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on Central and Western Asia |
| By: | Fantazzini, Dean; Hook, Mikael; Angelantoni, André |
| Abstract: | The Deepwater Horizon incident demonstrated that most of the oil left is deep offshore or in other difficult to reach locations. Moreover, obtaining the oil remaining in currently producing reservoirs requires additional equipment and technology that comes at a higher price in both capital and energy. In this regard, the physical limitations on producing ever-increasing quantities of oil are highlighted as well as the possibility of the peak of production occurring this decade. The economics of oil supply and demand are also briefly discussed showing why the available supply is basically fixed in the short to medium term. Also, an alarm bell for economic recessions is shown to be when energy takes a disproportionate amount of total consumer expenditures. In this context, risk mitigation practices in government and business are called for. As for the former, early education of the citizenry of the risk of economic contraction is a prudent policy to minimize potential future social discord. As for the latter, all business operations should be examined with the aim of building in resilience and preparing for a scenario in which capital and energy are much more expensive than in the business-as-usual one. |
| Keywords: | Peak oil; Economic risks; Energy transition risks; Government risks; Business risks |
| JEL: | Q32 Q31 Q34 Q48 Q30 |
| Date: | 2011–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33825&r=cwa |
| By: | Plante, Michael |
| Abstract: | Analytical and numerical results show how the presence of a subsidy on household and firm purchases of oil products distorts long-run macroeconomic aggregates in an oil-importing developing country. Beyond leading to over-consumption of oil products these subsidies also lead to increased labor supply, a distorted emphasis on producing traded goods, and higher real wages. The subsidy also impacts the relative price of non-traded goods, causing it to fall when the non-traded sector is more oil-intensive than the traded sector and vice-versa. |
| Keywords: | oil; fuel-price subsidies; developing countries; fiscal policy |
| JEL: | E62 O23 H30 Q43 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33823&r=cwa |
| By: | Aldy, Joseph E. (Harvard University) |
| Abstract: | The 2010 BP Deepwater Horizon oil spill posed near-term economic risks to the Gulf of Mexico region and raised questions about appropriate policies to mitigate catastrophic oil spill risks. This essay reviews the Obama Administration's assessment of the economic vulnerabilities to the spill, the Administration's May 12, 2010 legislative proposal focused on minimizing the adverse economic impacts to workers and small businesses in the Gulf of Mexico, and the effort to secure an agreement with BP to ensure that those harmed by the spill will receive full compensation. Then, the essay discusses several of the policy reforms advanced by the Administration to reduce the risks of future catastrophic oil spills, including the value of an industry consortium to provide deepwater well containment resources and the need to remove the arbitrary limit on liability for economic damages from offshore drilling. The essay closes with a few policy lessons learned from the spill. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp11-037&r=cwa |
| By: | Nikolay Aleksandrov; Raphael Espinoza |
| Abstract: | We study optimal oil extraction strategy and the value of an oil field using a multiple real option appraoch. Extracting a barrel of oil is similar to exercising a call option and optimal strategies lead to deferring production when oil prices are low and when volatility is high. We sow that, in theory, the net present alue ofa country's oil reserves is increased significantly (by 100 percent, in the most extreme case) if production decisions are made conditional on oil prices. We also show that the marginal value ofaditional capacity is higher for countries with bigger resources and longer production horizons. We apply the model to Brazil and the U>A>E> in order to pin down two points of the global supply curve. |
| Keywords: | Oil production, Real Options, Capacity Expansion, Stochastic Optimization |
| JEL: | C61 Q30 Q43 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:oxcrwp:064&r=cwa |
| By: | Al Wood (Institute for International Economic Policy, George Washington University) |
| Abstract: | This paper provides an historical perspective of the global oil-tanker market, the international tanker fleet, and the major trends in tanker ownership. The available data indicate that outside the OECD, more than half of large tanker capacity is ultimately owned by governments compared to less than one percent within the OECD. A positive correlation is identified between oil imports and tanker ownership at the national level, but only for non-OECD countries. This result suggests that the forecasted increases in oil imports and exports by emerging economies over the next two decades are likely to result in higher levels of government ownership of the international oil tanker fleet. |
