Ein exportallokationsmodell für die westlichen industrielÄnder

Summary A Model of Export Allocation for the Western Industrialized Countries. —Adequate modifications allow the application of the “linear-expenditure system” (LES) to international trade which —properly speaking —was conceived to explain the demand flows. A linear-expenditure system for the merchandise exports of 18 industrial countries (LESX) has been developed, based upon the hypothesis that the economic agents want to import as many goods as possible with given export prices and import budget, where the possibility exists to choose between the merchandise exports of the different industrial countries and to decide in favor of the optimal import quota according to the relative price conditions. The LESX is sufficient for the conditions of consistent demand systems. The import budget elasticities or income elasticities derived from the LESX are all positive and are to be understood primarily as a magnitude for the long-term development of the market share. The elasticities of the export prices are less than 1. The direct price elasticities and the cross-price elasticities are all negative, the elasticities of substitution are positive. The average direct export price elasticities and the substitution elasticities of the 18 industrial countries amount to —0.585 and 0.559. The statical character of the LESX, the positive “minimum import quantities,” the assumption of certainty, as well as a collinearity between the import budget elasticities and export price elasticities cause a substantial restriction of the dependability of the derived elasticities, so that the advantages of a consistent demand system partly disappear.

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Résumé Un modèle d’allocation exportatrice pour les pays industrialisés de l’Ouest. —Quelques modifications permettent d’appliquer le ?système linéaire de dépense? (SLD), originalement développé pour l’explication des flux de demande, au commerce international. En partant de la supposition que les sujets d’économie veulent importer tant de produits que possible sous des prix d’exportation donnés et sous la contrainte d’un budget d’importation donné aussi bien qu’avec la possibilité de choisir entre les exportations des biens des différents pays industrialisés et de se décider pour les contingents optimum sur les importations suivant les relations des prix relatifs, nous avons développé un système linéaire de dépense pour les exportations des biens (SLDX) des 18 pays industrialisés les plus importants. Le SLDX satisfait les conditions des systèmes de demande consistants. Toutes les élasticités de budget d’importation et de revenu dérivées du SLDX sont positives et doivent être comprises essentiellement comme une mesure pour le développement de la participation au marché à long terme. Les élasticités des prix exportatrices sont moins que un. Toutes les élasticités directes des prix et les élasticités croisées de la demande sont négatives, les élasticités de substitution sont positives. La moyenne élasticité directe de prix exportatrice et l’élasticité de substitution des 18 pays industrialisés se montrent à —0.585 et 0.559. Le caractère statique de SLDX, les ?quantités d’importation minimum? positives, la ?supposition de certitude? et une collinéarité entre les élasticités de budget d’importation et de prix exportatrice effectuent une réduction essentielle concernant la capacité explicative des élasticités dérivées, de sorte que les avantages d’un système de demande consistant fussent partiellement éliminés.

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Resumen Un modelo de asignación de exportaciones para los países industriales occidentales. —El sistema ?linear-expenditure-system? (LES), dise?ado en si para explicar las corrientes de demanda, puede ser aplicado al comercio internacional una vez efectuadas las modificaciones correspondientes. Si se parte del supuesto que los entes económicos ante precios de exportatión y un presupuesto de importación dados desean importar la mayor cantidad de bienes posible, existiendo la posibilidad de elejir entre bienes exportados por los distintos países industriales y de decidirse de acuerdo a las relaciones de precios por las cuotas de importación óptimas, se desarrolló un sistema de gastos lineal para las exportaciones (LESX) de los 18 paises industriales más importantes. El LESX satisface las condiciones de sistemas de demanda consistentes. Las elasticidades de ingresos y de presupuestos de importación derivadas del LESX son todas positivas y deben ser entendidas en primer lugar como medida de tama?o para el desarrollo de las participaciones de mercado de largo plazo. Las elasticidades-precio de las exportaciones son menores que uno. Las elasticidadesprecio directas y las elasticidades-precio cruzadas son todas negativas. Las elasticidades de sustitución son positivas. La elasticidad-precio directa promedio de las exportaciones y la elasticidad de sustitución de los 18 países industriales es —0.585 y 0.559 respectivamente. El carácter estático del LESX, ?cantidades de importación mínimas? positivas, el ?supuesto de seguridad? corao también una colinearidad entre las elasticidades del presupuesto de importación y de los precios de exportación constituyen una limitación fundamental para la capacidad de predicción de las elasticidades derivadas, de tal manera que las ventajas de un sistema de demanda consistente se absorven en parte.

