Global impacts of the Kyoto agreement: results from the MS-MRT model

This paper analyzes the economic impacts on different regions of the world of a global agreement to limit carbon emissions. A multi-sector, multi-region trade model (MS-MRT) is developed that focuses on the international trade aspects of climate change policy. These include the distribution of impacts on economic welfare, international trade and investment across regions, the spillover effects of carbon emission limits in Annex 1 countries on non-Annex 1 countries, carbon leakage, changes in terms of trade and industry output, and the effects of international emissions trading. Our central estimates are presented with a set of sensitivity tests to assess the extent to which our conclusions depend on elasticity and baseline assumptions. A technical appendix presents algebraic details of the model structure and calibration.     

Games of Climate Change with International Trade

We analyse games of greenhouse gas emission reduction in which the emissions and the emission reduction costs of one country depend on other countries' emission abatement. In an analytically tractable model, we show that international trade effects on costs and emissions can either increase or decrease incentives to reduce emissions and to cooperate on emission abatement; in some specifications, optimal emission reduction is unaffected by trade. We therefore specify the model further, calibrating it to larger models that estimate the costs of emission reduction, trade effects, and impacts of climate change. If trade effects are driven by total emission reduction costs of other countries cooperation is slightly more difficult than in the case without trade effects. If trade effects are determined by relative emission reduction efforts in other countries, cooperation becomes easier. Carbon leakage does not affect our qualitative insights, although it does change the numbers.     

技术吸收能力对技术溢出和全要素生产率的影响——基于1995—2009年中国省区面板数据

利用1995—2009年我国28个省(自治区、直辖市)的面板数据,采用数据包络分析法,实证检验了地区的技术吸收能力对地区获得的技术溢出及其全要素生产率的影响。研究表明:省际技术溢出以及来自进出口贸易、FDI和ODI渠道的技术溢出都是影响地区TFP及其分解变量——技术进步、技术效率的重要因素;人力资本、制度因素、技术差距和吸收能力综合变量通过与技术溢出发生交互作用,对地区TFP、技术效率和技术进步产生显著影响。     

Trade,transport costs and trade imbalances: An empirical examination of international markets and backhauls

The US trade deficit has been growing for over 25 years and has been accompanied by enlarging freight rate differentials. While traditional models of trade have ignored these gaps assuming symmetry across all bilateral trade costs, the specific linkages between trade imbalances and international transportation costs have remained unexplored. Given the current trade policies, the implications arising from the endogenous adjustment of bilateral transport costs to policy-induced changes in the US trade deficit are of particular importance. To break new ground on this issue, we develop and estimate a model of international trade and transportation that accounts for the effects of persistent trade imbalances. The theoretical results are supported by our empirical analysis and indicate that bilateral transport costs adjust to a country's trade imbalance. The implication is that a unilateral import policy, for example, will cause spillover effects into the bilaterally integrated export market. To illustrate, we use our empirical results to simulate the anticipated spillover effect from the Chinese ban on waste imports. We find that China's ban and the projected 1.5% rise in the US trade deficit will lead to not only a 0.77% reduction of transport costs charged on US exports to China but also a 0.34% increase in transport costs on US imports from China.     

Climate change,health care access and regional influence on components of U.S. agricultural productivity

This article examines factors driving three components of total factor productivity change (TFPC) in U.S. agriculture – technical change (TC), technical efficiency change (TEC), and scale and mix efficiency change (SMEC). We also examine TFPC and contrast implications derived from the component models with those from a directly estimated TFPC model. Our results show that TC and SMEC are both significantly impacted by innovation through public research and improved human capital through education and health care access. TEC and SMEC are significantly affected by farm size, and the latter is significantly affected by public policy. The ratio of family-to-total labour, terms of trade and precipitation have significant impacts on all three components, but extension has no significant impact on any component. Climate change variables are the most impactful factors on each component as well as on TFPC. While the impact of climate change is heterogeneous across regions and components, its estimated historical impact is most often positive. Nearly all TFPC elasticities estimated directly are qualitatively the same as those calculated from the component models and quantitatively similar.     

Paving the Road to Export: Assessing the Trade Impact of Road Quality

Assessing the trade impacts of domestic transport costs is data demanding and analyses that examine the effects of road quality, a critical aspect in regional and public policy, practically do not exist in the international trade literature. The few studies available rely mostly on distance-based measures as proxies of transport costs which impede analyzing the trade effects of transport-infrastructure improvements. In this paper, we combine highly disaggregated records of export flows with detailed geo-referenced information of the Colombian transport network, including its road quality, as well as real measures of transport costs of shipping goods within the country to measure the trade impacts of improving road quality. We find that the trade effects of improvements in road quality are relatively small on average; however, there is considerable heterogeneity in the magnitude of the effects. We show that longer routes have larger shares of their roads in poor conditions; accordingly, the trade impacts of shipments originated in remote regions are found to be quite substantial.     

