A model of firm heterogeneity in factor intensities and international trade

Empirical evidence suggests that exporters are, in addition to being more productive, significantly more skilled‐labour intensive than non‐exporters. In a setting that captures both these features, we show that the firm selection induced by trade liberalization works along two dimensions. First, export growth increases competition for skilled labour. This leads to the exit of some of the skilled‐labour intensive firms, while benefitting unskilled‐labour intensive ones. Second, within the group of firms with the same factor intensities, the reallocation of factors is towards the exporters. We show that the increased competition for skilled labour dampens the positive effect of trade liberalization on sector‐wide TFP and real income.     

The Valuation of Hidden Assets in Foreign Transactions: Why “Dark Matter” Matters

This paper clarifies how the valuation of hidden assets— what we call “dark matter”—changes our assessment of the U.S. external imbalance. Dark matter assets are defined as the capitalized value of the return privilege obtained by U.S. assets. Because this return privilege has been steady over recent decades, it is likely to persist in the future or even to increase, as it becomes leveraged by an increasingly globalized world. Once this is included in future projections of U.S. current accounts, the U.S. external position looks much more balanced than depicted in official statistics. JEL Classification F21     

Environmental benefits of air–rail intermodality: The example of Madrid Barajas

The environmental impact of transport is a growing issue in transport infrastructure planning. The construction of a high-speed rail station at the Madrid Barajas Airport in Spain is an example of the integration of different transportation modes, with expected environmental benefits. We construct a model to assess modal choice and environmental benefits. The results show that with high-speed rail the number of people choosing air travel and the private car is reduced leading to important environmental benefits: a reduction of close to 5 kg of CO₂ per passenger, or 10% of all emissions on the corridor. Our results also show that increasing the cost of using the private car is picked up by air transport rather than high-speed rail, leading to an increase in total emissions.     

Discretionary Government Consumption, Private Domestic Demand, and Crisis Episodes

This paper analyzes the dynamic impact of discretionary government consumption purchases on private demand. Using a panel of 132 countries from 1960 to 2008, we find that while discretionary changes in government consumption lead to crowding-in effects in the short run, crowding-out effects take over in the medium run. In addition, we also find that both short-term crowding-in and medium-term crowding out effects are amplified once we control for periods of crisis.     

The feasibility of low inflation: theory with an application to the argentine case

In this paper we review the Argentine experience of hyperinflation, concentrating on understanding why stabilization took so long, and was only implemented by the most unlikely candidate. To explain these facts we present a voting model in which politicians' actions transmit information about the state of the economy and thus shape voters' behavior. We discuss the implications of the model for countries which are going through the same instability that characterized Argentina in the late 80s.     

Do Firms Increase Productivity in Order to Become Exporters?*

Recent studies find that exporters are more productive than non‐exporters and that entry into exporting does not increase firms’ productivity. Thus, firms self‐select into foreign markets. This paper examines productivity before entry into exporting. Using Chilean plant‐level data, we find that productivity and investment increase before plants begin to export. Moreover, productivity of entrants to exporting, but not that of non‐exporters and exporters, increases in response to increases in foreign income, before entry but not after that. The results suggest that the productivity advantage of future exporters may be the result of firms increasing their productivity in order to export.     

Planning for sustainable development: Strategic alignment in Peruvian regions and cities

This paper explores the application of the Strategic Alignment Model (SAM) to the formulation of strategies for sustainable development in regions and cities. SAM was created during the 90s in order to bridge the gap in terms of objectives, competences and culture between business and IT professionals. The present study applies SAM to align economic development and environmental sustainability and identifies concepts such as industrial ecosystems, sustainable lifestyles, eco-business, and environmental services as integrative strategies. Previous to this research, alignment has been studied in terms of public participation process, policy innovation and adoption of best practices. This paper proposes a new framework to represent alignment in a way that multiple strategies and pathways can be recognized, favoring dialogue and coordination. Likewise, a strategic analysis of Peruvian Environmental Action Plan 2010-2021 is presented.