Toward a North American Security Perimeter? Assessing the trade,FDI, and welfare impacts of liberalizing 9/11 security measures

This paper examines the trade, FDI, and welfare impacts of (liberalizing) 9/11 security measures at the Canada–US border. First, the study provides econometric estimates of the impact of post 9/11 security measures on bilateral (US–Canada) trade flows. Second, we compute sectoral tariff rates “equivalent” to the 9/11 security measures using these econometric estimates together with a three-region nine-sector general equilibrium model. Finally, we assess for both the Canadian and the US economies: 1) the (general equilibrium) impacts on trade, FDI, and welfare, of (liberalising) the 9/11 US security measures and 2) the economic impacts of a change of security paradigm toward a North American Security Perimeter within a Customs Union that would liberalize the Canadian and US 9/11 security measures at the Canada–US border and shift them at the external security perimeter.     

The sources of use knowledge: Towards integrating the dynamics of technology use and design in the articulation of societal challenges

This paper reviews three strands of the innovation literature that have presented innovation as a distributed process that combines knowledge of designers and users: user innovations, Science and Technology Studies (STS), and domestication research. These literatures have explored different aspects of the micro-processes through which use and design knowledge are locally embedded. This paper pulls together insights from the literatures, and identifies an important gap: the connections between the local embedding of use and design knowledge, and the meso dynamics of industrial and technological change. The paper then develops a number of integrating concepts and propositions for a framework to study the co-evolution of use and design in innovation processes. It also demonstrates that this framework is most valuable in researching how societal challenges become articulated over time in processes of technological change and innovation.     

The Macroeconomic Consequences of Financing Health Insurance

Employer-financed health insurance systems like those used in the United States distort firms’ labor demand and adversely affect the economy. Since such costs vary with employment rather than hours worked, firms have an incentive to increase output by increasing worker hours rather than employment. Given that the returns to employment exceed the returns to hours worked, this results in lower levels of employment and output. In this paper, we construct a heterogeneous agent general equilibrium model where individuals differ with respect to their productivity and employment opportunities. Calibrating the model to the U.S. economy, we generate steady state results for several alternative models for financing health insurance: one in which health insurance is financed primarily through employer contributions that vary with employment, a second where insurance is funded through a non-distortionary, lump-sum tax, and a third where insurance is funded by a payroll tax. We measure the effects of each of the alternatives on output, employment, hours worked, and wages.     

Welfare and excess volatility of exchange rates

We study the properties of a GEI model with nominal assets, outside money (injected into the economy as in Magill and Quinzii (J Math Econ 21:301–342, 1992)), and multiple currencies. We analyze the existence of monetary equilibria and the structure of the equilibrium set under two different assumptions on the determination of the exchange rates. If currencies are perfect substitutes, equilibrium allocations are indeterminate and, generically, sunspot equilibria exist. Generically, given a nonsunspot equilibrium, there are Pareto improving (and Pareto worsening) sunspot equilibria associated with an increase in the volatility of the future exchange rates. We interpret this property as showing that, in general, there is no clear-cut effect on welfare of the excess volatility of exchange rates, even when due to purely extrinsic phenomena.     

Politics, stock markets, and model uncertainty

The available evidence on the effects of political variables on both returns and volatility of aggregate stock indices is scant and mixed. Applying Bayesian Model Averaging to a panel dataset of 17 parliamentary democracies spanning the post-war period until 1995, we test the robustness of political variables in explaining stock returns and stock return volatility. While we find that the influence of political variables on excess returns is weak, there is evidence of some political variables explaining return volatility.     

Tobacco and alcohol: complements or substitutes?

The question of whether alcohol and tobacco are consumed as complements or substitutes is crucial for determining the side-effects of anti-smoking policies. Numerous papers have empirically addressed this issue by estimating demand systems for alcohol and tobacco, and subsequently calculating cross-price effects. However, this traditional approach is often seriously hampered by insufficient price variation observed in survey data. We, therefore, suggest an alternative instrumental variables approach that statistically mimics an experimental study and does not rely on prices as explanatory variables. This approach is applied by means of German survey data. Our estimation results suggest that a reduction in tobacco consumption results in a moderate reduction in alcohol consumption. It is demonstrated that this implies that alcohol and tobacco are complements. Hence, we conclude that successful anti-smoking policies will not result in the unintended side-effect of an increased (ab)use of alcohol.     

On the performance of endogenous access pricing

Endogenous access pricing (ENAP) is an alternative to the traditional procedure of setting a fixed access price that reflects the regulator’s estimate of the supplier’s average cost of providing access. Under ENAP, the access price reflects the supplier’s actual average cost of providing access, which varies with realized industry output. We show that in addition to eliminating the need to estimate industry output accurately and avoiding a divergence between upstream revenues and costs, ENAP can enhance the incentive of a vertically integrated producer to minimize its upstream operating cost. However, ENAP can sometimes discourage surplus-enhancing investment.     

Information acquisition in conflicts

This paper considers incentives for information acquisition ahead of conflicts. First, we characterize the (unique) equilibrium of the all-pay auction between two players with one-sided asymmetric information where one player has private information about his valuation. Then, we use our results to study information acquisition prior to an all-pay auction. If the decision to acquire information is observable, but not the information received, one-sided asymmetric information can occur endogenously in equilibrium. Moreover, the cut-off values of the cost of information that determine equilibrium information acquisition are higher than those in the first best. Thus, information acquisition is excessive. In contrast, with open or covert information acquisition, the equilibrium cut-off values are as in the first best.     

A preliminary look at readmission and mortality among chronically critically ill and other medically complex Medicare patients

Chronically critically ill and other medically complex patients (CCI/MC-Ps) are those who are hospitalized with long-term intensive care needs and require extended periods of hospital-level care. CCI/MC-Ps may be at higher risk for readmission and mortality than other populations due to the severe nature their illnesses. This article examines factors that lead to increased probability of hospital readmission or mortality among CCI/MC Medicare patients. Logistic regression analyses are used to examine mortality and readmissions among the CCI/MC population. Numerous factors including length of stay in the acute hospital, age and gender affect whether a patient is readmitted to the acute care hospital within 90 days of discharge or dies within 60 days following a hospital stay.     

Understanding the Remittance Gender Gap among Hispanics in the US: Gendered Norms and the Role of Expectations

Using the 2006 Latino National Survey (LNS), this study analyzes the existence of a gender gap in favor of men in the monetary remittance behavior of Hispanics residing in the United States. Findings indicate that cultural gender norms and expectations in the country of origin play a key role. The study shows that women migrants are less likely to remit than men and, when they do, they transfer smaller amounts. The remittance gender gap is not universal among subgroups, since it is only observable among Hispanics who came to the US to improve their economic situation, plan to return to their home country, and have low income and low schooling. An index on migrants’ perceptions of gender roles as a proxy for cultural gendered norms is constructed and shows that more traditional gender views are associated with a significant gender gap in favor of men in remittances.