Traditional literature on energy economics gives a central role to exogenous political events (supply shocks) or to global economic growth (aggregate demand shock) in modeling the oil market. However, more recent literature claims that the increased precautionary demand for oil triggered by increased uncertainty about a future oil supply shortfall is also driving the price of oil. Based on this motivation, in the first chapter, we propose to build a DSGE model to explore macroeconomic consequences of precautionary demand motives in the crude oil market. The intuition behind the precautionary demand is that since firms, using oil as an input in their production process, are concerned about the future oil prices, it is reasonable to think that in the case of uncertainty about future oil supply (such as a highly expected war in the Middle East), they will buy futures and/or forward contracts to guarantee a future price and quantity. We simulate the effects of demand shocks in the oil market on macroeconomic variables, such as GDP and inflation. We find that under baseline Taylor-type interest rate rule, real oil price, inflation and output loss overshoot and go down below steady state at the next period if uncertainties are not realized. However, if the shock is realized, i.e. followed by an actual supply shock, the effect on inflation and output loss is high and persistent. Second chapter analyzes the effect of storage market on the monetary policy formulation as a response to an oil price shock. Some recent literature suggests that although high oil prices contributed to recessions, they have never had a pivotal role in the creation of those economic downturns. A general consensus is that the decline in output and employment was due to the rise in interest rates, resulting from the Fed’s endogenous response to the higher inflation induced by oil price shocks. However, traditional literature assumes that oil price shocks are exogenous to the U.S economy and they ignore the storage market for the crude oil. In this regard, a model with an endogenous (demand shock) or exogenous (supply shock) price shock may produce a totally different monetary policy proposal when there exists a market for storage for the crude oil. The rationale behind this idea is that when goods’ prices are sticky in the economy, the monetary authority can effect the level of inventories through the changes in the real interest rates. Thus, lower interest rate rules, as proposed in the literature, will cause additional oil supply scarcity in the spot market. Therefore, an optimal monetary policy that maximizes the welfare in the economy should consider the adverse affect of low interest rates on the crude oil market.

Abstract: Pharmaceuticals and their metabolites, collectively known as pharmaceutically active compounds (PhACs), have been detected in surface water, groundwater, and drinking water, in a number of countries, since the mid-1990s. Pharmaceuticals can be used in human or veterinary medicine; human pharmaceuticals in the environment are the subject of this dissertation. Human pharmaceuticals enter the environment via wastewater treatment plants, after being consumed and excreted by humans, and through improper disposal, to toilets and garbage, among other routes of entry. Some PhACs have been found to have detrimental effects on aquatic organisms at low concentrations, such as the feminization of fish after exposure to low levels of 17-ethinylestradiol, the active ingredient in the birth control pill. Others are suspected of having effects on non-target species, but the impacts of long-term exposure to mixtures of PhACs generally remain poorly understood. Nevertheless, the precautionary principle suggests that management action to mitigate the environmental impacts of PhACs should be considered and possibly implemented. The purpose of this dissertation is to provide an analysis of precautionary management strategies to mitigate the environment impacts of human PhACs. Four underlying objectives are set. The first is to review the extant scientific understanding of human PhACs in the environment, so that this knowledge can be applied to the analysis of management strategies. The sources, transport, fate, and occurrence of PhACs are discussed, and several classes of PhACs of particular concern are highlighted. The effects of PhACs on humans and aquatic organisms are explored, in addition to the gaps in scientific understanding of PhACs in aquatic environments. Finally, a rough ranking of priority PhACs is conducted; the PhACs of greatest concern are found to be carbamazepine, clofibric acid, ifosfamid, 17a-ethinylestradiol, oxytetracycline, ciprofloxacin, and diclofenac. The second objective is to investigate how planning and management principles and theories can be applied to the problem of PhACs in the environment. The precautionary principle and the theory of adaptive planning are identified as essential tools in this regard. The application of the precautionary principle and adaptive planning to pharmaceuticals in the environment are discussed, and a management framework is developed. The third objective is to determine how human PhACs in the environment can be managed at a local scale, using a case study in the Region of Waterloo. Pharmaceuticals released from two wastewater treatment plans are found entering the local environment at concentrations similar to those in other cities internationally. Social surveys indicate that residents desire management action to prevent environmental contamination by pharmaceuticals, but at a limited cost. The surveys also indicate that many residents dispose of pharmaceuticals improperly; education to encourage proper drug disposal is therefore recommended as one of several management strategies. The other two recommended management strategies target the wastewater treatment plants. In Foxboro, where the wastewater treatment plant is functioning less than optimally, optimization without technological upgrades is suggested. In Kitchener, where the plant is functioning within ministerial guidelines, ozonation is suggested as a means of improving pharmaceutical removal without exceeding residents’ willingness to pay. The fourth and final objective is to assess how human pharmaceuticals can be managed at a broad scale, such as at the national scale. Stakeholder interviews are conducted with the purpose of gaining a deeper understanding of possible management strategies. A policy analysis is conducted to determine which combinations of management strategies are likely to optimally address the problem of PhACs in the environment, and some policy packages are recommended for implementation by governments – in particular, multiple levels of government in Canada. This dissertation is among the first research efforts to investigate the management of pharmaceuticals in the environment. Few efforts to date have combined natural scientific research, social scientific research, and an understanding of planning and management theories, to explore policy and management options for this issue. It is hoped that this research will provide assistance to various governments grappling with pharmaceuticals in the environment. Furthermore, the research provides insight into how environmental problems surrounded by high levels of scientific uncertainty can be managed. The framework for precautionary decision making developed in this study can provide guidance to planners, managers and policy makers faced with the problem of uncertain environmental risk.

