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Mobility has been central to economic development and social progress in the modern era. There is emerging evidence, however, that personal daily travel has recently ceased to grow in developed economies. The historic increase in mobility served to enlarge access to desired destinations and allowed more choice of jobs, homes, shops schools etc within acceptable travel times. Access and choice increase in proportion to the square of the speed, whereas choice of any given kind of destination is characterised by declining marginal utility. Accordingly, saturation of daily travel demand is to be expected and is a likely explanation for the observed cessation of per capita growth of personal travel.
This paper reviews the main monthly indicators that could help forecasting world trade and compares different type of forecasting models using these indicators. In particular it develops dynamic factor models (DFM) which have the advantage of handling larger datasets of information than bridge models and allowing for the inclusion of numerous monthly indicators on a national and world-wide level such as financial indicators, transportation and shipping indices, supply and orders variables and information technology indices. The comparison of the forecasting performance of the DFMs with more traditional bridge equation models as well as autoregressive benchmarking models shows that, the dynamic factor approach seems to perform better, especially when a large set of indicators is used, but also that the marginal gains in adding indicators seems to diminish after a certain stage.
The external accident cost of road use is a function of the marginal relationship between road use and accidents, as expressed, for instance, by the elasticity. This elasticity is, however, not necessarily constant, but may be assumed to depend on the traffic volume as seen in relation to road capacity. Dense or congested traffic may force speed levels down, decreasing the risk of accidents or at least the average loss incurred given that an accident takes place. Relying on a large econometric accident model based on monthly cross-section/time-series data for all provinces of Norway, we derive non-linear empirical functions describing the relationship between road use and accidents and discuss their implications in terms of accident costs and externalities. The analysis reveals that there is probably a large accident externality generated by heavy vehicle road use, but that the marginal external accident cost of private car use is quite small, perhaps even negative. To the extent that it is positive, it is so in large part on account of public and private insurance. Contrary to what is frequently believed and maintained, auto insurance does not serve to internalise the cost of accidents. In fact, its primary purpose and effect is exactly the opposite. The adverse incentives created by insurance could, however, be mitigated by certain innovative approaches to ratemaking. Such schemes would ideally involve more decision variables than just the decision to drive. Incentives could, in principle, be attached to speeding, route choice, vehicle choice, safety equipment, or time of day/week/year.
This report provides a summary of the literature on the relationship between trade and informality in developing countries, with an emphasis on the BRIICS. While main conclusions of the ILO and WTO (2009) literature review are highlighted, the report focuses on additional and more recent literature. The report investigates four key issues in the literature on trade and informal labour markets: (1) theoretical predictions for trade and informality; (2) how trade liberalisation affects informal labour markets; (3) how trade flows affect the informal economy; and (4) what implications informality has for trade and growth. The main conclusion from this review is that empirical evidence on the relationship between trade and informality is complex and context-specific. Several of the empirical analyses reviewed in this report suggest that this variation is due to country-specific characteristics (in particular, labour market rigidity, capital mobility, level of economic development and heterogeneity of the informal workforce). Variation can also be partly explained by the fact that different methodologies are used and different measures of informality are employed across studies.

Europe has been beset by an interrelated banking crisis and sovereign debt crisis. Bond spreads faced by Greece and Ireland, and to a lesser extent Portugal followed by Spain, have increased. This paper explores these issues from the perspective of financial markets, focusing mainly on the four countries in the frontline of these pressures: Greece and Portugal, on the one hand, where the problems are primarily fiscal in nature; and Ireland and Spain, on the other, where banking problems related to the property boom and bust have been the key moving part. The paper first examines the probabilities of default implicit in observable market spreads and considers these calculations against sovereign debt dynamics. It then explores the implications of the interaction between bank losses and fiscal deficits on the one hand, and the feedback that any debt haircuts anticipated by markets could have on bank solvency. The study finds that market-implied sovereign default probabilities do in fact discriminate quite clearly between countries based on five criteria that affect the probability of debt restructuring. The discussion highlights some implications for banking system balance sheets of expected losses and shows the potential impact on them of sovereign restructuring implicit in market analysis. While the paper does not make any recommendations for policy action, it does explore a range of policy options and the implications each might have for the financial markets. JEL Classification: G01, G12, G15, G18, G21, H06, H60, H62, H63, H68 Keywords: financial crisis, sovereign risks, public deficits and debt, bond markets, banks.

