Sector- and economy-wide effects of terminating the use of anti-microbial growth promoters in Denmark

In Denmark the poultry industry and the National Committee for Pig Production, together with the feedstuff industry, decided to voluntarily abolish the use of all Anti-microbial Growth Promoters (AGP). The poultry industry abolished the use of AGP from 15 February 1998 and the pig industry followed on 1 March 1998 (for pigs over 35 kg) and 1 January 2000 (for pigs under 35 kg). To evaluate the effects of the removal of AGP, data from both the poultry and pig industries were collected prior to and after the removal of AGP from animal feed. Utilizing these production data, this paper calculates economy-wide effects of the removal of AGP using the Agricultural Applied General Equilibrium (AAGE) model of the Danish economy. The results show that the long-term effects are a moderate decline in the production and export of pig meat, and a positive indirect effect on other industries including poultry due to lower rental rates for primary factor inputs. The overall implication is a small decline in real GDP of 0.03%, reducing public and private consumption by 68 DKK per capita per year in Denmark.     

Endogenous Growth and Trade Liberalization Between Small and Large Countries

The paper combines insight from new trade theory and R&D-based endogenous growth models to argue that there are ambiguous growth effects of trade liberalization between countries that differ in terms of the size of their home markets. In particular, trade liberalization may reduce R&D incentives in countries with low purchasing power without invoking parallel increases in countries with high purchasing power. The paper also considers the case of imperfect international knowledge spillovers, and demonstrates that complete trade liberalization may affect the growth rate negatively.     

The European economy in an expanding world

Summary Postwar economic development in Europe can be subdivided in two periods. In the first subperiod 1950–1973 growth is determined by catching up vis-d-vis the US. The second subperiod 1973–1993 is characterised by a reorientation with respect to the international division of labour. This sets the stage for future developments, which are presented in the form of three different scenarios. In the European Decline scenario Europe cannot match developments in the US and Japan. As appears from a scenario called Fortress Europe import protection provides no sensible solution. To compete on a world scale Europe needs more technological dynamics as sketched in the European Recovery scenario. Calculations of future paths are based on the WorldScan model of the Central Planning Bureau.Theo van de Klundert is Professor of Economics at Tilburg University. Ben Geurts and Hans Timmer are staff members of the Central Planning Bureau, The Hague. We are indebted to Martin Fase and Simon Kuipers for useful comments on an earlier version of the paper.     

Conditional utility

Summary The motivation for this paper starts out with a decision situation under risk where the decision-maker has to choose among various lottery tickets. We will ask what happens to a person's lottery choice if he is given additional information in terms of probabilities on some states of nature which might affect his choice among lottery tickets. In other words, in evaluating his decision situation, a person should not only consider the probability of a certain prospect to be realized but also the problem how and to which extent some state(s) of nature modify the utility of this prospect. This problem has not been dealt with in Bernoullian utility theory.We state several conditions which are necessary and sufficient to treat conditional utility as Bernoullian utility. Then we show as a main result that it is possible to represent expected utility of decision acts (in Savage's terminology) by conditional expected utility of prospects which preserves well-known properties of expected utility with the exception of linearity.We give a potential application of the notion of conditional utility to the estimation of the value of information as a residual value of prior and posterior utility.