TOURISM, TRADE AND DOMESTIC WELFARE

Abstract.  Tourism has been regarded as a major source of economic growth and a source of foreign exchange. It has also been viewed as an activity that imposes costs on the host country. Such costs include increased pollution, congestion and despoliation of fragile environments, and intra-generational inequity aggravation. One aspect that has been ignored is the general equilibrium effects of tourism on other sectors in the economy. This paper presents a model that captures the interdependence between tourism and the rest of the economy, in particular agriculture and manufacturing. An important result obtained is that the tourist boom may 'immiserize' the residents.     

TOURISM, TAXES AND IMMISERIZATION: A TRADE THEORETIC ANALYSIS

Abstract.   Many countries promote tourism as a device for earning foreign exchange and promoting domestic welfare and growth. In all these countries the non-traded goods (internationally not traded) are consumed by both domestic residents and tourists. It is well known that the relative price of non-traded goods and services is determined in the local market – hence the tourist demand results in monopoly power in trade for the host country. We use a very simple two-country model to demonstrate the specific nature of the offer curve and the trade equilibrium and the difficulties of taxation.     

SPECIALIZATION AND TRADE: A GAME THEORETICAL APPROACH

Abstract.  In this paper we consider the problem of specialization and trade for large economies with a continuum of ex ante identical individuals and with a finite number of goods. Different from the classical treatment, we adopt a game theoretical approach. Therefore in our models the prices of traded goods are endogenously formulated according to the bidding strategies of the producer-consumers. Furthermore, we assume that in the beginning individuals randomly choose their professions. As a result, with a short-run Nash equilibrium different types of professionals may have different utility levels; while through a dynamic process, a long-run Nash equilibrium with utility equalization is reached. Besides, we also attempt to provide a new algorithm for the computation of general equilibrium models in the Yang-Ng framework.     

逆周期的贸易政策与福利分配

2008年金融危机以来,全球逆周期的贸易政策盛行。为了探究逆周期贸易政策对双方福利分配的影响,本文在巴格维尔和斯泰格解释发达经济体之间逆周期贸易政策最优选择模型的基础上,构建了一个2×2×2模型,假定两国商品的需求价格弹性不同,首次在理论上证明了发达国家(如美国)和发展中国家(如中国)之间的逆周期贸易政策取向和福利分配,并依据经验数据证实了自由贸易政策对中美双方来说都是帕累托改进,但中国的福利增进水平低于美国的福利增进水平;而在逆周期贸易政策下,美国和中国通过贸易获得的福利增进水平之差进一步扩大。     

CRIME AND POVERTY: A SEARCH‐THEORETIC APPROACH*

Numerous studies document that criminal activity is positively related to unemployment and negatively related to educational attainment levels within given communities. We study this phenomenon in the context of a search‐equilibrium model, in which agents choose between formal employment and pursuing crime‐related activities (theft). Prior to their “occupational choices,” agents undertake costly schooling, raising their productivity. Crime acts, in essence, as a tax on human capital by affecting the probability that a worker's earnings (possessions) are subsequently appropriated. There are multiple equilibria. High crime, low levels of educational attainment, long spells of unemployment, and poverty are correlated across them.     

LIFETIME AND VERTICAL INTERTEMPORAL INEQUALITY, INCOME SMOOTHING, AND REDISTRIBUTION: A SOCIAL WELFARE APPROACH

Between and within-households intertemporal inequality indices are proposed to highlight the vertical and lifetime (i.e. cyclical) components of overall intertemporal inequality. Comparison with the classical static inequality indices is made. Income redistribution and smoothing (i.e. stabilization) are conveniently defined as the public policy impact on welfare, by means of the relative increase in intertemporal vertical and cyclical equity, respectively. The issue is important as many public policies are aimed at both (vertical and cyclical equity) objectives. Our approach provides a more appropriate evaluation of the desirability of public reforms aimed at achieving a greater vertical and cyclical equity, within a social welfare framework.     

A DYNAMIC MODEL OF TOURISM, EMPLOYMENT AND WELFARE: THE CASE OF HONG KONG

Abstract.  The present paper uses a dynamic open-economy model with wage indexation to examine the impact of tourism on employment and welfare. Both short-run and long-run situations are analysed. It is well known that tourism converts non-traded goods into tradable goods. An increase in the demand for a non-traded good raises its relative price, which results in an expansion of the non-traded sector at the expense of the traded goods sector. This output shift raises labour employment in the short run. However, in the long run, the higher relative price leads to higher wages, resulting in a negative impact on labour employment. If the output effect is dominant, the expansion in tourism raises employment and welfare. However, under realistic conditions tourism may lower both labour employment and welfare due to rising costs. These results are demonstrated by simulating a dynamic model for the case of Hong Kong.     