Masking methods for the safe dissemination of microdata consist of distorting the original data while preserving a pre-defined set of statistical properties in the microdata. For continuous variables, available methodologies rely essentially on matrix masking and in particular on adding noise to the original values, using more or less refined procedures depending on the extent of information that one seeks to preserve. Almost all of these methods make use of the critical assumption that the original datasets follow a normal distribution and/or that the noise has such a distribution. This assumption is, however, restrictive in the sense that few variables follow empirically a Gaussian pattern: the distribution of household income, for example, is positively skewed, and this skewness is essential information that has to be considered and preserved. This paper addresses these issues by presenting a simple multiplicative masking method that preserves skewness of the original data while offering a sufficient level of disclosure risk control. Numerical examples are provided, leading to the suggestion that this method could be well-suited for the dissemination of a broad range of microdata, including those based on administrative and business records.

New restrictions on short-selling sovereign debt need to be supported by concrete evidence that links systematically unrestricted short-selling activities to fraud, abuse or market manipulation. OECD debt managers noted that there is plenty of empirical evidence on the benefits of short selling, including more liquidity, pricing efficiency and better allocated risk. However, solid evidence in the form of empirical data on market instability unambiguously caused by unrestricted short-selling activities (to be counted as ‘costs’) seems to be lacking. Debt managers also noted that the reporting requirements will be costly from a purely administrative point of view. A ban on uncovered short selling transactions of sovereign debt would make risk management more difficult and expensive, with detrimental effects on market efficiency, liquidity and funding costs for sovereigns. Moreover, it is unlikely that such bans would have a stabilising effect in government securities markets during a crisis. Rather than containing the crisis, a ban on short selling of government debt is likely to worsen the situation. The paper concludes that OECD debt managers have a range of tested tools at their disposal for dealing with temporary or chronic dysfunctional measures in sovereign debt markets, ranging from ‘quantity measures’, such as openings, to ‘pricing measures’ such as dynamic fails charges. JEL Classification: E44, G01, G21, G28, E61, H21. Keywords: financial regulation, short-selling, restrictions on short-selling, debt management, risk management, sovereign debt.

As a result of the massive growth of higher education in Turkey, the most pressing priority for this sector today is to meet the new space requirements for an increasing number of students. Now a subject of public attention more than ever before, the second largest item of expenditure for universities is the construction of physical spaces. This article sets out the key trends and presents the findings of a questionnaire conducted in 2005.
The OECD Secretariat, at the invitation of the AHELO Group of National Experts, contracted the Tuning Association to undertake initial development work on learning outcomes to be used for valid and reliable assessments of students from diverse institutions and countries. The two disciplines selected for the AEHLO Feasibility Study are engineering and economics.

Following the Tuning approach, academics from various regions and countries in the world reached consensus on definitions of expected learning outcomes for bachelor’s-type programmes in both disciplines. This Working Paper presents the outcomes of their work for the engineering discipline.

Members of the Engineering Tuning-AHELO working group defined general learning outcomes for all engineering programmes supplemented by branch specifications for the fields of mechanical, electrical and civil engineering, taking into account different degree profiles and relevant occupations.

In addition to the agreed upon learning outcomes, the paper presents an overview of the field of engineering, the typical degrees and engineering occupations associated to the first and second cycle degrees. The paper also discusses the role of learning outcomes and presents the approach used to defining them. A comparative summary of some of the most influential learning outcomes frameworks in the engineering field is also provided.

