A disaggregated analysis of EU imports: the implications for the study of patterns of trade and technology

This paper examines trends in the unit prices of manufacturedimports into the European Union (EU) in the period 1988–2002.This is undertaken at a high level of disaggregation, and itis this decomposition which we believe has important implicationsboth for a range of bodies of economic analysis and for policy.The analyses undertaken in this paper confirm that disaggregationmatters in helping to identify unit-price trends. We have alsoshown that unit-price trends vary with the type of economy exportinginto Europe and the type of product being exported, and thatthese results are robust at high levels of disaggregation.     

Markup Variation and Productivity Measurement in Singapore*

Conventional measures of total factor productivity using growth accounting may not be appropriate when there is variation in markups across industries. The existence of market power implies that total factor productivity contains an endogenous component related to the variation in markups. I examine the variation of markups at the industry level for the manufacturing and services sectors in Singapore from 1983 to 2003. Using two different measures, I find that the markups in Singapore are significant in most industries, at around 28 and 55percent for the manufacturing and services sectors, respectively. Markups for the services sector declined during the period, while the markups for the key manufacturing industries increased after the Asian financial crisis in 1997. Accounting for variation in markups suggests that improvement in technological progress tends to be underestimated by 0.5–1.0percent per year. The underestimation is more severe in industries with relatively high markups.     

GSE Activity,FHA Feedback,and Implications for the Efficacy of the Affordable Housing Goals

There is a seeming paradox regarding the “affordable housing goals”: GSE activities in targeted communities have increased under the goals but there has been little measurable improvement in housing market conditions in these communities. This paper seeks to reconcile this paradox by focusing on linkage between GSE purchases and FHA activities. We present a simple theoretical framework suggesting that GSE activities can have a feedback effect on FHA. More aggressive GSE pursuit of targeted borrowers under the affordable housing goals induces potential FHA borrowers with best credit quality to use the conventional market. Changes to the housing market will depend on the FHA response to the loss of its best credits, with many different possible outcomes for credit supply and homeownership, including scenarios in which they remain effectively unchanged. While market-level benefits might not be forthcoming, the shift from FHA to less costly conventional loans is clearly beneficial for affected borrowers. Two-stage least squares estimates of the relationship between GSE and FHA lending after the affordable housing goals were made more binding are found to be consistent with the theoretical predictions.

Modeling CO2 emission allowance prices and derivatives: Evidence from the European trading scheme

This paper studies the three main markets for emission allowances within the European Union Emissions Trading Scheme (EU ETS): Powernext, Nord Pool and European Climate Exchange (ECX). The analysis suggests that the prohibition of banking of emission allowances between distinct phases of the EU ETS has significant implications in terms of futures pricing. Motivated by these findings, we develop an empirically and theoretically valid framework for the pricing and hedging of intra-phase and inter-phase futures and options on futures, respectively.     

The Asian Drivers and SSA: Is There a Future for Export‐oriented African Industrialisation?

(1253) Raphael Kaplinsky and Mike Morris Export‐oriented industrialisation is the orthodoxy and is widely indicated as a development path for sub‐Saharan Africa. In recent years there has been a surge of clothing exports from a limited number of SSA economies to the US. In 2006 these exports accounted for more than half of SSA’s manufactured exports (excluding South Africa). However, the ending of quota controls on Chinese clothing exports to the US led to a significant fall in these exports. Is this a harbinger for the future of export‐oriented industrialisation in SSA in a world of a level trading playing field?     

Mortgage Product Substitution and State Anti-predatory Lending Laws: Better Loans and Better Borrowers?

Mounting foreclosures and disclosures of abusive lending practices led many states to adopt new anti-predatory lending (APL) laws. Researchers have examined the impact of such laws on credit flows and the cost of credit. This research extends the literature by examining whether the market responded to these laws by substituting different mortgage products for those restricted by APL provisions. The evidence indicates that the laws were effective in restricting loans with targeted characteristics, and that the market substituted other product types to maintain access to credit and affordability in the face of these restrictions. The laws reduced the involvement of investor and second home purchases but appeared to impact borrower credit scores or down payments.     

Do CRA Agreements Influence Lending Patterns?

This article considers the broader impact of Community Reinvestment Act (CRA) agreements—bank pledges to extend a certain volume of lending to targeted groups and communities—by examining whether they are associated with changes in lending to lower–income and minority communities in the markets where they are initiated. We find the number of newly initiated CRA agreements in a county to be associated with significant increases in CRA, minority and overall conventional mortgage lending in a county over a three–year period. The results are consistent with the view that the increases in lending represent new lending, with some evidence suggesting that the increases in lending are relatively short–lived. Overall, the results are consistent with the notion that lenders view CRA agreements as a form of insurance against the potentially large and unknown costs associated with fair lending violations, poor CRA performance ratings and adverse publicity from CRA–related protests of mergers or other applications. The results are also consistent with the view that the effectiveness of CRA agreements in increasing lending activity is ultimately determined by the persistence and sophistication of community groups in monitoring compliance with CRA agreements.     

Indigenous technical change: What we can learn from sugar processing

This paper is primarily concerned with the nature and extent of indigenous technological capability in peripheral countries. Set in the context of a recent survey article on this topic, it uses the case of open pan sugar technology to discuss the nature and significance of Third World technological capabilities. The paper has an additional relevance to readers of this journal in that it addresses itself to a topic — namely the choice of sugar technology — which has been extensively discussed in previous issues. It charts the impact which recent technological improvements in the small-scale technology have had in changing the private and social optimality of choice.     

Who Will Pay for Long‐Term Care in the UK? Projections Linking Macro‐ and Micro‐Simulation Models

The long‐term care funding system continues to attract much debate in the UK. We produce projections of state and private long‐term care expenditure and analyse the distributional impact of state‐financed care, through innovative linking of macro‐ and micro‐simulation models. Variant assumptions about life expectancy, dependency and care costs are examined and the impact of universal state‐financed (‘free’) personal care, based on need but not ability to pay, is investigated. We find that future long‐term care expenditure is subject to considerable uncertainty and is particularly sensitive to assumed future trends in real input costs. On a central set of assumptions, free personal care would, by 2051, increase public spending on long‐term care from 1.1 per cent of GDP to 1.3 per cent, or more if it generated an increase in demand. Among the care‐home population aged 85 or over, the immediate beneficiaries of free personal care would be those with relatively high incomes.