Differing factor adjustment costs across industries: Evidence from Japan

This study uses industry data from Japan to examine the joint behavior of investment and hiring. We estimate factor adjustment costs in industries and focus on the industrial differences in such costs. Our analysis reveals that heavy industries, such as steel and transportation equipment, require relatively large adjustment costs. Furthermore, comparing our results with studies that estimate these adjustment costs using US data, we find that the ratio of labor adjustment costs to total adjustment costs is higher in Japan than in the US. Our findings could be very useful in considering the implications of economic policies on factor adjustments.     

Industrial Policy As an Alternative to Trade Policy: Helping By Hurting*

Abstract Industrial policies that are essentially nonlinear taxes or subsidies on adjustment costs of domestic firms affect those firms' market power in oligopolistic international markets. These adjustment policies often can achieve a strategic purpose at lower cost to the government than linear trade or investment subsidies and are less likely to result in retaliation by other governments. Many governments, however, use adjustment policies for nonstrategic purposes without recognizing that they are reducing their firms' market power by subsidizing adjustment costs rather than taxing them.     

特保条款的歧视性--兼评对我国对外贸易的影响与启示

特保条款是指《中国入世议定书》第16条规定的“过渡期内特殊保障措施”条款,是我国入世时,发达国家强加给我国作为所谓“非市场经济国家”的不公平的歧视性保障措施条款,无论从性质、实施条件、还是程序上其歧视性远大于一般保障措施。该如何面对这一特殊条款,已成为影响我国对外贸易的重要因素。     

Stranded Costs,Takings, and the Law and Economics of Implicit Contracts

Economic Analysis can help resolve the stranded cost controversy that has arisen in debates over electricity market deregulation. "Stranded costs" are costs electric utilities will not recover as power markets move from protected monopolies to an open, competitive environment. We describe the stranded cost problem, its magnitude and the prominent arguments for and against recovery. An economic analysis of implicit contracts can clarify whether there should be a legal duty to compensate utility shareholders for unrecovered costs. However, efficient approaches to electricity deregulation should rely on more than analysis of contracts. The politics of deregulation, as reflected in optimal compensation for regulatory "takings" of property, also affects the desirability of stranded cost recovery.     

Investment in trade facilitating infrastructure: A political-economy analysis

This paper analyzes public investment in infrastructure that facilitates international trade. It considers a world consisting of small open economies that face transport costs for exporting or importing a particular good. Transport costs can be lowered by an improvement in transport infrastructure. National governments non-cooperatively decide about their respective country's investment level. Governments' preferences are assumed to be biased in favor of producers' interests with consequences for equilibrium investments: Exporting countries, whose producers benefit from a transport cost reduction, spend more for infrastructure than importing countries, whose producers are protected by transport costs from foreign competition. This outcome is inefficient, and governments have an incentive to cooperate internationally. The paper also incorporates bilateral trade with two goods that benefit from infrastructure improvements as well as trade that results from offshoring.     

How unemployable are displaced manufacturing workers?: An analysis of adjustment costs and supplemental adjustment assistance benefits in France

There are government programs which provide supplemental adjustment assistance benefits to displaced workers in designated industries. Appealing to the ‘gains from trade’ with income redistribution theory, this paper analyzes the link between the adjustment costs of displaced workers and their former sector of employment. These costs are measured by French data on the mean duration of joblessness of laid-off workers. Empirical evidence is found which confirms the hypothesis that workers displaced from traditional manufacturing and resource industries suffer particularly high losses stemming from unemployment. These effects may be tied to workings of internal labour markets.     

民工荒和半城市化：刘易斯模式困境与出路

当前由各级政府推动的高速城市化,已经造成土地和住房等城市要素价格的过快增长,而农民工工资增长缓慢,因此：（1）农村劳动力城市化的边际成本,已经高于城市化的边际收益;（2）农村劳动力转移与城市化在空间上的不匹配,很大程度上是因为农村劳动力就业过多集中于劳动密集型行业。而劳动密集型行业普遍缺乏创新能力,这会造成农村劳动力转移的边际收益小于城市化成本的趋势,使得刘易斯推-拉模型在中国失灵。     

An empirical, small scale ‘Traded–Nontraded Goods’ model for New Zealand

In this paper, an empirical model of the traded–nontraded goods model was built in order to examine the effect of various policy variables on the real exchange rate and resulting impacts on the variation in industrial supply, demand and employment levels. This framework was also built to search and simulate alternative policy settings to 1984 economic reforms of New Zealand, that would possibly decrease the short-term adjustment costs of 1984 reforms. It was found that, particularly the output contraction and employment loss in exportable industries, would have been lower if the liberalization in the exportable and importable industries had followed similar timing.     

