The effects on agriculture in the United States of an oil import fee

This paper focuses on the effect that a crude oil import fee would have on the various producing sectors, consuming sectors and household categories in the United States where the interrelationships between these entities is explicitly considered. Special attention is given to the agricultural sectors of the economy. Thus, in the context of a general equilibrium model, the effect of a $5.00 per barrel import fee on the producing sectors in general and the three agricultural sectors plus forestry in particular, on the consuming sectors, on households and on the government is calculated. Over the period 1984–90 with such an import fee (relative to the absence of a crude–oil import fee), the model results suggest that there will be a reduction in output by all producing sectors (except the crude-oil industry) by about $13,924 billion, there will be a fall in the consumption of goods and services by about $318 million and there will be a decline in aggregate social welfare (measured as utility) by about $208 mill ion. The government will realize an increase in revenue of about $3,622 billion. The agricultural sectors in the aggregate can expect to see a fall in output of $769 million with an attendant increase in the price of its goods as a consequence of the oil import fee.     

Bioenergy Crop Production in the United States: Potential Quantities, Land Use Changes, and Economic Impacts on the Agricultural Sector

The U.S. Departments of Agriculture and Energyjointly analyzed the economic potential for,and impacts of, large-scale bioenergy cropproduction in the United States. Anagricultural sector model (POLYSYS) wasmodified to include three potential bioenergycrops (switchgrass, hybrid poplar, and willow). At farmgate prices of US $2.44/GJ, anestimated 17 million hectares of bioenergycrops, annually yielding 171 million dry Mg ofbiomass, could potentially be produced at aprofit greater than existing agricultural usesfor the land. The estimate assumes highproductivity management practices are permittedon Conservation Reserve Program lands. Traditional crops prices are estimated toincrease 9 to 14 percent above baseline pricesand farm income increases annually by US $6.0billion above baseline.At farmgate prices of US $1.83/GJ, anestimated 7.9 million hectares of bioenergycrops, annually yielding 55 million dry Mg ofbiomass, could potentially be produced at aprofit greater than existing agricultural usesfor the land. The estimate assumes managementpractices intended to achieve highenvironmental benefits on Conservation ReserveProgram lands. Traditional crops prices areestimated to increase 4 to 9 percent abovebaseline prices and farm income increasesannually by US $2.8 billion above baseline.     

Market-based systems for reducing chemical use in agriculture in the United States

This study uses a computable general equilibrium (CGE) model of the U.S. economy to estimate the economic effects of agricultural fertilizer and pesticide input reductions on individual farm sectors, and on the economy as a whole. The costs of reducing agricultural chemicals using a market-based approach and a command-and-control approach are compared. The real cost to society of restrictng fertilizer and pesticide use by 20-percent across all uses is estimated to be $2.3 billion. A market-based approach that would provide incentives to reduce chemical use in the most cost efficient manner would be about 10-percent less costly.We would like to thank Greg Alward, Norman Bakka, Eldon Ball, Ken Hanson, Valerie Personick, and Mark Planning for supplying data.     

The Welfare and Resouce Allocation Implications of the U.S.Dairy Quotas

This paper examine the welfare and resource allocation implications of the U.S. dairy quotas. A computable general equilibrium model detailing five dairy sectors and nine aggregate sectors is calibrated to a 1989 benchmark of the U.S economy. The model is used to simulate the removal of the U.S.dairy quotas both the with and without a first-best subsidy to maintain a dairy farm output objective. Welfare, production, trade, and employment results are provided. The welfare cost of the U.S dairy quotas ranges from $0.7 to $1.0 billion. The first-best subsidy ranges from $2.0 to $2.3 billion or approximately $1.4 million per full-time equivalent job maintained in the dairy farm sector [F13, Q17]     

The efficiency costs of the postal monopoly: The case of third-class mail

This paper provides an estimate of the efficiency costs of the letter monopoly for third-class bulk advertising, the Postal Service's second largest category of mail. Using market data from private mail carriers, excess costs to mailers in 1992 are estimated to be about $2.5 billion, almost one-third of the Postal Service's third-class mail revenues. These costs are the sum of (1) the allocative efficiency loss due to reduced output ($237 million); (2) the increased production costs due to non-cost-minimizing behavior ($712 million); and (3) transfers to postal labor ($1.511 billion). Total efficiency costs-the sum of (1) and (2)—are estimated to be about $950 million.The author would like to thank Roger Sherman and an anonymous referee for helpful comments and Monica Bettendorf and Stephen McGonegal for their assistance in preparing this paper.     