     

Energy consumption of urban households in China

We estimate China urban household energy demand as part of a complete system of consumption demand so that it can be used in economy-wide models. This allows us to derive cross-price elasticities unlike studies which focus on one type of energy. We implement a two-stage approach and explicitly account for electricity, domestic fuels and transportation demand in the first stage and gasoline, coal, LPG and gas demand in the second stage. We find income inelastic demand for electricity and home energy, but the elasticity is higher than estimates in the rich countries. Demand for total transportation is income elastic. The price elasticity for electricity is estimated to be −0.5 and in the range of other estimates for China, and similar to long-run elasticities estimated for the U.S.     

Immigrant Struggles in New Orleans Post-Katrina

Race relations in New Orleans have often been narrowed to Black and white, especially pre-Katrina. According to the 2000 census, the city was about 67% African American, 27% white, 2% Asian, and 3% “Hispanic.” In a city with a deep history of racial tensions between Black and white, other people of color—and especially recent immigrants—often went unmentioned in discussions of city demographics. The city’s world famous culture—whether in the traditions of Mardi Gras Indians and secondline parades, or in music like jazz and bounce—is also famously rooted in specifically African cultures. Even in media coverage of the city post-Katrina, the story of immigrant experiences has remained mostly invisible. When these stories have been told, they have often fit into the old stereotypes of “model minorities” (as in the case of the Vietnamese recovery) or of low-wage workers stealing jobs (as in the case of news reports on the city’s new Latino population). However, the stories of these other New Orleanians offer an important lens through which to view the overall struggle over the city’s recovery. And the work of grassroots activists from these communities, who strived to not only work for justice for their friends and neighbors, but also to build broad multi-racial alliances, provides an inspiring example for people in other cities who are waging similar fights.     

Oil shocks and endogenous markups: results from an estimated euro area DSGE model

This paper estimates a linearised DSGE model for the euro area. The model is New Keynesian and allows for a role for oil usage and endogenous price markups. The importance of shocks to monetary policy and oil prices is estimated to have declined in the post-1990 period, in line with the higher predictability of policy and the fall in the persistence and—to a lesser extent—variability of oil disturbances. Counterfactual exercises show that oil efficiency gains would alleviate the inflationary and contractionary consequences of oil shocks, while higher wage flexibility would help ease the impact on real output at the expense of larger inflationary pressures. While we report evidence of “countercyclical” price markups, the rise in markups induced by an oil disturbance is not found to considerably amplify the inflationary and contractionary effects of the shock. The paper discusses the policy implications of our empirical results for the euro area economy.     

Sectoral labor employment in a Caribbean economy: The case of Barbados

This study examines the demand for labor in five major sectors of the Caribbean economy of Barbados. While the demand for labor function in the nontradable sectors appears well-defined in terms of real wages and real aggregate output, the inclusion of a variable to capture the effects of capital-deepening appears important to the specification of labor demand in the tradable sectors—agriculture and manufacturing. Low estimates of real wage elasticities and real output elasticities in the vicinity of unity suggest that employers in the major sectors are more likely to alter their demand for labor based on expectations of the economy’s performance than in response to labor cost factors denominated in producer prices.     

