Trade Liberalization and Antidumping: Is There a Substitution Effect?

Many nations have undergone significant trade liberalization even as they have increased their use of contingent protection measures. This raises the question of whether some of the trade liberalization efforts, at times accomplished through painful reforms, have been undone through a substitution from tariffs to non‐tariff barriers. Among the new forms of protection, antidumping is the most relevant. This paper examines whether the use of antidumping is systematically influenced by the reduction of applied sectoral tariffs in a sample of 29 developing and six developed countries from 1991 through 2002. Evidence is found of a substitution effect only for a small set of heavy users of antidumping among developing countries. There is no similar statistically significant result for other developing countries or developed countries. Robust evidence is also found of retaliation and deflection effects as determinant of antidumping filings across all subsamples.     

Is it all about competence? The human capital of U.S. presidents and economic performance

This paper explores the extent to which human capital improves the economic policy competence of US presidents. Several recent studies have used international data to test similar hypotheses. However, international studies suffer from a variety of comparability issues, not all of which can be avoided through fixed effects and error correction. The US results developed in this paper suggest that both career paths and education have significant effects on a president’s economic policy judgment, particularly in the period after the Civil War. However, the paper also suggests that more than good economic management skills are required to win national elections.     

Is the relationship between gold and the U.S. dollar always negative? The role of macroeconomic uncertainty

The main work of this article is to access the role of macroeconomic uncertainty in effecting the correlation between gold and the dollar. The empirical analysis is divided into two parts. Firstly, we examine the impact of macroeconomic uncertainty on short and long correlation between gold and the dollar. Secondly, we analyse the explanatory power of economic uncertainty for the abnormal market relation between gold and the dollar with a threshold model. In particular, we investigate impacts of economic uncertainty sourced from different economies. The empirical results indicate that economic uncertainty generates direct impacts on the correlation between gold and the dollar. Moreover, our results emphasize that uncertainty sourced from different economies have different impacts on the dynamics between gold and the dollar. This article also presents the relative contribution of gold and the dollar shocks to the likelihood of being in the high-uncertainty regime. These results have implications for risk management, international asset allocation and hedging strategies.     

Will Trade Liberalization Harm the Environment? The Case of Indonesia to 2020

Most-favoured-nation (MFN) trade liberalizations willalways improve global economic welfare providedglobally optimal environmental and other policies arein place. But since the latter proviso is not met inpractice, empirical studies of the environmental andresource depletion effects of such reforms are neededto determine whether trade reform is still worthwhile.This paper provides a methodology for doing that. Itis illustrated with a case study of Indonesia, a largenewly industrializing country that is rich in naturalresources and committed to taking part in majormultilateral and regional trade liberalizations overthe next two decades. A modified version of theglobal CGE model known as GTAP is used to project theworld economy to 2010 and 2020 without and with thosereforms. An environmental module is attached to theIndonesian part of that global CGE model so as tomeasure the effects of changes in economic activity onair and water pollution. The proportionalcontributions to environmental indicators of changesin the level and composition of output, and changes inproduction techniques, are identified. A base caseprojection without trade reform is compared withalternative scenarios involving full globalimplementation of Uruguay Round commitments by 2010,and the additional move to MFN free trade by APECcountries by 2020. The study suggests that, at leastwith respect to air and water, trade policy reformsslated for the next two decades would in many casesimprove the environment and reduce the depletion ofnatural resources and in the worst cases would addonly slightly to environmental degradation – evenwithout toughening the enforcement of existingenvironmental regulations or adding new ones, and evenif the reforms stimulate a faster rate of economicgrowth.     