The economic impacts of drought on the economy of Iran: An integration of linear programming and macroeconometric modelling approaches

In this paper, we provide economy-wide estimates of the costs of drought in the cropping sector of the Iranian economy, using a linear programming model to estimate the direct costs on agriculture, and a macroeconometric model to trace the indirect impacts on the rest of the economy. The results indicate that a severe drought such as the one that occurred in the crop year 1999-2000 imposes a direct cost of 1605 million USD, equivalent to 30.3% of the total value added of the cropping sector in Iran. This, in turn, leads to a 12.7% reduction in the value added of other agricultural sub-sectors (livestock, fisheries and forestry). In the rest of the economy, the manufacturing and service sectors experience value added declines of 7.8 and 3.7%, respectively. In addition, there is a substantial decrease in investment in the agricultural, manufacturing and service sectors. Thus, such a drought reduces overall GDP by about 4.4%, and it would also result in decreased non-oil exports, increased food imports, and a rise in inflation. The results of some drought mitigation simulations are reported in brief. Such estimates strengthen the case for increased attention to drought strategies and management in agriculture in Iran and elsewhere.     

VALUING HEALTH EFFECTS: THE CASE OF OZONE AND FINE PARTICLES IN SOUTHERN CALIFORNIA

This study presents a conservative estimate of the health benefits that would result from attainment of the federal ozone and fine particle (PM_2.5) standards in the South Coast Air Basin of southern California. A three‐stage approach is used that links pollution exposures to adverse health outcomes to economic values. The annual value of the aggregate health benefits approaches $500 million (with a range of $295–$646 million) for ozone and exceeds $21 billion (with a range of $12.85–$34.22 billion) for fine particles. Such results are useful to regulatory agencies and other policy makers when evaluating the merits of various air pollution reduction strategies. (JEL Q51, Q53)     

WELFARE COST OF AN OIL IMPORT FEE

This paper examines the impacts on the US. oil market of a $5-per-barrel tariff on imported crude oil. The analysis shows that the United States currently is a price taker in the world oil market. This means that "optimal tariff" arguments for an oil import fee have no validity. The author also argues that any economic losses that oil supply disruptions generate are better addressed with alternative policy tools. To forecast the effects of the tariff on US. production, the author uses a domestic oil supply model that she developed elsewhere. She calculates the resulting gains in producer surplus and then combines them with an estimate of consumer surplus losses and government revenues so as to yield an estimate of the tariff's welfare cost. This welfare cost amounts to approximately $17 billion (in present-value terms) over the 1988–1998 period.     

The economic effect of the Canadian BSE outbreak on the US economy

Before the discovery of the first Bovine Spongiform Encephalopathy (BSE) cow in May 2003, Canada was the most important exporter of live cattle into the US with a share of 74% of US total live cattle imports. With the outbreak of BSE in Canada, the US ceased imports of Canadian cattle and beef products. This study analyses the short to medium-term effect of the import trade ban for the US economy using a 20 sector, economy wide Computable General Equilibrium (CGE) model. Uncertainty about exogenous elasticity values was addressed using Monte Carlo techniques. Beneficiaries of the trade ban are the cattle industry and related sectors, such as feed production and agricultural service providers. The US economy as a whole, however, is negatively affected with a loss of ～$-1.7 billion in gross domestic product and –11000 jobs. The model shows how the restriction on Canadian cattle imports generates income losses for both rich and poor households in the US.     

What happens when the Kiwi flies? Sectoral effects of exchange rate shocks on the New Zealand economy

We use a data-rich approach, a factor-augmented vector autoregression (FAVAR), to identify idiosyncratic exchange rate shocks and examine the effects of these shocks on different sectors of the New Zealand economy. We find that an unexpected shock to the exchange rate has significant effects on relatively tradable sectors of the economy. Whilst this is expected, relatively ‘more’ non-tradable sectors of the economy are also influenced by shocks to the exchange rate, presumably due to their linkages to more trade-exposed sectors. We also find that exchange rate shocks explain a small proportion of overall business cycle variability, implying that the exchange rate acts as a buffer rather than as a source of shock.     