Using home-biased demand to test trade theories

Using Home-Biased Demand to Test Trade Theories. — This paper proposes a discriminating hypothesis that distinguishes between two paradigms of international trade: (1) constant returns and perfect competition (CRS-PC) and (2) increasing returns and monopolistic competition (IRS-MC). The discriminating hypothesis rests on the different degree of home bias among “consumers.” It predicts a positive relationship between a country’s share in world output and a country’s share in the world home-biased expenditure if the sector is IRS-MC and no relationship if the sector is CRS-PC. Accordingly, 7 sectors (covering 54.86 per cent of industrial output) of the eight countries under investigation were associated with the IRS-MC and 10 sectors (41.15 per cent) with the CRS-PC paradigm.     

A new look at the impact of U.S. import barriers on corporate profit expectations

A New Look at the Impact of U.S. Import Barriers on Corporate Profit Expectations. — The notion that industries benefit from protection is firmly grounded in trade theory. However, previous “event studies” measuring the impact of trade restrictions on stock prices reveal that shareholders expect no improvement in industry profits from protection. The implication is that barriers designed to promote industry adjustment are considered ineffective by equity holders. This investigation of U.S. “Escape Clause” cases shows that shareholders do expect protection to enhance profits, but not universally. Outcomes are linked to the type of trade measure selected, with industries protected by tariffs or global quotas faring better than those shielded by nonglobal “Orderly Marketing Agreements.”     

Income and Price Elasticities of Demand in South Africa: An Application of the Linear Expenditure System

This paper investigates the expenditure patterns of South African households using detailed cross‐sectional expenditure and price data that varies across region and time. Linear expenditure system parameter estimates are used to calculate income and price elasticities for a number of product categories at different points of the income distribution. We find substantial variation in the price and income elasticities of demand for items across the income distribution, with the bottom quartile being extremely sensitive to increases in the price of food and clothing items, and the top quartile being as sensitive as households in developed countries.     

A critique of mises’s theory of monopoly prices

Conclusion Built on Rothbardian insights, our attempt to show the peculiarities of Misesian monopoly theory results in a few conclusions. First of all, in Mises’s theory of monopoly two of the three conditions for the emergence of monopoly prices belong to different realms of scientific inquiry. On the one hand, Mises points out the idea of a counterfactual comparison between competitive price and monopoly price; on the other hand, he stresses the importance of an empirical method to discover monopoly prices. The latter, even if it describes a true statement about market conditions, i.e., the entrepreneurs do not know (beforehand) the market demand curve, does not help us to identify the monopoly price on market. Second, Mises erroneously founds his welfare arguments on value theory. His utilitarian endeavor to show that “consumers’ sovereignty” is infringed by monopolistic restriction of production does not succeed. He based his arguments on nonscientific interpersonal and intertemporal comparisons of utility. Third, Mises is not consistent in the use of a standard of comparison for “monopoly prices”: on the one hand, the market prices are not distinguishable from “monopoly prices”; on the other hand, the transfer of the discussion to the equilibrium framework does not help us either, as we try to explain real market phenomena. Thus, Mises’s attempts to incorporate the neoclassical concept of monopoly price into the framework of the market process, as depicted by Austrians, do not succeed. Our inquiry supports the largely shared opinion among Austrian economists that monopoly price (at least in its present definition) does not exist on the free market; it appears only, and is logically identifiable, as a result of a privilege given by the State.     

Insurance redlining and the process of discrimination

Insurance redlining and the racially discriminatory consequences of the sale of property insurance have been documented in several cities throughout the United States. In this study teams of “testers”—comparably qualified insurance consumers who differed only in the racial composition of the neighborhood of the homes they sought to insure—contacted three Milwaukee area insurance companies regarding the possibility of purchasing insurance for their homes. Though no blatantly discriminatory behavior was exhibited, agents representing these companies expressed a clear preference to pursue business in white communities and placed additional barriers in the way of testers from nonwhite neighborhoods. These findings parallel changes in other institutional sectors of the housing industry where blatantly discriminatory behavior has generally given way to more subtle forms of bias. Policy recommendations are offered to reduce existing racial disparities in the availability of insurance and to open up housing markets in general for minorities.     