| Keywords: | petroleum, oil tanker, maritime law, OECD |
| JEL: | F52 L33 L71 L91 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2011-07&r=cwa |
| By: | Inmaculada Martínez-Zarzoso (Georg-August-Universität Göttingen / Germany; Universitat Jaume I, Castellòn / Spain); Sami Bensassi (Universitat Jaume I, Castellón / Spain) |
| Abstract: | A growing body of literature has recently focused on the economic origins and consequences of modern maritime piracy and on the perception that the international community has failed to control it. This paper aims to investigate maritime transport costs as one of the channels through which modern maritime piracy could have a major impact on the global economy. A transportcost equation is estimated using a newly released dataset on maritime transport cost from the OECD together with data on maritime piracy from the IMB. Our results show that maritime piracy significantly increases trade cost between Europe and Asia. |
| Keywords: | maritime piracy, transport costs, maritime trade, panel data |
| JEL: | F51 |
| Date: | 2011–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:got:iaidps:213&r=cwa |
| By: | Caterina Gennaioli (Fondazione Eni Enrico Mattei); Massimo Tavoni (Fondazione Eni Enrico Mattei) |
| Abstract: | The aim of this paper is to provide an assessment of the potential for resource curse in the renewable energy sector. Taking a political economy approach, we analyze the link between public support schemes for renewable energy and the potential scope for rent seeking and corruption. The insights of a model of political influence by interest groups are tested empirically using a panel data of Italian provinces for the period 1990-2007. We find evidence that a curse exists in the case of wind energy, and specifically that: i) criminal association activity increased more in high-wind provinces and especially after the introduction of a more favourable public policy regime and, ii) the expansion of the wind energy sector has been driven by both the wind level and the quality of political institutions, through their effect on criminal association. The analysis points out that in the presence of poor institutions, efficient market-based policies can have an adverse impact. This has important normative implications especially for countries that are characterized by abundant renewable resources and weak institutions, and are thus more susceptible to the private exploitation of public incentives. |
| Keywords: | Corruption, Natural Resources Curse, Wind Energy, Political Economy |
| JEL: | D73 O13 P16 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.63&r=cwa |
| By: | Dietrich, Antje-Mareike; Sieg, Gernot |
| Abstract: | This article shows that in the presence of environmental externalities, it may be welfare enhancing to overcome a technological lock-in by a dead- end technology through governmental intervention. It is socially desirable to subsidize a dead-end technology if its environmental externality is small relative to the one of the established technology, if the installed base and/or the strength of the network effect is small and if future generations matter. Applying our results to the private transport sector, governments promoting alternatives to gasoline-driven vehicles have to be aware of these opposing welfare effects. |
| Keywords: | environmental externalities; network effects; private transport; technological change |
| JEL: | L92 Q55 O33 |
| Date: | 2011–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33780&r=cwa |
| By: | Morgan Bazilian (United Nations Industrial Development Organization); Patrick Nussbaumer (United Nations Industrial Development Organization); Giorgio Gualberti (Technical University of Lisbon); Erik Haites (Margaree Consultants Inc.); Michael Levi (Council on Foreign Relations); Judy Siegel (Energy and Security Group); Daniel M. Kammen (The World Bank); Joergen Fenhann (UNEP Risoe Centre, Technical University of Denmark) |
| Abstract: | Energy poverty is widely recognized as a major obstacle to economic and social development and poverty alleviation. To help inform the design of appropriate and effective policies to reduce energy poverty, we present a brief analysis of the current macro financial flows in the electricity and gas distribution sectors in developing countries. We build on the methodology used to quantify the flows of investment in the climate change area. This methodology relies on national gross fixed capital formation, overseas development assistance, and foreign direct investment. These high-level and aggregated investment figures provide a sense of scale to policy-makers, but are only a small part of the information required to design financial vehicles. In addition, these figures tend to mask numerous variations between sectors and countries, as well as trends and other temporal fluctuations. Nonetheless, for the poorest countries, one can conclude that the current flows are considerably short (at least five times) of what will be required to provide a basic level of access to clean, modern energy services to the “energy poor”. |
| Keywords: | Energy Access, Energy Finance, Financial flows |
