Trade effects of alternative carbon border-tax schemes

In industrial countries contemplating emissions reductions, there have been calls for additional border taxes on imports from countries with lower carbon prices. A key factor affecting the impact of any border taxes is whether they are based on the carbon content of imports or the carbon content of domestic production. Our quantitative estimates suggest that the former action when applied to all merchandise imports would address competitiveness and environmental concerns in high-income countries but with serious consequences for trading partners. For example, China’s manufacturing exports would decline by one-fifth and those of all low- and middle-income countries by 15 %; the corresponding declines in real income would be 3.7 and 2.4 %. Border tax adjustment based on the carbon content in domestic production would broadly address the competitiveness concerns of producers in high-income countries and less adversely affect developing country trade.     

RISK AND RETURN ON NEWLY LISTED STOCKS: THE POST-LISTING EXPERIENCE

Researchers consistently find that newly listed stocks underperform in the post-listing period. It has been suggested that this anomalous finding may, in part, be explained away if the risk during this period is lower than at other times. Evidence is presented here that the riskiness of newly listed stocks undergoes a seasoning process. Instead of lower risk, riskiness is found to be greater immediately after listing than in later periods. This suggests that the post-listing anomaly is actually worse than has been previously recognized.     

THE PARALLEL MARKET IN CENTRALLY PLANNED ECONOMIES

This paper presents some general-equilibrium models of the parallel market in centrally planned economies. The models are based on the hypotheses that private firms can operate more efficiently than bureaucratically-run state enterprises and that Soviet-type economies are characterized by price controls and quantitative allocations. The state's enforcement policy is explicitly modeled. Although the welfare implications of the parallel market for workers are ambiguous in general, under a variety of circumstances they turn out to be negative. For instance, responding to the shortage created by price controls, illegal firms divert resources from the official economy into the parallel market. The result is a higher price in the parallel market without any increase in the total supply of the good.     

Determinants of Consumption and Savings Behavior in Developing Countries

The determinants of savings generally and the specific effectsof government policies on savings and consumption are pivotalforces in investment and economic growth. The Hall hypothesisstates that consumption is a function of lifetime ("permanent")income, rather than income in each period independently. Changesin interest and tax rates, money supply, or government expenditurewill affect permanent income and hence consumption and savingsonly if they are unexpected and thus not already incorporatedin the estimation of permanent income. We are unable to rejectthe Hall hypothesis in tests for developing countries when weallow for varying interest rates. We do find evidence of a negativeeffect of inflation on consumption, and a positive relationshipbetween the real interest rate and consumption. The evidencefor the Hall hypothesis also suggests that Ricardian equivalencemay be valid—this is Barro's hypothesis that the effecton savings is the same whether government deficits are financedthrough taxation or debt. Our preliminary testing, however,does not support Ricardian equivalence.     

Market-driven versus driving markets

The purpose of this article is to discuss two approaches to being market oriented—a market-driven approach and a driving-markets approach.Market driven refers to a business orientation that is based on understanding and reacting to the preferences and behaviors of players within a given market structure.Driving markets, on the other hand, implies influencing the structure of the market and/or the behavior(s) of market players in a direction that enhances the competitive position of the business. There are three generic ways of changing the structure of a market: (1) eliminating players in a market (deconstruction approach), (2) building a new or modified set of players in a market (construction approach), and (3) changing the functions performed by players (functional modification approach). Market behavior can be modified directly or, alternatively, indirectly by changing the mind-set of market players (e.g., customers, competitors, and other stakeholders). The Monitor Company Bernard Jaworski is the Markets Chair at the Monitor Company. He has researched and taught extensively in the areas of brand management, marketing control, market orientation, and marketing strategy. He obtained his Ph.D. from the University of Pittsburgh and has taught at Arizona and the University of Southern California. Ajay K. Kohli is the Isaac Hopkins Chair of Marketing in the Goizueta Business School at Emory University. A widely cited scholar, his areas of interest include market orientation, sales force management, and marketing strategy. He obtained his Ph.D. from the University of Pittsburgh and taught at the University of Texas before moving to Emory. Arvind Sahay is an assistant professor of marketing and international business at the London Business School. He has published in the areas of technology marketing, international marketing, E-commerce, and marketing strategy. He obtained his Ph.D. form the University of Texas.     

A new Bandung? : Economic growth vs. distributive justice among emerging powers

The demographic weight and the scale and magnitude of economic growth in China and India—as well as in Brazil and South Africa—marks a seismological transformation in world politics. However, despite their economic clout, the emerging powers of the global South have done little to challenge the Euro-North American domination of the international stage—leaving that task to Bolivia, Venezuela, and Iran. The reluctance of the large states of the global South to challenge the contemporary world order—and the widening income and wealth inequalities within their borders—suggests that they are increasingly complicit in this new world order. However, as growing inequalities unleash greater political instability, it is in the interests of states in the global South to cooperate with each other to change the rules of the game.