budget cut-backs will be quite different
by institution depending on their sensitivity to public funding. However,
predicting the outcome of budget cutbacks at the margin is problematic for reasons that we identify
Ordering Policy Rules with an Unconditional Welfare Measure
Get PDFThe unconditional expectation of social welfare is often used to assess alternative macroeconomic policy rules in applied quantitative research. It is shown that it is generally possible to derive a linear -
quadratic problem that approximates the exact non-linear problem where the unconditional expectation of the objective is maximised and the steady-state is distorted. Thus, the measure of pol icy
performance is a linear combinat ion of second moments of economic variables which is relatively easy to compute numerically, and can be used to rank alternative policy rules. The approach is applied to a simple Calvo-type model under various monetary policy rules
Realised and Optimal Monetary Policy Rules in an Estimated Markov-Switching DSGE Model of the United Kingdom
Get PDFThis paper investigates underlying changes in the UK economy over the past thirtyfive
years using a small open economy DSGE model. Using Bayesian analysis, we find UK monetary policy, nominal price rigidity and exogenous shocks, are all subject to regime shifting. A model incorporating these changes is used to estimate the realised monetary policy and derive the optimal monetary policy for the UK. This allows us to assess the effectiveness of the realised policy in terms of stabilising economic fluctuations, and, in turn, provide an indication of whether there is room for monetary authorities to further improve their policies
Regime-Switching Cointegration
Get PDFWe develop methods for Bayesian inference in vector error correction models which are subject to a variety of switches in regime (e.g. Markov switches in regime or structural breaks). An important aspect of our approach is that we allow both the cointegrating vectors and the number of cointegrating relationships to change when the regime changes. We show how Bayesian model averaging or model selection methods can be used to deal with the high-dimensional
model space that results. Our methods are used in an empirical study of the Fisher effect
The EMU sovereign-debt crisis: fundamentals, expectations and contagion
Get PDFIn a research project conducted
while visiting the DG-ECFIN in
June 2010, we provided a detailed
empirical investigation of the
EMU sovereign-debt crisis up to
February 2010
Time-consistent fiscal policy under heterogeneity: Conflicting or common interests?
Get PDFThis paper studies the aggregate and distributional implications of Markov-perfect tax-spending policy in a neoclassical growth model with capitalists and workers. Focusing on the long run, our main fi ndings are: (i) it is optimal for a benevolent government, which cares equally about its citizens, to tax capital heavily and to subsidise labour; (ii) a Pareto improving means to reduce ine¢ ciently high capital taxation under discretion is for the government to place greater weight on the welfare of capitalists; (iii) capitalists and workers preferences, regarding the optimal amount of "capitalist bias", are not
aligned implying a conflict of interests
The Signalling Channel of Central Bank Interventions: Modelling the Yen/US Dollar Exchange Rate
Get PDFThis paper presents a theoretical framework analysing the signalling channel of exchange
rate interventions as an informational trigger. We develop an implicit target
zone framework with learning in order to model the signalling channel. The theoretical
premise of the model is that interventions convey signals that communicate
information about the exchange rate objectives of central bank. The model is used to analyse the impact of Japanese FX interventions during the period 1999 -2011 on the yen/US dollar dynamics
The names in Spain are mainly not in vain: Intergenerational mobility and the informational content of surnames
Get PDFThe paper presents a (genetic) model of
the joint distribution of surnames and
income. It shows that we can infer how
important background is by looking
at how informative surnames are.
Extensions of the model allow for the
possibility of assortative mating, and the
introduction of ethnic differences in the
income process (due to discrimination or
any other reason).This paper was presented at the launch of
SIRE, November 2007 and has also been
published as CEPR Discussion Paper
Number 81