Foodcrop Demand in Indonesia: A Systems Approach

Aggregate agricultural commodity demand parameters are estimated, based on an application of the Deaton and Muellbauer Almost Ideal Demand System to a seventeen year Indonesian time-series data set of prices, expenditures and consumption availability. The statistical results are generally significant and correctly signed. The revealed demand relationships imply that the Indonesian food Staples are normal goods. Expenditure elasticities are higher for the higher value foodstuffs than for the lower value starchy staples. Furthermore, the demand for rice has become highly inelastic to both own and cross-price interventions. This implies that rice price interventions will require a high degree of fine-tuning in order to stabilise prices effectively, and that low urban rice prices cannot be regarded as an appropriate, or even second best policy instrument for improving nutritional status.

A high degree of Substitution between rice and secondary food crops, and amongst groups of secondary food crops, is identified. The significance of the cross-price elasticities for the secondary food crops suggests that single-market interventions will have non-trivial budget-mediated effects in other commodity markets. The management of a multi-commodity food policy requires that the spillover effects from commodity pricing policy must be taken into account in order to optimise the effects of price policy interventions.     

Why Speed Doesn’t Kill: Learning to Believe in Disinflation

Central bankers generally prefer to reduce inflation gradually. We show that a central bank may try to convince the private sector of its commitment to price stability by choosing to reduce inflation quickly. We call this “teaching by doing”. We find that allowing for teaching by doing effects always speeds up the disinflation and leads to lower inflation persistence. So, we clarify why “speed” in the disinflation process does not necessarily “kill” in the sense of creating large output losses.     

Social bias in the recruitment of black elected officials in the United States

Conclusion Common to patterns found in other elites, the recruitment of the black elite is highly selective and biased towards certain kinds of individuals. Blacks who are female, not highly educated, who have low status occupation, or are not involved in conventional political activities are at a decisive disadvantage in the political arena. Serious obstacles, therefore, remain for the “average” Black—the overwhelming majority—who aspires to a political career.     

Changes in industry structure and technological convergence: implications for competition policy and regulation in telecommunications

The two leading US long-distance carriers—AT&T and MCI—have recently been acquired by two of the four major incumbent local exchange carriers—SBC and Verizon—and shortly thereafter, the new AT&T (SBC and the old AT&T) acquired BellSouth. Contemporaneously, alternatives to traditional voice communications provided by cable television and internet- based providers indicate a shifting of competition from a single voice market to the “triple play” of voice, video, and high-speed data. These developments imply a fundamentally different model of competition and industry structure than the one of “dominant firms” supplying essential inputs to new entrants for traditional voice service that was envisioned in the 1996 US Telecommunications Act, as implemented by Federal Communications Commission. In response to these developments, state governments, the FCC, and Canadian authorities have enacted legislative or regulatory changes that limit retail price regulation to services such as the basic residential telephone line. Approaches for assessing market power and other competitive issues that account for the specific characteristics of the emerging (converging) industry are also discussed. The paper concludes by describing the implications of the emerging nature of telecommunications competition for future ex ante and/or ex post regulation, market power assessment, continued regulation, and antitrust analyses.

U.S. Antidumping Enforcement and Macroeconomic Indicators Revisited: Do Petitioners Learn?

