The trade destruction effect and trade diversion effect of RMB appreciation

This paper examines how Chinese RMB appreciation affects China and its competitor’s exports to the third market at industry level. We develop a two-country competition model to analyze the trade destruction effect and trade diversion effect of RMB appreciation. The theoretical analysis shows that the appreciation of RMB has negative impacts on China’s exports and positive impacts on its competitor’s exports. We then empirically test how the appreciation of RMB to the US dollar affects China’s and India’s textiles and apparel exports to the US from 1995Q1 to 2008Q4. The empirical results show that an 1% appreciation of RMB to US dollar will reduce China’s exports of textiles & apparel to the U.S. by 2.63% and raise the India’s exports of textiles & apparel to the U.S. by 2.71%.     

A new Keynesian framework and wage and price dynamics in the USA

This paper investigates theoretical implications from a new Keynesian model focusing on the labor market, by imposing them as testable restrictions in an estimated vector error correction model on US data from 1982Q3 to 2016Q1. By this, I conduct an important, but rarely addressed, step in assessing the empirical relevance of a theoretical new Keynesian model. Another advantage of this approach is that the cycle and trend components of the data are separated when imposing the testable restrictions, such that there is no need to filter the data series prior to estimation. The results show that most of the properties pertaining to the theoretical model cannot be rejected when imposed as restrictions. The new Keynesian model on the labor market is thus found to be empirically relevant. Furthermore, the estimated econometric model explains a large degree of the wage and price dynamics in the USA, such that the paper also provides an estimated macroeconometric model.     

地下水灌溉系统产权制度的创新与理论解释——小型水利工程的实证研究

水资源管理制度和政策越来越被认为是解决日益严重的水资源短缺问题的重要手段。本项研究的主要目的是分析我国地下水灌溉系统产权制度的创新过程和诱导因素 ,为国家引导和制定合理的水资源管理政策提供理论和实证依据。本项研究采用了定量研究的方法 ,建立了地下水灌溉系统产权制度创新模型 ,分析数据来源于作者对河北省 3县 3 0个村的实地调查。研究结果表明 ,80年代以来 ,以河北省为代表的地下水灌溉系统的产权制度逐渐从集体产权向非集体产权演变。影响地下水灌溉系统产权制度创新的主要因素是水资源开发利用程度、生存环境、社区经济条件、社区人力资本、市场发育程度、水利财政政策和水利信贷政策等因素。本项研究还对如何引导产权制度创新更快更有效的发展提出了一些政策建议。     

China's export growth and the China safeguard: threats to the world trading system?

Abstract Is there evidence from China's pre‐WTO accession period that newly imposed U.S. or EU import restrictions deflect Chinese exports to third markets? We examine this question by drawing on a newly constructed data set of U.S. and EU product‐level import restrictions on Chinese trade imposed between 1992 and 2001, and we estimate their impact on Chinese exports to alternative markets. We find no systematic evidence that the import restrictions imposed during this period resulted in Chinese exports surging to third markets. To the contrary, there is weak evidence of a chilling effect on China's exports to third markets.     

Hidden costs of supply management in a small market

Canada regulates its dairy and poultry industries through supply management. The supply‐management programs use target prices, production quotas and import tariff‐rate quotas to raise domestic prices. Canadian supply‐managed producers cannot export their output to world markets as exports would be considered subsidized under World Trade Organization rules. In this paper, we show that once foregone export opportunities are accounted for, supply management may no longer be beneficial to domestic producers of the supply‐managed commodities. The extent to which foregone profits from exports dominate domestic rents depends on Canada's comparative advantage, domestic market elasticities and the extent of supply management distortion in the domestic market.     