Adjustment costs and threshold effects in factor demand relationships

It has been recently argued that producers may not respond to every input price change in the way that a linear factor demand model would predict. This lumpy response is due to adjustment costs that are inherent in the act of adjusting the mix of inputs applied in the underlying production technologies. This study aims to provide a solid conceptual framework for these nonlinearities in factor demand relationships. Industry-specific implications of convex and non-convex adjustment costs for the linearity of the factor demand relationships as well as price and substitution elasticities are explored. A two-regime threshold system of factor demand equations is estimated for several manufacturing industries in the United States. Empirical results suggest significant threshold effects in the factor demand relationships in most nondurable goods sectors. The size and the nature of thresholds depend upon industry characteristics, including input composition and (non)convexity of underlying adjustment costs. Complete matrices of price and substitution elasticities for each industry are derived using estimates of threshold factor demand systems. Discussion of two contrasting cases in greater detail sheds light on how the effect of price shocks on factor demand relationships varies across industries with different adjustment cost structures.     

Determinants of price adjustment

This paper reports results of an empirical study investigating the adjustment speed of prices to change in costs and demand. Particular emphasis is laid on the impact of concentration on the adjustment speed. In addition, the effects of the business cycle and capital intensity are considered. It shows that concentrated industries tend to adjust prices faster, while capital intensity has a negative impact. Prices are more flexible during an upswing than in times of a recession.     

Labour Rents,Adjustment Costs and the Cost of US Steel Trade Restraints in the 1980s

Recent studies have compared labour gains from protection in import-competing industries with the costs of protection and found that those gains are not large enough to justify trade restraints. This study utilizes a new empirical technique for estimating the costs and benefits of protection in a partial equilibrium framework, and provides a complete and consistent accounting of labour benefits including both labour rents and adjustment costs saved. We find that a small steel tariff could have generated net welfare gains for the US in the 1980s, even though actual protection through Voluntary Restraint Agreements generated net welfare losses.     

The Pattern and Determinants of Intra-Industry Trade in Australian Manufacturing

This paper presents the pattern and determinants of intra-industry trade (IIT) in Australian manufacturing since the late 1970s. The results point to a sharp rise in IIT from the mid 1980s which appears to be linked with an outward-oriented policy. Industry-level analysis indicates that industries which experienced a sharp fall in protection are the industries with the higher levels of IIT. These include textiles, garments, rubber products, and machinery and equipment. An increasing trend in IIT suggests that the short-term adjustment costs associated with trade liberalisation are likely to be lower, and that liberalisation can proceed without huge short-term adjustment costs. Using a logit model the determinants of IIT are investigated. Results indicate that IIT is positively related to product differentiation and scale economies, and negatively related to the levels of protection and foreign ownership in the pre-liberalisation period. In the post-liberalisation period, however, scale economies explain the inter-industry variations in IIT. R&D intensity and close economic integration appear to have no impact on IIT regardless of the nature of the policy regime.     

Environmental Quality and Industry Protection with Noncooperative Versus Cooperative Domestic and Trade Policies

This paper characterizes environmental quality and industry protection in a large-country Grossman–Helpman model when production or consumption externalities exist and governments decide noncooperatively or cooperatively on domestic and trade policies. Governments choose policies efficiently from among those available, but competitive lobbies may prefer less efficient regimes. Under restricted policy availability, political-support effects can offset terms-of-trade effects on equilibrium outcomes, and inefficient trade policies can lead to higher environmental quality than efficient domestic policies. If governments cooperate, they can satisfy particular organized industries at lower costs to other lobbies and total welfare. This may result in lower environmental quality than noncooperation.     

农村劳动力流动、产业结构调整与经济增长--基于1993-2012年省际面板数据的实证研究

利用1993-2012年省级面板数据,运用动态差分和系统GMM估计方法对农村剩余劳动力流动、产业结构调整对经济增长的影响进行实证分析,得出结论：（1）各地区合理调整三次产业中农村劳动力比例,有利于三次产业增长;（2）产业结构合理化与高级化对地区三次产业的发展呈现差异性影响;（3）城乡收入差距和城镇化水平对三次产业经济增长的影响存在差异。因此,各地区应结合实际合理调整产业结构,恰当处理产业结构合理化与高级化的关系;加快推进户籍制度改革,进一步转移农村剩余劳动力,合理调整三次产业中农村就业人员的比例,以配合产业结构的战略性调整,实现经济的可持续增长。     

