WELFARE IN THE NASH EQUILIBRIUM IN EXPORT TAXES UNDER BERTRAND DUOPOLY

In the Eaton and Grossman Quarterly Journal of Economics, 101 (1986), pp. 383–406 model of export taxes under Bertrand duopoly, it is shown that welfare in the Nash equilibrium in export taxes is always higher than welfare under free trade for both countries.     

STRATEGIC EXPORT POLICY IN VERTICALLY RELATED MARKETS

This paper analyses how strategic export policies are affected by introducing an imperfectly competitive intermediate good into a Bertrand duopoly model with product differentiation, where a home and a foreign final‐good firm export to a third‐country market. It is shown that when the home and foreign markets for the intermediate good are segmented, the optimal export policy towards the final good is a tax. In contrast, under integrated markets, the optimal export intervention is a subsidy. Whether bilateral export intervention is welfare improving compared with free trade, depends on the degree of product differentiation between the home and foreign final goods.     

Market collusion and the politics of protection

This paper investigates the relationship between trade and competition policy within a model where market collusion and protectionist lobbying are themselves related. Collusion and lobbying are modeled as joint products of the same collective effort of firms. In equilibrium, firms cannot achieve greater cooperation in one dimension without reducing it in the other. A trade agreement that limits the effectiveness of lobbying may cause firms to increase market collusion, thereby increasing the domestic price. Thus, international trade agreements may run counter to the goals of competition policy. On the other side, a more restrictive competition policy is shown to either reduce the domestic price or reduce import protection. Thus, competition policy tends to promote trade policy goals. The reason is that restrictive competition policy undermines collusion at the source—it decreases the per-firm benefit to collusion relative to the gains from deviating—reducing firm cooperation in both dimensions.     

New Economic Theories

This paper analyses some of the most important spillovers of recent developments of economic theory into environmental economics. Attention is given to the anlaysis of sustainable economic development paths, where endogenous growth models are used; the implications of environmental dumping and more generally of policies concerning global environmental issues, where new trade theories are very useful; and, the effectiveness of environmental policy instruments when markets are imperfectly competitive, where industrial organisation theory is employed. The paper does not only note recent developments in environmental economics, but also relates these to the previous environmental economics literature. Thus, it can be assessed whether new results actually improve our knowledge of crucial economic and environmental issues.     

Price discrimination: A classroom experiment

In this article, the authors describe a classroom experiment aimed at familiarizing students with different types of price discrimination (first-, second-, and third-degree price discrimination). During the experiment, the students were asked to decide what tariffs to set as monopolists for each of the price discrimination scenarios under consideration. The objective was to allow the students to work empirically, through trial and error, selecting tariffs for each type of discrimination that would maximize a monopolistic entrepreneur's profits. The purpose of the exercise also was to enable the students to differentiate each type of price discrimination and to set tariffs in each case, as well to help them understand the repercussions in terms of welfare for each type of price discrimination.     

Review article. Kalecki on imperfect competition, inflation and money

This paper reviews the final two volumes of Kalecki's CollectedWorks. It first discusses, based on the papers in Vol. VI, hiscontributions on cartels, on Nazi Germany, the development ofindices of business fluctuations and of national income accounts,and the movement of prices and costs over the business cycle.Drawing on the papers reproduced in Vol. VII, this paper continuesby discussing Kalecki's writings on rationing, inflation, imperfectcompetition and unemployment, money and finance, the nationaldebt and the welfare state, international economic arrangements,the post-war American economy and econometrics and methodology.     

价格竞争还是质量竞争--中国出口产品竞争力的实证研究

中国出口产品普遍被认为“价廉质次”,然而这并不能充分解释中国出口贸易长期增长的实质。对中国2001年加入WTO以来出口产品竞争力的实证研究表明：一方面,中国出口产品的相对单位价格呈现持续下降的趋势,这说明低价竞争是中国出口产品的一个主要特征;另一方面,中国出口产品质量在逐年上升,其中高技术出口产品的质量竞争力较为明显,这说明中国出口产品并未陷入低质量产品的陷阱。在新时期进一步深化对外贸易转型中,把握中国出口产品竞争力特征对我国对外贸易政策制定有重要意义。     

What are the determinants of hiring? The importance of product market demand and search frictions

In this article, we study the importance of product market demand and search frictions for hiring. We use a search-matching model with imperfect competition in the product market to derive an equation for total hiring in a local labour market, and estimate it on Swedish panel data. If product markets are imperfectly competitive, product demand shocks should have a direct effect on employment for given levels of prices and wages. Our main finding is that product demand has such a direct effect on hiring. This highlights the importance of taking imperfect competition in the product market into account in studies of employment dynamics and hiring. We also find that, for given levels of prices, wages, and product demand, the number of unemployed workers in a local labour market has a positive effect on hiring, suggesting that search frictions matter. Quantitatively, product demand shocks seem to be more important for understanding the variation in hiring than shocks to the number of unemployed workers.     