This paper assesses some welfare consequences of climate change mitigation policies. In the same vein as Becker, Philipson and Soares (2005), a simple index of economic progress weighs in the monetary cost induced by mitigation policies as well as the health benefits arising from the reduction in local air pollution. The shadow price of pollution is calculated indirectly through its impact on life expectancy. Taking into account the health benefits of mitigation policies significantly reduces their monetary cost in China and India, as well as in countries with large fossil-based energy-producing sectors (Australia, Canada and the United States).

The complex effects of the global financial crisis (GFC) have affected countries differently. The concept of stimulus packages to enable economies to withstand its full effects was widespread, as were decisions by several countries to invest in higher education as a means of stimulating the economy while placing workforce development and research on a firmer footing. While the GFC increased awareness of the need to invest in the knowledge economy, governments adopted approaches reflecting their different fundamental priorities. Arguably Ireland was left with little leeway, whereas Australia’s far better economic position might have provided an opportunity to invest in higher education through its stimulus packages. This paper examines the policy choices that Australian and Irish governments made both before, and in response to, the GFC to assess how these decisions have prepared higher education for the future.

2010 was a landmark year for the Development Assistance Committee (DAC) in many ways. It marked 50 years since the DAC was founded, it was the year Eckhard Deutscher handed over the Chair to Brian Atwood, and it marked the coming of age of the Paris Declaration on Aid Effectiveness. In this article, the out-going DAC Chair reflects on the lessons of the past and concludes that despite the many changes and new challenges, development co-operation is as relevant today as ever. He sets three key priorities for the DAC and its members as they embark on the next 50 years. These are to stay true to the commitments made to increase aid volumes, continue to be guided by the principles of effective aid in an increasingly complex context, and reach out to all providers of development co-operation in the effort to create an effective global development partnership.