This thesis is concerned with promoting better environmental protection through the application of the precautionary principle in the Nigerian oil and gas industry. The last four decades have brought a new awareness of the environmental risks of upstream oil and gas exploration and production in the Nigerian Niger Delta region. The enviro'nmental risks can be classified into certain (identified) and uncertain environmentaI risks. Uncertainties "associated with oil and gas pollution are manifested "in uncertainty as to probability of occurrence and uncertainty as to the magnitude of the environmental risk. For instance, there exist uncertainties as to impact of atmospheric emissions, uncertainty as to the full impact on biodiversity, uncertainty as to the impact on marine environment. The realisation that there are uncertain environmental risks in the oil and gas industry which cannot be completely ignored without consequence ne~essitated this research. In view of the uncertainties surrounding oil and gas environmental risks, this thesis argues that the best approach to deal with these uncertainties is through the adoption and application of the precautionary principle in the Nigerian oil and gas environmental regulatory framework. Through a comparative analysis of the UK and the Nigerian upstream oil and gas environmental laws the thesis shows that the precautionary principle has not been incorporated into the Nigerian laws. The research shows that the UK's upstream oil and gas environmental laws are more disposed to the application of the precautionary principle in the face of uncertainties than the Nigeria laws. The research recommends different ways through which the precautionary principle can be integrated into the Nigerian upstream oil and gas environmental legal framework. The recommendations made in this research do not arise solely from the positive sides of the UK experience. Measures that will promote the application of the precautionary principle which have not been implemented in the UK but are deemed to be beneficial to Nigeria are also recommended.

The precautionary principle has emerged as one of the most contentious international norms within international environmental law. Yet, despite the vexing conceptual uncertainties confronting the precautionary principle, it is repeatedly invoked by policy makers and incorporated within international and domestic environmental law and agreements. This thesis explores how the international norm of precaution comes to be translated from the international sphere to domestic public policy. The research utilizes the pathways framework, which suggests that there are three additional pathways in additional to the direct implementation of international rules in national law and policy - international norms and discourse, markets and direct access - through which actors, institutions and interests can influence domestic and firm-level policy change. The findings propose an explanation of why Canada came to adopt a particular version of the precautionary principle, also revealing the complex nature of norm transfer, the significance of multiple causal pathways of influence and the interactions arising along these pathways.

This thesis consists of three essays. In Precautionary Saving under Correlated Risk, I show that the sign of the correlation between the random variables might determine whether saving increases or decreases when risk is introduced. Precautionary saving is thus not confirmed. In the second part of this chapter, the consumer must also allocate her saving between an insurance and an interest-bearing asset. It is shown that switching the sign of correlation changes the optimal insurance ratio and probably also optimal saving. Saving and Portfolio Choice by Mutually Altruistic Consumers treats the effects of mutual altruism between two individuals. Compared to the Utilitarian social optimum there is, on the one hand, a tendency to higher saving and lower risk share resulting from the higher uncertainty of future income in the Nash equilibrium. On the other hand, there is a tendency to lower saving and higher risk share arising from the possibility of a free ride on the generosity of others, named "Samaritan's Dilemma". Analytically, it was not possible to determine the size or the direction of divergences in the choice variables. Numerical examples show that the effect of the Samaritan's Dilemma outweighs the effect of the greater uncertainty of future income in the Nash equilibrium. However, the divergence in saving between the two solutions is rather small. In the literature, uncertain lifetime has been used to explain both unexpectedly low and unexpectedly high saving by the elderly. In The Effect of Uncertain Lifetime on the Saving of the Elderly, risk is introduced into the remaining lifetime and the consequences of a background risk are investigated. Introducing uncertain lifetime into the certainty model results in a slower decumulation of wealth from the date of retirement. On the contrary, introducing uncertain lifetime into a model with uncertain investment income results in a swifter decumulation and an earlier depletion of wealth.