“When it rains,it pours”: Fiscal policy,credit constraints and business cycles in emerging and developed economies

Fiscal procyclicality, meaning co-movement between government expenditure and macroeconomic fundamentals, is an important feature of business cycle dynamics for emerging and poor economies. I estimate a panel SVAR to investigate the reasons for fiscal procyclicality. The analysis sheds light on the role of external financial constraints in shaping fiscal policy. My findings suggest that the response of emerging governments to output fluctuations is similar to that of developed governments. However, emerging governments curtail spending in response to increases in the sovereign borrowing rate, which forces their consumption expenditure to act more procyclically. Using counterfactual analysis, I show that the key forces behind fiscal procyclicality are the sensitivity of government spending to international borrowing costs and the procyclical nature of these costs for emerging economies.     

Industrial Policy and the East German Productivity Puzzle

Catching-up of East German productivity to West German levels has completely faded out since the mid-1990s. The remaining productivity gap cannot be attributed to an inferior capital endowment or qualification deficiencies of the East German labor force. Instead, it appears to be the result of an inappropriate design of industrial policy which concentrated on the subsidization of physical capital and largely ignored the advance of human capital- and service-intensive industrial structures. East Germany will have to face another wave of painful structural adjustment when capital-intensive industries are no longer protected from competition by public subsidies.     

Technology Adoption Costs and Productivity Growth: The Transition to Information Technology

Using two panels of U.S. manufacturing industries, this paper estimates capital adjustment costs from 1961 to 1996. I find that from 1974–1983 adjustment costs rose sharply—they more than doubled from about 3% of output to around 7%. Moreover, this increase is specifically associated with a shift to investment in information technology. But such large adoption costs imply that the Solow residual mismeasures productivity growth: Adoption costs are resource costs representing an unmeasured investment. I find that when this investment is included, productivity grew about 0.4% per annum faster than official measures during the 1970's and early 1980's, reducing the size of the productivity “slowdown.” Indeed, estimated productivity growth rates were roughly the same from 1974–1988 as from 1949–1973. Thus technology transitions critically affect productivity growth measurement. Journal of Economic Literature Classification Numbers: O30, O47, E22.     

以产业结构调整为目标的产业环境评估

提高地区经济发展质量的路径之一在于合理的产业结构调整,而合理评估区域产业情况,是确定区域产业发展政策、开展产业结构调整的先决步骤。研究提出了产业的资源环境综合成本概念,并应用于指导区域内的产业结构调整。资源环境综合成本包括了各行业的资源损耗成本、环境污染成本和附加环境成本。应用资源环境综合成本概念。可以横向地、综合地评估区域内各产业对区域的生态环境造成的压力,并可作为环境方面的评估信息,与其他信息一并供决策者参考。研究以沙湾河流域的产业结构调整研究为例,介绍资源环境综合成本概念的应用。结果显示,产业发展而带来的附加环境成本所占比重较大,这表明产业带来的人口生活污染影响,在评估区域产业结构时值得关注。     

DISTRIBUTIONAL CONFLICT, FINANCIAL ADAPTATION AND DELAYED STABILIZATIONS

In this paper we model delayed stabilizations as the rational outcome of a distributional conflict between two risk averse groups in the presence of post-stabilization payoff uncertainty and costly policy reversion. We show that in the initial stages of an extreme inflation episode there is a bias towards maintaining the current inefficient (but certain) revenue collection system which prevents the adoption of the required fiscal adjustment program. The access by those with higher income to a financial adaptation technology increases the average rate of inflation through time for any given government deficit, raising the welfare costs of not reaching an agreement and increasingly redistributing the burden of inflation to those with lower income. This process, if strong enough, will eventually trigger the necessary political support for the required fiscal adjustment. Delayed stabilizations will, nevertheless, induce the poor into accepting conditions that they did not find optimal before.     

Agglomeration economies in manufacturing industries: the case of Spain

This study analyses the extent of geographical concentration of Spanish industry between 1993 and 1999, and studies the agglomeration economies that could underlie that concentration. The results confirm that there is major geographic concentration in a number of industries with widely varying characteristics, including high-tech businesses and those linked to the provision of natural resources as well as traditional industries. The analysis of the scope of spillovers behind this agglomeration supports the idea that transportation costs may induce plants in some industries to locate near their customers and suppliers. However, one cannot conclude that this is a common fact for all industries. This study also shows that the higher the technological level of an industry, the higher the agglomeration it experiences. This result implies the importance of the labour market, informational spillovers and producer services location for the agglomeration of these industries.