http://hdl.handle.net/2027.42/57418 Wed, 19 Jun 2013 09:25:03 GMT 2013-06-19T09:25:03Z http://deepblue.lib.umich.edu:80/bitstream/id/208856/229159.jpg http://hdl.handle.net/2027.42/57418 http://hdl.handle.net/2027.42/94442 Does investment call the tune? Empirical evidence and endogenous theories of the business cycle Tapia Granados, José Abstract: Theories of the business cycle can be classified into two main groups, exogenous and endogenous, according to the way they explain economic fluctuations—either as responses of the economy to factors that are external (exogenous shocks) or as upturns and downturns of the economic system internally generated (by endogenous factors). In endogenous theories investment is generally a key variable to explain the dynamic status of the economy. This essay examines the role of investment in endogenous theories. Two contrasting views on how changes in investment and profitability push the economy toward expansion or contraction are represented by the insights of Kalecki, Keynes, Matthews, and Minsky, versus those of Marx and Mitchell. Hyman Minsky claimed that investment “calls the tune” to indicate that investment is the only variable not determined by other variables, so that future profits, investment, and the dynamic status of the economy are determined by current investment and investment in the near past. However, this hypothesis does not appear to be supported by available empirical data for 251 quarters of the U.S. economy. Statistical evidence rather supports the hypothesis of causality in the direction of profits determining investment and, in this way, leading the economy toward boom or bust. Sat, 01 Dec 2012 00:00:00 GMT http://hdl.handle.net/2027.42/94442 2012-12-01T00:00:00Z http://hdl.handle.net/2027.42/93589 Dynamics and Economic Aspects of Climate Change Tapia Granados, José A; Carpintero, Oscar Climate change is the alteration of climate directly or indirectly caused by human activities that modify the composition of the atmosphere. Greenhouse gases (GHG), particularly CO2, are accumulating in the atmosphere, with the consequent warming. Global mean temperature has risen since preindustrial times, with most of the warming occurring in the last three decades. The consequence are increasingly frequent extreme weather events. Though economists have often disagreed about economic aspects of global warming, views as those of the Stern Review—that purports global warming as a major economic problem implying risks of disaster and demanding the use of major resources—are increasingly common. The idea that with development and technological progress, total GHG emissions or at least emissions per capita would decrease has been discredited by evidence of a link between increased economic activity and greater emissions. In general, global emissions of CO2 have increased at rates correlated with the annual increase of world GDP (WGDP). Furthermore, the annual increase in atmospheric concentrations of CO2 is correlated with the growth of WGDP. Impacts of climate change and strategies to mitigate them have been often subjected to integrated assessment models (IAMs), which involve many controversial aspects. For global warming above 2 or 3 °C IAMs agree that there will be a reduction of long-term social well-being and a negative impact suffered mostly by low-income regions, but different IAMs strongly disagree on the level of human-induced damage, with estimates ranging from less than 1% to over 10% of WGDP. However, significant economic and technological potentials for mitigation and emissions reductions are now available. These would be larger if non-technical options (changes in consumption models and lifestyles) are also considered. Direct emissions of GHG related to agriculture are mainly emissions of CH4 and NO2. Indirect emissions of GHG from agriculture include large CO2 emissions from land use change, when natural ecosystems are transformed into cultivated land. The sum of direct and indirect emissions may represent annually ¼ of GHG global emissions, with about ¾ of GHG agricultural emissions coming from low-income countries. Global warming impacts on agriculture include decreased yields in warmer environments, increased yields in colder ones due to longer growing season and CO2 fertilization (that perhaps could be offset by ozone emissions), more insect outbreaks and risk of wildfires, crop damage, and land and water degradation. Mitigation measures focused in soil carbon sequestration by modifying practices of intensive agriculture and moving towards agroecology or low-carbon agriculture are needed. Permits trading and the implementation of a carbon tax are the major options in the public debate about policies to mitigate climate change by reducing emissions. The European Trading Scheme (ETS) implemented in 2005 has yielded very poor results, failing to reduce emissions and with the emissions market presently inactive, with a price of emissions at almost zero. A carbon tax would reduce emissions by discouraging consumption of “carbon-rich” commodities and therefore promoting recycling, reusing and innovation toward production and consumption of “carbon-poor” commodities, but there have been only some timid steps to implement such a tax in some countries, and there is strong opposition to it. Sat, 01 Sep 2012 00:00:00 GMT http://hdl.handle.net/2027.42/93589 2012-09-01T00:00:00Z http://hdl.handle.net/2027.42/91022 Climate change and the world economy: Short-run determinants of atmospheric CO2 Tapia Granados, José; Ionides, Edward; Carpintero, Oscar Volcanic eruptions, the El Niño Southern oscillation (ENSO), world population, and the world economy are the four variables usually discussed as influencing the short-run changes in CO2 atmospheric levels through their influence on CO2 emissions and sinks. Using proper procedures of detrending, we do not find any observable relation between the short-term growth of world population and the increase of CO2 concentrations. Results suggest that the link between volcanic eruptions, ENSO activity, and CO2 concentrations may be confounded by the coincidence of the Pinatubo eruption with the breakdown of the economies of the Soviet Bloc in the early 1990s. Changes in world GDP (WGDP) have a significant effect on CO2 concentrations, so that years of above-trend WGDP are years of greater rise of CO2 concentrations. Measuring WGDP in constant US dollars of 2000, for each trillion WGDP deviates from trend, the atmospheric CO2 concentration has deviated from trend, in the same direction, about half a part per million. Tue, 01 May 2012 00:00:00 GMT http://hdl.handle.net/2027.42/91022 2012-05-01T00:00:00Z http://hdl.handle.net/2027.42/91021 Statistical evidence of falling profits as a cause of recession: A short note Tapia Granados, Jose Data on 251 quarters of the U.S. economy show that recessions are preceded by declines in profits. Profits stop growing and start falling four or five quarters before a recession. They strongly recover immediately after the recession. Since investment is to a large extent determined by profitability and investment is a major component of demand, the fall in profits leading to a fall in investment, in turn leading to a fall in demand, seems to be a basic mechanism in the causation of recessions. Sun, 01 Jan 2012 00:00:00 GMT http://hdl.handle.net/2027.42/91021 2012-01-01T00:00:00Z