Competition and monopoly of Chinese rural groundwater market：structure and determinants

China is facing severe problem of water scarcity.Agricultural sector,the main consumer of water resource,has remarkably changed its institutions on water resource deployment,due to heavy environmental pressure.As a new and spontaneous institution,groundwater market has developed rapidly in northern China,and has impacts on waterusing behaviors and benefits of farmers.Using household survey data from Hebei and Henan in 2007,this paper attempts to pin down the development and operating of groundwater market in rural China.We focus on the monopoly and competition in the market.Empirical analysis reveals that Chinese farmers are trying to make rational decision when they compete with others in groundwater market.In general,monopoly is not fierce in Chinese rural groundwater market,with great variations among different villages and even different tubewells within one village.Tubewell costs,regulation and the density of tubewells are the main determinants that affect monopoly level of groundwater market.To make water market benefit more and more farmers of low income,corresponding policies are needed to modify its development in the future.     

影响中国出口贸易的主导因素分析

本文采用自回归分布滞后模型和边限检验方法,利用1997年1季度至2008年4季度的数据估计了中国进出口贸易需求的收入弹性、价格弹性和汇率弹性,结果发现国外收入变化是影响中国出口的主要因素,产品价格对出口的影响较小,而人民币汇率波动对出口的影响不确定。因此,如果采取低价格促进出口的措施,不仅是低效的,而且是得不偿失的。转向以内需驱动为主的经济增长方式,是中国经济发展的必然战略选择。     

Short Selling Pressure,Reporting Transparency,and the Use of Real and Accruals Earnings Management to Meet Benchmarks

Abstract

Prior literature finds that short selling is beneficial to the market because it increases liquidity and helps to discipline optimistic market prices. The authors use 2 controlled experiments to examine the potential for an unintended consequence of allowing short selling or easing short selling restrictions. Because prior research identifies short sellers as sophisticated market participants who have the ability to see through accrual earnings management choices, we predict and find that, when reporting is transparent, managers are more likely to use real earnings management relative to accrual earnings management when short selling restrictions are relaxed. This is consistent with the idea that real earnings management activities are more defensible as the result of legitimate operating decisions and are therefore more likely to hold up to scrutiny from short sellers. Overall, the results suggest that regulations that are unrelated to financial reporting can affect how managers respond to the transparency that arises from financial reporting regulations.     

Implications of reform and WTO accession for China’ agricultural policies

While China’s trade policies in most areas have been transformed in the reform era, trade in many agricultural goods remains under relatively non‐transparent state trading arrangements. Accession to the WTO will be a critical turning point, increasing transparency and introducing disciplines on protection even for the commodities remaining under state trading. While China’s tariff bindings for the most sensitive products seem unlikely to require substantial short‐term reductions in protection, they rule out substantial increases in the future, provide the opportunity to develop an efficient agricultural sector, and highlight the need for effective policies to reduce rural poverty. WTO membership provides an opportunity for China to improve market access opportunities for its agricultural exports, which face much higher barriers than its exports of industrial products. JEL classification: D58, F13, O13, O56, P33, Q17.     

Long–run price and income elasticities of demand for Hong Kong exports: a structural cointegrating VAR approach

This article revisits a system of export volume and price equations to estimate the long–run price and income effects in the demand for Hong Kong's exports. Using a recently developed restricted cointegrating VAR approach it tests theorybased restrictions and obtains estimates of the long–run structural coefficients. The estimation results provide supporting evidence for the theory–based restrictions and suggest that the demand for Hong Kong's exports is both price and income elastic. This article is therefore able to present a long–run model of Hong Kong's exports that is both theory and data consistent, and long–run elasticities that are economically interpretable. The short–run properties of the model are illustrated by means of persistence profiles, which confirm the cointegrating vectors tendency of convergence.     

Exchange-rate volatility and export performance: Do emerging market economies resemble industrial countries or other developing countries?

Authors who do not distinguish between Emerging Market Economies (EMEs) and other developing countries, find evidence of negative and significant effects of exchange-rate volatility on trade. We investigate the effects of real exchange-rate volatility on exports of ten EMEs and eleven other developing countries that were not classified as EMEs over our estimation period. We use panel-data sets that cover the periods 1980:Q1–2006:Q4 for the EMEs and 1980:Q1–2005:Q4 for the other developing countries. We use two estimation methods — generalized method of moments (GMM) estimation and time-varying-coefficient (TVC) estimation. The TVC procedure removes specification biases from the coefficients, revealing the underlying stable parameters of interest. We obtain similar results as previous authors for only the eleven non-EME developing countries we consider. In contrast, our results for the EMEs do not show a negative and significant effect of exchange-rate volatility on the exports of the countries considered. Our findings suggest that the open capital markets of EMEs may have reduced the effects of exchange-rate fluctuations on exports compared with those effects in the cases of other developing countries.     

