A NOTE ON THE EFFECT OF TRADE LIBERALIZATION VIA OPTIMAL POLLUTION TAX

This paper reexamines the environmental consequences of trade liberalization in a general equilibrium model of a small open economy facing trade and environmental distortions. I show that, under certain conditions, trade liberalization achieved by reducing trade barriers increases the amount of pollution through change in the optimal pollution tax. This result is worthy of consideration in regard to countries that pursue trade liberalization, and the subsequent environmental cleanup.     

Ramsey policies in a small open economy with sticky prices and capital

This paper analyzes jointly optimal fiscal and monetary policies in a small open economy with capital and sticky prices. We allow for trade in consumption goods under perfect international risk-sharing. We consider balanced-budget fiscal policies where authorities use distortionary taxes on labor and capital together with monetary policy using the nominal interest rate. First, as long as a symmetric equilibrium is considered, the steady state in an open economy is isomorphic to that of a closed economy. Second, sticky prices’ allocations are almost indistinguishable from flexible prices allocations both in open and closed economies. Third, the open economy dimension delivers results that are qualitatively similar to those of a closed economy but with significant quantitative changes. Tax rates are both more volatile and more persistent to undo the distortions implied by terms of trade fluctuations.     

Uncertainty, the structure of production and the pattern of trade of centrally planned economies

Conclusions In this paper we have demonstrated that terms of trade uncertainty imposes a welfare loss on a centrally planned economy by reallocating resources toward the production of import substitutes and domestic consumption of exportables and a consequent decrease in the volume of trade. We have also shown that the centrally planned economies have developed a number of institutions, such as trade agreements and pricing rules, designed to minimize the losses caused by terms of trade uncertainty. Finally, we have suggested that the behavior of these economies during the post-Warperiod is consistent with welfare maximization under terms of trade uncertainty.I am indebted to Edward A. Hewett and Paul N. Rappoport for their assistance and comments at various stages of my work on this paper. Any errors and all opinions are entirely my responsibility.     

进出口贸易对地区生产总值增长贡献的实证研究——以镇江市为例

在推动经济增长的各种因素中,进出口贸易无疑是一个重要的因素。本文对近几年的镇江市生产总值和贸易发展展开了研究,并利用Eviews软件和SPSS软件,对镇江的生产总值、进口额和出口额进行了相关性分析和回归分析,最终得出两者之间存在正相关性,进而提出努力发展镇江市进出口的相关建议,以更好的发挥进出口贸易对经济增长的促进作用。     

On Conformity Testing and the Use of two Stage Procedures

Conformity testing is a systematic examination of the extent to which an entity conforms to specified requirements. Such testing is performed in industry as well as in regulatory agencies in a variety of fields. In this paper we discuss conformity testing under measurement or sampling uncertainty. Although the situation has many analogies to statistical testing of a hypothesis concerning the unknown value of the measurand there are no generally accepted rules for handling measurement uncertainty when testing for conformity. Usually the objective of a test for conformity is to provide assurance of conformity. We therefore suggest that an appropriate statistical test for conformity should be devised such that there is only a small probability of declaring conformity when in fact the entity does not conform. An operational way of formulating this principle is to require that whenever an entity has been declared to be conforming, it should not be possible to alter that declaration, even if the entity was investigated with better (more precise) measuring instruments, or measurement procedures. Some industries and agencies designate specification limits under consideration of the measurement uncertainty. This practice is not invariant under changes of measurement procedure. We therefore suggest that conformity testing should be based upon a comparison of a confidence interval for the value of the measurand with some limiting values that have been designated without regard to the measurement uncertainty. Such a procedure is in line with the recently established practice of reporting measurement uncertainty as “an interval of values that could reasonably be attributed to the measurand”. The price to be paid for a reliable assurance of conformity is a relatively large risk that the procedure will fail to establish conformity for entities that only marginally conform. We suggest a two‐stage procedure that may improve this situation and provide a better discriminatory ability. In an example we illustrate the determination of the power function of such a two‐stage procedure.     

区域经济一体化经济增长收敛性的实证研究

本文采用δ收敛考察欧盟(欧共体)在1955年-2000年和东盟在1965年-2005年区域经济一体化与经济增长收敛的关系,发现欧盟在1955年-1990年呈现显著的经济增长收敛,而东盟成立后经济增长呈发散趋势。本文通过分析认为,呈现经济增长收敛的区域经济一体化具有如下特点:一是经济一体化成员国消除了彼此间的贸易壁垒,区域内部基本实现自由贸易;二是经济一体化成员国之间的贸易流量成为各自对外贸易的主要流量;三是FDI效应导致成员国之间的资源配置进一步优化。     

Trade and Income Growth in Vietnam: Estimates from a New Social Accounting Matrix

Economic reforms and greater outward orientation are giving rise to extensive structural change in the Vietnamese economy. Because of the leverage that global markets can exert on an emerging economy, such adjustments will be particularly significant in the composition of domestic supply and demand. As domestic protection levels are reduced and external market access increases, trade growth and shifting trade patterns will have pervasive effects on income distribution in Vietnam. In this paper, we use a newly estimated Vietnam social accounting matrix to elucidate the links between trade and income in the country. With matrix decomposition methods, we show how the Vietnamese economy propagates the direct effects of external demand across the spectrum of domestic activities, factors, and households. This detailed analysis provides a blueprint for policies to improve economic participation of activities and households with relatively weak linkages to the rest of the economy.     

