“True exposure”: The analysis of trade liberalization in a general equilibrium framework

Zusammenfassung “Wirkliche ?ffnung”: Die Analyse der Handelsliberalisierung im Rahmen eines Modells des allgemeinen Gleichgewichts. - Das kürzlich entwickelte Konzept der “wirklichen Protektion” wird in diesem Beitrag für die Analyse des Abbaus von Handelsschranken genutzt. Dabei werden die Bedingungen aufgezeigt, unter denen es zu absoluten Preissteigerungen (-Senkungen) der Binnengüter bzw. zu einer Abwertung (Aufwertung) des realen Wechselkurses kommt. Au▾erdem werden die Wirkungen von Einkommenseffekten pr?zisiert. Der Vergleich verschiedener Wechselkursregime, unter denen eine Liberalisierung stattfinden kann, führt zu einer eindeutigen Pr?ferenz für flexible Wechselkurse, die mit freiem Kapitalverkehr verbunden sind. Daher spricht einiges dafür, da▾ eine Liberalisierung des Kapitalverkehrs dem Abbau von Protektion im Handel vorausgehen sollte.

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Résumé “Vraie exposition”: l’analyse de la libéralisation du commerce international en cadre de l’équilibre général. - Cet article applique le concept récemment développé de la “vraie protection” pour une analyse des effets de la libéralisation du commerce international. L’auteur discute les conditions sous lesquelles le niveau de prix des biens non-commerciables accro?t (décro?t) ou le taux de change réel dévalorise (revalorise). De plus, l’effet des changements de revenu est analysé. Une comparaison des régimes alternatifs de taux de change sous lesquelles la libéralisation du commerce peut se passer démontre clairement la supériorité d’ un taux de change flexible avec des mouvements libres des capitaux internationaux. Cela pourrait indiquer qu’il faut libérer les mouvements des capitaux internationaux avant la libéralisation du commerce extérieur.

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Resumen Exposición al riesgo: el análisis de la liberalización del comercio en un marco de equilibrio general. - En este trabajo se utiliza el concepto de “protección verdadera”, desarrollado recientemente, en un análisis de los efectos de la liberalización del comercio. Se discuten las condiciones bajo las cuales el nivel de precios de bienes no transables aumenta (disminuye) o la tasa de cambio real es devaluada (revaluada). Asimismo, se analiza el impacto de cambios en el nivel de ingresos. Una comparación de regímenes de cambio alternativos bajo los cuales puede tener lugar una liberalización del comercio demuestra sin ambiguedades la superioridad de una tasa de cambio flexible con un libre movimiento internacional de capitales. Esto puede indicar que la liberalización del movimiento internacional de capitales debiera preceder a la liberalización del comercio.

     

The relationship between efficiency and profitability with respect to the size of firms: An empirical investigation for Austria

In this paper, an attempt is made to investigate the performance of Upper-Austrian firms by size class. Considering the six derived hypotheses, why small firms have a better performance measure, some of the hypothesis with respect to profitability and labour cost efficiency are confirmed. On average, the gross residual quota (profitability measure) of small firms is higher than the one of medium-sized and large firms. However, a similar result could not be found for the productivity development. Considering the influence of the firm size on the productivity measure, there is in three out of four cases no statistically significant influence at all and in one case the opposite result is obtained indicating the larger the firm, the higher is the productivity. In the case of labour cost efficiency, the hypothesis (the smaller the firm the lower the labour cost per employee) is clearly confirmed.     

On third order rotatability

Third order rotatability of experimental designs, moment matrices and information surfaces is investigated, using a Kronecker power representation. This representation complicates the model but greatly simplifies the theoretical development, and throws light on difficulties experienced in some previous work. Third order rotatability is shown to be characterized by the finitely many transformations consisting of permutations and a bi-axial 45 degree rotation, and the space of rotatable third order symmetric matrices is shown to be of dimension 20, independent of the number of factorsm. A general Moore-Penrose inverse of a third order rotatable moment matrix is provided, leading to the information surface, and the corresponding optimality results are discussed. After a brief literature review, extensions to higher order models, the connections with tensor representations of classic matrix groups, and the evaluation of a general dimension formula, are all explored.     

Euro-Asian trade: The stepchild in triadic relations takes over

Euro-Asian trade was for a long time by far the weakest link in the triadic chain of economic relationships between Europe, North America and Asia. The development of the EC towards the single market, the opening up of Eastern Europe and the growth of trade within the Asia Pacific region itself have led to the expectation that this link would become even weaker in future. The following article presents evidence to the contrary. This paper is a revised version of a lecture given at the Euro-Asia Centre of INSEAD on 14 February 1992. The statistical work and the preparation of graphs was largely done by Alexander Bushaev.     

Economic and political determinants of foreign direct investment

Four models explaining the flow of foreign direct investment in 80 less developed countries are econometrically estimated and compared by ex post forecasts. A politico-economic model which simultaneously includes economic and political determinants performs best. The higher the real per capita GNP and the lower the balance of payments deficit are, the more foreign direct investment is attracted. Among the political determinants the amount of bilateral aid coming from Western countries and multilateral aid has a stimulating effect, while help from communist countries has a negative effect. Political instability significantly reduces the inflow of foreign direct investment.     

Competing models of international lending activity

Four competing models of the World Bank's lending to developing countries are constructed and econometrically estimated by pooled time series and cross-section data. The analysis suggests that a model combining economic and political determinants performs best. Besides per capita income, inflation, balance of payment and budget deficit, external debt and past growth, political determinants such as the ‘capitalist’ climate or political instability are also important, as well as a recipient country's former status as a colony or dominion. This politico-economic-model is successfully used to forecast the distribution of IBRD loans and IDA credits among the developing countries.     

Employment and Environment in a Sustainable Europe

major challenges in Europe. The EuropeanTreaties require an integration of environmental, economic and social policies in orderto allow for a Sustainable Development. This is of special importance for the linkbetween environmental and employment policy. This paper starts with a definition of thethree pillars of sustainable development, the viability (resilience) of environmental, economicand social systems. With regard to economic development and the social field,these objectives are relatively easy to operationalise: GDP and employment are generallyused headline indicators of sustainable development. The total material input into aneconomy can be seen as an indicator showing the environmental impact.This view brings about major challenges for economic theory:We include the total material input along with resource productivities to describe, explainand evaluate possible developments of economic and environmental variables.With the help of the results from a German research project weshow the relationships between the indicators, the productivities and how they can beinfluenced by policy measures. The simulation results indicate the possibility ofwin-win situations concerning the environment and employment. Additionally, we investigatewhether the developed minimum conditions of sustainable development are valid for Austria.     

Zukunft der Versicherung – Versicherung der Zukunft

The insurance industry is currently characterized by a long-lasting low-interest period and various legislative proposals. Especially the bundling of the requirements of Solvency II, the so called “interest back-up reserve” and the achievement of promised guarantees in the current interest rate environment represent a major challenge for the life insurance industry. In a joint study by Deloitte, E?+?S Rück and the University of Hannover, within the sense of qualitative research by collecting broad expert knowledge the economic effects of the regulatory provisions were discussed. Another focus of research refers to the expectations of the industry representatives regarding the advancing digitization. This paper presents selected reactions and consequences of life insurance companies and derives recommendations for that industry.