Exports and innovation: the role of heterogeneity in exports

This paper examines whether and how heterogeneity in exports affects firms’ innovations in China. Using comprehensive transaction-level trade data from China Customs to construct various dimensional measures exports, empirical results obtained from a matched firm-transaction panel data find that exports overall have a positive impact on promoting innovations in terms of R&D and new product sales. The innovation-enhancing effect of exports depends on the heterogeneity in exports. Firms with greater varieties of exports, more market diversification, and higher export quality are associated with a higher R&D propensity and more new product sales, while process exports are found a negative association with innovations.     

Renewable resource management with stock externalities: Coastal aquifers and submarine groundwater discharge

We model coastal groundwater management and its effects on submarine groundwater discharge, nearshore marine water quality, and marine biota. Incorporating the stock externality effects on nearshore resources increases the optimal sustainable steady-state levels of both the aquifer head and the stock of a keystone native algae species. Numerical simulations are illustrated using data from the Kuki’o region on the Island of Hawaii. Two different approaches for incorporating the nearshore resource are examined. Including algae's market value in the objective function results in only slightly lower rates of groundwater extraction. When a minimum constraint is placed on the stock of the keystone species, however, greater conservation may be indicated. The constraint also results in non-monotonic paths of water extraction, head level, and marginal opportunity cost of water in the optimal solution.     

Russian exports of emission permits under the Kyoto Protocol: The interplay with non-competitive fuel markets

The paper analyses optimal strategies for a country that has market power in an international market for emission permits at the same time as a domestic fuel producer participates in a non-competitive fuel export market. In particular, the effects of coordinating fuel and permit exports are explored. We show that such coordination may either increase or reduce the optimal mark-up on permits, depending on the degree of substitution between alternative fuels.When the fuel market is oligopolistic, coordination of permit and fuel exports may lead to a strategic disadvantage in the fuel market, which makes such coordination unprofitable. However, illustrative numerical simulations suggest that Russia will benefit from coordinating its permit exports with its oil and gas exports during the Kyoto commitment period.     

Monopoly Power and Distribution in Fragmented Markets: The Case of Groundwater

This paper examines monopoly power in the market for groundwater (irrigation water extracted by private tubewells), a market characterized by barriers to entry and spatial fragmentation. In Pakistan's Punjab region, groundwater and tenancy contracts are often interlinked, with share-tenants gaining access to water through the use of their landlord's tubewell. An analysis of groundwater transactions shows that tenants of tubewell owners are charged lower prices than other customers. Tubewell owners and their tenants also use considerably more groundwater on their plots than other farmers. Using detailed price and quantity data, the efficiency and distributional implications of this monopoly power are explored.     

THE VALUE OF IN‐STREAM WATER TEMPERATURE FORECASTS FOR FISHERIES MANAGEMENT

Water temperature is an important factor affecting aquatic life within the stream environment. Cold water species, such as salmonids, are particularly susceptible to elevated water temperatures. This paper examines the economic value of short‐term water temperature forecasts for salmonid management. Forecasts may have economic value if they allow the water resource manager to make better water allocation decisions. This study considers two applications: water releases for management of Chinook salmon in the Klamath River and leasing water from agriculture for management of steelhead trout in the John Day River. We incorporate biophysical models and water temperature distribution data into a Bayesian framework to simulate changes in fish populations and the corresponding benefit from recreational fishing and opportunity cost of water under different temperature forecast accuracies. Simulation results indicate that use of the forecasts results in increased fish production and that marginal costs decline and net benefits increase as forecast accuracy increases, suggesting that provision and use of such stream temperature forecasts would have value to society. (JEL Q22, Q25, Q28, Q50)     

