Did Georgia’s Post-Pipeline-Hack Gasoline-Tax Suspension Lower Prices?

Atlantic Economic Journal -     

EU Enlargement and the Portuguese Economy

The main focus of the present paper is on the emerging and likely future trade effects of enlargement. Though our particular concern is with Portugal, we set the scene by comparing the trade structures of the 10 countries of Central and Eastern Europe (i.e. the eight CEE accession states plus Bulgaria and Romania) – including an analysis of the individual cases of the Czech Republic, Hungary and Poland – with those of the EU15 as a whole, and with those of the 4 EU cohesion countries. The elimination of trade barriers between incumbents and accession states will have two trade‐related effects on EU incumbents: an increase in bilateral flows with the CEEC and a shift effect as the CEEC displace some incumbent exports to EU markets. The first effect is likely to be strongest for those incumbents for which there is a strong overlap between their export structure and the import structure of the CEEC. Portugal emerges as one of the economies with the least overlap. The displacement effect, we conclude, is likely to be particularly strong in the case of Portugal, given the high degree of similarity between Portuguese exports and those of the CEEC. Portugal appears to be ‘being squeezed from below’ in that, for the majority of its traditional export sectors, the CEEC became progressively more competitive during the second half of the 1990's. Portuguese specialisation was increasingly confined to low‐technology, low‐added‐value sectors with declining demand, as strong FDI inflows to the CEEC led to an increasing preponderance of more dynamic sectors in their export structures. Thus, Portugal is also being squeezed from above. This suggests that there may be substantial industrial disruption, in response to which labour‐market flexibility and dynamic entrepreneurial response is crucial. Intersectoral mobility is generally easier the more highly educated the workforce – an indicator on which Portugal scores poorly. The Portuguese labour market, however, displays a high degree of flexibility, consistent with its long lasting low rate of unemployment. Continued flexibility will help minimise these likely adjustment costs. Besides the trade and industry effects, other topics considered in the paper include the implications of enlargement for Portugal's ability to attract FDI, the likely consequences for Portugal of inward migration from the CEEC to the EU, and the implications of enlargement for Portugal's budgetary relations with the rest of the EU.     

Enlargement and the European Geography of the Information Technology Sector

The information technology sector in Europe, comprising the production of computer hardware and software, is disproportionately located on the continent's western periphery. The vast bulk of computers sold in Europe in the 1990s were assembled either in Ireland or Scotland, while Ireland also accounted for over 40 per cent of all packaged software and 60 per cent of all business software sold in Europe. As the sector in both these locations is largely foreign owned, the question arises as to whether EU enlargement might impact on the geography of the sector by diverting information technology FDI from the western to the new eastern periphery. This issue is explored in the present paper by analysis of five individual sub‐segments: computer assembly and electronic components, R&D, mass‐market packaged software and the remainder of the software sector. The paper deems it likely that computer assembly operations will continue the shift seen in recent years from Ireland and Scotland to Central and Eastern Europe. The production of electronic components such as microchips represents a growing share of activity in most EU locations as well as in the CEE countries. Analysis suggests that this pattern of geographically‐dispersed growth will resume once the consequences of the collapse of the high‐tech bubble are played out. The distribution of R&D activity across Europe and globally is also considered unlikely to be much affected by enlargement. As for software, as long as localisation activities remain important, Ireland – the EU location in which most of this activity is carried out – seems set to be able to compete strongly, given the attractiveness of its English‐language environment and other attributes to the young continental Europeans upon which this activity relies. Most software services remain largely non‐tradable however. This sector will grow in the accession states as computer penetration rates converge on the EU average, but without displacing activity from the incumbent EU member states. For firms already competing in the tradable niche software segment, on the other hand, enlargement cannot but be beneficial because of its impact on the size of the market into which they sell.     

Regional GDP in the UK, 1861–1911: new estimates

This article compares the Geary–Stark method for distributing known GDP totals across regions with a variation suggested by Crafts. Tests of the Geary–Stark method confirm that it generates accurate estimates of regional GDP. There are practical and conceptual problems with Crafts' extension, and it is not tested nor is it testable. New estimates of regional GDP for the period 1861 to 1911 contradict Crafts's suggestion of rising regional inequality. Purchasing power parity adjustments do not alter this trend. The new estimates confirm Ireland's post‐Famine catch‐up. The great bulk of Irish labour productivity growth can be accounted for by an upward shifting production function, though it can be argued that that portion of growth that represents catch‐up may be attributable to labour force decline.     

Contingent trade policy and economic efficiency

Review of World Economics - This paper models the competition for a domestic market between one domestic and one foreign firm as a pricing game under incomplete cost information. As the foreign...     

Reaping the Economic Benefits of Decarbonization for China

Chinaneeds to reduce its carbon emissions if global climate change mitigation is to succeed. Conventional economic analysis views cutting emissions as a cost, creating a collective action problem. However, decarbonization can improve productivity andprovide co-benefits that accord with multiple national policy objectives. We track China ＇ s progress in reducing the emissions intensity of the economy, and construct a macro scenario with China＇s carbon emissions peaking in the 2020s. Investment in greater energy productivity and economic restructuring away from heavy industries can bring productivity gains, and decarbonization of energy supply has important co-benefits for airpollution and energy security. Combined with lower climate change risks and the likelihood thai China＇s actions will influence other countries, this suggests that cutting carbon emissions is not only in China＇s self-interest but also in the global interest. To properly identify the true costs and benefits of climate change action requires new thinking in economic analysis.     

The Tragedy of the Commons and Inflation Bias in the Euro Area

Central bank credit has expanded dramatically in some of the Euro Area member countries since the beginning of the financial crisis. This paper makes two contributions to understand this stylized fact. First, we discuss a simple model of monetary policy that includes (i) a credit channel and (ii) a common pool problem in a monetary union. We illustrate that the interaction of the two elements leads to an inflation bias that is independent of the standard time-inconsistency bias. Secondly, we present an institutional analysis that is consistent with the view of fragmented monetary policy and empirical evidence that illustrates the heterogeneity of central bank credit expansion.     

Non-financial Determinants of Retirement: A Literature Review

Retirement is often concentrated at specific ages—in particular the ‘normal retirement age’ and an ‘early retirement age’. Financial incentives cannot fully explain this. Moreover, the participation effect of a higher normal retirement age importantly exceeds the encompassing income effect. Based on a literature survey, we conclude that social norms, default options, and reference-dependent utility are likely explanations for the individual propensity to retire at specific retirement ages. Further empirical research on non-financial determinants of retirement is needed to fully understand individual retirement behavior.     

How to predict transfer of training? Investigating the application of the unified model of task-specific motivation

Transfer motivation is an important factor influencing transfer of training. However, earlier research often did not investigate transfer motivation as a multidimensional construct. The unified model of task-specific motivation (UMTM) takes into account that (transfer) motivation is multidimensional by including both affective and cognitive motivational components and their antecedents. Prior research has provided evidence that the UMTM can predict self-reported transfer of training, but is unclear whether it also can predict transfer reported by expert external raters. Moreover, it is unclear whether controlling for prior knowledge matters for the relationship between transfer motivation and transfer of training. This study improves on existing research by accounting for both of these gaps in the literature. Data were collected among 299 participants who filled in a questionnaire about the UMTM components directly after attending a writing training. They also handed in written documents before, and 6 weeks after the training, which were rated on transfer by trainers. Outcomes showed that components of the UMTM positively predict externally reported transfer when prior knowledge was controlled for. The outcomes imply that the UMTM has predictive value for transfer of training and points out which factors influence whether transfer does or does not occur.