THE COST OF THE U.S. SUGAR PROGRAM REVISITED

The article analyzes the welfare cost of the U.S. sugar program using a multimarket model of U.S. sweetener markets. The latter includes raw crops, sugar extraction and refining, and sweetener users (food-processing industries and final consumers). The authors address the industrial organization of food industries using sweeteners and treat the United States as a large importer. With the removal of the program, this article estimates (all figures in 1999 dollars) that in 1998 cane growers, sugar beet growers, and processors would have lost $307, $650, and $89 million, respectively; sweetener users would have gained $1.9 billion. World prices would have increased by 13.2%. The deadweight loss of the program is estimated at $532 million.     

Sectoral and Aggregate Technology Shocks:Is There a Relationship?

We analyze sector-specific shocks in productivity and demand in 19 manufacturing sectors of the Austrian economy. Based on a structural vector autoregressive model (SVAR) with long-run restrictions developed by Galí (1999) we extract technology and non-technology shocks from sectoral and aggregate data. We study their patterns and relationship by means of a principal components analysis and find a close association of sectoral and macroeconomic non-technology shocks but only a very weak association for technology shocks. Impulse response analysis indicates that for almost all manufacturing sectors as well as the aggregate Austrian economy productivity growth rates experience an immediate increase due to positive technology shocks while hours worked decline. Thereby we confirm Galís results on the level of Austrian manufacturing industries. From regression analysis, we find that our shocks are closely associated to employment growth and output growth but not to investment growth and that the reaction is different for the aggregate economy and manufacturing industries.JEL codes: D24, E23, E32, O30We thank Werner Müller and the participants of the 2004 conference of the Austrian Economic Association (NOeG) for helpful comments. We would like to thank an anonymous referee for many helpful comments that led to a substantial improvement of the paper. The usual disclaimer applies. This research project was supported by a research Grant (Project Nr. 9800) of the Jubiläumsfonds der Österreichische Nationalbank (OeNB).     

Finance and politics: the wealth effects of special interest group influence during the nationalisation and privatisation of Conrail

Conrail, nationalised in 1976 and privatised in 1987, was themost significant nationalisation and privatisation by the USgovernment in recent years. It was created from six bankruptrailroads under the pressure of interest groups, formed by customers,existing claimants, employees and related companies. We documentthe gains and losses to these special interest groups at keypoints in the nationalised and privatised time periods. Overthis period, the US government had outlays of $6.59 billion,and cash inflow of $6.15 billion, and internal return of –6.4%.The paper provides evidence that a state-owned firm with goodgovernance could deliver superior performance.     

Impact of Chinese growth and trade on labor in developed countries

This paper examines the impacts of growth in China's economy and trade on the skill premium of labor in developed countries. We utilize a unique global dataset that disaggregates workers by occupations to identify impacts across labor categories with different skill sets, complementing the widely used GTAP Data Base in the CGE framework offered by the GTAP model. To study the impacts of China's fast-paced growth, we model the counterfactual, i.e., what if China grew and opened at a more modest rate; we then compare this baseline with China's actual growth. Results indicate that a strong rise in manufacturing exports from China to the US impacts output and employment in the US. The US shifts its production away from light manufacturing sectors to more service-oriented sectors that also tend to engage higher skilled labor. There is a small decrease in the real wages of unskilled labor and a rise in the real wages of skilled labor. Interestingly, not all categories of unskilled labor lose, rather those that are more directly linked with manufacturing sectors are impacted; unskilled ‘service and shop workers’ and the unskilled ‘agricultural workers, machine operators, assemblers, craft workers, and others’ observe a small decline in real wages, while the impact on unskilled ‘clerks’ is insignificant. For all categories of skilled workers, there is an increase in real wages primarily driven by the shift in production to services and high-skilled labor intensive categories, resulting in the rising skill premium. Hence disaggregating the labor data provides greater depth on the understanding of the differential impacts on domestic workers resulting from trade, and thereby guides policy on how these differential impacts can be smoothed through redistribution of benefits. Consistent with other study findings, there is a positive impact on overall growth and welfare in the US, EU and Australasia.     

Dominant carrier market power in US international telephone markets

An econometric model is used to examine market power in US international telephone markets. Lerner index estimates suggest AT&T's collection rate-cost margin was between 12% and 24% during 1991 to 1995. Although Lerner estimates imply deadweight welfare losses of up to US $261 million per annum, such losses are small compared to those from the inefficient pricing of international interconnection. Settlement rate-cost margins on US bilateral markets of approximately 89% translate into a US $4907 million transfer from consumers to carriers in 1995.     