We contribute to the literature on the political economy of U.S. antidumping enforcement through an analysis of the pattern—and macroeconomic determinants—of country-specific antidumping petitions filed by U.S. firms against 15 countries between 1981 and 1998 (examining quarterly data). We reconcile some seemingly inconsistent results from the prior literature by suggesting that “learning” by petitioners about the administration—in practice—of the U.S. trade laws has led to changes in the roles of the macroeconomic determinants over time. JEL no. F13     

Financial innovations and the interest elasticity of money demand: Evidence from an error correction model

The difficulty of estimating a stable money demand function has been blamed on financial innovations of the past two decades. Gurley and Shaw's [1960] thesis implies that a proliferation of money-like assets resulting from financial innovations increased the interest elasticity of money demand. However, Hafer and Hein [1984] provided empirical evidence to the contrary. This paper presents the empirical results of the M2 demand for money using an error correction model for the period 1959:1–87:4 and two subperiods 1959:1–73:4 and 1974:1–87:4. The findings suggest lower interest and price elasticities for money demand in the second sample in which money substitutes proliferated.     

Substitutions among energy imputs in U.S. manufacturing

Summary and Conclusion With cross-section data on the purchases of four energy inputs by 11 U.S. manufacturing industries, Allen partial cross elasticities of input substitution and own price elasticities of demand were computed. The sample set represents 85 percent of total manufacturing energy demand in 1962. The substitution elasticities between fuel oil and natural gas, fuel oil and purchased electricity, and between natural gas and electricity, were statistically significant for about half of the 11 two-digit SIC industries studied. These elasticities ranged between 12.9 and 1.7 with half of them less than 4.0.Importantly, the elasticity of substitution between coal and the above three energy inputs was significantly different from zero in only three manufacturing industries (comprising some 35 percent of total manufacturing energy demand). Thus it would appear that only three U.S. manufacturing sectors will contribute towards the substitution of domestic for international energy sources. Indirect substitution between energy sources, with the consequent implications for the balance of payments, will primarily have to come from the substitution of electricity (from coal-fired plants) for natural gas (from Canada) and fuel oil (indirectly from the Middle East, Africa, and Latin America).Similar substitution results were found when all 11 industries were aggregated together or divided into large and small energy demand groups. As well, there appear to be no significant differences in overall substitution response between the two categories of large and small energy users. Supporting the substitution results, we found that the own price elasticity of demand for coal to be about –.5 and not different from zero while the price elasticities for natural gas, fuel oil, and purchased electricity were between –.7 and –2.67 (and statistically different from zero).As a general conclsuion, the substitution of domestic coal for other energy inputs will primarily have to come indirectly through greater use of coal to produce electricity which is purchased by the manufacturing sector. The scope for direct substitution of coal for other energy inputs in U.S. manufacturing is limited to only three sectors and cannot be expected to have an exceptionally large impact on mitigating the inflation and blanace of payments implications of the recent increases in the price of imported energy inputs.This work was undertaken at the Bureau of Economic Analysis. Discussions with George Green, A. Ray Grimes, Jr., Michael Mohr, John R. Moroney, Gorti Narasimham, and Benjamin Wolkowitz are acknowledged. These individuals, as well as the B.E.A. and the author's present employer, remain independent from the views expressed in this study.     

Doomed to Deficits? Aggregate U.S. Trade Flows Re-Examined

This paper examines the stability of import and export demand functions for the United States over the 1975q1–2001q2 period. Using the Johansen maximum likelihood approach, an export demand function is readily identified. In contrast, there appears to be a structural break in the import demand function in 1995; specifications incorporating this break pass tests for cointegration, although the price elasticity is not statistically significant. Only when excluding computers and parts from the import series is a stable import demand function detected. The resulting point estimates confirm the persistence of the income asymmetry first noted by Houthakker and Magee, although in a slightly diminished form. One policy implication of these findings is that dollar depreciation—unaccompanied by a realignment of growth trends—is insufficient to substantially reduce the U.S. trade deficit. JEL no. F31, F41     

Characteristics of minorities who are entering self-employment

Self-employed minorities have, as a group, clearly become better educated and registered substantial income gains in recent years. They have shifted away from traditional fields, favoring such emerging industries as skill-intensive services. Many entrants to self-employment, however, are poorly educated minorities concentrating heavily in such traditional areas as retailing. This study investigates the apparent paradox of poorly educated entrants coexisting with general upgrading in the minority entrepreneur universe. An elusive group—defined as “part-timers”—is found to be vitally important to the growth dynamic of minority enterprise.     