Native and Colonial Americans had vastly different approaches to the world, and viewed nature and other people in quite dissimilar ways. The concept of self is central to this project because personal values and attitudes toward others are grounded in agency - actions that emerge from the self and define the way that one treats his or her surroundings and everyone or thing in it. The way that one's self is perceived is necessarily communicated within the context of social settings. Situation in a world of other people (and of nature) requires that actions be weighed in accordance with agency. The very concept of what it is to have self is a key way to understand a world-view, because the values that are central to cultural communities have their locus within self. As such, the importance of defining to what or to whom one is agent must be addressed. The concepts of self that were fostered in members of tribes and early settlement communities contributed greatly to the world-views of their members, and consequently the treatment of their surroundings. One aim of Native American religions was to cultivate within tribal members the worthiness of respect harbored within beings of all sorts. Native American oral traditions established in members, from early on, the skill of actively listening to nature and the mindset that the earth and its inhabitants should be approached with care and respect. This was apparent in the treatment of nature, for personhood was extended to living creatures of all kinds, and even what we might regard as inanimate objects. Native Americans viewed themselves as vitally related to all other living powers of the world. These approaches to interacting with nature, combined with a word-view that was willing to accept a wide array of entities as beings, instilled a broad concept of self within Native American peoples. In contrast, based on traditional Western thought - foundationally that of Descartes and highly influenced by John Locke - Colonial Americans developed a very different concept of self from which members of this culture saw the world as hierarchical. As a result, selves turned inward and understood personal existence as other than, or separate from, nature. Persons were manifestly cognitive beings with moral agency, and only other beings with the same attributes should be afforded equal respect or regarded as having rights, as such. The thematic that developed as a result was, and still is today, founded upon the value of property ownership and the utilization of property and natural resources for production. Why is it important to look at the individual Native American tribe member or Colonial American community member? Since the actions of each member contribute to the wellbeing of the whole group, and consequently of nature, it is important to grasp how self-conduct that is necessarily a product of the individual self, fits into the bigger picture and affects the attitudes and actions of the individual toward other people and the environment. This coincides with the purpose of this project to show how the concept of self for Native Americans can be illuminating in many ways, consequently casting light on how we might learn from their ways, rather than give the impression to readers that one concept of self is any better or worse than the other. It is my aim to illustrate the unique and intriguing way that Native Americans view the self as part of nature, and investigate how these differing concepts of self, in relation to nature, affect how the these groups act toward nature. My hope is that readers will be encouraged to reflect on their own values and the roles that those values play in modern America, including some of the implications that these concepts of self have had in the past and continue to have for the future.

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No / This paper shows that the presence of persistent uninsurable risk concentrated in economic depressions has the potential to resolve two well¿known asset pricing puzzles. It is also shown that the presence of such risk in more normal economic expansions and recessions is likely to be much less relevant in determining equilibrium asset prices.

A large literature has related the failure of interest rate parity in the foreign exchange market to the existence of a time-varying risk premium. Nevertheless, most modern open economy DSGE models imply a (near) perfect interest rate parity condition. This paper presents a stylized two-country incomplete-markets model in which countries have strong precautionary motives because they face international liquidity constraints, the presence of which successfully generates a time-varying risk premium: the country that has accumulated debt after experiencing relative worse times has stronger precautionary motives and its asset carries a risk premium. (author's abstract) / Series: Department of Economics Working Paper Series

In the first chapter, I analyze the question that whether the elasticity of intertemporal substitution or risk aversion is more important determinant of precautionary savings. This is an important question since a significant fraction of the capital accumulation is due to precautionary savings according to studies. Thus, knowing the important determinant of precautionary savings will be helpful to understand the capital accumulation mechanism. I look into the effects of the elasticity of intertemporal substitution and risk aversion on precautionary savings separately by performing simulations in order to obtain numerical results. I find that the elasticity of intertemporal substitution is more important determinant than risk aversion. In the second chapter, I study the impact of the introduction of futures trading on the volatility of the underlying spot market for Turkish Istanbul Stock Exchange (ISE).The economic literature intensified the debate on the negative or positive impact of futures trading on the stock market volatility. Although there are empirical studies for different countries with mixed results, most of them focus on developed countries. There are a few empirical researches on emerging markets. Analyzing the data, following results are obtained for ISE. First, the results suggest that the introduction of futures trading has decreased the volatility of ISE. Second, the results show that futures trading increases the speed at which information is impounded into spot market prices. Third, the asymmetric responses of volatility to the arrival of news for ISE have increased after the introduction of futures trading. In the third chapter, I investigate the presence of calendar anomalies in ISE by using GARCH models. The presence of calendar anomalies and their persistence presence since their first discovery still remains a puzzle to be solved. On the other hand, there are some claims that general anomalies are much less pronounced after they became known to the public. Most of the studies have examined the developed financial markets. However, it is important to test the calendar effects in data sets that are different from those in which they are originally discovered and so ISE is a good case to test the calendar effects for a developing country. / text