The Interaction of Wage Bargaining Institutions and an Independent Central Bank – A Methodological Reflection on Current Theories

The paper analyses the increasingly popular literature on strategic interactions from a methodological viewpoint. These political economy approaches focusing on interactions between wage bargaining institutions and an independent central bank do not follow unified methodological rules and so cannot be categorised under a single particular paradigm. Moreover, the literature remains in a way circumscribed by the limits of our logical capacities and of mathematical tractability and therefore relates to the 'real world' of wage bargaining and economic policy institutions in a very limited way only. A consideration of the vast complexity of institutional conditions that impact economic performance in EMU reminds and cautions one that actual economic policy research is able to cover only very few of the numerous conditions responsible for the overall outcome.     

International stock return predictability: Is the role of U.S. time-varying?

This study investigates the predictability of 11 industrialized stock returns with emphasis on the role of U.S. returns. Using monthly data spanning 1980:2–2014:12, we show that there exist multiple structural breaks and nonlinearities in the data. Therefore, we employ methods that are capable of accounting for these and at the same time date stamping the periods of causal relationship between the U.S. returns and those of the other countries. First we implement a subsample analysis which relies on the set of models, data set and sample range as in Rapach et al. (J Finance LXVIII(4):1633–1662, 2013). Our results show that while the U.S. returns played a strong predictive role based on the OLS pairwise Granger causality predictive regression and news-diffusion models, its role based on the adaptive elastic net model is weak. Second, we implement our preferred model: a bootstrap rolling window approach using our newly updated data on stock returns for each countries, and find that U.S. stock return has significant predictive ability for all the countries at certain sub-periods. Given these results, it would be misleading to rely on results based on constant-parameter linear models that assume that the relationship between the U.S. returns and those of other industrialized countries are permanent, since the relationship is, in fact, time-varying, and holds only at specific periods.     

The Analysis of U.S. Deposit Insurance System and the Enlightenment to China

U.S. deposit insurance system has important and deep influence on the building and operating of the deposit insurance system for many countries in the world. Based on the analysis of the development stage and status quo of the U.S. deposit insurance system, this paper suggests that China should learn from the experience of U.S. deposit insurance system, to build and perfect the laws of deposit insurance system, and the mandatory, the scope, the insurance premium, and the top insurance amount of the deposit insurance system should be stated, and the deposit insurance agencies should maintain their independence and restrain the moral hazard. Only in that way can the deposit insurance system of China be built and perfected.     

Employers’ Estimates of Market Wages: Implications for Wage Discrimination in the U.S.

In the U.S., public and private employers often survey each other’s wages in order to estimate the prevailing “market wage” for a job. I examine this process to see how it can lead to underpaying women, relying on a 1989 study of government wage-setting in the State of Washington and my own study of government wage-setting in the State of California. Gender biases can appear because numerous decisions are involved in each step of the process, and these decisions are often influenced by the gendered social and political environment, including the different levels of political organization of male and female employees.     

Is Abe's Fiscal Policy Ricardian? What Does the Fiscal Theory of Prices Mean for Japan?

The second arrow of Abenomics is flexible fiscal policy. However, it does not mean just fiscal stimulus as the Abe administration decided on the fiscal consolidation target of achieving a primary surplus by fiscal year 2020. Improving the primary balance implies making government debt more sustainable. Although the consumption tax rate was raised from 5% to 8% in April 2014, the Abe administration has decided twice to postpone increasing the consumption tax from 8% to 10%. In addition, a fiscal stimulus package was implemented. We use a Fiscal Stance Index to examine fiscal policy from the viewpoint of fiscal sustainability and a Markov switching model to examine fiscal policy from the viewpoint of the fiscal theory of the price level, and find that the Abe's fiscal stance is not Ricardian.     