技术的公共品或私人品特性与国际技术溢出效应：基于我国的实证分析

本文在假设技术/知识的公共品或私人品特性条件下,研究分析了以进口贸易和FDI为传导机制的国际技术溢出对我国全要素生产率的影响。分析结果表明:通过进口贸易和FDI传导的国际R&D资本、国内R&D资本与我国全要素生产率之间存在稳定的长期均衡关系;技术的公共品或私人品特性不同,技术溢出对我国技术进步产生的影响也存在显著差异。     

Technological spillover through industrial and regional linkages: Firm-level evidence from China

This paper provides new insights into the study of technology spillover effects through the interaction between industrial and spatial linkages. We develop a theoretical model that provides a useful modeling framework for spillover research, and then empirically test the model inferences using Chinese firm-level data. Input-output tables and spatial decay measurements are combined to construct the key spillover variables. Using seemingly unrelated regressions, the paper finds that vertical spillover effects are more significant than horizontal spillover effects, both within- and between-regions; regional characteristics have greater impacts on vertical spillovers than on horizontal spillovers; and regional spillover effects vary across different regions. Regional policies and regional endowments, including human capital, transportation infrastructure, and enterprise ownership, are crucial in explaining these heterogeneities in regional technology spillover. Our empirical results provide many policy implications including strengthening the connection between upstream and downstream industries and devoting more R&D to upstream industries.     

产业内贸易与经济增长:基于人力资本的分析框架

贸易的知识扩散效应和贸易竞争的资源配置效应是长期内产业内贸易影响增长的最根本的两个方面。本文将包含贸易知识扩散程度参数的人力资本积累函数引入Bucci提出的经济增长模型,把模型拓展到开放经济环境,在动态贸易均衡中考察这两种效应。研究发现：贸易的知识扩散效应促进人力资本积累,有利于经济增长;贸易竞争效应使人力资本更多地配置到低效率的非竞争性部门,不利于经济增长。因此,产业内贸易对经济增长的影响取决于知识扩散效应和贸易竞争效应的影响程度的相对大小比较结果。     

Geographical advantage: Home market effect in a multi-region world

I propose a theoretical framework for studying the effects of geographical factors on the distribution of industries across many regions. The geographical feature of each region is summarized by a proximity matrix, whose elements measure the closeness between every pair of regions and depend on the parameters representing the transport and other costs of using a variety of trade routes. A change in these costs of trade affects the distribution of industries by amplifying the geographical advantages and disadvantages of regions. Through a series of examples, I demonstrate how this framework can be used not only to examine the effects of an improvement in transport infrastructure, but also to address some problems from economic history, regional economic integration, and the north-south division, and discuss some geopolitical issues.     

Spillovers from Foreign Exporters

We develop a general equilibrium model of international trade with heterogeneous firms that accounts for productivity spillovers transmitted by foreign exporters. Everything else equal, stronger spillovers increase welfare. We embed the model framework into a trade policy scenario where countries strategically set inter‐country variable trade costs for the trading partner. In the strategic Nash‐equilibrium policy, governments trade‐off welfare gains from protectionism and those that are due to spillovers from foreign exporters. The equilibrium degree of protectionism is decreasing in the strength of the spillover. Policy coordination induces welfare gains but these gains can be hump‐shaped in the spillover strength.     

Home and regional biases and border effects in Armington type models

We discuss biases in preferences and their trade effects in terms of impacts on non-neutral trade flows motivated by recent literature on both home bias and the border effect. These terms take on multiple definitions in the literature and are often used interchangeably even though they differ. The border effect refers to a higher proclivity to trade behind rather than across national borders and is usually defined by the coefficients of regional dummies from an estimated gravity model. It can be present both in data and in counterfactual model solutions. Sometimes the reduced form of the gravity model used is asserted to reflect an Armington type model. For the border effect to occur as a model outcome, a structural model with at least 2 home regions and 1 country abroad is needed. In contrast to current literature, we offer a characterization of various forms of preference bias in trade models and measures of their associated trade effects based on a concept we term trade neutrality. These effects go beyond conventional border effects, and can be both across and within borders. Home bias is typically specified as an Armington preference for domestic over comparable foreign products in a trade model where goods are heterogeneous across countries. It is reflected in both model structure and parameterization, but defined in several different ways in the literature. We assess the contribution of each form of bias to the set of possible trade effects using a calibrated model with 3 Canadian regions, the U.S., and the rest of the world using 2001 data. We also evaluate how much of the conventional border effect is accounted for when model biases are modified in various ways.     

Possible economic impacts of a shutdown of the thermohaline circulation: an application of <Emphasis Type="Italic">FUND</Emphasis>

Climate change can lead to a substantial reduction of the strength of the thermohaline circulation in the world oceans. This is often thought to have severe consequences particularly on the North Atlantic region and Northern and Western Europe. The integrated assessment model FUND is used to estimate the extent of these impacts. The results indicate that, owing to a slower warming (rather than cooling) of the regions most affected by a thermohaline circulation collapse, climate change induced damages in these regions would be smaller in case of a shutdown of the thermohaline circulation. However, even with a thermohaline circulation collapse, the total and marginal impacts of climate change are negative.JEL Classification: Q510, Q540We are grateful to Till Kuhlbrodt for providing the CLIMBER data and to Andre Krebber for processing them. The German Federal Ministry for Education and Research through the INTEGRATION project, the US National Science Foundation through the Center for Integrated Study of the Human Dimensions of Global Change (SBR-9521914) and the Michael Otto Foundation provided welcome financial support.     

