THE RELATIONSHIP BETWEEN GREENSPACE AGREEMENT, EXTERNAL DISECONOMY AND RESIDENTS’ RISK ASSESMENT

Kenichi SHIMAMOTO

Associate Professor, Hirao School of Management, Konan University

kenichi@center.konan-u.ac.jp

Abstract

The greenspace agreement is an effective method to promote the conservation and creation of greenspace. In this paper, the mechanism of the formation of the greenspace agreement is analysed using the coalition game. As a result, it was identified that the greenspace agreement requires a certain level of supporters in order to be formed and the most desirable situation is when there is a universal agreement. It also identified the possibility of the existence of free riders which could prevent a unanimous support of the greenspace agreement. The number of supporters of the greenspace agreement and number of free riders are dependent on the size of the external diseconomy caused by the lack of consideration for greenspace, the government’s enforceability of taxes on the diseconomy and the decline in land prices due to the external diseconomies from the neglect of greenspace. Furthermore, it was found that it was also influenced by the residents and stakeholder’s risk assessment based on their view towards the government’s enforceability of taxes and the rate of decline in land prices.

Keywords: Greenspace agreement, coalition game, free rider, external diseconomy

JEL classification: H2, Q5, R0

read more

THE UNCOVERD INTEREST PARITY PUZZLE (UIP): EVIDENCE FROM MAJOR CURRENCIES

Athanasios PETSAS

MSc. Hellenic Open University

apetsa@tee.gr

Theodoros PELAGIDIS

Professor, University of Piraeus & NR Senior Fellow, Brookings Institution, US. 21, Lambraki str., GR-18533

pelagidi@unipi.gr

Abstract

This paper investigates empirically the Uncovered Interest Parity puzzle, highlighting the weak relationship between exchange rates and interest rates in particular, using data for the exchange and interest rates from four countries, in different time horizons, running from 3 to 60 months. The analysis in particular focuses on the deviations from rational expectations as a possible explanation of the UIP puzzle.

Keywords: UIP, PPP, Exchange rates

JEL classification: F41, Macro focus

read more

WHO CARES ABOUT REGIONAL INEQUALITIES? EFFECTS OF FISCAL CONSOLIDATION

Vinko MUSTRA

Assistant professor Faculty of Economics, University of Split, Cvite Fiskovića 5, 21000 Split, Croatia

vmustra@efst.hr

Abstract

The most recent global economic crisis and the concerns about long-term (un)sustainability of public finances has supported the implementation of budgetary consolidation measures. Although there are relatively large number of papers investigating the impact of fiscal consolidation on different aspect of economy this paper represent unique attempt of investigating the effects of fiscal consolidation on regional inequalities. We test the hypothesis that in the period of fiscal consolidation, when some spending cut and/or tax hikes, less developed regions are not in position to protect themselves against undesired redistributive policies which put them in more disadvantaged position and increase regional inequalities. In empirical part of the paper we explore the impact of fiscal consolidation on regional inequalities on national levels among 13 EU member countries for period 1995-2009. Two groups of variables are particularly important for this study: measure of regional inequality and fiscal consolidation. Due to fact that recent literature recognizes problems with using cyclically-adjusted primary budget balance (CAPB) as a measure for fiscal consolidation we extend regional empirical literature by using a new database of fiscal consolidation that successfully tackles all this issues. The results indicate that fiscal consolidation led by tax hikes increases regional inequalities and that fiscal consolidation led by spending cuts doesn’t have significant influence on regional inequalities. Finally, the paper highlights that fiscal consolidation is not only the matter of the public debt levels or economic growth, but also important regional issue.

Keywords: Regional inequalities, Fiscal consolidation, European Union

JEL classification: R12, E62, H23

read more