| JEL: | Q4 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.56&r=cwa |
| By: | Ferris, John (Jake) |
| Abstract: | Rising prices on vegetable oils and animal fats have enabled dry mill ethanol plants to profitably extract corn oil from distillersâ dried grain. While the mandates under the Energy Independence and Security Act of 2007 for grain based ethanol will level off at 15 billion gallons in 2015, the mandates for biodiesel will likely continue to increase from 1.0 billion gallons in 2012 to nearly 2.0 billion gallons in 2022. Corn oil from distillersâ dried grain can provide the needed profits and diversification of feedstock to assist the biodiesel industry in meeting the mandates. |
| Keywords: | Agribusiness, Crop Production/Industries, Resource /Energy Economics and Policy, |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:midasp:115632&r=cwa |
| By: | AfDB |
| Date: | 2011–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:adb:adbwps:328&r=cwa |
| By: | Ambec, Stefan (Toulouse School of Economics (INRA-LERNA) and University of Gothenburg); Coria, Jessica (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | We examine the choice of policy instrument price, quantity, or a mix of the two when two pollutants are regulated and firms’ abatement costs are private information. A key parameter that affects this choice is the technological externality between the abatement efforts involved, i.e., whether they are substitutes or complements. If they are complements, a mix policy instrument with a tax on one pollutant and a quota on the other is sometime preferable, even if the pollutants are identical in terms of benefits and costs of abatement. Yet, if they are substitutes, the mix policy is dominated by taxes or quotas.<p> |
| Keywords: | pollution; environmental regulation; policy mixes; tax; emission standard; asymmetric information |
| JEL: | D62 Q50 Q53 Q58 |
| Date: | 2011–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0517&r=cwa |
| By: | John Gibson (University of Waikato); David McKenzie (World Bank, BREAD, CReAM and IZA) |
| Abstract: | High-skilled emigration is an emotive issue that in popular discourse is often referred to as brain drain, conjuring images of extremely negative impacts on developing countries. Recent discussions of brain gain, diaspora effects, and other advantages of migration have been used to argue against this, but much of the discussion has been absent of evidence. This paper builds upon a new wave of empirical research to answer eight key questions underlying much of the brain drain debate: 1) What is brain drain? 2) Why should economists care about it? 3) Is brain drain increasing? 4) Is there a positive relationship between skilled and unskilled migration? 5) What makes brain drain more likely? 6) Does brain gain exist? 7) Do high-skilled workers remit, invest, and share knowledge back home? and 8) What do we know about the fiscal and production externalities of brain drain? |
| Keywords: | Brain drain, Brain gain, High-skilled Emigration, Development |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:1111&r=cwa |
| By: | Alireza Naghavi (University of Bologna and Fondazione Eni Enrico Mattei); Chiara Strozzi (University of Modena and Reggio Emilia) |
| Abstract: | In this paper we study theoretically and empirically the role of the interaction between skilled migration and intellectual property rights (IPRs) protection in determining innovation in developing countries (South). We show that although emigration from the South may directly result in the well-known concept of brain drain, it also causes a brain gain effect, the extent of which depends on the level of IPRs protection in the sending country. We argue this to come from a diaspora channel through which the knowledge acquired by emigrants abroad can flow back to the South and enhance the skills of the remaining workers there. By increasing the size of the innovation sector and the skill-intensity of emigration, IPRs protection makes it more likely for diaspora gains to dominate, thus facilitating a potential net brain gain. Our main theoretical insights are then tested empirically using a panel dataset of emerging and developing countries. The findings reveal a positive correlation between emigration and innovation in the presence of strong IPRs protection. |
| Keywords: | Intellectual property rights, Migration, Technology transfer, Brain gain, Diaspora |
| JEL: | O34 F22 O33 J24 J61 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.60&r=cwa |
| By: | Ariel Burstein; Javier Cravino; Jonathan Vogel |
| Abstract: | Capital equipment – such as computers and industrial machinery – embodies skill-biased technology, in the sense that it is complementary to skilled labor. Most countries import a large share of their capital equipment, and by doing so import skill-biased technology. In this paper we develop a tractable quantitative model of international trade in capital goods to quantify the extent to which trade, through capital-skill complementarity, raises the relative demand for skill and hence increases the skill premium. In one counterfactual, we find that moving from the trade levels observed in the year 2000 to autarky would decrease the skill premium by 16% in the median country in our sample, by 5% in the US, and by a much larger magnitude in countries that heavily rely on imported capital equipment. |
