Trade policy substitution: theory and evidence

Review of World Economics - With the help of a political economy model, we show that the extent of ‘trade policy substitution’—namely, substitution of tariffs with non-tariff...     

Consumer arbitrage in cross‐border e‐commerce

In today’s internet markets consumers can search for, find and compare prices worldwide. Online, information circulates faster than offline and arbitrage opportunities such as the ones arising from currency shocks are easily unveiled. In this paper, we estimate for the first‐time exchange rate elasticities for cross‐border e‐commerce transactions. Exploiting a new high‐frequency database on international transactions of parcels, we find that a 1% appreciation of the domestic currency increases e‐commerce imports by 0.7%. Comparing the result with traditional estimates in offline markets, this implies a 50% exchange rate pass‐through online.     

An Anticompetitive Effect of Eliminating Transport Barriers in Network Markets

This paper examines the welfare effects of physically interconnecting two (network) markets that were previously separated. In each market a different set of capacity-constrained firms operate. Firms engage in a supergame and collude whenever it is rational for them to do so.We find that, under certain parametric restrictions, interconnection of the two markets reduces total welfare. The collusive horizon may extend from a single market to the overall integrated market. In such case, interconnection can be viewed as “exporting” collusion, rather than competition.      

Bottleneck co-ownership as a regulatory alternative

This paper proposes a regulatory mechanism for vertically related industries in which the upstream “bottleneck” segment faces significant returns to scale while other (downstream) segments may be more competitive. In the proposed mechanism, the ownership of the upstream firm is allocated to downstream firms in proportion to their shares of input purchases. This mechanism, while preserving downstream competition, partially internalizes the benefits of exploiting economies of scale resulting from an increase in downstream output. We show that this mechanism is more efficient than a disintegrated market structure in which the upstream natural monopoly bottleneck sets a price equal to average cost.     

Statistical analysis of HIV seropositive results from 1988-1993 performed on life insurance applicants

This review of statistical data, derived from HIV antibody testing performed on life insurance applicants over a period of five and one-half years, reflects the evolving nature of the HIV epidemic in the United States and demonstrates how the findings in the life insurance low risk population mirror the trends and changes that are occurring in the general population.     

Do we need deeper trade agreements for GVCs or just a BIT?

The paper investigates two policies geared towards stimulating and shaping global value chains (GVCs), namely deep regional trade agreements (DRTAs) and bilateral investment treaties (BITs). In an augmented gravity model, we test the impact of both policies on a variety of trade in value added indicators. We find that both policies are likely to increase GVC trade, although their transmission channels differ. While backward linkages are stimulated through both BITs and DRTAs, forward linkages respond only to DRTAs. The estimates suggest that negotiating a DRTA with investment provisions has a higher impact on trade in value added than signing a shallow RTA and a separate BIT.     

Time,uncertainty and trade flows

This paper quantifies the impact of international transport time on bilateral trade flows in goods using previously unexploited information drawn from a large data set on international parcel delivery times. In line with previous work, we find that an extra day spent in international transit reduces bilateral trade by just under 1% at the sample median. In addition, and for the first time in the literature, we examine the impact of time-related uncertainty, which requires traders to hold costly inventories or build costly redundancies into supply chains. We find that a one day increase in international transport time uncertainty reduces bilateral trade flows by just over 1%. Splitting the sample into developing and developed countries shows that international transit time matters primarily for south–south trade, whereas uncertainty is relatively more important for north–north trade. Using new data on trade in intermediate versus final goods, we also find some evidence that time and uncertainty both matter more for movements of intermediates of the type that takes place within global value chains.     

Beta-2 microglobulin as a marker for HIV infection

Beta-2 microglobulin is a sensitive surrogate test for HIV infection for use in jurisdictions where HIV antibody tests are not allowed to be performed on life insurance applicants by law/regulation. The advantage of beta-2 microglobulin over T cell testing, which is a surrogate test also used by the life insurance industry for detecting HIV infection, is the stability of B 2M in serum over long periods of time.