Kurzfristige schÄtzfunktionen für den warenhandel der bundesrepublik deutschland

Summary Short-term Foreign Trade Estimates for the Federal Republic of Germany. — In the econometric estimates of Germany’s foreign trade at least one of the cyclical variables, i.e. capacity utilization rate, accelerator and judgement of inventory levels, significantly enters each import equation and — with one exception — each export equation. However, as opposed to the results of other empirical investigations, the dominating influence of the capacity utilization rate could not be substantiated. The long-term influences on import demand are captured by disposable income as well as those final demand components with a high import content. The long-term development of exports can be explained by production in the respective countries. The size of the estimated import price elasticities corresponds quite well with a priori expectations : the lowest elasticity was exhibited by products for which domestic substitutes exist only to a limited degree. On the other hand, imports of price-competitive consumer goods revealed the highest elasticity. The price elasticity of demand for total imports was calculated to be -0.50. With respect to export demand, the equations — disaggregated by countries — produced significant results for the price variables in almost all cases. For total exports to OECD countries the export price elasticity amounted to -1.09. Given this estimate as well as the above mentioned import price elasticity it can be generally concluded that the requirements of the Marshall-Lerner condition are met.

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Résumé L’estimation de court terme du commerce extérieur de la République Fédérale d’Allemagne. — Dans l’estimation économétrique du commerce extérieur allemand des variables cycliques — l’utilisation de l’équipement, l’accélérateur et l’opinion des entreprises sur les stocks — jouent un r?le important. Pourtant, l’influence eminente de l’utilisation de l’équipement dans d’autres investigations empiriques du commerce extérieur ne pouvait pas être supportée ici. Les influences de long terme sur la demande importatrice sont reflétées dans le revenu disponible et dans ceux composantes de la demande finale qui absorbent beaucoup de biens importés. L’évolution de long terme des exportations peut être expliquée par la production dans les pays importatrices. Les coefficients estimés des variables de prix reflètent les caractéristiques économiques des groupes des biens importatrices individuels très bien. L’élasticité-prix des importations allemandes totales se chiffre á -0.50. Dans presque tous les cas, il y avait une influence de prix dans les équations des exportations désagrégées par des pays consommatrices. L’élasticité des exportations allemandes totales vers les pays OCDE se chiffre á -1.09. L’élasticité-prix des importations et des exportations permettent la conclusion que la condition de Marshall-Lerner est satisfaite.

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Resumen Funciones de estimación de corto plazo para el comercio de la Repüblica Federal de Alemania. — En la estimación econométrica del comercio exterior alemán las variables cíclicas de utilización de capacidad instalada, acelerador y apreciación de stock, juegan un papel importante. La influencia más que proporcional de la utilización de la capacidad instalada en otras investigaciones empiricas del comercio exterior no pudo ser confirmada aquf. Las influencias de más largo plazo sobre la demanda por importaciones se reflejan a través del ingreso disponible y de aquellos componentes de la demanda final a los que se incorporan los bienes importados. El desarrollo de largo plazo de las exportaciones se puedo explicar por la producción del pais importador en cuesti?n. Los coeficientes estimados de las variables de precios, reflejan muy bien las caracteristicas econ?micas de los grupos de productos de importación individuales. La elasticidad-precio para todos los productos de importación alemanes es de -0,50. Entre las funciones de exportación desagregadas por paises de destino, se déterminé en casi todos los casos un efecto-precio. La elasticidad-precio del total de las exportaciones alemanas hacia los paises de la OCDE se calculé en -1,09. Junto con la elasticidad-precio de las importaciones, se concluye, que se cnmple la condition Marshall-Lerner.