Traffic accidents are a human tragedy that kills 1.2 million people worldwide annually (World Health Organization, 2004). The cost of traffic accidents are huge and recent estimates for US alone suggest the cost to be USD 433 billion in year 2000 or 4.3 percentage of GDP (Parry et al, 2007). A reduction of this cost can be done in two ways, either by reducing the number of accidents or by mitigating the consequences of the existing accidents. Insurance systems can contribute to both.
The imputation of the labour income of the self-employed typically relies upon the assumption that individuals of this group earn the same average hourly compensation as employees, either at the total economy or industry level. While this assumption is convenient in that it relies upon readily available information on the composition of the labour force and on the compensation of employees, it nevertheless remains somewhat simplistic and thus questionable in its validity. This shortcoming is addressed here by investigating a more refined method to impute the labour income of the self-employed in the United States. Imputations are based on the assumption that the labour income of the self-employed equals the average earnings of employees of the same sex and within the same age group, working in the same industry and having the same level of education. The proposed estimation of the labour income of the self-employed is followed by an analysis of how adjusted total labour income might impact the value of the labour share of output. Results for the United States show that applying this alternative methodology leads to a 2.5 percentage point rise in labour shares of output at the total economy level, led by larger increases of this indicator in sectors such as agriculture and hunting as well as professional, business and other service industries. The time profile in recent years, i.e. 2003-2009, of the labour share of output remains nevertheless unchanged when applying the proposed adjustment methodology.
Offshore natural-gas discoveries have released Israel from complete reliance on imported primary fuels and are allowing for a cleaner energy mix. Furthermore, additional production will soon come on stream, and there is a reasonable chance of new commercially viable gas finds, and possibly of oil too. The authorities have overhauled the system of royalties and taxes, although how best to use the resulting revenues remains the subject of debate. Concerns about competition in the gas sector have risen following the disruption of imports via the pipeline from Egypt, which has strengthened the market position of the lead consortium developing the offshore fields. Competition concerns in the electricity sector have been longstanding due to sluggish reform away from monopoly provision by the state-owned incumbent. As elsewhere, energy use has important environmental side-effects. A comprehensive plan for reducing greenhouse-gas emissions has been developed recently, which relies primarily on energy-efficiency measures and an increase in the share of renewable-electricity product. This Working Paper relates to the OECD 2011 Economic Survey of Israel (www.oecd.org/eco/surveys/Israel).
This paper develops a method for adjusting structural budget balances for asset price cycles and presents estimates of structural budget balances corrected for house-price and equity-price cycles for OECD countries. The traditional cyclically adjusted budget balance indicator, which is the basis for measuring structural or underlying budget balances, does not adjust for the effects of cyclical fluctuations in asset prices. This implies that, by default, asset price related effects on revenues are included in the structural budget measure. That can be misleading for policy makers where asset price shifts prove to be temporary, leading to pro-cyclical fiscal action, especially where policy makers cut tax rates or increase spending in response to unexpected revenue buoyancy. The paper first presents econometric estimates of tax revenue elasticities measuring the response of the major tax categories to house-price and equity-price movements. It then uses these elasticities to adjust revenues for the effects of asset price cycles measured in terms of deviations from “fundamental” and smoothed asset prices. To the extent that asset price movements are independent of, and uncorrelated with, the output cycle, the adjustment can be added to the conventional structural balance to create an asset-adjusted structural balance. The analysis is retrospective, but an important consideration has been to improve the identification of cyclical revenue fluctuations as they occur, or as they are incorporated into fiscal projections, and to be able to recognise the source of revenue “surprises”.
  • 01 Sept 2011
  • David Elzinga, Lew Fulton, Steve Heinen, Oscar Wasilik
  • Pages: 64
  • in IEA Energy Papers
Increased focus has been placed on the issues of energy access and energy poverty over the last number of years, most notably indicated by the United Nations (UN) declaring 2012 as the “International Year of Sustainable Energy for All”. Although attention in these topics has increased, incorrect assumptions and misunderstandings still arise in both the literature and dialogues. Access to energy does not only include electricity, does not only include cook stoves, but must include access to all types of energy that form the overall energy system. This paper chooses to examine this energy system using a typology that breaks it into 3 primary energy subsystems: heat energy, electricity and transportation. Describing the global energy system using these three subsystems provides a way to articulate the differences and similarities for each system’s required investments needs by the private and public sectors.
Advertising of procurement opportunities and contract award results is a foundation stone of public procurement. Full and open advertising facilitates appropriate competition, develops markets and helps in the battle against corruption. SIGMA Brief 6 provides the reader with guidance on where and when notices for contracts subject to the European Union public procurement Directives must be advertised. It also provides information on other methods of keeping the market informed. It gives guidance on the correction of contract notices which contain incorrect information, on how to complete and dispatch contract notices electronically, and special rules for Utilities.

This paper shows that negative comovements between major macroeconomic variables at business-cycle frequencies are commonly observed, but that standard Real Business Cycle (RBC) theory fails to predict this feature of the data. We show that allowing for “anticipation effects” in response to “news shocks” enables standard RBC models to predict both the observed patterns of negative comovement and overall positive correlations. Anticipation also improves magnification of shocks in the model without harming predictions for the other second moments central to RBC studies. Anticipation effects improve on standard RBC frameworks by offering an empirically plausible explanation for the nontrivial fraction of time that aggregate variables are observed to comove negatively.

I examine the effect of labour market policies and institutions on the transmission of macroeconomic shocks to the labour market, using both aggregate and industry-level annual data for 23 OECD countries, 23 business-sector industries and up to 29 years. I find that high and progressive labour taxes and generous unemployment benefits amplify labour income fluctuations. By contrast, statutory minimum wages reduce the difference in the sensitivity of wages to aggregate shocks between low-wage and high-wage industries. Dismissal regulations are found to mitigate the impact of shocks on both earnings and employment. Moreover, this mitigation effect is greater in industries where firms have a greater propensity to make staffing changes through dismissals. Stringent dismissal regulations also appear to reduce the counter-cyclicality of the earnings dispersion between high and low-educated labour.
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