The evolution of free trade networks

This paper considers the evolutionary dynamics of a free trade agreement (FTA) network formation game among N countries. We first explore the static model introduced by Goyal and Joshi (2006) and precisely characterize the set of pairwise stable FTA networks. Then, we develop a dynamic model under random perturbations and identify long-run outcomes to remove prediction uncertainty inherited from static analysis. The results show that both partial free trade and global free trade will result when there are only three countries. However, when more countries are involved, only the complete FTA network emerges.     

INTERNATIONAL TRADE IN MINING PRODUCTS

Abstract The increase in mineral price volatility since 1970 and worries about the impact of rapidly growing mineral exports on the economic growth of developing countries have created recent interest in mineral trade flows and policies. This paper provides a review of current thinking on the economics of international trade in mining products. Despite mining products’ importance in early formulations of trade theory, there have been relatively few studies that have specifically examined mining product trade flows. The limited evidence that exists supports the idea that factor endowment differences explain much mining product trade. There is some apparent South–South and intra‐industry trade in mining products, but we find no need to resort to the ‘new trade theory’ to explain this. Given worries of substandard growth and development in mining‐based economies, trade policies have been used to try to accelerate the movement towards resource‐based manufacturing. In the light of recent evidence that mining product exporters have not suffered in the long‐run from mining activity, these policies are likely to have been unwarranted. Nevertheless, there is some evidence that the more closed mining economies have had faster growth than the open mining economies, reflecting correction of a political economy trap that causes open mining economies to under‐invest in education.     

Investment in Fixed Capital Stock: Testing for the Impact of Sectoral and Systemic Uncertainty*

This paper applies current theory recognizing the irreversibility of investment, in order to test for the impact of uncertainty on investment expenditure for a middle income country. The contribution of the paper is unique in two respects. First, it employs dynamic heterogeneous panel estimation techniques not previously applied to investment functions. Secondly, it explicitly tests for the impact of both sectoral and systemic uncertainty on investment expenditure. We find that both sectoral (as measured by output volatility) and systemic uncertainty (as measured by political instability) have a negative impact on investment rates in a middle income country context. Liquidity constraints and growth in total factor productivity are found to have no impact on investment, while trade liberalization has the impact predicted by Heckscher‐Ohlin trade theory. Finally, we find complementarity effects between physical capital and skilled human capital, suggesting that South African educational policies may have hampered investment in physical capital as well as the growth performance of the economy. Policy implications emphasize the importance of lowering uncertainty for investors, and the need for sound human capital investment.     

Elastic attention,risk sharing,and international comovements

In this paper we examine the effects of elastic information-processing capacity (or elastic attention) proposed in Sims (2010) on international consumption and income correlations in a tractable small open economy (SOE) model with exogenous income processes. We find that in the presence of capital mobility in financial markets, elastic attention due to a fixed information-processing cost lowers the international consumption correlations by generating heterogeneous consumption adjustments to income shocks across countries facing different macroeconomic uncertainty. In addition, we show that elastic attention can improve the model’s predictions for the other key moments of the joint dynamics of consumption and income.     

中国的银行业竞争结构对国际贸易影响的区域收敛性

本文通过建立内生经济增长理论模型,利用我国1996～2009年30个省份的面板数据,建立空间面板数据模型考察银行业竞争结构对国际贸易影响的区域差异性。研究结果表明,在控制银行业竞争结构、外商直接投资水平等差异后,各省份国际贸易的增长符合条件β收敛假说,表明省际间银行业竞争结构差异是造成各省份对外贸易差异的原因,缩小省际间银行业结构差异,加快落后地区中小银行的发展,提升银行业的竞争力度有利于国际贸易差距的减小。本文为通过改善银行业的结构关系可以促进内陆开放经济高地建设提供了理论及实证依据。     

Evolution in a General Equilibrium framework

In this paper, we consider a general equilibrium model in which the economies are characterized by the distribution of firms on a set of branches of production; we will show that based on the decisions of the managers of the firms, it is possible to build a dynamic system whose solutions reproduce the possible trajectories of the economy. Once the initial state of an economy is known, that is, the initial distribution of firms, we will have a unique solution for this dynamic system, which will coincide with the evolution of the economy, that is, the evolution of prices and equilibrium allocations.The investment decisions of the administrators of the companies will change the distribution over the set of existing productive branches, which in turn will produce changes in the wealth of consumers who are also shareholders of the companies and then as a consequence, their demand will change, and therefore the equilibrium allocations and prices will too.In most cases, these decisions lead to an improvement in the efficiency of the productive side of the economy and an increase in the welfare of the economy as a whole, but, as we will show, under some particular circumstances, even when it comes to rational decisions from the point of view of administrators, this can lead to undesirable repercussions on the welfare of consumers. Besides, in a neighborhood of a critical economy, even when these decisions may involve small changes in the distribution of companies, they can cause abrupt and unexpected changes in the behavior of the economy, or in other words, they can cause an economic crisis. These are characterized by large changes in the prices, in the demand, and in the supply of goods. In contrast, in a sufficiently small neighborhood of a regular economy, small changes in the distribution of firms produced by the investment decisions of managers do not lead to large changes in the subsequent behavior of the economy. We will exemplify these statements with several numerical examples.     

