How barriers to international trade affect TFP

We ask how barriers to international trade affect TFP when there are monopoly rights in the import-competing industries. Holmes and Schmitz [1995. Resistance to new technology and trade between areas. Federal Reserve Bank of Minneapolis Quarterly Review 19, 2–17] show that without barriers to trade TFP in these industries is as large as possible. We study the general case of finite barriers to trade. We find that binding quotas lead to the use of inefficient technology in the import-competing industries. In addition, finite quotas or tariffs imply that the import-competing industries produce larger than efficient quantities, if they produce at all. For both of these reasons, barriers to international trade reduce TFP.     

How trade and capital restrictions affect the probability of a balance of trade disturbance

Free market economists argue that national authorities avoid restrictions on the free movement of goods, services and financial capital between countries. Yet, countries continually choose to restrict the flow of capital both into and out of the country. Why is this done? Is it done to protect the domestic banking system, to control the domestic money supply, to manage the exchange rate, to provide stability for internal markets or to avoid wide swings in the availability of capital? Are these controls effective in precluding wide swings in a country's international trade balance? This article uses panel data in a logit model to analyse policy choice with respect to an international trade and/or investment regime. The goal is to identify choices effective in reducing the likelihood of a severe Balance of Trade Disturbance (BTD) and determine if the appropriate choice is related to per capita income (pci).     

How does the flow of remittances affect the trade balance of the Middle East and North Africa?

ABSTRACT

The Middle Eastern and North African (MENA) economies have one of the highest degrees of dependency on received remittances worldwide. In this study, we have examined the role of remittances in the trade balance of 11 labour abundant MENA countries. Our panel regression analysis showed that the inflow of remittances has fostered the trade deficit. We also found that the final effect of remittances depends on the level of domestic capital formation. The results are robust after controlling for other drivers of trade deficit such as income, inflation, exchange rate and institutions as well as country and year fixed effects.     

The paradox of weakness in the politics of trade integration

In his 1960 seminal contribution to game theory and its applications, The Strategy of Conflict, Thomas Schelling suggested that in international negotiations, strong international opposition may be an asset rather than a liability. Rather than constraining it, the opposition would enlarge the opportunity set thus making it easier to successfully conclude international negotiations. This property, which is also known as the Schelling-conjecture, shares some aspects with constitutional economics, namely the two-level approach suggesting that it might be beneficial for all parties to give up some power by tying one??s hands. In this paper we examine by means of a simulation study how far we can take this notion in the politics of trade integration. In explicitly marrying Schelling??s 1960 idea with the 1988 two-level approach by Putnam and embedding the result into the political economy of trade we find that the threat of a domestic opposition or national institution having a veto power frequently but not always delivers a more favorable outcome for the respective trade representative at the international table. Whether the Schelling-conjecture applies or not actually depends on the subtle interplay of a ??bully effect?? and a ??serenity effect??.     

An options based bioeconomic model for biological and chemical control of invasive species

The management of non-native invasive species is a complex but crucial task given the potential for economic and environmental damages. For many invasions the development of socially optimal control strategies requires more than is offered by the single-species, single-control models that have dominated this area of research. We develop a general stochastic optimal control framework that accommodates multiple interacting species while accounting for uncertainty in the temporal population dynamics. This extension to the current line of bioeconomic control models allows for the design of optimal integrated pest management strategies that utilize both chemical and biological controls in an environment of uncertainty and irreversibility. We demonstrate the benefits of combining chemical and biological controls in long term management strategies through a case study of the hemlock wooly adelgid (Adelges tsugae) infestation in the eastern United States. In this application we find that the introduction of natural predators is usually sufficient to manage the infestation, though chemical insecticides can play an important role when detection of the infestation is delayed or when the biological control agent does not sufficiently increase mortality of the invasive species.     

Bang for buck: cost-effective control of invasive species with different life histories

Strategies for controlling invasive species can be aimed at any or all of the stages in the life cycle. In this paper, we show how to combine biological data on population dynamics with simple economic data on control costs options to determine the least costly set of strategies that will prevent an established invader from continuing to increase. Based on biological data alone (elasticities of matrix population models), effective control strategies are sensitive to both life history and rate of population growth. Adding economic considerations, however, can cause the optimal control strategy to shift, unless the costs of intervention are the same across life stages. As an example, we apply our methods to oyster drills (Ocinebrellus inornatus), an economically important aquaculture pest that has been accidentally introduced worldwide. Control efforts are applied to local tidelands through manual removal of adults, although the life history characteristics of the species indicate a low population elasticity for adult survival. Aquaculturists are making bioeconomic decisions to remove adults vs. egg capsules, because of the relative ease of controlling each stage.     

How economic rewards affect cooperation reconsidered

Recent studies suggest that payoffs in cents, compared to dollars, produce less defection in a repeated prisoner’s dilemma game. We are unable to replicate these findings with conventional economic procedures or in a direct replication.     

Exchange rates and trade: How important is hysteresis in trade?

This paper looks at the responsiveness of a country's export supply to exchange rate changes and measures its quantitative importance by breaking down export adjustments between changes in output levels by existing exporters (intensive margin) and movements due to changes in the number of exporters (extensive margin). Using data on a representative sample of Spanish manufacturing firms, the paper finds sunk costs hysteresis in entry and exit to be an important factor in determining export market participation, but unrelated to exchange rate uncertainty. The sunk costs of entering the market appear to be much larger than the costs of exiting the market. Finally, although hysteresis exists, its effect on the responsiveness of aggregate trade volumes to exchange rate changes is quantitatively small. A 10% home currency depreciation results in an increases in export volume due to the increase in the number of exporting firms of only 1.4% of export volume.     