Fixed export cost heterogeneity, trade and welfare

Recent literature on the workhorse model of intra-industry trade has explored heterogeneous cost structures at the firm level. These approaches have proven to add realism and predictive power. This paper presents a new and simple heterogeneous-firms specification. We develop a symmetric two-country intra-industry trade model where firms are of two different marginal cost types and where fixed export costs are heterogeneous across firms. This model traces many of the stylized facts of international trade. However, we find that with heterogeneous fixed export costs there exists a positive bilateral tariff that maximizes national and world welfare.     

Distributional Preferences and the Incidence of Costs and Benefits in Climate Change Policy

We explore the relationship between willingness to pay (WTP) for climate change mitigation and distributional preferences, by which we mean individuals’ opinions about who should be responsible for climate change prevention and whether the share of climate change impacts borne by the poor is a cause for concern. We use 1,770 responses to an online stated preference survey. The domestic costs in our survey’s policy choice scenarios are expressed as a set of randomized shares across four different payment vehicles, and the international cost shares are randomized across four groups of countries. We also elicit respondents’ perceptions of the likely regressivity of climate change impacts under a policy of business-as-usual. WTP is higher when larger cost shares are borne by parties deemed to bear a greater responsibility for mitigation, and when respondents believe (and care) that the impacts of climate change may be borne disproportionately by the world’s poor. That WTP for an environmental policy depends on the distributional consequences of the policy is an unsettling result: efficiency assessments are typically assumed to be separate from equity considerations in most benefit-cost analyses.     

Carbon Abatement and International Spillovers

Carbon abatement policies in large open economies affect both the allocation of domestic resources and international market prices. A change in international prices implies an indirect secondary burden or benefit for all trading countries. Based on simulations with a large-scale computable general equilibrium model of global trade and energy use, we show that international spillovers have important welfare implications for carbon abatement policies designed to meet exogenous emission reduction targets. We present a decomposition of the total welfare effect of carbon abatement policies into a primary domestic market effect (at constant international prices) and a secondary international spillover impact as a result of changes in international prices. This decomposition reveals the extent to which domestic abatement costs are increased or decreased as a result of the impact of carbon abatement on international prices.     

Market size and entry in international trade: Product versus firm fixed costs

This paper develops a theoretical framework to infer the nature of fixed costs from the relationship between entry patterns in international markets and destination market size. If fixed costs are at the firm level, firms take advantage of an intrafirm spillover by expanding firm‐level product range (scope). Few firms enter with many products and dominate international trade. If fixed costs are at the product level, an interfirm spillover reduces the fixed costs to export for all firms producing the product. The resulting entry pattern consists of many firms exporting different varieties of the same product. Using cross‐country data on firm and product entry, I find empirical evidence consistent with product‐level costs. More firms than products enter in larger markets offering their consumers lower prices and a greater variety of goods within the product category.     

Endogenous induced technical change and the costs of Kyoto

We present a model for climate change policy analysis which accounts for the possibility that technology evolves endogenously and that technical change can be induced by environmental policy measures. Both the output production technology and the emission–output ratio depend upon a stock of knowledge, which accumulates through R&D activities. Two versions of this model are studied, one with endogenous technical change but exogenous environmental technical change and the other with both endogenous and induced technical change. A third version also captures technological spillover effects. As an application, the model is simulated allowing for trade of pollution permits as specified in the Kyoto Protocol and assessing the implications in terms of cost efficiency, economic growth and R&D efforts of the three different specifications of technical change.     

Uncertainty and climate treaties: Does ignorance pay?

Uncertainty and learning play an important role in the management of many environmental and resource problems and in particular in climate change. In stylized game-theoretic models of international environmental treaty formation, which capture the strategic interactions between nations, learning usually has a negative impact on the success of cooperation. We use a richer climate model that captures the large heterogeneity between different world regions and considers uncertainty about the benefits and costs from climate mitigation. By explicitly exploiting differences between regions and allowing transfers to mitigate free-rider incentives, we derive much more positive conclusions about the role of learning.     

The effect of free trade agreements revisited: Does residual trade cost bias matter?

This paper revisits a prominent gravity model‐based empirical literature on the effects of free trade agreements by accounting for a potential bias caused by unobservable trade costs that operate through general equilibrium constraints. It embeds state‐of‐the‐art panel estimation techniques in a recently proposed two‐step remedy that features a constrained ANOVA‐type estimation. Using a dataset on manufacturing trade flows in eight sectors in 40 countries and a rest‐of‐the‐world aggregate for the period 1990–2002, it finds evidence of significant residual trade cost bias. The direction and magnitude of bias vary across sectors, with the standard one‐step approach used in the literature overestimating or underestimating the partial effect of free trade agreements by up to 110 percent. Overall, coefficients on trade costs variables are jointly significantly different between the standard method and the two‐step method. The biases in partial effect estimates translate into biases in general equilibrium effects.