The Henderson Question? The Melbourne Institute and 50 Years of Welfare Policy

I discuss selected research contributions of the Melbourne Institute of Applied Economic and Social Research to 50 years of welfare policy for those of workforce age and focus particularly on the policy focus of R. F. Henderson, the inaugural director. Following the spirit of his 1960s poverty research, in the mid‐1970s, government doubled unemployment allowances in real terms and increased pensions by approximately 40 per cent. Both income support payments were to be indexed by average wage increases. At the time, unemployment was typically around 1 per cent and the pension take‐up for those of workforce age was also limited. Today, income support take‐up rates have probably increased fivefold. In response, government has adopted a ‘make work pay’ policy over the last two decades and indexed allowances for Consumer Price Index increases and allowances have fallen by 25–35 per cent, relative to community living standards. Pensions continue to be indexed by average wage changes. I address a range of questions arising from this experience, including: Why has government abandoned the Henderson recommendations?; Is there any evidence that a ‘make work pay’ policy is working?

     

How to forecast cross-border patent infringement? — The case of U.S. international trade

The International Trade Commission is one venue for enforcement of United States Patents, the other venue being the Federal District Courts. The ITC conducts investigation on unfair methods of competition and unfair acts in the importation under United State Section 337. The majority of ITC investigations are based on the importation of goods that are alleged to infringe a United States patent. This paper seeks to investigate fundamental characteristics of patents investigated by ITC, name as “ITC patent” in this study, from 1976 to 2012 in order to obtain early precaution of possible ITC investigation for newly filed patents. Patents which have been investigated by ITC are defined as ITC patents (1305 patents) and those which have never been investigated by ITC defined as non-ITC patents (4,388,043 patents). Both ITC patents and non-ITC patents are analyzed to understand the differences between the two types of patents in terms of 11 variables. Subsequently, the difference between ITC patents and non-ITC patents in a manner that is statistically different from random distribution will be identified. Furthermore, regression model is used to test whether each of the above variables (the 16 indicators) is related to each other and evaluate the probability of being investigated by ITC.     

Do immigrants affect the profile of U.S. exporters?

We highlight that an increase in the stock of immigrants corresponds with greater numbers of U.S. firms that engage in exporting to foreign markets. Our results are obtained from the estimation of a multi-level mixed effects model. Overall, the effect of immigrants is relatively larger among small- and medium-sized enterprises and is smaller among large-sized enterprises. There are, however, considerable differences, both in the magnitude and in nature of the observed effects of immigrants on manufactured and non-manufactured goods exporters of comparable size categories. Similarly, heterogeneity is found in the effects of immigrants on the numbers of small-, medium-, and large-sized exporters across home country cohorts that are grouped by World Bank income classifications and by broad regional classifications of destination markets. These findings imply that immigration has the potential to alter the profile of domestic firms involved in exporting.     

U.S. Pensions in the 2000s: The Lost Decade?

The last three decades saw a sharp decline in traditional defined benefit (DB) pensions and a corresponding rise in defined contribution (DC) plans. Using the Survey of Consumer Finances from 1983 to 2010, I find that after robust gains in the 1980s and 1990s, pension wealth experienced a marked slowdown in growth from 2001 to 2007 and then fell in absolute terms from 2007 to 2010. Median augmented wealth (the sum of net worth, pensions, and Social Security wealth) advanced slower than median net worth from 1983 to 2007 and its inequality rose more, as DB wealth fell off. However, from 2007 to 2010, the opposite occurred. While median wealth plummeted by 41 percent and inequality spiked by 0.032 Gini points, median augmented wealth fell by only 21 percent and its Gini coefficient rose by only 0.009 points. The differences are due to the moderating influence of Social Security wealth.     

Analyzing the Interaction of Monetary and Fiscal Policy: Does Fiscal Policy Play a Valuable Role in Stabilisation?

This paper provides an overview of recent papers which use estimatedNew Keynesian models to study the extent to which fiscal policycan be used to stabilize the economy. We use a variety of differentNew Keynesian models, estimated on data for both the US andfor the Euro area, and highlight the diverse transmission channelsthrough which fiscal policy acts in these models. Although wefind that fiscal policy can provide a useful complement to monetarypolicy, especially in models where consumers have finite horizons,there are important limitations to the value added of fiscalpolicy. (JEL E58, E62, E63)     

The U.S. Social Security System: What Does Political Sustainability Imply?

