How do Multiproduct Exporters React to a Change in Trade Costs?*

We use data on individual French exporters to document how a change in trade costs, following the introduction of the euro, affected the export margins of firms in relation to export decisions, the number of products exported, and the average sales per product. Our results confirm two effects predicted by the theory: firms increase the range of products they export as well as their intensive margin. This effect is most evident in markets with moderate monetary policy coordination before 1999. General equilibrium competition effects reduce the initial positive impact on each of these margins. We find no evidence that firms increase their participation in the export market.     

General framework for the rotation of units in repeated survey sampling

Coordination of probabilistic samples is a challenging theoretical problem faced by statistical institutes. One of their aims is to obtain good estimates for each wave while spreading the response burden across the entire population. There is a collection of existing solutions that try to attend to these needs. These solutions, which were developed independently, are integrated in a general framework and their corresponding longitudinal designs are computed. The properties of these longitudinal designs are discussed. It is also noted that there is an antagonism between a good rotation and control over the cross-sectional sampling design. A compromise needs to be reached between the quality of the sample coordination, which appears to be optimal for a systematic longitudinal sampling design, and the freedom of choice of the cross-sectional design. In order to reach such a compromise, an algorithm that uses a new method of longitudinal sampling is proposed.     

The relative maxima of the likelihood function. II

Abstract

In [1] it was shown that under mild conditions, with probability approaching unity as n increases the likelihood function has a relative maximum in a fixed open interval centered at the true value of the parameter. This paper strengthens the result by having the length of the interval approach zero as n increases. An application is given.     

Trade impact of European measures on GMOs condemned by the WTO panel

In May 2003, the United States, Canada and Argentina launched a World Trade Organization (WTO) case against the European Union concerning its authorization regime for genetically modified organisms (GMOs). The complainants challenged three types of measures: (i) an alleged general moratorium on the approval of GMOs; (ii) delays in the processing of product-specific applications; (iii) national safeguard measures adopted by certain Member States banning the marketing of certain genetically modified products. In November 2006, the WTO condemned the European regime. Using the most recent advances in gravity equation, we estimate the reduction in exports of potentially affected products from the complainants to the European Union. Export losses are calculated by product, complainant country and measure at stake. Our results tend to confirm the foundations of the dispute: the European moratorium and product-specific measures have a negative effect on trade, as do safeguard measures adopted by Germany, Italy and Greece.     

Correcting for Sampling Bias in the Measurement of Welfare and Poverty in the Cote d'Ivoire Living Standards Survey

The sampling aspects of a household data set are important toanalysts. The early years of the Côte d'Ivoire LivingStandards Survey (CILSS) had a sampling bias, which seriouslyaffected estimates of population statistics such as householdsize. The bias arose from sampling procedures that overrepresentedlarger dwellings. Assuming that samples drawn in later yearswere unbiased, a correction procedure is applied that uses weightsbased on household size. Results from the weighted data arethen compared with the unweighted findings to assess the seriousnessof the bias. Estimates of household expenditure per capita inthe early years of the survey are found to be significantlyunderestimated, resulting in an overestimation of poverty. Thesampling bias also resulted in an underestimation of the upwardtrend in poverty during 1985–88. The CILSS has been apopular and fruitful data set for policy analysis. These findings,however, cast doubt on the robustness of earlier work. Thus,the effort to trace sampling information is particularly worthwhilefor policy-oriented applied research.     

Elimination of arbitrage states in asymmetric information models

In a financial economy with asymmetric information and incomplete markets, we study how agents, having no model of how equilibrium prices are determined, may still refine their information by eliminating sequentially “arbitrage state(s)”, namely, the state(s) which would grant the agent an arbitrage, if realizable.      

Efficient Option Replication in the Presence of Transactions Costs

In the presence of transaction costs, a risk-return trade-off exists between the quality and the cost of a replicating strategy. In that context, I show how to expand the set of all possible time-based strategies through the introduction of a multi-scale class of strategies, which consist in rebalancing different fractions of an option portfolio at different time frequencies. The method, based on time-scale diversification, is to dynamic replication what investment in diversified portfoliosis to static portfolio selection: in a dynamic context, one may enjoy the benefits of diversification by using different time scales in trading the same asset. This revised version was published online in November 2006 with corrections to the Cover Date.