Screening, cross-border banking, and the allocation of credit

The author analyses competition among banks when banks can use creditworthiness tests that generate (imperfect) information about borrowers. When banks can strategically adjust the test characteristics by investing resources in the screening technology, he shows that credit markets are not easily contestable. An increase in the intensity of competition may have few effects on incumbents» conduct and overall market shares. Moreover, conditions are provided under which screening efforts are reduced by competition. In such situations the quality of the overall loan portfolio declines and the economy incurs higher aggregate risk due to the lower quality of banks» information production. The welfare gains from integrating fragmented loan markets can actually be negative.     

A Note on Ad Valorem and Per Unit Taxation in an Oligopoly Model

This note shows that per unit taxation welfare dominates ad valorem taxation in an oligopoly model, when the number of consumers is sufficiently high compared to the number of oligopolists. It aims to provide an alternative perspective to existing literature arguing instead the dominance of ad valorem over per unit taxation in oligopoly frameworks. Our result is obtained in a simple example which uses a strategic market game formulation to study strategic behavior at a general equilibrium level.     

How Will EMU Affect Inflation and Unemployment in Europe?

This paper explores how European Monetary Union will change the wage setting behavior of national labor unions. We derive the impact of national inflation aversion and labor militancy on the performance of national labor markets under different monetary arrangements. A common central bank raises inflation and unemployment if it acts as conservatively as national central banks. However, unemployment falls in countries that previously tied their monetary policy to the Bundesbank. We also examine the composition of EMU and the influence of national labor market legislation.
JEL Classification : E 24; F 02; F 33     

FINANCIAL MARKET COMPETITION AND ECONOMIC GROWTH: THE IMPORTANCE OF HOW PROFITS ARE RETURNED

If households have finite lives, the effect of imperfect competition in the financial sector on economic growth depends also on how its profits are returned. The return may be exogenous though fiscal transfers to the young and/or the old or endogenous through dividend payments to a subset of old households that have acquired financial sector equity. Returning financial profits to the old, either exogenously or endogenously, unambiguously reduces growth, but through the two respective mechanisms of consumption-smoothing and of encouraging 'unproductive saving'. As the latter is the more powerful, a public pension paid for by taxing financial profits will raise steady-state growth rate. However, the main results are that if profits are returned to the young, growth will be highest with monopolistic finance, if the elasticity of intertemporal substitution is sufficiently low; and, generally, the number of Nash–Cournot financial firms that maximizes growth is increasing in the value of this parameter.     

The impact of China's accession to the WTO on its economy: an imperfect competitive CGE analysis

To examine the impact of trade barrier reductions on the Chinese economy following its WTO accession, a single‐country, static CGE (Computable General Equilibrium) model is constructed, which incorporates certain elements of imperfect competition in China's current economic situation. China's real GDP and total employment are expected to rise by small degrees, while the general price level may decline by a few percentage points. Total imports would rise by more than 10%, whereas total exports would increase far less. China's trade surplus is, therefore, likely to shrink substantially and its dependence upon foreign trade is likely to rise by a few percentage points. A sensitivity analysis confirms the robustness of the simulation results. A comparison with other CGE studies on China's trade liberalization also shows the plausibility of this study's predictions.

JEL Classification: F17, C68     

Imperfect competition and capital accumulation: the role of price normalization

We consider a capital-accumulation model with infinitely lived households and two production sectors. The intermediate-good sector is characterized by perfect competition, a constant-returns-to-scale technology, and production externalities. The final-good sector is a monopoly operating under constant returns to scale. We analyze the general equilibrium in the sense of Gabszewicz and Vial [Journal of Economic Theory (1972) 4: 381–400] for this economy and different price-normalization rules. It is shown that the qualitative behavior of the equilibrium paths depends crucially on the chosen normalization rule. In particular, whether equilibria are monotonic or oscillating and whether indeterminacy occurs or not may depend on the choice of the numeraire.     

农村剩余劳动力转移的重要途径——国际劳务输出

我国农村剩余劳动力的转移问题越来越受到社会各界的关注。本文提出扩大国际劳务输出是转移农村剩余劳动力的重要途径。我国进行国际劳务输出具有较大的比较优势和发展空间。我国政府应加大国际劳务输出的管理力度,为促进我国农村剩余劳动力转移另辟新径。     

Optimal Emissions Taxation under Imperfect Competition in a Durable Good Industry

This paper investigates optimal emissions taxation under imperfect competition in a durable good industry where products are sold (instead of rented). As a benchmark, attention is paid to the special case of monopoly with exogenously given product durability. In line with previous literature, the optimal emission tax in this benchmark model falls short of marginal damage (underinternalization). Extending the benchmark model either to the case of an oligopolistic market structure and/or to the case of endogenous product durability then provides two cases in which the optimal emission tax overinternalizes marginal damage.