This paper examines how political constraints can shape the social security system under different demographics. A steady-state mapping between relevant economic and demographic variables and the social security tax rate resulting from a majority voting is provided. I calibrate an OLG model to the U.S. economy. Calculations using census population and survival probabilities projections and 1961–96 labor productivity growth deliver a social security tax rate of 13.3% (currently 11.2%) and a 54% replacement ratio (51.7%). This result reflects the median voter's aging, from 44 to 46 years, which dominates the decrease in the dependency ratio, from 5.45 to 4.72. Journal of Economic Literature Classification Numbers: H55, E17, D72.     

Is the exchange rate a shock absorber or a source of shocks? Evidence from the U.S.

We examine the stabilization role of the exchange rate in the U.S. economy using a factor augmented vector autoregression model. We find that exchange rate shock explains a large fraction of the variation in exchange rate and transmits major disturbances to the real economy. Further, we find that demand and supply shocks explain less than a quarter of the exchange rate movement. We provide robust evidence that although the exchange rate plays some role as a shock absorber, its role as an independent source of shocks is more dominant for the U.S. economy. The foreign exchange market breeds its own shocks which are destabilizing not only to the value of the dollar but to the overall economy as well. Our results suggest that policymakers need to take foreign exchange market fluctuations into account when making macroeconomic policy decisions.     

The changing economic status of U.S. disabled men: Trends and their determinants, 1982–1991

We track the level of economic well-being of the population of men who began receiving Social Security Disability Insurance benefits in 1980–81 from the time just after they became beneficiaries (in 1982) to 1991. We present measures of the economic well-being of disabled individuals and their nondisabled peers as indicators of the relative economic position of these two groups. These measures also provide an intertemporal comparison of well-being and hardship as disabled persons and their nondisabled peers age and retire. We first show several economic well-being indicators for new male recipients of disability benefits in 1982 and 1991. We then compare their economic position to that of a matched group of nondisabled males with sufficient work histories to have been disability-insured. Because labor market changes over this decade have led to a relative deterioration in the position of younger and less-educated workers, we compare men with disabilities to those without disabilities and distinguish different age and educational levels within the groups. We conclude by assessing the antipoverty effectiveness of Social Security income support for both younger and older male SSDI recipients. First version received: May 1998/final version received: July 1999     

Opening the Farm Gate to Women? The Gender Gap in U.S. Agriculture

Abstract:

This article provides an empirical analysis of the gender gap for farming in the United States. Using the 2012 U.S. Census of Agriculture we show that farms operated by women earn forty percent less farm income than farms operated by men after controlling for farm and operator characteristics. These findings indicate that farming is one of the most unequal professions in the United States today. Further, we investigate whether three forms of sustainable agriculture improve incomes for women farmers. We find that only farms engaging in Community Supported Agriculture experience a marked decline in the gender income gap.     

Are China and India backward? Evidence from the 19th century U.S. Census of Manufactures

Hsieh and Klenow (2009) argue that a large fraction of aggregate TFP differences between the U.S. and the developing countries of China and India can be explained by factor misallocation. Their interpretation is that this misallocation is due to institutions and policies in these developing countries that redirect resources from productive to unproductive firms. Using the U.S. Census of Manufactures from the late 19th century, I find that the level of dispersion in these modern, less developed countries is very similar to that in the 19th century U.S. What is similar about the countries is their level of development not the existence of institutions that Hsieh and Klenow (2009) emphasize such as state-owned enterprises as in China or entry restrictions as in India. These results suggest that the institutional basis of misallocation potentially goes beyond these overtly distortionary policies. I apply their accounting procedure to the U.S. and find that between 4% and 7% of total manufacturing TFP growth in the 20th century can be attributed to a more efficient intra-industry allocation of resources. I conclude by discussing some other explanations for these results including differences in transportation networks and lack of competitive regulation.