How luck and performance affect stealing

This paper investigates how the way of earning payoff affects the probability of stealing. The participants who earned their payoff according to performance were three times more likely to take the (undeserved) maximum payoff than participants with randomly allocated payoff. Conditional on stealing something, most subjects steal the full amount available.     

Does a currency union affect trade? The time-series evidence

Does leaving a currency union reduce international trade? We answer this question using a large annual panel data set covering 217 countries from 1948 through 1997. During this sample a large number of countries left currency unions; they experienced economically and statistically significant declines in bilateral trade, after accounting for other factors. Assuming symmetry, we estimate that a pair of countries that starts to use a common currency experiences a near doubling in bilateral trade.     

Optimal control of an invasive species with imperfect information about the level of infestation

The presence of invasive species is often not realized until well after the species becomes established. Discovering the location and extent of infestation before the invasive species causes widespread damage typically requires intensive monitoring efforts. In this paper, we analyze the problem of controlling an invasive species when there is imperfect information about the degree of infestation. We model the problem as a partially observable Markov decision process in which the decision-maker receives an imperfect signal about the level of infestation. The decision-maker then chooses a management action to minimize expected costs based on beliefs about the level of infestation. We apply this model to a simple application with three possible levels of infestation where the decision-maker can choose to take no action, only monitor, only treat, or do both monitoring and treatment jointly. We solve for optimal management as a function of beliefs about the level of infestation. For a case with positive monitoring and treatment costs, we find that the optimal policy involves choosing no action when there is a sufficiently large probability of no infestation, monitoring alone with intermediate probability values and treatment alone when the probability of moderate or high infestation is large. We also show how optimal management and expected costs change as the cost or quality of information from monitoring changes. With costless and perfect monitoring, expected costs are 20–30% lower across the range of belief states relative to the expected costs without monitoring.     

How urbanization affect employment and social interactions

We develop a model where the unemployed workers in the city can find a job either directly or through weak or strong ties. We show that, in denser areas, individuals choose to interact with more people and meet more random encounters (weak ties) than in sparsely populated areas. We also demonstrate that, for a low urbanization level, there is a unique steady-state equilibrium where workers do not interact with weak ties, while, for a high level of urbanization, there is a unique steady-state equilibrium with full social interactions. We show that these equilibria are usually not socially efficient when the urban population has an intermediate size because there are too few social interactions compared to the social optimum. Finally, even when social interactions are optimal, we show that there is over-urbanization in equilibrium.     

Strategic pollution control under free trade

This paper designs a reciprocal dumping model to address the control of industrial pollution between two trading partners. Firms generate transboundary pollution from production and environmental taxes represent the pollution control instrument. We ask whether environmental taxes implemented in a non-cooperative setting are more stringent than the globally efficient level. Relative to the globally efficient case, we find in the linear Markov Perfect Nash Equilibrium (MPNE) context that the tax rate for both countries is smaller and individual emissions are larger. However, these results may not hold in the non-linear MPNE case depending on market structure and environmental conditions. Unlike the symmetric equilibrium case, the tax rates are always discontinuous under asymmetric MPNEs. The asymmetric equilibrium scenario can give rise to higher individual payoffs relative to the symmetric equilibrium case.     

Tariff escalation and invasive species damages

We investigate the interface between trade and damages from invasive species (IS), focusing on escalation in tariffs between raw-input and processed-good markets, and its implication for IS-based damages. The current tariff escalation in processed agro-forestry products motivates our analysis. Tariff escalation exacerbates the likelihood of IS introduction by biasing trade flows towards increased trade of primary commodity flows and against processed-product trade. We show that a reduction of tariff escalation, by lowering the tariff on processed goods increases allocative efficiency and reduces IS-based damages, a win-win situation. We also identify policy menus for trade reforms involving tariffs on both raw input and processed goods leading to win-win situations.     

OEM方式对中国外贸发展的影响

随着经济全球化的发展,加工贸易在我国对外贸易中所占的比重越来越大,对我国外贸的发展也起着越来越举足轻重的作用.本文通过分析OEM方式对我国生产企业的影响来阐述其对中国对外贸易发展的影响,并提出对加工贸易的看法.     

Cohort crowding: How resources affect collegiate attainment

Analyses of college attainment typically focus on factors affecting enrollment demand, including the financial attractiveness of a college education and the availability of financial aid, while implicitly assuming that resources available per student on the supply-side of the market are elastically supplied. The higher education market in the United States is dominated by public and non-profit production, and colleges and universities receive considerable subsidies from state, federal, and private sources. Because consumers pay only a fraction of the cost of production, changes in demand are unlikely to be accommodated fully by colleges and universities without commensurate increases in non-tuition revenue. For this reason, public investment in higher education plays a crucial role in determining the degrees produced and the supply of college-educated workers to the labor market. Using data covering the last half of the twentieth century, we find strong evidence that large cohorts within states have relatively low undergraduate degree attainment, reflecting less than perfect elasticity of supply in the higher education market. That large cohorts receive lower public subsidies per student in higher education explains this result, indicating that resources have large effects on degree production. Our results suggest that reduced resources per student following from rising cohort size and lower state expenditures are likely to have significant negative effects on the supply of college-educated workers entering the labor market.