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This paper brings together the largest available sets of national-level data, covering 157 countries over the years 2005–2012, to assess the extent to which governance quality contributes to life evaluations. Our most significant new finding is that changes in governance quality within a policy-relevant time horizon can lead to significant changes in the quality of life. For example, the ten most-improved countries, in terms of changes in government service delivery quality between 2005 and 2012, when compared to the ten most-worsened countries, are estimated to have average life evaluations higher by 0.4 points on a 0 to 10 scale. The results also confirm earlier findings that service delivery quality generally dominates democratic quality in supporting better lives until delivery quality has reached sufficient levels. The situation changes as development proceeds, with democratic quality showing a positive influence among countries that have already achieved higher quality of service delivery.

This paper uses a variety of individual-level survey data from several countries to test for interactions between subjective well-being at different ages and variables measuring the nature and quality of the social context at work, at home, and in the community. While earlier studies have found important age patterns (often U-shaped) and social context effects, these two sets of variables have generally been treated as mutually independent. We test for and find several large and highly significant interactions. Results are presented for life evaluations and (in some surveys) for happiness yesterday, in models with and without other control variables. The U-shape in age is found to be significantly flatter, and well-being in the middle of the age range higher, for those who are in workplaces with partner-like superiors, for those living as couples, and for those who have lived for longer in their communities. A strong sense of community belonging is associated with greater life satisfaction at all ages, but especially so at ages 60 and above, in some samples deepening the U-shape in age by increasing the size of the life satisfaction gains following the mid-life low.

This paper attempts to explain international and inter-personal differences in subjective well-being over the final fifth of the twentieth century. The empirical work makes use of data from three waves of the World Values survey covering about fifty different countries. The analysis proceeds in stages. First there is a brief review of some reasons for giving a key role to subjective measures of well-being. This is followed by a survey of earlier empirical studies, a description of the main variables used, a report of results and tests, and discussion of the links among social capital, education, income and well-being. The main innovation of the paper, relative to earlier studies of subjective well-being, lies in its use of large international samples of data combining individual and societal level variables, thus permitting the simultaneous identification of individual-level and societal-level determinants of well-being. This is particularly useful in identifying the direct and indirect linkages between social capital and well-being.

This paper describes the structure of INTERMOD, a linked international model constructed at the Department of Finance using annual data. Our model follows closely the structure of a policy simulation model developed at the IMF (MULTIMOD), which employs a highly aggregated and common structure for each of the industrial countries. The most important difference is that INTERMOD has separate blocks for each of the G7 countries whereas MULTIMOD aggregates the four smaller countries (France, the UK, Italy and Canada) into a single region. Our discussion of the structure of INTERMOD focuses on the relationship between consumption and wealth, the role of fiscal policy in influencing aggregate demand, the specification of international linkages and the modelling of expectations. This is followed by a comparison of simulation results for INTERMOD, MULTIMOD and other linked international models. Operation of the model in a PC environment is then described. The paper concludes with a discussion of possible policy applications and avenues for further development. A detailed listing of simulation results and the model structure is provided in an appendix to the paper.

This paper describes MACE, a two sector annual nacroeconometric model of the Canadian economy. The sectoral breakdown highlights the role of energy in a small open economy. In addition, the model emphasizes the supply side, which includes both the evolution of normal output and the determination of the level of current output as the consequence of an explicit operating rate decision by firms. The bulk of the paper outlines the approach used to model supply side considerations, since this is where most of the model's innovative features lie.

This paper explains the effects of federal and provincial taxes and royalties on the choice of mine life, mine size, reserve volumes and ore grades for copper deposits in British Columbia. The model described in the paper attempts to spell out some of the complicated interplay of geological, financial, and fiscal factors affecting mine development decisions.

This article continues previous research by the authors into the economic efficiency of two actual tax systems, one relying on a mining profits tax and the other on a gross royalty. The relative efficiency of the royalty-based taxation system is found to be conditioned by the share of resource income sought by the province: at low tax rates there is little difference between the two systems, while at high rates the royalty system is markedly less efficient. The efficiency comparisons are quite consistent over different expected price levels. However, they are influenced significantly by the flexibility of mining operations, which in practice is associated with the ability to produce ore systematically in order of diminishing quality. Curtailed flexibility renders the royalty-based system relatively less efficient.

This paper uses an integrated model of aggregate supply to analyse the post-1973 slowdown in productivity growth in the seven major OECD economics. Factor substitution, unexpected demand changes, profitability, and inventory disequilibrium all contribute to the explanation, which is based on a three-factor nested aggregate production function, including energy, and postulating Harrod-neutral disembodied technical progress. The model is first applied separately to the seven countries assuming constant (though country specific) rates of technical progress. This model provides empirical evidence that this rate of progress has inffact slowed down for several of the faster-growing countries, even after adjusting for factor substitution and cyclical factors. The model is therefore re-estimated, and the sources of productivity decline recalculated, on the hypothesis that rates of efficiency growth in other countries are converging to those in the United States.

Empirical evidence has long shown that output varies more in the short run than do all factor inputs, including employment and hours worked. In such a context, long-run equilibrium involves the choice of average factor proportions and rates of utilization of employed factors, also referred to as operating rates, that minimize total cost of producing the desired level of output. In response to unexpected or temporary changes in demand or costs conditions, optimal temporary equilibrium involves some changes in factor demands coupled with the joint use of pricing and production decisions to make best use of the buffering capacity provided by inventories and factor utilization rates. Applying this framework to aggregate annual data, this paper concentrates on the econometrics of the production or operating rate decision, since the operating rate is the key adjusting variable in the short run. The operating rate decision also reveals most clearly the important consequences of quasi-fixity, and shows how our model contrasts with more conventional treatments. Non-nested hypothesis tests are used to compare the preferred specification with several alternatives.

This paper contrasts with others in electricity economics in that it examines the effect of utility rate structures on the amount of electricity generated as a by-product of industrial heat production, usually referred to as ‘cogeneration’. The example used here is the British Columbia pulp and paper industry. The results are based on process models of the eighteen largest plants in the province. These models permit us to choose the profit-maximizing cogeneration investment options at these mills. While the considerable potential for cogeneration is outlined, the effects of constraints due to the nature of the existing, energy-producing capital stock are also portrayed, permitting the drawing of both long- and short-term supply curves. Similar supply functions are drawn against the price paid for electricity sold by plants to the province's major utility, and for mills located on Vancouver Island, to which the utility is considering the construction of a submerged, high-voltage transmission line.

Simulations of the Canadian quarterly model RDX2 are used to illustrate the main macroeconomic adjustment processes called into play by an exogenous expenditure shock. Primary emphasis is placed on supply responses, including international flows of goods, services, capital and population, and on the key role played by inventory changes in buffering discrepancies between ex ante supply and demand. The constraining roles of prices, wages, and monetary policy are also dissected in some detail.