WATER SUBSIDIES, WATER TRANSFERS, AND ECONOMIC EFFICIENCY

Water pricing subsidies and restrictions on water transfers are integral features of federal water supply policies in the western United States. Critics claim that these features discourage efficient use of water. However, current analyses ignore an important feature of federal water supply contracts: entitlement ceilings. This paper analyzes the implications of entitlement ceilings for federal water policies and several proposals for policy reform, including eliminating transfer restrictions, reducing pricing subsidies, and imposing groundwater pump taxes. Analysts may overstate both the efficiency losses resulting from Bureau policies and the amount of water that would be freed up from agriculture if the proposed policy reforms were instituted.     

以合作谋求发展:农业灌溉用水困境、原因和解决思路

农业灌溉用水占我国用水总量的70%左右,如果解决不好灌溉问题,水问题也就得不到很好的解决。我国的灌溉问题主要表现在用水浪费、设施老化、地下水抽取过度、农业水价偏低和分配中的不公平等现象,主要原因是农业效益低下、流域管理分割、水权水市场的缺失、灌溉管理体系的缺陷以及农民的合作意识缺乏等。灌溉问题看似表现各异,但根源在于缺乏合作。因此解决的思路在于从农业、流域、农民的全方位合作入手,配合完善和规范的水权水市场,以求达到一种和谐的农业灌溉用水局面。     

EXCHANGE RATE PROBLEMS IN NATIONAL ACCOUNTING OF DEVELOPING COUNTRIES*

Developing countries which typically have import surpluses and inflationary pressures because of insufficient savings are prone to use indirect taxes on imports (Tm) and subsidization of exports (Sx) in order to prevent deterioration of the balance of trade. If these substitutes for devaluation are included in the net indirect tax component of product at current market prices (Ym) the import surplus is likely to be understated, and Ym upward biased. This distortion will be avoided if imports and exports are measured at effective exchange rates (ER), that is, at official rates (OR) plus Tm and Sx respectively, and if (Tm - Sx) is deducted from the net indirect tax component of Ym. Only in this manner become imports and exports consistent with the other uses and resources at market prices and can be articulated with them. At base-year prices the volume index of product at OR diverges from that of ER to the degree that the composition of imports and exports in regard to tax and subsidy rates computed ad valorem significantly changes. Such a case is similar to that of the price indexes of imports and exports moving in diverging proportions: the trade balance at base-year prices will differ from that at current prices. The resulting discrepancies in national accounts have led to proposals of deflating, for example, exports by the price index of imports. Suchlike approaches are incompatible with the principle of national accounting that prices are supposed already to measure substitution values. Deflating exports by import prices means reintroducing substitution values, as does, for example, deflation of incomes by a consumer price index. Correspondingly, since the trade balance at ER conceptually expresses the value of imports at domestic market prices as compared to the corresponding domestic market value of exports, and if at ER the trade balance diverges from that at OR, the former balance has an important meaning (as has the trade balance at base-year prices as compared to that at current prices) and the resulting discrepancy between the two measures should not be removed merely for the sake of accounting smoothness. In contrast to the market price approach, the measurement of product at base-year factor cost is indifferent to the measurement of the trade balance at ER and at OR. It is, therefore, proposed in countries in which part of import taxation and export subsidization substitutes for devaluation, to record imports and exports in the national accounts at effective exchange rates, and to correct the net indirect tax component of product correspondingly. Imports and exports at official exchange rates should be shown within the balance of payments, and the latter separately as a memorandum item.     

Families and firms: Agency costs and labor market imperfections in Sialkot's surgical industry

The family firm is generally viewed as an organizational solution to agency costs in the labor market for managers and institutional underdevelopment. Consistent with this view, this paper links the preponderance of family firms in the surgical instrument industry of Sialkot to the prevailing agency and institutional problems. However, strong dependence on family management coupled with restrictions on family size constrains the firms from optimally choosing management size. The resulting labor market distortion is manifested by a significant positive correlation between the founder's family size and the firm size such that the founders who have more brothers (a larger pool of potential managers) end up with bigger firms.