EXISTENCE AND UNIQUENESS OF AVERAGE COST PRICING EQUILIBRIA: A DEGREE THEORETIC APPROACH

This paper considers the issues of existence and uniqueness of average cost pricing equilibria within the context of a single, regulated, multiproduct monopoly with additively separable costs. We employ basic degree theoretic arguments to establish conditions under which an average cost pricing equilibrium exists. The degree theoretic approach permits the development of uniqueness results in a very natural manner.     

TOURISM,DUTCH DISEASE AND WELFARE IN AN OPEN DYNAMIC ECONOMY*

This paper examines the effects of an expansion in tourism on capital accumulation, sectoral output and resident welfare in an open economy with an externality in the traded good sector. An expansion of tourism increases the relative price of the nontraded good, improves the tertiary terms of trade and hence yields a gain in revenue. However, this increase in the relative price of nontraded goods results in a lowering of the demand for capital used in the traded sector. The subsequent de‐industrialization in the traded good sector may lower resident welfare. This result is supported by numerical simulations.     

INTERNATIONAL AND INTRA‐NATIONAL TRADE: A CONTINUUM APPROACH*

We build up a Ricardian trade model with multiple regions within a nation and examine how international trade determines interregional patterns of production and specialization. We show that the degree of interregional concentration of economic activities moves in different directions in two trading nations. The role of “absolute advantage” becomes crucial in dictating the course of income disparity across regions. We discuss cases with varying degrees of labour mobility and reconfirm the result on post‐trade interregional concentration and dispersion. Later we explore the impact of “scale factor” in this model and show how principle of comparative advantage and economies of scale interact to determine the pattern of specialization and volume of trade.     

SOCIAL INTERACTIONS IN LARGE NETWORKS: A GAME THEORETIC APPROACH

This article studies estimation of social interactions in a large network game, where all observations come from one single equilibrium of a network game with asymmetric information. Simple assumptions about the structure are made to establish the existence and uniqueness of the equilibrium. I show that the equilibrium strategies satisfy a network decaying dependence condition requiring that dependence between two players' decisions decay with their network distance, which serves as the basis for my statistical inference. Moreover, I establish identification and propose a computationally feasible and efficient estimation method, which is illustrated by an empirical application of college attendance.     

KALDORIAN DEMAND FUNCTIONS AND THE RETURN TO CAPITAL: AN ANALYSIS IN A TRADE THEORETIC FRAMEWORK

Abstract.  This paper shows that under certain plausible conditions capital accumulation raises the return to capital. A three good trade theoretic model with Kaldorian demand functions is used to establish this result. This proposition is also independent of the assumption of diminishing return to capital a key feature of endogenous growth theory. Our result sheds light on the high rates of investment and growth that many East Asian economies have achieved.     

ENDOGENOUS TRADE POLICY: A TIME-SERIES APPROACH*

This paper provides a time-series analysis on the relationship between the extent of endogenous trade policy and both political and economic variables. The chosen trade policy indicator is the number of foreign-trade regulations passed each year for the benefit of a single firm or industry. The data are from Uruguay, 1925–1983. This country, which experienced an impressive economic decline, is an outstanding example of the rent-seeking society. The paper shows that endogenous regulations increased with discretionary policies, with adverse macroeconomic shocks and under dictatorship. It also shows that these regulations had a negative long-run effect on the growth rates of output and exports. The short-run effect was positive however.     

全球价值链下中国的对外贸易

全球价值链(GVC)作为一种组织和治理力量,已使当今的国际贸易发生了重大变化,也对中国的对外贸易产生了深刻影响。本文首先总结在GVC的影响下,当前国际贸易呈现的6个特征性事实;其次揭示了在中国贸易急剧增长的表象下,隐藏着GVC这样一种组织和治理的力量,并从结构、地区、主体和地位等方面,分析了GVC对中国对外贸易的影响;最后,指出中国外贸在GVC下面临的挑战及相关的对策。     

MODELLING PRODUCTIVITY EFFECTS OF TRADE OPENNESS: A DUAL APPROACH*

A cost function framework is used to model the productivity effect of trade openness in terms of cost saving. The idea of ‘cost saving’ is closer to the entrepreneur's view of productivity. An entrepreneur would expect a reduction in the cost of production if trade openness brings any benefits to their firm. The output‐enhancing (primal) productivity effect of openness is obtainable from the cost‐saving (dual) productivity effect through the cost‐output link. The cost‐function framework also enables us to investigate whether trade openness induces firms to adopt a technology that is biased towards the use or saving of any factor of production. An empirical exercise based on time series data for the Australian two‐digit manufacturing industries reveals significant cost‐saving and output‐enhancing productivity effects of trade openness. Trade openness is biased towards the saving of labour and the use of capital. These results are quite insensitive to the choice of alternative measures of openness.