Liar’s Loans,Mortgage Fraud,and the Great Recession

ABSTRACT

This paper contributes to research on misrepresentation in private residential mortgage-backed securities by using new data on losses from foreclosure to estimate higher than expected losses associated with income overstatement and adverse selection in no/low documentation loans, using full documentation loans as a counterfactual. Overall, no/low documentation loans account for $350 billion of the $500 billion lost from 2007 to 2012. No/low documentation loans lost an additional $5200 per loan, implying $97 billion of total no/low documentation losses were higher than expected. I also find underwriting exceptions differentially predict loss by documentation type, which provides evidence consistent with originator-led adverse selection.     

开放视角下的国家综合负债风险与市场化分担

随着中国经济金融的日益开放,中国国家综合负债的规模与结构在动态变化:一方面,国家综合负债的某些旧因素(如银行不良资产)的存在形式发生了变化,另一方面,国家综合负债的一些新因素(社保基金缺口、巴塞尔协议的顺周期影响和汇率波动导致的外汇资产损失)开始显现。从开放视角考察,中国的国家综合负债风险形势仍较为严峻。在政府承担社会性支出的基础上,更多地重视和运用市场化分担方式是化解和防范国家综合负债风险的基本途径,保持经济持续稳定增长是应对国家综合负债风险的根本保障。     

Economies of superscale in commercial banking

Most previous studies of scale economies in banking have excluded banks larger than $1 billion in assets. Thus study, by contrast, estimates cost functions for the 100 largest US commercial banks. ‘Hedonic’ terms are incorporated to correct for the aggregated nature of the Call Report data available for these banks. In addition, we attempt to quantify the cost benefit of diversification in the model. We estimate efficient bank scale to range from $15 billion to $37 billion in total assets, a thousandfold increase over some previous findings. These results are supported by comparison of actual average costs, as well as by casual historical observation and the level of widespread concern over interstate banking. Our findings suggest some cost incentive or benefit to expansion or consolidation among large regional banks, including interstate expansion or consolidation.     

An econometric assessment of telecommunications prices and consumer surplus in Mexico using panel data

We analyze telecommunications prices in Mexico by using a panel data of countries similar to Mexico to estimate demand models for mobile and fixed-line telecommunications. We find that Mexico’s actual mobile and fixed-line prices are below the predicted prices based on similar countries’ prices. Mexican consumers are paying lower prices than what one would expect based on comparisons of comparable countries. We calculate that in 2011 Mexican consumers received at least $4–$5 billion (USD) in consumer surplus from these lower mobile prices and in 2010 they received over $1 billion (USD) in consumer surplus from these lower fixed-line prices. These findings are in contrast to the general perception that concentrated telecommunications markets in Mexico are resulting in high prices and harming consumers.     

Economic impact of ocean fish populations in the global fishery

Our goal in this paper is to estimate the total output in an economy that is currently dependent (at least partially) on current fisheries output. We therefore applied the Leontief technological coefficients at current production and then estimate total output supported throughout the economy at the current level of production. Estimates of gross revenue from capture fisheries suggest that the direct value of output for this sector is US $80–85 billion annually (Sumaila et al., Journal of Bioeconomics 9(1):39–51, 2007; Willmann et al., The Sunken Billions, World Bank, FAO, Washington DC, Rome, 2009). However, as a primary or a potential economic base industry, there are a vast number of secondary economic activities—from boat building to international transport—that are supported by world fisheries, yet these related activities are rarely considered when evaluating the economic impact of fisheries. This study applies an input–output methodology to estimate the total direct, indirect, and induced impact of marine capture fisheries on the world economy. While results suggest that there is a great deal of variation in fishing output multipliers between regions and countries, when we apply the output multipliers to the capture fisheries sector at the global level, we find that significant indirect and induced effects place the impact of this sector to world output nearly three times larger than the value of landings at first sale, at between US $80–85 billion annually (Sumaila et al., Journal of Bioeconomics 9(1):39–51, 2007; Willmann et al., The Sunken Billions, World Bank, FAO, Washington DC, Rome, 2009). However, as a primary or a potential economic base industry, there are a vast number of secondary economic activities—from boat building to international transport—that are supported by world fisheries, yet these related activities are rarely considered when evaluating the economic impact of fisheries. This study applies an input–output methodology to estimate the total direct, indirect, and induced impact of marine capture fisheries on the world economy. While results suggest that there is a great deal of variation in fishing output multipliers between regions and countries, when we apply the output multipliers to the capture fisheries sector at the global level, we find that significant indirect and induced effects place the impact of this sector to world output nearly three times larger than the value of landings at first sale, at between US 225 and 240 billion per year.