| JEL: | F1 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17460&r=cwa |
| By: | Avdasheva, Svetlana; Goreyko, Nadezhda; Pittman, Russell |
| Abstract: | In 2006, Russia amended its competition law and added the concepts of “collective dominance” and its abuse. This was seen as an attempt to address the common problem of “conscious parallelism” among firms in concentrated industries. Critics feared that the enforcement of this provision would become tantamount to government regulation of prices. In this paper we examine the enforcement experience to date, looking especially closely at sanctions imposed on firms in the oil industry. Some difficulties and complications experienced in enforcement are analyzed, and some alternative strategies for addressing anticompetitive behavior in concentrated industries discussed. |
| Keywords: | competition law; collective dominance; abuse of dominance; Russian Federation |
| JEL: | L13 L41 K21 D43 |
| Date: | 2011–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33742&r=cwa |
| By: | Jong-A-Pin, R.; Mierau, J. O. |
| Abstract: | This paper develops a model of the relationship between the age of a dictator and economic growth. In the model a dictator must spread the resources of the economy over his reign but faces mortality and political risk. The model shows that if the time horizon of the dictator decreases, either due to an increase of mortality risk or political risk, the economic growth rate decreases. The model predictions are supported by empirical evidence based on a three-way fixed effects model including country, year and dictator fixed effects for a sample of dictators from 116 countries. These results are robust to sample selection, the tenure of dictators, the definition of dictatorship, and a broad set of economic growth determinants. |
| JEL: | H11 O11 O43 |
| Date: | 2011–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1158&r=cwa |
| By: | Anders Akerman (Department of Economics, Stockholm University); Anna Larsson (Department of Economics, Stockholm University); Alireza Naghavi (University of Bologna and Fondazione Eni Enrico Mattei) |
| Abstract: | Data on the growth performances of countries with similar comparative (dis)advantage and political institutions reveal a striking variation across world regions. While some former autocracies such as the East Asian growth miracles have done remarkably well, others such as the Latin American economies have grown at much lower rates. In this paper, we propose a political economy explanation of these diverging paths of development by addressing the preferences of the country’s political elite. We build a theoretical framework where factors of production owned by the political elites differ across countries. In each country, the incumbent autocrat will cater to the preferences of the elites when setting trade policy and the property rights regime. We show how stronger property rights may lead to capital accumulation and labor reallocation to the manufacturing sector. This, in turn, can lead to a shift in the comparative advantage, a decision to open up to trade and an inflow of more productive foreign capital. Consistent with a set of stylised facts on East Asia and Latin America, we argue that strong property rights are crucial for success upon globalization. |
| Keywords: | Autocracy, Growth, Political Elites, Landowners, Capitalists, Growth Miracles, Trade, Comparative Advantage, Capital Mobility, Property Rights |
| JEL: | F10 F20 P14 P16 O10 O24 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.65&r=cwa |
| By: | Etienne Farvaque (Equippe -University of Lille 1, Faculté des Sciences Economiques et Sociales); Alexander Mihailov (University of Reading and University of Warwick, Department of Economics); Alireza Naghavi (University of Bologna, Department of Economics) |
| Abstract: | This paper aims to explain the rise and fall of communism by exploring the interplay between economic incentives and social preferences in different economic systems. We introduce inequality-averse and inefficiency-averse agents responding to economic incentives and transmitting their ideology as they are affected by evolving outcomes. We analyze their conflict through the interaction between leaders with economic power and followers with ideological determination. The socioeconomic dynamics of our model generate a pendulum-like switch from markets to a centrally-planned economy abolishing private ownership, and back to restoring market incentives. The grand experiment of communism is thus characterized to have led to the discovery of a trade-o¤ between equality and efficiency at the scale of alternative economic systems. |
| Keywords: | Capitalism, Communism, Inequality, Inefficiency, Ideological Transmission, Economic Transitions |
| JEL: | C72 D31 D63 D74 D83 P51 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2011.70&r=cwa |
| By: | Böddeling, Annika; Witte, Benjamin |
| Abstract: | -- |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:uwhdps:92011&r=cwa |