Stochastic trends and economic fluctuations in a small open economy

In this paper we describe how restricted vector autoregressions can be employed to examine the sources of macroeconomic fluctuations. We show how cointegration restrictions can be used to identify a VAR system with common stochastic trends subject to transitory and permanent changes in average growth, and how we may investigate the system's responses to permanent shocks, i.e. to innovations to the trends. Theoretical cointegration vectors are derived from a small open economy growth model for terms of trade, real GDP, real consumption, and real investments. Applying these methods to Swedish annual data (1875–1986) we find that permanent real (supply) shocks account for most of the fluctuations in GDP, even in the short run.     

Changing industrial structure and competitive patterns of manufacturing and non-manufacturing in a small open economy: An entropy measurement

This paper studies the industrial concentration and competitive patterns of Hong Kong, a typical small open economy, via an entropy measurement. A relatively low degree of concentration was found to exist. Manufacturing showed decreasing concentration for 1976-81 and increasing concentration after 1987. Non-manufacturing had decreasing concentration since 1982. A structural change between the sectors had occurred. The size of the domestic market seemed unimportant in determining the level of concentration in a small open economy with free trade. The open-door policy of the PRC which facilitated free resource mobility and outward investment between the two regions should be important to contribute such patterns.     

Stochastic optimal growth with a non-compact state space

This paper studies the stability of a stochastic optimal growth economy introduced by Brock and Mirman [Brock, W.A., Mirman, L., 1972. Optimal economic growth and uncertainty: the discounted case. Journal of Economic Theory 4, 479–513] by utilizing stochastic monotonicity in a dynamic system. The construction of two boundary distributions leads to a new method of studying systems with non-compact state space. The paper shows the existence of a unique invariant distribution. It also shows the equivalence between the stability and the uniqueness of the invariant distribution in this dynamic system.     

Stochastic growth with social-status concern: The existence of a unique stable distribution

This paper extends Kurz’s (1968) growth model to a stochastic growth framework with social-status concern and unbounded production shocks. Using the stochastic monotonicity of a stochastic dynamic system and the methods adopted in Zhang (2007), the existence, uniqueness, and stability of invariant distribution are investigated. Different from the existence of multiple steady states under certainty, it is shown here that there exists a unique stable invariant distribution under uncertainty.     

我国对外贸易与经济增长的相关性实证研究

随着经济全球化进程的不断加快,对外贸易对于任何一个国家来说都已经成为经济发展的焦点之一。尤其对于自加入WTO以来越来越成为名副其实的"世界工厂"的中国来说,一方面我国正处在经济迅猛增长的关键时期,另一方面对外贸易的依存度一直在不断上升,此时此刻对外贸易与经济增长之间的相关性的研究就更加具有价值。我国应该优化进出口贸易结构,在汇率制度上进行创新,在政策上辅佐支持国际贸易,以使其发挥出对经济增长的促进作用的最好水平。     

Outsourcing and trade in a spatial world

This paper provides an analysis of outsourcing and trade in a spatial model à la Hotelling. In this setting, we discuss the trade-off between transport-cost-related disadvantages and outsourcing-related production cost advantages of a large economy and we investigate how the existence of national transport costs influences both the structure of industrial production and the pattern of final goods trade. In addition, the model gives a rich picture of the possible welfare effects of trade liberalization. In particular, we show that a final goods exporting country definitely gains from economic integration, while a final goods importing country may lose. Finally, when lowering domestic outsourcing activities, trade liberalization may reduce world welfare, even if pro-competitive effects lead to a decline in consumer prices.     

Optimal policy in Markov-switching rational expectations models

In this paper we consider the optimal quadratic control problem of Markov-switching linear rational expectation models. These models are general and flexible tools for modelling not only regime but also model or parameter uncertainty. We show, first, how to find the solution of a Markov-switching linear rational expectation model. Based on this solution we then show how to apply dynamic programming to find the optimal time-consistent policy and the resulting Nash-Stackelberg equilibrium. Suitable modifications of the algorithm allow to deal with the (non-RE) case in which the policymaker and the private sector hold different beliefs or probabilities over regime change. We also show how the optimisation procedure can be employed to obtain the optimal policy under commitment. As an illustration we compute the optimal policy in a small open economy subject to stochastic structural breaks in some of its key parameters.