Taxation and the Environment–Health–Poverty Trap: A Policy Experiment Perspective

Under pressures related to economic growth and environmental protection, China is facing an increasingly severe “environment–health–poverty” trap risk. Fuel taxation is generally considered an effective policy to counter such a risk. Since 2009 China has raised the fuel tax rate many times to enhance tax reform. However, the effects of this policy remain unknown. Therefore, it is vitally important to estimate the impacts of China's current fuel taxation policy on environment, public health and the national economy. As the first attempt in existing literature on China, this paper builds a general equilibrium framework with the feedback effect of public health on economy. We find that that the fuel tax policy benefits the adjustment of the economic structure and improves human health; however, it is detrimental to economic growth, public welfare and price stability. In this sense, it plays a limited role in reducing the trap risk and might not be sustainable in the long term.     

INTRAINDUSTRY SPECIALIZATION AND THE UNITED STATES–CENTRAL AMERICA–DOMINICAN REPUBLIC FREE TRADE AGREEMENT

This paper examines changes in intraindustry specialization indicators over the 1992–2004 period to assess the potential for structural adjustment problems that may arise in the United States with growth in trade resulting from the United States–Central America–Dominican Republic Free Trade Agreement (CAFTA‐DR) between the United States and six Central American countries—Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica, and the Dominican Republic. CAFTA‐DR will expand market access for US exporters. Few US industries are likely to encounter structural adjustment problems. Given the relatively large size of the US economy, and the small number of industries that face potential adjustment pressures, the United States should have liberalized all trade immediately. When potential adjustment pressures are indicated, long tariff phaseouts, complex rules of origin, and import safeguards are used to delay factor adjustments in import‐sensitive industries.     

Evolution of Urban–rural Living Standards Inequality in Thailand: 1990–2006

The present study examines the developments in urban–rural living standard inequality in Thailand from 1990 to 2006 using a methodology that allows for the identification of individual contributors to changes in inequality. We also propose a method to analyze the changes over time in urban–rural living standards. We find that the urban–rural gap in living standards in Thailand has narrowed substantially since the early 1990s, both at the mean and especially for households in the upper part of the expenditure distribution; however, the narrowing of the gap at the bottom of the expenditure distribution has been negligible. The study also identifies the main individual contributors to changes over time in living standards between urban and rural areas in Thailand.