Commodity Trade and the Carry Trade: A Tale of Two Countries

Persistent interest rate differentials account for much of the currency carry trade profitability. “Commodity currencies” offer high interest rates on average, while countries that export finished goods tend to have low interest rates. We develop a general equilibrium model of international trade and currency pricing where countries have an advantage in producing either basic inputs or final goods. In the model, domestic production insulates commodity‐producing countries from global productivity shocks, forcing final‐good producers to absorb them. Commodity‐currency exchange rates and risk premia increase with productivity differentials and trade frictions. These predictions are strongly supported in the data.     

Recreation Specialization and Site Choice Among Vehicle-Based Campers

Recreation specialization theory predicts that individuals will differ in their physical, management, and social setting preferences. Few studies, however, support the hypothesis that individuals choose recreation settings consistent with their level of specialization. This study examined the association between behavioral, cognitive, and affective dimensions of specialization and site choice among vehicle-based campers in Alberta, Canada. Data were collected using on-site interviews and a mail survey. Campers at unmanaged sites (no facilities and services) had higher centrality scores, had greater familiarity with the site and more experience with unmanaged sites, and a higher level of bush skill than campers at managed sites. An ordered multinomial logit model showed that the more familiar individuals were with the site and campground type, the higher the level of bush skill, and the more important and central camping was in an individual's life, the greater the probability of choosing a campground type that required a higher degree of self-reliance and decreased dependence on facilities and services. Higher household income increased the probability of camping at managed sites, suggesting that income might limit the expression of specialization by constraining choice to affordable options.     

THE INTERNATIONALIZATION OF AGRICULTURAL TECHNOLOGY: PATENTS, R&D SPILLOVERS, AND THEIR EFFECTS ON PRODUCTIVITY IN THE EUROPEAN UNION AND UNITED STATES

Multilateral indices of total factor productivity (TFP) allow efficiency comparisons between ten European Union countries and the United States from 1973 to 1993. Differences in TFP levels are then explained by land quality differences, public research and development (R&D) expenditures, education levels, private-sector patents, international spillovers of public R&D, and private-sector technology transfer. There is evidence that public R&D results in limited knowledge spillovers between the European countries and the United States. However, the use of international patent data from the Yale Technology Concordance shows not only that patents matter, but also that private sector technology transfer may be the dominant force in explaining TFP trends. The United States and the European Union countries with more advanced research systems (Netherlands, Denmark, France, and Belgium) converge in a high-growth club, while Germany, Luxembourg, Greece, Italy, Ireland, and the United Kingdom form the slow-growth group. Ignoring knowledge spillovers and technology transfer leads to biased estimates of R&D elasticities, which is hardly surprising since the private sector is now spending more than the public in some of these countries. Thus, the estimated rate of return to public agricultural R&D falls from over 60% in the closed economy model to 10% in the model that takes account of international spillovers. (JEL Q16)